Tag: Lean

Incentive to Self-Organize and Scale

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To avoid the complexity of a socio-technical transformation in a mature publicly traded corporation, we may build by analogy in simpler terms. Suppose two lumberjacks have the property rights for adjacent properties. They have the option of working together of separately. Even if they are identical in strength, skill, resources, and tools, the processes available grow exponentially if they cooperate. The process option of each individual worker may continue, but entire sets of new options that only cooperation may accomplish become available. If we add two more lumberjacks, there is four times the land, four times the potential output of four individuals, plus the additional options that only groups of two, three, or all four may pursue cooperatively.

It is easy to assume, up to our rough limit of 10 members, that the lumberjacks gain from cooperation additional options as a decision-making unit, using each of their property and abilities in ways that acting individually would lack. However, the larger that group becomes, the more effort they require when attaining consensus on which of the processes to pursue. The group of 10 may elect a leader or vote democratically, but two primary feedback mechanisms will arise. Productivity when the workers act out of sight of the others will become judged on output. Productivity when all work as a group will become judged on direct observation. Once this company of lumberjacks grows beyond 10, there are obvious diminishing returns for direct observation, even an impossibility of observation. Once we collect a group of 40, 70, or 200 lumberjacks, managers who coordinate decisions, observe their team for performance, judged exclusively on productivity become an inevitable recourse. 200 lumberjacks simply cannot cooperate effectively in a single forest through reliance on direct informal interaction.

Likewise, even without introducing the complexity of a legal, accounting, tax, or government system, and even before we consider actual market demand or the possibility of competitors, divisions in the organization emerge to benefit every worker. Specialized knowledge on planting new trees, care for trees over multiple years, coordinating which areas to work, care for the tools, and the preparation and shipping of the logs are not only distinct processes from the original effort of the individual lumberjack, but are also increasingly important to the optimization of long-run residual claims. Therefore, even if we assume it possible for all workers to equally “own” the organization, meaning that all have an equivalent residual claim, knowledge and specialization will still drive the introduction of management and coordination based on the output performance of distributed decision-making units.

If we now add a single competitor to this logging industry, a very simple “game” becomes available. Suppose one the residual claimants of one organization decides to hire workers based on wages and the other remains an equal partnership with no wage employees. The incentive structure of the residual claimants and the wage employees are different, creating fractal changes at scale. While wage employees gain remuneration as they work, they do not bear the risk that that the residual claim is zero. While wage employees may need to know some skills for the job, they will not need to know all the processes of the organization. Also, while the residual claimants may only exit the partnership with some difficulty, the wage employee could exit any time to pursue a better opportunity. Therefore, while residual claimants have incentive to ensure the long-run sustainability of the processes, the wage employees have incentive to maximize the short-run behaviors prescribed by the wages.

Comparing these two competitors, we begin to see advantages to the use of wage workers who do not possess a residual claim. First, because they do not possess a long-run interest in the organization, wage employees may carry out the calculated risks of the managers without fear and hesitation that the collectively-owned organization would. If one of these risks produces a windfall gain, the organization gains competitive advantage. Second, because their focus is on short-run optimization of the behavior pattern demanded by the incentive structure, wage employees can perform tactical activities that require less knowledge of the organization as a long-run system. Wage workers make the workforce more malleable and responsive to incentive structures in aggregate. Third, because the optimal number of workers for any one specialty may change over time, the competitor with a variable pool of wage employees can respond more quickly and with less risk than an organization that is taking on a partner with an equal residual claim to assets they did not originally participate in earning. Fourth, the ability to grow the workforce with wage employees in a boom cycle without increasing the total residual claimants allows the organization to respond to the incentives of fleeting opportunities with a limited subset of the long-run disincentives.

