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Strategic Implications of Complexity

 

Emergent Strategic Thinking for Our Complex, Global Era

 

By Chris Harth, Ph.D.

 

 

Recent scientific research has dramatically improved our understanding of complex systems and networks, with significant strategic implications for a wide-range of fields, including business and international relations.  Encompassing two premises, three principles, and two caveats, the general strategic approach described below derives primarily from theories of complexity and geopolitics and can be applied by various actors -- individuals, firms, organizations, and states -- interested either in promoting change or preserving the status quo.  Both outcomes hinge on the interplay of adaptive agents and emergent structures and on the system’s connectedness and dynamism, particularly on pushing or pulling the system toward or away from the critical state between order and chaos, where small events can trigger avalanches and take on a life of their own.       

 

Premise 1 – Think and Act Strategically:  Strategies are plans of attack to accomplish specific objectives with appropriate means in a given environment.  Instead of simply reacting to events in an ad hoc fashion, actors seeking to use their resources for the greatest advantage can secure considerable advantages from not only specifying their objectives and priorities in advance, but also from identifying those tools and tactics that are most suitable for pursuing these ends in a particular context.   As circumstances change, actors need to reassess and adapt their strategies and tactics to fit the new landscape.  While our capacity to influence, control, and predict events may be limited (especially over time), planning where one wants to go and following a fitting route can improve one’s chances for arriving in a timely and safe manner. 

 

Premise II – Commit to Engagement:  Beyond thinking and behaving strategically, actors should commit to engagement and interaction with other players.  In earlier, less connected ages, one might safely consider a strategy of isolation or non-intervention.  But, with technological developments continuing to increase interaction capacity, such anachronistic approaches are less likely to bear fruit, if they are even possible to sustain.  Rather than trying to sequester oneself from the growing dynamism in various, interconnected systems, actors should recognize the necessity of involvement and adaptation to changing conditions, directly engaging with others where appropriate.  Considerable advantages can derive from such proactivity, from surprise and seizing the initiative to setting the stage and pursing one’s own agenda, as well as establishing a constructive working relationship with other actors.    

 

Principle I – Target Key Nodes:  All actors are not created equally; some clearly are more important than others.  Such differences derive not only from size and power, but also from location and connectivity.  Some nodes in networks, for instance, are more integrated than others, serving as connectors or hubs of activity.  Other nodes may be more influential because of their knowledge, resources, or communication skills.  Regardless of whether one seeks to catalyze social change, increase market share, or launch a revolution, other actors vary in their capacity to help make it happen.  A sensible and economic strategy focuses on those nodes that are most powerful and connected, ideally using their leverage to increase returns and generate a larger impact with the same inputs.  For more conservative actors (those interested in preserving the status quo), protecting such nodes and their connections becomes a central task for systemic stability; while systems with multiple hubs may be robust, they are vulnerable and unstable if several hubs are disabled at once, particularly if this happens on different levels or in different sectors.       

 

Principle II – Manage Connectivity:  Given the importance of connectedness for node value, it follows that one could deal with the medium and not just the actors.  For those interested in generating as much change as possible, higher levels of connectivity make sense.  For those trying to minimize the effects of change, on the other hand, lower levels of connectivity can help dampen system-wide effects.  While connecting actors can occasionally reduce the impact of any one actor, the general tendency in interactive systems is for connectivity to breed contagion, where one small event can ripple across the system, triggering waves of effects across the connected entities.  Actors can and should seek to manage not only their own connectedness to other actors but also the connectedness of other actors to each other and of the system as a whole, increasing it for change and decreasing it for stability (at least in the short term).   

 

Principle III – Provide Captivating and Contagious Inputs:  To generate the most dramatic and widespread changes, one needs to prompt or perturb the system with some form of memorable and transferable inputs.  For businesses, these might include tag lines and logos; for political candidates or parties, these might be slogans or platforms.  The objective is to capture people’s attention with a product that they identify with, that they believe will benefit them, and that they can share with others.  In the battle for hearts and minds, as much as for wallets and votes, both content and packaging matter; the message must be accessible, meaningful, and communicable.  The same holds for the more conservatively inclined: in addition to encouraging people to reject new alternatives because of the risks and costs associated with change, one should seek to reinforce traditional patterns and to hold fast in their embrace of traditional views, beliefs, or arrangements.  Either way, one needs inputs that resonate with people and that can stick with them and spread on their own.            

 

Caveat I – Anticipate System Effects:  Almost regardless of the inputs, the connectivity, or the nodes involved, perturbing complex systems can cause a wide range of effects, some of which may be unintended, unpredictable, and uncontrollable.  In interconnected systems, one can rarely change one variable and hold everything else constant.  Instead, changes in one area unavoidably cause changes in other areas.  While point predictions about the timing and scope of these changes are inherently problematic, the distributions of effects tend to follow power laws, with their negative exponential relationship between frequency and magnitude.  Thus, we do not know with certainty when or where the next terrorist attack will occur or how severe it will be; we do, however, know that most attacks -- like social protests, stock market fluctuations, cultural fads, or disease outbreaks -- are relatively small and short-lived.  In this respect, one must recognize the potential for small inputs to trigger enormous changes (the “Butterfly effect”) and for large inputs to have negligible effects, as well as for unintended consequences and blowback -- not just surprising but counterproductive reactions that arise from system dynamics and the repeated interaction of multiple, adaptive actors.        

 

Caveat II – Prepare for More Interactions:  Even in the best-case scenario where sticky inputs generate the desired outcome, the game goes on, with the effects from one round of interactions becoming causes for the next.  Caught in this ongoing state of becoming, complex systems do not reach some final resting point or permanent equilibrium; they continue to evolve and exhibit perpetual novelty.  Because of such emergent properties, actors in complex systems cannot afford to rest on their laurels or expect the situation to maintain itself.  Instead, they should process the feedback from the previous round of interactions, learn from experience, and adapt their strategic approach to fit the new circumstances, embracing or reinforcing those schema and behaviors that suit a given landscape and produce desired results and rejecting or modifying those that appear dysfunctional.  Of course, even these one-shot impressions can be misleading, with the outcomes of subsequent iterations influenced no less by system effects, with the potential to generate dramatic and unexpected changes either for or against the expected course of events.  Nevertheless, looking ahead while learning from the past and acting purposefully in the present makes strategic sense -- particularly in a complex, global era. 

 
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