Organizations that are too rigid cannot adapt to changing economic conditions, demand, prices, interests, shocks, and crises. Problematically, an enterprise can grow quite large while preserving its rigidity in the medium-run, delaying the need to adapt until the industry as a whole has a crisis (airlines, automobiles, etc).
Thus, my first book focused heavily on the need to build and cultivate tension within an organization to ensure that continuous experimentation preserves adaptive complexity.
One example that humanity has struggled to grasp, is the adaptive complexity of a system that relies on individuals who need to be a mix of selfishness and altruism. Standard economics is largely built on the axiom of rational self-interest, that individuals have static preferences and will optimize marginal returns on margin investment. For instance, when I have $10 to spend, I will maximize the utility or value of my spending, based on information, rational self-interest, and prices.
Behavioral Economics, however, has shown us that the choices we make are often quasi-rational at best. Any parent who has gone grocery shopping with a young child knows that gut-feel, intuition, snap decisions, and a desire to get the complex decisions of a stressful shopping trip over with, leads to less-than-perfect spending decisions. Anecdotes aside, research has proven a growing list of fallacies and biases that are consistent across gender, race, culture, and intelligence–from anchoring our conclusions based on whatever information we receive first, to an optimism bias that our success is more likely than the average success rate.
As Hoff and Stiglitz review, there is strong evidence for treating individual actors within a system as encultured actors, partly depending on social context and expectations to determine the best decision.
We can each fit the standard model of classic economics during “slow-thinking”. Under observation, we act rationally self-interested as long as we have perfect information and sufficient time for deliberation. The rest of the time, we are swept up in our action-packed schedules, engaged in thousands of quasi-rational decisions. We copy what has been successful for others, act agreeable when the impact of a decision is unclear, and rely on our past experiences to maintain the habits that have worked so far. This “fast-thinking” is not static, however. The research is very clear that we can be manipulated in very subtle ways, toward selfishness, mistrust, polarity, and dishonesty. Likewise, with enough changes to social context, education, and time, the weak can be strong, the forgotten can be outspoken, the rigid can grow again.
So, who would you like to be?
While I will present the science behind complexity thinking in lean-agile organization development in future posts, the real question that I am left with is, “Who would I like to be; who should I hope to become?” Naturally, there is no perfect answer to this. Personal identity is a question of strategy, in its own way; you can only choose so many vocations, specialties, social contexts, and roles. To be enormously successful in one arena is a trade-off against other opportunities.
One thing, however, is entirely clear. To the extent that our quasi-rational behavior allows us to rely on several “identities” based on mental schema, role models, behavioral narrative, and social norms, isolation within any one institution and ideology is a dangerous prison. We are only free to determine our own path to the extent we know those paths exist. We can only adopt the best mental schema for an unknown decision by having as many modes of thinking as possible at our disposal. We can only carve out the best self-identity as the exposure to new options, cultures, and role models permit.
Frankly, if we are all very honest, we find it easiest – because is simple, familiar, and less scary – to remain stuck in the simplistic modes of thinking we developed as children. Good-baby/Bad-baby, Good-mommy/Bad-mommy, Good-worker/Bad-worker… and yet, when we view the world as a complex adaptive system, it is true of humanity that the health of the forest is so much more complex than can be observed tree by tree. Sometimes we need mother-soldiers, brother-florists, teacher-friends and so on. So my call to action is not to choose a single destiny and blindly pursue it; my imperative to you is see all the paths, invent a hundred identities, meet every kind of person, think through the lens of your worst enemies. Only by expanding your vocabulary, experience, and exposure to the full complexity of the world can you hope to say, in the end, “I chose who I have become.”
Hoff K, Stiglitz J. “Striving for balance in economics: Towards a theory of the social determination of behavior” Journal of Economic Behavior & Organization, 2016, vol: 126 pp: 25-57