Our first conclusion should be that some introduction of wage employees in each organization is inevitable. If we compare an organization with 10 residual claimants and a variable wage workforce of 5 employees, compared to an organization with any number of residual claimants fixed at a number between 10 and 15, the use of wage employees creates more options and some potential for competitive advantage. However, if we add more organizations, we can also see that the effectiveness in optimizing decision-making becomes as much based on knowledge of coordination and incentive structure as it is of the given hierarchy or individual value production. Where a production process was highly stable, predictable, and productivity easily measured on output, a larger number of residual claimants could cooperate as partners. Where the process is highly variable, requiring little knowledge, and productivity is the result of effect management rather than worker virtuosity, minimizing residual claimants while relying on wage earners will be more effective.

There is significant incentive to assure that an organization builds itself not through the exclusive dichotomy of long-run residual claimants that bear all the risk and short-run wage workers without systemic constraints or incentives. The pressure for stability from wage employees and the necessity of management incentives that more closely align to the optimization of long-run residual claims combine to create a gradation of fixed-claim wage earners with specific performance constraints. The salaried employee and the manager compensated partly in company stock can optimize the preservation of an externally directed mid-run. Neither feel the freedom to leave the company due risk and sunk cost. Neither feel the full freedom to exploit new opportunities held by a partner with equal residual claims.

The clear trade-off in a corporation, reliant on salaried employees with slow aggregation of a small percentage of residual claims, is the increasing and widespread hesitation to act, combined with diffusion of responsibility for emergent decisions. When growth remains strong and fitness of solution to market context remains stable, bureaucratic rationalization continues to preserve the organization rather than the optimization of the residual claim. Once growth stagnates, it becomes clear the organization became fine-tuned to internal signals of political disputes while placing layers of noise between decision-making units and the external signals of the market. Transformation is a paradigmatic shift from a structure no longer adapting its knowledge production to its changing market context, to a new paradigm in its place. The challenge of transformation, primarily, is the development of new knowledge networks that can create sufficient benefit to entice the bureaucrat to make the shift to the new paradigm of systemic incentives and constraints

The nature of the production process and the structure of the industry shape the way market forces reward variations in what is otherwise an identical number of inputs. A tax accounting firm or a law firm may rely primarily on equal partnership or tiered partnership with few wage employees relative to the residual claimants. In an oil or mining endeavor with major risk that only requires capital to pull wage employees and the tools of production from other opportunities, such as applying recent technology to previously unexplored mineral rights, the fewest number of residual claimants necessary to raise the necessary capital optimizes the use of a much larger organization of wage employees, vendors, and contractor firms. Many publicly traded corporations are some mix of options, allowing different residual claims in the form of preferred stock, common stock, bonds, pensions, etc. The selection of incentive structures and systemic constraints provide the administrative context for an organization. Decisions regarding the internal context and the selection of an external context with which it must integrate is the realm of competitive strategy.

Economic Knowledge Organization

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Transformation is the systemic restructuring of the knowledge production processes and decision-making networks within an organization. While a precise history and understanding of the organization status quo is impossible, it is also foolhardy to begin a transformation without any respect for the system as we find it. Mature organizations adapt over extended periods of time to a unique pattern of decision-making. The individual workers change continuously, so the organization replicates knowledge of the decision-making processes as patterns of behavior increasingly distant from original context. The systemic understanding of the original context for the behaviors becomes separate from the decision-making units performing the behavior. The origin of organizational knowledge becomes increasingly distant from the processes using outdated knowledge.

Maturity produces stability at the expense of adaptability, just as the bones of an adult gain load-bearing capacity at the expense of the trauma-bearing malleability of the bones in a child. Children rarely need to lift heavy objects but frequently fall, while a young father may frequently lift and move heavy objects but falls that might break his adult bones are very rare. The goal here is not to contend that transformation is impossible or that maturity is superior to malleability. Instead, we should recognize from the outset that each have costs and benefits. The first consideration of any disruptive influence must be what purpose current adaptations serve.

