It's Complete Chaos Around Here! Part 1 - By Philippa Thomas - March 2010

“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change” Charles Darwin

Heard someone complain “it’s complete chaos!” at work recently? It’s a safe bet that you will have heard this phrase uttered many, many times over during your career (and not just in the midst of 2009’s recession, when the comment might have been totally justified). Thinking about it, chaos may be – or feel like - the normal state of affairs in your organisation.

Actually, despite what you, your colleagues and managers might think, chaos might not be such a bad thing. But it may have major implications for the ways in which we approach management.

A few weeks ago, I watched a fascinating BBC 4 programme on ‘The Secret Life of Chaos’, presented by Jim Al-Khalili, Professor of Physics at the University of Surrey. In this fascinating documentary, Professor Al-Khalili set out to explain Chaos Theory in layman’s terms (which even I could understand), providing answers to such questions as: how does a universe that starts off as dust end up with intelligent life? How does order emerge from disorder?

For thousands of years, our ancestors pondered the creation of order and created simple stories that described the emergence of systems from chaos, the Book of Genesis from the Christian Bible being a particularly powerful example:

“In the beginning God created the heavens and the earth. Now the earth was formless and empty, darkness was over the surface of the deep, and the Spirit of God was hovering over the waters.”

The mathematics of chaos explains how and why the universe creates mind blowing order and pattern. Much of the natural beauty and symmetry in the world, far from being magic or an act of God, is an intrinsic part of the laws of physics. The natural world is full of awe-inspiring examples of the way nature transforms simplicity into complexity, "the ordinary-sized stuff which is our lives, the things people write poetry about - clouds, daffodils, waterfalls - and what happens in a cup of coffee when the cream goes in" (Tom Stoppard).

Before we go any further, I should point out that in scientific terms, 'chaos' refers not to the word's popular meaning of anarchy and confusion, but to the behaviour of a system, like the weather for example - which is governed by simple physical laws but is so unpredictable as to appear random. This phenomenon was brilliantly illustrated by the mathematician and meteorologist Edward Lorenz in his paper "Predictability: Does the Flap of a Butterfly's Wings in Brazil Set Off a Tornado in Texas?" or to give it its proper scientific title ‘sensitive dependence on initial conditions’.

In 1961, Edward Lorenz was trying to forecast the weather. He was running a long series of computations on a computer when he decided he needed another run. Rather than do the entire run again, he decided to save some time by typing in some numbers from a previous run. Later, when he looked over the printout, he found an entirely new set of results. The results should have been the same as before. After thinking about this unexpected result, he discovered that the numbers he typed in had been slightly rounded off. In principle, this tiny difference in initial conditions should not have made any difference in the result. But it did. From this, Lorenz determined that long-distant weather forecasts are impossible. Tiny differences in weather conditions on any one day will show dramatic differences after a few weeks, and these differences are entirely unpredictable. (Gerald Schueler, 1997)

The Butterfly Effect

Explained in mathematical terms, in complex chaotic systems, represented by non-linear equations, a small change in one variable can have a disproportional, sometimes catastrophic effect on other variables. In layman’s terms, the key point of The Butterfly Effect (as Lorenz’ theory has become known), is that nobody will ever know for sure (let alone prove) the result of any action, because the connections between the action the butterfly took – to flap its wings - and other elements of the weather system, is infinitely complex and unknowable.

Some theorists in management and social organisation now believe that organisations are also non-linear dynamic systems, having the same characteristics as natural phenomena (Ralph Stacey, 1996). For us managers, the implication of Lorenz’s theory is that we can never predict with anywhere near certainty, the outcomes of the actions we take in a complex system like an organisation, because we can not hope to understand all the variables at play. A business, or team with essentially identical personnel and similar characteristics will never perform exactly the same as another - or even itself. A strategy or decision will never be made twice with the same context: the long-term behaviour of the organisation, is akin to the inability to predict hurricanes far into the future.

If we were studying for a management qualification, at some point we would be invited to analyse why Strategy X worked in 2002 for company A, but failed when replicated in 2009 for company B. Looking at the problem with an understanding of Chaos Theory, we might be tempted to state the obvious that according to the natural laws of the universe, it couldn’t have worked! At least, that is, not without some form of adaptation to reflect the differences in time and environmental context.

It’s interesting to ponder for a moment on the vast and growing body of publications which attempt to find a repeatable formula for business success. How many of them reflect this reality of a chaotic world? I’m not going to attempt to answer this one, as my editor (Rob) has given me a strict word count limit, but perhaps we should give it some serious consideration.

