Complex Systems Thinking Can Help Business Leaders Prepare for the Next Covid-19

But wait, first — what is a complex system?

Written by Sameer Ahuja
Published on May. 03, 2022
Complex Systems Thinking Can Help Business Leaders Prepare for the Next Covid-19
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Nature and human life are complex systems, or a state of being that involves scores of components (ex. planet, countries, states, towns,etc.), each with many of their own components (communities, households, groups etc.), with several acting independently without a control or guiding force like an established society, culture, or set of principles. At the individual level, people are complex systems surrounded by man-made complex systems like financial markets, economic sectors, supply chains, infrastructure, hospitals, public transit, and governments.

What Is a Complex System?

Complexity science, also called complex systems science, studies how a large collection of components — locally interacting with each other at small scales — can spontaneously self-organize to exhibit non-trivial global structures and behaviors at larger scales, often without external intervention, central authorities or leaders. The properties of the collection may not be understood or predicted from the full knowledge of its constituents alone. (Source: ComplexityExplained.github.io)

The most important feature of a complex system is that the individual actions of its participants come together, usually without warning, to produce system-altering events. Only afterwards does what happened seem obvious. And these events, often rare, change the system more than much longer stretches of normal system behavior. For example, a three-month-long stock market crash can impact companies and livelihoods more than ten years of calm.

Covid-19 did many things to shake the very core of our way of life. In an industry context, it illuminated what happens when a global phenomenon impacting every complex system in society shreds the ‘how to do business’ playbook without offering a replacement guide for how to work under the new, stressed-system circumstances.

What Are the Features of a Complex System?

  • Dense interconnectivity: Complex systems consist of many components interacting with each other and their environment in multiple ways.
  • Emergence: Properties of complex systems as a whole are very different, and often unexpected, from properties of their individual components.
  • Dynamic: Complex systems tend to change their states dynamically, often showing unpredictable long-term behavior.
  • Self-organized: Complex systems may self-organize to produce non-trivial patterns spontaneously without a blueprint.
  • Adaptive: Complex systems may adapt and evolve.
  • Nonlinear: Causes can be radically disproportional, e.g. small causes do not always produce small effects. (Sources: ComplexityExplained and the University of Waterloo Institute for Complexity and Innovation)

 

How Complex Systems Have Impacted Work Recently

The way people work — and the very concept of what it means to be “at work” — changed fundamentally when Covid spread beyond a few early cases. People were sent home en masse to sign into work email accounts from living rooms, studio apartments, or parks with WiFi. Entire industries pivoted in days, from holding global and internal events virtually to allowing employees to sign on from wherever over video conferencing platforms, like Zoom, and work chats, like Microsoft Teams or Slack. Many companies are now staffed with people who have never met in person (unthinkable even 18 months ago).

As a direct result of the pandemic, physical offices have closed permanently, staffs have moved far and wide to do the same jobs remotely, companies that wanted to keep employees within eyesight adopted hybrid work arrangements, and enough people left jobs to warrant a movement called “the Great Resignation.” A recent Gallup poll found that 48 percent of employed workers are currently looking for a new job. A significant number of Americans quit their jobs outright during April, May and June of 2021 (11.5 million, according to the U.S. Department of Labor). Over the past 18 months, entire legions of customers adopted new products and forsook others.

People in positions of corporate power are now faced with challenges ranging from how to recruit and retain top talent that can sign on from their living rooms, Lake Tahoe, or the Swiss Alps to where to even call headquarters. In order to make sense of a complex and evolving situation, business leaders should do the following.

Read More About Paradigm Shifts on Built In’s Expert Contributors NetworkIs Your Industry Primed for Disruption? Study Weak Signals to See It First.

 

3 Ways Business Leaders Can Use Complex Systems Thinking

3 Ways Business Leaders Can Use Complex Systems Thinking

  1. Get ready to not be ready. Make use of past events to improve adaptation ability, not to rigidly adhere to behaviors that belong to the past.
  2. Embrace autonomy. Complex systems are self-organizing, give trusted staff the leeway to take advantage of that fact.
  3. Get comfortable with unpredictability. Complex systems, by their natures, produce unforeseeable events. Learning to roll with it is the only way to survive.

 

1. Get Ready to Not Be Ready

Understanding the context and history of an organization is crucial in considering what may trigger a seismic event. It should not be taken for granted that a seemingly big thing like a major new partnership, a headquarters move from San Francisco to Austin, or a brand new board of directors is what triggers change. For a certain company with its own unique history, a small thing, a random comment by a leader, a subtle change in a policy, a weird conversation between a boss and an employee, could be what sets off a profound systemic change.