We should “start at the beginning” then, and define what an organization is, why it survives, and what it means that it matures. Every organization is a combination of decision-making units that cooperate collectively in the expectation of individual benefit. However, the decision-making unit is neither the collective nor the individual. The totality does not make decisions independent of the individuals comprising it. The individual, though self-interested, never makes decisions in a vacuum. Therefore, the decision-making units within the organization could be pairs of individuals, formally identified groups, or informal teams who act together. Likewise, these individuals are not exclusively participating in the decision-making unit that performs within the boundary of the organization. The knowledge worker might make decisions within the organization as part of a jobsite decision-making unit, as a family-system provider, as an alumnus of a university, or as a thought-leader in a professional community. If we lose ourselves in consideration of the individuals, we may become convinced of chaos and uncertainty, never knowing if cooperative self-interest will optimize the family, fraternity, or career prospects at the organization’s expense. However, as we scale to include larger groups we find that emergent consistencies hold despite these individual differences. The operational “team” follows patterns of behavior even as individuals join or exit. We should thereby place our consideration of the decision-making unit at this “team” level.

The decision-making unit is not the individual, while each of these individuals participate in a multitude of decision-making units. We need not apply a hard constraint to the number of individuals a decision-making unit may contain in practice, though we may say with confidence that one of two constraints limit this size. First, beyond 10 individuals it will become evident that a subset of members is the informal decision-making unit within the formal collective. These leaders must agree or a decision fails, while the remainder provide knowledge but will defer to group decisions. The ability to remain silent altogether increases as the diffusion of responsibility, whether economic, social, or psychological, spreads across a larger collection. Second, beyond 10 individuals, diminishing marginal returns make it increasingly difficult to ensure that each member is producing the maximum effort on behalf of the group. A large formal group then creates informal smaller groups that ensure their own expectations of cooperative effort and protect their own group from outsiders. In the mature enterprise, there typically exists a mixture of formal hierarchy and informal group dynamics. The formal hierarchy develops each time a costly situation makes the benefit of observers that ensure the productivity of subordinates outweigh the cost of trusting individuals to optimize their own productivity. The informal groups that form as decision-making units distinct from the formal hierarchy do so to participate in the spread of beneficial knowledge that the formal hierarchy cannot provide alone.

To answer the question, “Why do organizations form?” we should rely on an economic definition of value creation as the combination of inputs with knowledge. Value increases through many mechanisms, but knowledge is what makes value increase exponentially for a linear increase of inputs. Moreover, this value is subjective but aggregate. The “owners” of an organization do not own much at all, if ownership is the freedom to dispose of inputs according to any desire. For instance, the owner of an airplane is not free to land on an interstate highway, and the owner of a lake is not free to restrict air traffic or the orbit of satellites overhead. Property is not only material, but also intangible. Property ownership is not freedom of disposal, it is the legal privilege to constrain the use of a mutually identifiable resource. Those who form an economic organization do not create property that they may own it and dispose of freely. Instead, they cooperate to constrain and guide the use of resources to maximize value through the addition of knowledge. All value creation is part of a knowledge process. The “owners” of an organization, whether a sole proprietor, partnership, or the shareholders of a publicly-traded corporation, are the residual claimants to any value leftover.

We will adopt the terminology of the “residual claimant” to maintain strict honesty that the organization is not profit seeking nor the owner of property. Each socioeconomic organization is collection of individuals with knowledge, engaging in cooperative self-interest, making decisions that maximize the incremental subjective value of outputs. The residual claimants receive both the profit and the loss of such value-add activities. The residual claimants invest in a production process, but their residual claim at any time boundary exists as a positive or negative return.

Transformation has a clear economic definition with these concepts as a foundation. Transformation is a paradigmatic shift in decision-making processes needed once an organization can no longer attain the knowledge required to maximize value creation. The resistance to such transformation comes from many sources. The benefits of the new paradigm are often unknown while the cost to the individuals that comprise the organization are often high. The changes necessary for one set of decision-making units may undermine the performance of other decision-making units. The benefits of the new paradigm may benefit newcomers, while incumbents rely on the formal and informal networks to resist this challenge to the processes that benefit them.

