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Introduction to Complex Systems: How to think like nature

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  1. Introduction to Complex Systems: How to think like nature Innovation: generalized evolution and environmentally based resource allocation. Russ Abbott Sr. Engr. Spec. 310-336-1398 • 1998-2007. The Aerospace Corporation. All Rights Reserved.

  2. Innovative environments Net-centricity and the GIG Inspired by the web and the internet Goal: to bring the creativity of the web and the internet to the DoD • Other innovative environments • Market economies • Biological evolution • The scientific and technological research process What do innovative environments have in common? How can organizations become innovative?

  3. The innovative process: exploratory behavior If I were to give an award for the single best idea anyone has ever had, I'd give it to Darwin, ahead of Newton and Einstein and everyone else. In a single stroke, the idea of evolution by natural selection unifies the realm of life, meaning, and purpose with the realm of space and time, cause and effect, mechanism and physical law. Innovation, including human creativity, is always the result of an evolutionary process. Daniel Dennett, Darwin's Dangerous Idea • Generate new variants (e.g., ideas)—typically by combining and modifying existing ones. • This is a random process in nature. • But random or not isn’t the point. • The point is to generate lots of possibilities, to explore the landscape. • (Select and) exploit the good ones • Allow/enable the good ones to flourish. The easy part! The hard part!

  4. Exploratory behavior in nature • Evolution. • E. Coli navigation. • The immune system. • Termite nest building. • Ant and bee foraging. • Building out the circulatory and nervous systems.

  5. Mental exploratory behavior in non-human animals Not long ago I watched [a grey squirrel] eyeing the [bird] feeder ... It studied the situation long and hard from one side of the deck, then from the other. It climbed up on the railing to study the situation from there, first from one side, then from the other side, and then from underneath. It eyed the screen on the door that goes out to the deck. Finally it made a try. Starting from a run along the railing, it leapt and ricocheted off the screen toward the feeder but missed. Once again it surveyed the situation from various angles, and finally succeeded by hitting the screen a little higher up, then hanging on tight [to the feeder]. I hadn't the heart to shoo it away! What was going on in that squirrel's head as it sat up on its haunches, studying and studying from this angle and that? What was going on, I suspect, was a sort of trial and error in perception. It was trying to see a way up, trying to see an affordance. Similarly … before crossing a stream on scattered rocks, it may take you a while to see a good way to cross without wetting your feet. … This form of rationality seems to be common to humans and, I imagine, many other animals as well. Ruth Garrett Millikan “Styles of Rationality”

  6. Exploratory behavior in humans and society • As processes carried out by individuals • Individual mental trial and error exploration. • Modeling and simulation. • As processes carried out by groups • Market economies. (A speeded up form of evolution.) • The scientific and technological research process. • These give us enormous leverage and speed-up over traditional evolution. It’s better to let one’s hypotheses die in one’s stead. —Karl Popper, source uncertain. M. Nudds and S. Hurley eds. (2006) Rationality in Animals, (Oxford: Oxford University Press); Introduction:

  7. Exploratory behavior: groups and individuals • Exploratory behavior typically requires autonomous individuals to do the exploration. • Much exploratory behavior is wasted effort. • Successful group exploratory behavior typically requires multiple, loosely coordinated, i.e., autonomous, individuals. • One may hit the jackpot while the others drill dry holes. • For a group to benefit from the discoveries of individuals, there must be mechanisms that bring those discoveries back to the group and allow them to take root. • Mechanisms to internalize successful/promising discoveries must be built into a group’s process. • This frequently requires “creative destruction,” which may be more difficult to accept—especially if it’s your job that is being destroyed. • Markets are how we integrate creative destruction into society. Recall ant foraging and pheromone following. It’s amazing how well we have tamed destruction. It is now an accepted part of our normal processes. Joseph Schumpeter, Capitalism, Socialism, and Democracy

  8. How does this apply to organizations? Creation and trial • Encourage the prolific generation and trial of new ideas. Establish the successful variants • Allow new ideas to flourish orwitherbased on how well they do—rather than political reasons. To ensure innovation: Sounds simple doesn’t it?

  9. Innovation in various environments Getting good ideas established New ideas aren’t the problem. Trying them out We save ourselves by spin-doctoring and benign neglect

  10. Exploratory behavior: asymmetric warfare It is the nature of complex systems and evolutionary processes that conflicts become asymmetric.  No matter how well armored one is … there will always be chinks in the armor, … and something will inevitably find those chinks. The something that finds those chinks will by definition be asymmetric since it attacks the chinks and not the armor.