By definition, complex system participants engage with each other. In fact, some complex systems modeling tools rely on autocorrelation, which is the correlation of a set of data with a prior version of itself. However, complex systems are fundamentally (and notoriously) unpredictable. It’s nearly impossible to model what will happen to a complex system when it’s shaken to the core or rattled by things like organizational change, product pivots, rebranding, or global pandemics that send everyone into lockdown without notice.

It seems straightforward, but reality is much more complex than that. And complex systems earn their moniker. If a society faces a global pandemic, for instance, there are literally millions, if not billions, of incremental factors that could change the macro trajectory of a response.

From a practical business standpoint, leaders should be ready to not be ready. In other words, they should read up on the company’s context, history, and current state of being in order to chip away at an action plan when the world (or the world within an organization) turns upside down.

 

2. Embrace Autonomy 

While alignment is critical, business leaders with remote employees have an opportunity to take advantage of the self-organizing nature of complex systems. In this case, employees, given high degrees of autonomy under a shared context, can achieve amazing things. Some may argue that this is naturally unstable, but complex systems are unstable by nature. Accept it, lean into it. Embracing this characteristic instead of overly controlling it, can produce amazing results, especially in disruptive companies.

At my company, GameChanger, 90 percent of our employees were based in New York and working out of our office headquarters 2019. During the start of the pandemic in the first half of 2020, we quickly made the decision to turn into a fully, indefinitely remote company. This didn’t stop us from hiring much needed engineering support. In fact, our headcount grew by 35 percent in 2021, with 71 percent of these new hires working in product and engineering. Today, 60 percent of our workforce is located outside of the NYC metropolitan area.

The key is to embrace individual empowerment within a fast-paced, often business environment. While employees need to earn the trust of business leaders (and vice versa), it’s important for those in charge to pivot quickly from oversight to a culture of autonomy with guidance available once that trust is established. Leaders who fail to do so risk micromanaging, alienating and even repelling employees who might prove crucial to success — especially in a company’s earliest stages.

 

3. Get Comfortable With Unpredictability

Leaders facing rapidly accelerating trends, like the surge in ecommerce, and evolving customer behaviors, like buying more things online but shopping less frequently, should embrace that the future holds intense uncertainty, perpetual unpredictability, and relentless change. World-changing events like the invention of a new way of doing things (ex. Smartphones replacing landlines), political conflict, climate disasters and pandemics will continue to occur, and can’t always be controlled.

An organization’s customers also operate in complex systems independent of, and with, each other. Seemingly overnight, consumers may turn away from a previously loved product or embrace a previously insignificant one. For example, according to a PwC survey, Covid-19 has directly caused a spike in the purchase of non-perishable groceries (+27 percent), cleaning supplies (+25 percent), and frozen food (+25 percent). Customers that used to buy groceries in-person are now turning to online ordering and delivery (+17 percent).

On the business side of things, employees may leave a company abruptly if they feel disrespected at all — especially in the areas of compensation, advancement, management, or schedule oversight. According to a Pew Research survey, a majority of people who quit their jobs in 2021 as part of the Great Resignation and now work somewhere else cited improvements in compensation (56 percent), schedule flexibility (53 percent), and opportunities for promotion (53 percent). While the individual trends of demanding more flexibility, better pay, and advancement opportunities predates Covid-19, the pandemic clearly accelerated each one and forged them together into a larger movement for better working conditions — while shattering the pre-pandemic pretense that work can only be done in the office within eyesight of bosses.

The challenge in front of employers losing talent to organizations that pay a lot and don’t care where people work from is how to keep or boost levels of employee morale. The challenge in front of employees facing the decision whether to stick it out, quit for something higher paying or more flexible, or start their own business, is how to retain their commitment to the work. The lesson for everyone: Approaching work as a collection of complex systems can help keep businesses humming and people feeling empowered as companies respond to crises and unprecedented situations — or simply tackling everyday issues that arise over the course of a somewhat normal work day.

Learn More About Leading Through Change on Built In’s Expert Contributors NetworkLeading Your Workforce Through Uncertainty and Change

 

Understanding Complex Systems Can Make Work and Life Easier

Designing internal systems to be responsive to force majeure-level events, like a global pandemic, climate disaster, or political conflict, without trying to control them, will make organizations more nimble. In practice, this requires leaders to keep tabs on company context, empower employees (especially ones that have earned trust through good work or critical decision-making), and be aware that countless complex systems are at play at any given time. It’s a tall order, but manageable when the status quo is expected chaos and layers of complexity defined by nuance.

As another pandemic year begins, we need to shift focus from responding to its initial shock to rebuilding our working world. Specifically, we need to structure every day tasks and big picture progress around new realities like increased customer adoption of certain products, varying levels of adherence to public health measures in public spaces, and working closely with a collection of people a world or country away. As a society, we need to ensure innovation advances regardless of which humanity-altering event looms around the corner.

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