Quantum Agnosticism

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This may all seem silly, to say that we ought to guide so many of our beliefs about reality by a “playful doubt” that our beliefs are correct or even significant; moreover, that we might venture upon a more aggressive critical exploit. Quantum physics shows us just how useful the pursuit of uncertainty, with pragmatic goals of acceleration and expansion, can be. We analyze reality as information, fundamentally predicated upon stochastic modeling of flows. Regardless of what code, what material, or what product we create, once we see continuous investment is at work we can apply principles of complex probability functions to predict outcomes with reasonable pragmatic certainty even if we establish these predictions upon an assumption of uncertainty, randomness, and chance. What a triumph of the human mind, to axiomatize uncertainty-in-itself to generate confidence of prediction!

Moreover, we do not need to know anything about the code itself or its origins if we can trace enough of its recent history to forecast the near-term recurrent. We do not need to know what the material guided-by-code is so long as a population of observable opportunities can show us the behavior of the exchange of those materials. We do not need to know at all what the ultimate product of the code or material will be nor do we need to possess any information on its purpose, intent, or consequences. Quantum Physics is the ultimate triumph of human mathematics – in response to challengers of Euclidean geometry Leibniz and Newton invented calculus, showing that limits of acceptable certainty free math to represent reality; to the challenges of marrying local, microscopic, and cosmic forces, special and general relativity and quantum physics were born.

The overwhelming consequence of the last 100 years has, in a sense, accomplished Kant’s Second Copernican Revolution better than he ever would have imagined. We can build an entire axiomatic system based on uncertainty, imaginary constructs, unreal events, or unobservable possibilities, then apply this to predict tiny likelihoods with enough consistency to build transistors, compilers, processors, and commercialize technological progress with unheard of ferocity.

What else could we call this, philosophically, except an agnosticism toward metaphysics and an atheism toward a designer-deity? Disbelief is the new morality, as uncertainty is the vanquisher of Chaos and the Dark. Theoretical science has made great strides with a few simple axioms. Uncertainty assumes 50/50 randomness, assumes uncertain arrival rates of varying inputs, assumes trillions of opportunities, and the laws of population statistics quickly fill in the gaps.

Quantum Physics is an embrace of the tension between opportunity and entropy. When we suspend our obsession with the beginning and origin of the stream and equally suspend our obsession with the end and purpose of the stream we can finally experience the stream itself, as a flow we are in, as a flow that defines us! More importantly, we can realize that we guide the stream. We can facilitate each system to ensure that flow remains continuous and smooth, neither violent nor stagnant.

Continuous Irreducibility

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Precession of a stable axis, this wobble of sociopolitical construction and distribution, reveals the distinction between “permanence” as dogmatic eternals, versus what accretive, decentralized adaptation attains irreducible differentiation through continuous shaping of an equilibrium identity. Continuous irreducibility appears stable to the pattern-designing mind, despite mutagenesis, oscillation, eccentricity, and errors. Precession allows an illusion of consistent identity, patterns so intricately interconnected to be irreducible as a system. Morality is not the realm of tolerated disagreement, it is the transformative shift, reparations of the revolutionary spin.

Regardless of the absurd acrobatics pursued by the tabula rasa empiricists or phenomenological existentialist Sartre, none of them denied that every human possesses in varying degrees of intensity and “stylistic arrangement” of psychosomatic drives. We use psychosomatic intentionally; it is an experience of physical discomfort that distorts mental signification. Like a cattle prod, the body reminds us that the mind is bodily in its operations, restricting our considerations, chasing us into the rancher’s chutes: fight, free, fuck, and food for oneself. The number of drives remain debated in psychology, business, and philosophy, primarily because too few drives begins offending the delicate masses, while too many drives lacks theoretical elegance. Every attempt to “think outside” empirical reality, when faced with human instincts and drives, finds itself in a circus of values, acrobatics of explanation. Just look, for example, of Sartre’s explanation of sex drive as an obsession with exploring holes (EHE).

Sufficient explanation in practice comes more easily to methodological naturalism: sexual dimorphism cannot self- perpetuate its gains in complexity without a sex drive, animals cannot self-perpetuate the body-system without a food and thirst drive, intelligent consciousness self-perpetuate its pattern recognition and design of tools and systems without a comprehension drive. Regardless of the path by which all these drives attained continuous irreducibility, all human history attests to what the “hullabaloo” is about: freedom, movement, sex, food, water, territory, security, and denial of death.

