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Leadership in Complex Adaptive Systems

Team Obama is placing their bets on the idea of Leadership being responsible for results.

The latest manifestation of this is in the call for the resignation of the CEO of GM, Rick Wagoner.  The proposition is that Obama, from his vantage point of President, USA (CEO, USA?) is in a position to determine that the causal factor in the failure of GM and Ford and Chrysler can be attributed to leadership and not, let’s say, to one of the reasonable and possible outcome-states that happen all the time in the conduct of business in a complex adaptive system of world markets, where  complexity precludes certainty.

The argument of  complex adaptive systems (CAS) is that we lack the ability to compute cause and effect relationships and that we cannot “know” with anything like certainty, that a particular factor is the probable cause of a particular result at a particular time.

The problem with having a pattern-making evolutionary brain is that it uses pattern-making processes that lead to success in individual survival issues, where cause-and-effect is more plainly seen, and applies it inappropriately to situations that are fundamentally different in terms of size, scope, complexity and uncertainty.

Imagine a monkey that beats on a drum and is rewarded with a banana, regularly. Given enough iterations, he would be entitled to conclude that one event influences if not causes the other.

Imagine the monkey then gets  thirsty and beats on the drum and it happens to rain and his water bowl fills up and he drinks. Do you imagine the monkey not concluding that his drum has certain important properties? And what if the tribe of monkeys gets mad at the first monkey because now when he beats on the drum it doesn’t rain? Would they conclude it is a failure of leadership? The monkey lost his mojo?

Silly monkeys.

We know better than that. We’d never make that foolish mistake. Its obvious that drumbeats have nothing to do with rain. Clearly drums make bananas appear! Look at the evidence!

Is it a reasonable proposition that Obama can diagnose the  carmakers’ business  environment and conclude that it was leadership failures of Mr Wagoner that were the cause of the problems at GM …AND …. that the appropriate solution, here and now, is to fire him?! and this will have some direct measureable effect on performance in the foreseeable future? and that somehow the President has this ability to diagnose, assess and treat, when the collective wisdom of auto executives and boards, who have life long experience in the nuances of this complex business environment are unable to see that? And is it reasonable that this is his decision to make?

Take a look at Wagoner’s background and experience and the collective experiences of the boards and senior leaders of GM and Ford and compare that to the executive experience, and the private commercial business experience of Obama and Team Obama. Now decide that IF YOUR LIFE DEPENDED ON IT, which group of people  were in a better position to know what to do with GM going forward? The farther you are from the problem the  more certain you are that your simple solution is both obvious and correct.

Now, take that same philosophical approach and apply it to the recommended solutions that Team Obama is applying towards every major issue of national concern and consider the complexity of each decision domain, and then consider the laws of unintended consequences, and the connectivity of the various elements of society and how they can affect each other in unforeseen ways, and consider just how smart it is to allow the newest kids on the block to make sweeping changes of national magnitude in very little time, with little to no public debate.

Then reflect on the wisdom of the Founding Fathers in creating a cumbersome system for creating change which prevents “the wisdom of experts” from changing things too far and too fast. We’ve plenty of evidence of what happens when you let “experts” run everything according to “expert plans”

My sense is that our national leaders are going thru a shaman’s dance to assign blame and hope for the best. We might as well be selecting who we want to hold the rainstick to shake at the clouds to end the drought..

Seriously.  Obama is qualified to say that Wagoner should be fired? How about, stick to your enumerated powers and leave the markets alone. Get us out of entangling alliances. bring the troops home. Secure the borders, enforce the rule of law. Stop borrowing money to get out of debt.

Geithner the Tax Cheat had the nerve to lecture the nation to stop worrying about how much we make and focus on what we can  accomplish with what we can keep. How about shut up until such time as you pay your taxes?

Leadership in complexity takes on different dynamics when the cause and effect rules of the system cannot be known.

My working hypothesis is that the adaptivity is improved by maximizing decentralized execution, combined with limiting the consequences of individual situations to the local areas much as possible. This design REQUIRES inefficiency, to allow other elements of the  network to react, adapt and respond to ‘brushfires” in time to save the rest of the network.

This happens to be why DNA is the most successful adaptive construct on the planet: gazillions of small decisions, rapidly tested, where success is rewarded all out of proportion to the initial investment risk, but where failure is localized to immediate surroundings.  Bad mutations die fast, and that’s the end of it, sorrowful as the individual case may be. But the successful mutations thrive and propagate and benefit the entire species.

In that kind of model of society or organizations, our understanding of leadership, of what it can do and be and what it should do and be, and how we evaluate it as effective or not, must be radically adjusted.

No, let me eat my own cooking, and say our understanding of leadership should carefully evolve.


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