  11. Exploratory behavior: like water finding a way down hill Microbes attempting to get into your body must first get past your skin and mucous membranes, which not only pose a physical barrier but are rich in scavenger cells and IgA antibodies. Next, they must elude a series of nonspecific defenses—and substances that attack all invaders regardless of the epitopes they carry. These include patrolling phagocytes, granulocytes, NK cells, and complement. Infectious agents that get past these nonspecific barriers must finally confront specific weapons tailored just for them. These include both antibodies and cytotoxic T cells. From a tutorial on the immune system from the National Cancer Institute. Quite a challenge! We are very well defended. But we still get sick! Some “invaders” will make it past these defenses. The problem is not even that some get through, it’s that they exploit their success. How do they find the open pathways? It’s not “invaders” vs. “defenders.” Through (evolutionary)exploratory behavior, if there is a way, some will inevitably find it. Innovation is the (disruptive) invader not the defender. Innovative organizations make that inevitability work in their favor.

  12. Exploratory behavior: recall evolutionary processes How can the human genome, with fewer than 25,000 genes fill in all the details of the circulatory and nervous systems? produce a brain with trillions of cells and synaptic connections? Cell growth followed by species-specific die-off produces webbing in duck feet and bat wings but not in human fingers. Military strategy of “probing for weakness.” Ant and bee foraging: group is a perceptual organ for individuals. Scientific research. Corporate strategy of seeking (or creating) marketing niches. • The general mechanism is: • Prolifically generate a wide range of possibilities • Establish connections to new sources of value in the environment. Mechanism generation Function explore Purpose use result Bottom up

  13. “Garages and laboratories, workbenches, and scribbled napkins are filled with brilliant ideas unmatched with determination, resources, and market sensibilities.” Jack Russo, Silicon Valley intellectual-property lawyer. • In 1999, when Nathan Myhrvold left Microsoft (formerly CTO; brilliant, but he missed the importance of the web) he set himself an unusual goal. • He wanted to see whether the kind of insight that leads to invention could be engineered. • He formed a company called Intellectual Ventures. • He raised hundreds of millions of dollars. • He hired the smartest people he knew. • It was not a venture-capital firm. • Venture capitalists fund insights. They let the magical process that generates new ideas take its course, and then they jump in. • Myhrvold wanted to make insights—to come up with ideas, patent them, and then license them to interested companies. Malcolm Gladwell (May 12, 2008) “In the Air,” The New Yorker, Matt Richtel (March 30, 2008) “Edison ...Wasn’t He the Guy Who Invented Everything?,” New York Times,

  14. Planned invention? • When Myhrvold started out, his expectations were modest. • Although he wanted insights like Alexander Graham Bell’s, Bell was clearly one in a million, a genius who went on to have ideas in an extraordinary number of areas—sound recording, flight, lasers, tetrahedral construction, and hydrofoil boats, to name a few. • Invention has its own algorithm—some combination of genius, obsession, serendipity, and epiphany. How can you plan for that? • The original expectation was that I.V. would file a hundred patents a year. • It’s filing five hundred a year and has a backlogof three thousand ideas. • It just licensed off a cluster of patents for $80,000,000. • Its ideas are not trivial. • Improved jet engines • New techniques for making microchips • A way to custom-tailor the mesh “sleeve” used to repair aneurysms • Automatic, battery-powered glasses, with a tiny video camera that reads the image off the retina and adjusts the fluid-filled lenses accordingly, up to ten times a second. Malcolm Gladwell (May 12, 2008) “In the Air,” The New Yorker,

  15. The history of science is full of ideas that several people had at the same time • Newton and Leibniz: calculus. • No less than nine claimants: the telescope. • At least six different inventors: the thermometer. • Three mathematicians: invention of decimal fractions. • Charles Darwin and Alfred Russel Wallace: evolution. • Elisha Gray and Alexander Graham Bell: the telephone. • John Napier, Henry Briggs, and Joost Bürgi: logarithms. • Charles Cros and Louis Ducos du Hauron: color photography. • Galileo, Scheiner, Fabricius, and Harriott: discovery of sunspots. • Joseph Priestley and Carl Wilhelm Scheele: discovery of oxygen. • Several individuals in England and in America: typewriting machines. • Fulton, Jouffroy, Rumsey, Stevens, and Symmington: the steamboat. • Édouard-Léon Scott de Martinville and Thomas Edison: the phonograph. • Mayer, Joule, Thomson, Colding, and Helmholz: formulation of the conservation of energy. W. F. Ogburn & D. S. Thomas (March 1922) “Are inventions inevitable?” Political Science Quartly, 37, 83-98. Malcolm Gladwell (May 12, 2008) “In the Air,” The New Yorker, Matt Richtel (March 30, 2008) “Edison ...Wasn’t He the Guy Who Invented Everything?,” New York Times,

  16. The genius is not a unique source of insight.He is merely an efficient source of insight. A scientific genius is not a person who does what no one else can do; he or she is someone who does what it takes many others to do. Consider Kelvin: • At least 32 “multiple” discoveries, involving 30 other scientists. • Some, like Stokes, Green, Helmholtz, Cavendish, Clausius, Poincaré, Rayleigh, themselves men of undeniable genius. • Others, like Hankel, Pfaff, Homer Lane, Varley, and Lamé, men of talent but not of the highest order. • Each of these discoveries was destined to find expression without Kelvin. • Kelvin’s stature as a genius remains undiminished. It required many others to duplicate these 32 discoveries. William Thomson, 1st Baron Kelvin Malcolm Gladwell (May 12, 2008) “In the Air,” The New Yorker, Robert K. Merton (1961) “Singletons and Multiples in Scientific Discovery: A Chapter in the Sociology of Science,” Proceedings of the American Philosophical Society 105: 470–86