Kant attempted a logically necessary moral system because he hoped to supersede every variation of the precession of values modernity discovered. This was a reaction to the unravelling of simplicity underway. Colonialism and expansion of global trade gave rise to comparative culturalism. One consistency reveals itself. Rising population density requires to complex systems of domestication. That is, more bodies amassing their drives requires intricate methods of control over food, water, sex, resources, and territory. As Deleuze & Guattari describe the “Ideal State” springs into every text fully-established. Language that survives in written form never appears without massive efforts of domestication huddled around a source of abundance and power.

Relativism, a tolerance of immigrants, allowance of extreme ideals, many gods, several specializations; the average freedom decreases as more free wills amass together. The increasing complexity in their system of morals, aimed at minimization of “complaints” in its many forms. Monarchy and aristocracy were the major forms in which enough privilege amassed to accrue the power that stabilizes the lesser average freedom of the masses. For most of human history, this was gradation of rank relied on domination and enslavements, in which domestication was a single process applied by the few to the many. Restated – moral systems dictate the limits of domination in the realms of enslavement and domestication. When many internal limits compete, gradations of rank arise.

Even the axiom, “All men are created equal,” has produced multi-layered systems of inequalities, desperately to achieve sameness of treatment across all human adults, of sound mind, after age of consent, before age again removes this power. Animals, children, and other property have more rules of civilized conduct than ever, but it is premature to conclude that the intention of equality produce equality in consequence. The saying “freedom isn’t free” gains more cohesive meaning, as freedom not only requires great cost, in resources, time, and deaths, but becomes a system of restriction and incarceration.

This is not to justify any form of inequality that arises, but to add to our backlog that a system of inequalities is produced by every moral system, so our ethics must grapple which inequalities are engineered as its consequence. Thus far, we have only concluded that ethics must sustain the minimum viable resilience of systems that question morality.

The Complex Agnosticism Function

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“What happened in old times with the Stoics still happens today, as soon as ever a philosophy begins to believe in itself. It always creates the world in its own image; it cannot do otherwise; philosophy is this tyrannical impulse itself, the most spiritual Will to Power, the will to ‘creation of the world,’ the will to the causa prima.”

– Nietzsche, Beyond Good and Evil

The observer recognizes and prioritizes in accordance with expansion of its Information Dominance. In observing this, we are prudent to maintain healthy skepticism toward any popular theory that starts by anchoring the Observer. For instance, perhaps the infamous division of Man and Nature is propaganda for the war between mitochondria and photosynthesis. We should likewise be wary of the “laws” that go unquestioned within each system of objects and representations. We fill our lives and equations with these constants. We trust them as immutable laws, though they are repeatedly unmasked as emergent power-laws instead. Indeed, they are reliable to the extent the agents of their system continue to obey the axioms. The categories of the mind and the constants of physics may be one in the same re-valuation.

Does this mean you should stop “believing in” gravity? No. Does this mean you should assume the entire world is in your solipsistic head, and that you can gain mystical control over its illusions? No. Likewise, one should not shy from conceptualizing such foolishness, searching for what lies beneath it. Metaphysics means little more than a long-running “To Do” list of semiotic intelligent observation. Rather than a platform, a partisan statement, we will claim metaphysical agnosticism as a complex function, a tool in our toolkit, one that suspends our disbelief, our desperation to delude ourselves with fantastic answers, long enough to evolve as scientists and philosophers our available information.

Einstein revolutionized physics with special and then general relativity; Planck, Bohr, Schrodinger, Heisenberg, and others built quantum reality “below” their perception; by unlocking mathematical considerations, this complex agnosticism function has become supercomputers in our pockets. We have networked the world. We have begun collecting data that separates pattern from chaos. We may embed artificial superintelligence within our human bodies. Certainty was always the greatest enemy of discovery. We should “play with” each metaphysical option, compare where they lead us, and question what we are missing.