Each year, significant amounts of time, money and effort are devoted to the development of strategic plans. Subsequently, significant amounts of time, money and effort are devoted to turning those plans into operational reality – with varying degrees of success. 90% of strategic plans are never implemented; 70% of major change projects fail; go figure!

In her 1994 article for Management Today, Anita van de Vliet quotes one leading management theorist, Ralph Stacey (referenced earlier), who questions hard the approach we take to planning and strategy: "anything useful about the long-term future is essentially unknowable, because of the very nature of the system. This undermines the conventional wisdom that success depends on a vision of where the company wants to be in 2020, the strategy to get to that point, and a shared culture". Instead, she says he believes managers should recognise that:

• Strategic planning meetings serve a ritual rather than a functional purpose.
• Elaborate forecasts presented to the board to convince them of the wisdom of a proposed business venture are a fiction, and that their purpose is to allay anxiety rather than perform any genuinely predictive purpose.
• Real strategy emerges - from group dynamics e.g. the politicking and informal lobbying in the corridors, from the complicated patterns of relationships and interplay of personalities that spring up after the formal meeting is over.

Furthermore, real success lies not in total stability and 'sticking to your knitting', but in the tension between stability (in the day-to-day running of the business) and instability (in challenging the status quo). She quotes Stacey again: "Instability is not just due to ignorance or incompetence, it is a fundamental property of successful business systems". Creative organisations encourage counter-cultures and subversion: Honda, for example, hires large groups of managers in mid-career from other organisations with the express aim of introducing challenge and contention into the company.

So how do managers feel about all the new realities which are emerging from our understanding of Chaos Theory as it relates to organisations? Stacey reported two distinct reactions:

• Anger and fear, deep discomfort with ambiguities and uncertainties.
• Excitement and ready recognition, with relief at finding out that they are not alone in being unable to forecast the future.

No surprises there, I’d say! Stacey states that managers much learn how to manage the anxiety that accompanies being on the edge of chaos, employing a nearly mystical concept of "creative destruction." Stacey is optimistic for the future, believing that although long term outcomes are impossible to predict, dealing effectively with change and challenge on a daily basis will ultimately result in success.

So how do we do actually achieve this? What are the skills that managers need to succeed in this world? It’s safe to say that the great manager of the future will plan for and expect constant change in the environment. His or her goals will become not a set of results but a series of contingency scenarios to which he or she can react swiftly. We must all be flexible, willing to learn new things, willing to question our assumptions all the time, and to recognise that we are blinkered by our own belief systems, prejudices and biases. Things that worked in the past may not work in the future, so you have to keep on learning and experimenting (Free Management Library, 2010). Even if you don't change, everything else and most other people around you will.

Although there is a huge body of research available, as yet there is no single cohesive view of the implications of Chaos Theory for our daily practices as managers. There is even less on how we can develop the skills to truly succeed in this universe of paradox, instability and unpredictability? In twenty years time, we will undoubtedly have adapted and evolved the frameworks which will help us. The field of ‘systemic thinking’ is one to watch, producing some exciting results in European organisations, but has yet to really be embraced in the UK.

But what can steps can we take in the meantime? Chaos theory tells us to pay as much attention to the micro as we do to the macro, so perhaps the best starting point is to look inwards. For me, Gerald Schueler provides the most eloquent reason why:

“Life includes both chaos and order. Our lives consist of a continuous series of good and bad experiences ….The two interrelated concepts of chaos and order describe the complex nature of our physical universe as one of chaotic order. And we, too, embody chaotic order. In other words, we are ruled alternately, and indiscriminately, by chaos and by order. We cannot get away from this relationship, but rather must somehow learn to deal with it. When our lives are going as planned, we can usually expect chaos to show up at some point, in one form or another. Perhaps it will rain when we want to do some work outside, or perhaps our car will have a flat tyre on the way to an evening in town. The important thing is how we meet this chaos and react to it. According to the findings of chaos theory, times of chaos (i.e., those unplanned, unexpected, and usually unwanted, events that occur to all of us) can be creative. If we look hard, perhaps we can find the new order within the chaos and be better for it.”

If this article has posed more questions than provided answers for you, that's just as it should be! It seems appropriate to close this article with another – perhaps the critical - question posed by Linda F. Dennard (1996): "What good is a science of chaos, if it doesn't tell us how to overcome chaos and complexity? If a manager cannot control anything or force a system into some form of order, is management possible? Is a manager necessary?". We will explore the concept of ‘self organising systems’ next month, in part 2 of this article.

References:
Tom Stoppard, Arcadia
Chaos Theory: Interface With Jungian Psychology, Gerald Schueler, Ph.D. © 1997
Free Management Library, http://managementhelp.org/systems/chaos/chaos.htm, accessed March 2010