  17. Practical innovation • Although innovation has become a management buzzword, a significant amount of practical progress has been made in understanding how to make organizations innovative. • Hamel, Gary and Bill Breen (October, 2007) The Future of Management, Harvard Business School Press. • Skarzynski, Peter and Rowan Gibson (March 2008) Innovation to the Core: a blueprint for transforming how your company innovates, Harvard Business School Press. • Hamel and Skarzynski, are founders of Strategos (, a consulting company that specializes in innovation.

  18. Has an organization institutionalized innovation?Hamel: ask employees these questions • How have you been equipped to be an innovator? What training have you received? What tools have you been supplied with? • Do you have access to an innovation coach or mentor? Is there an innovation expert who will help you develop your breakout idea? • How easy is it for you to get access to experimental funding? How long would it take you to get a few thousand dollars in seed money? How many levels of bureaucracy would you have to go through? • Is innovation a formal part of your job description? Does your compensation depend in part on your innovation performance? • Do your organization’s management processes—budgeting, planning, staffing, etc.—support or hinder your work as an innovator?

  19. Skarzynski: an innovation “architecture” • An innovation pipeline for managing and opportunities • A core set of people trained in the processes of innovation • A systematic process for generating and managing strategic insights • The right evaluative criteria at every stage of the development process to prevent potentially valuable ideas from being killed off prematurely • Ideas that are sufficiently radical to deliver breakthrough performance • Mechanisms for rapidly reallocating resources behind new opportunities • Mechanisms to manage growth opportunities with different timescales and risk profiles • Metrics to measure innovation performance • Linkages between innovation and management compensation • A self-sustaining enterprise capability and a tangible core value

  20. Simplified model of successful organisms/organizations Lower levels discover opportunities through exploratory behavior. New initiatives often grow from the “edges,” where perception occurs. Constrained by “rules of engagement,” which protect them from harm. Must be possible for initiatives to originate at all levels—even the top. Higher/broader levels provide perspective, impose constraints, shape direction, and add or withhold resources as events develop. They do not primarily issue commands. This is primarily a bottom-up model of resource allocation. Decisions about increasingly significant commitments are made at increasingly higher/broader levels. If the entire organism/organization commits, becomes an entity-level goal. The top-level organism/organizational goal should be to stay healthy and to build skills, resources, and capabilities which can be recruited/applied/committed when needed. Just what your mother always told you: eat right, exercise, get plenty of sleep, study hard, practice, and save money.

  21. C2: management in the military There is no “commander’s intent” in nature or in the market. But there is something like commander’s intent in entities. Biological organisms: survive, eat, reproduce. Businesses: survive and make money: execute current strategy, find new (profitable) products/services/markets. Science: survive, get funding, discover and publish. Open-ended and internally focused: stay healthy. Different from external missions: accomplish X. Primary externally focused mission: maintain an environment in which one can survive—and preferably flourish. Our military is intentionally mission driven—where the missions are determined by civilian authority. We don’t want our military to take the initiative to find new missions for itself. What kinds of initiatives does it make sense for the military to take? Initiatives that further already agreed upon missions—or derived missions. I.e. internal initiatives that make it more effective at doing what it is charged to do. It isn’t clear how success can be made self-defining in the same way as making money or reproducing is self-defining. Need a way to aggregate resources/success bottom-up.

  22. Backups

  23. Ensuring quality: markets vs. centralized control • Markets ensure a reasonably high level of quality by letting many variants appear and selecting the good ones. • To do this requires • the ability to recognize quality when one sees it • means to generate lots of variants • the luxury of allowing low quality items to come into being and then be rejected. (Doesn’t work if low quality kills.) • If these pertain, quality is (relatively) easy—although there will always be fraud, free-riders, and counterfeiters. • Centralized control ensures quality by rigid oversight. • To do this requires that • one know in advance how to produce quality and • the means to ensure that the knowledge is applied. • This is much harder.

  24. Evolution and Markets • All the mechanism we have seen are controlled evolution. • Markets are evolution with initiative. (How would you define initiative?) • The ability to act on one’s own. I.e., control over a source of energy that is devoted to generating and apply variants. • Nature has neither money or trading in goods or liquidity. • Markets enable creative destruction without violence. • For the most part, competition is for resources and not head-to-head conflict. Competitors are rivals rather than adversaries. Cannot attack the other directly. • The bottom line is competition for resources, not conquest. • But advertising and other forms of marketing and mass influence attempts to influence how resources are allocated. • So do attempts by entrenched interests to shape the environment, e.g., by regulations.

  25. Designs in various environments All bottom-up