In practice, continuing the example of gravity, maintaining metaphysical agnosticism permits pursuit of paths that may appear to compete. Like music, superficial contradictions in one measure may harmonize with impressive strength later. If all reality is cybernetic, binary bits that interpreted as space-time, light, matter, and gravity, even if one believed it a game or a dream, we can maneuver against each law, leveraging another law against it. Emergent power-laws are economic. If all reality is substantial physicality, we should keep looking for a physical source that produces gravitational force. Representation is political. In the end, there will be no difference between a cosmos that is many or one, mental or natural, wave or particle – each false dichotomy belies two vectors of the same superposition. We should play little games with our truth-ideas. We should enjoy our serious games, taking these ideas, smashing them, freezing them, shooting them with lasers; whether philosophically, mathematically, or physically.

Question Your Assumptions

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“Is there any knowledge in the world which is so certain that no reasonable man could doubt it? This question, which at first sight might not seem difficult, is really one of the most difficult that can be asked. When we have realized the obstacles in the way of a straightforward and confident answer, we shall be well launched on the study of philosophy — for philosophy is merely the attempt to answer such ultimate questions, not carelessly and dogmatically, as we do in ordinary life and even in the sciences, but critically after exploring all that makes such questions puzzling, and after realizing all the vagueness and confusion that underlie our ordinary ideas.”

— Bertrand Russell

Karl Marx vs Dan Pink

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Somewhere between Karl Marx and Dan Pink, we see a loss of “code coverage” in the behavioral economics of the knowledge worker. On the one hand, postmodern capitalism has largely mitigated the strength of the Marxist surplus labor value argument. Everything is now becoming so progressively commoditized that capitalism has turned rhizomatically back toward shock, grit, and authenticity as a customizable product. Meanwhile, the intrinsic motivation to create exhibited by the knowledge worker leads Pink to conclude that we only need to provide financial sustainability that is roughly triple the poverty line and money ceases to play a motivational role.

Between the two, we see the same problem that has always plagued the time-value of money and the surplus value produced. Some institutions, housing elite knowledge professions well-established as such, understand this remuneration is not monetary. It is not cash that miraculates capital; it is equity, patents, and partial ownership of economic rents. Only a very small number of knowledge workers can trace their right to the surplus value of information-capital, the remaining few that capture it own (or partially own) their company.

This post is not a critique of capitalism and the perplexing behavioral economics of surplus value, socialism has already made immense retributive efforts in that regard and belongs to a separate debate.

No, what’s missing from Marx and Pink is mediocre middle – the knowledge workers with untraceable but recognized value-add that accumulates as surplus despite the reduction of the duration of hands-on time. The salaries of the middle America typically purchase the surplus value of responsiveness, not the active time spent producing new value.

Marx is noticeably, and rightfully, outraged by the coal miner that is all but whipped to chisel and hammer on a death march 16 hours per day, while Pink romanticizes the owner-artist building Apache and Linux for free. In between the are the billions of postmodern knowledge workers who produce value in their availability for 8hrs, not through 8hrs of economic productivity.

Our universal obsession with equating all labor back to hours and dollars is the problem; we haven’t even begun asking the right questions, despite all the passionate fundamentalist rhetoric we hear based on our incomplete assessment of the situation.

Bureaucracy

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Portrayed as a clash between two opposing valuation-ideologies, innovation appears a simple (albeit violent) enterprise. In practice, innovating – truly shifting market valuation for a socioeconomic ideology – becomes extremely difficult because of the countless factors that impinge on it. These factors collectively can be called bureaucracy: the systemic, emergent will-to-delay that resists all action and saps energy. It makes the simple difficult and the difficult seemingly impossible. In a world more comfortable living in denial, pretending market equilibrium is peacefully aligned to hegemonic truth bureaucracy is the resistance to all re-valuation, so the very essence of innovation (as a clash between opposed valuation-ideologies) creates bureaucracy around it.

In the dynamic environment of competitively interacting factors of production, bureaucracy abounds. Bureaucracy may be a problem of execution, as a collective indecision over a course of action. It may be oppositional, when a competitor Information System possess first-mover advantages, economies of scale, or some barrier-to-entry must be overcome and we hesitate to commit to the risk of open competition. Bureaucracy may be externally instigated, imposed by the disruptive actions of a competitor Information System, the strategic landscape, shifting market trends, or mere chance. Bureaucracy may be self-induced, caused by a lack of strategic vision, lack of coordination, unclear or complicated plans, complex task organizations or command relationships, or complicated technologies.

Whatever form it takes, because socioeconomic innovation is a human enterprise, bureaucracy will always have a psychological as well as a market impact. While we should attempt to minimize self-induced bureaucracy, the greater requirement is to fight for value-signification effectively despite the existence of bureaucracy. Thus, at the very outset, one essential means to overcome bureaucracy is the will to fight it; we prevail over bureaucracy through persistent strength of “mind and spirit”. While personally striving to overcome the effects of bureaucracy, we must attempt at the same time to raise our competitor’s bureaucracy to a level that weakens their ability to compete. We can readily identify countless examples of bureaucracy, but until we have experienced it ourselves, we cannot hope to appreciate it fully. Only through experience can we come to appreciate the force of will necessary to overcome bureaucracy and to develop a realistic appreciation for what is possible in innovation and what is not. While training our ideological actors should attempt to simulate the experience of innovation, its excitement, frustrations, and creative synergy, we must realize the insufficiency of training and workshops in their inherently controlled environments: training can never fully duplicate the level of bureaucracy in real socioeconomic systems.

Rebellion, Bigotry, and Due Process

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To build a legacy that will truly last, we need consistency of self-identification in addition to experimentation. This takes balance. An over-reactive system may adapt quickly, but it will fail to scale in complexity.

A complex system too rigorous in its resistance to change, cutting down strange attractors and emergent organic leadership that opposes its orthodoxy, will find itself maladaptive. Such a system, if made of relatively independent actors, will produce schisms, splits, and offshoots due to the excessive fundamentalism of its self-identification process. Instead, we systems builders want the robustness, strength, and adaptiveness that results from the tension between tradition-rooted cultivated practices versus the spontaneous pursuit of fashion and buzz. This tension is healthy so long as it drives the continuous experimentation engine of the organization, allowing signals to emerge and backpropogating message errors. In other words, we should expect “just enough” sibling rivalry at any level of the organization. We should expect triangulation and escalation of signaling.

Experimentation requires tension, but discovery requires due process – the fair treatment of both sides in a conflict resolution.  The essential role of the systems builder is the promotion of self-awareness. A system unable to recognize its own constructs and correct them is unable to change. We see all too often that power need not be taken from someone so long as they believe they are powerless. Similarly, an executive order is rarely an effective mechanism for introducing lasting adaptation, but it can be quite effective as a signal for the system self-organize against.

A cultivator of adaptive systems does not generate unrealistic and unreasonable new rules in an effort to artificially push the system in a new direction; rather, we make the existing rules of interaction and exchange visible and known equally. Where the rules allow differentiation, we make the logic behind such distinctions known, trusting that an adaptive system will correct itself. We do not employ attrition warfare – one ideological information system against another – instead we maneuver against the broken logic of the enemy system. In this way, organic leadership does not pursue the wholesale destruction of an opposing nation, religion, economic institution, or political party. This is folly, as the diminishing returns of attrition warfare depletes energy, resources, and public support. Those are people on the other side of our wars, after all, and our monstrosities in the pursuit of victory easily turn public support against us.

Instead, wherever there is differentiation the systems builder ensures there is equal access to knowledge of the logic behind apparent unfairness. We encourage open rebellion and take even the least realistic signal seriously, as this is preferable to letting the system stagnate while an insurgency is festering behind closed doors.

To maintain our persistence, to balance tradition and stability with experimentation and responsiveness, we must above all ensure due process and the faith of the public that due process provides fair treatment in any conflict at each level of the system. It is decentralization of local process enforcement that allows systems to experiment. Equal access to escalation of justice will resolve critical reinterpretations. We do not need, as a systems-builder within an overarching complex adaptive system, to control the rebellion of progressives and early adopters nor the backward quasi-bigotry of instinctually late adopters. We must only ensure the system is healthy enough to re-inform itself based on the outliers, trends, and signals.