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The temptation of equilibrium

September 25, 2010

Last Thursday I was invited to attend a seminar organised by the Institute of Physics at the Judge Institute in Cambridge. The topic was the application of complexity and the restricted membership made for some good debate/discussion. The importance of aesthetics in particular is something I will blog about in the not too distant future. Now one of the speakers was Eric Beinhocker whose Origin of Wealth is one of the must read books for those interested in complexity. I’ve wanted to meet him for some time, if only to ask how he survives in a large consultancy firm with such radical ideas; his answer by the way was similar to ones that both Larry and I gave while we worked for IBM.

  

One of the critical points that Eric made in respect of economics is that it has always been governed by equilibrium. The classic metaphor here is the bowl with a marble, grape or whatever (see illustration to the right courtesy of Mathematics Illuminated) which disturbed will always return to the centre, the equilibrium point. The whole idea of neo-classical economics is based on this idea, but in practice complex adaptive systems are far from equilibrium towit we need to think about them in very different ways. Again look at the illustration, if the bowl is inverted then a small nudge can destabilize the grape completely.

Now it occurred to me while I was listening that we see something similar in organisations, the trend is clearly towards an equilibrium position. Mission statements, strategy, communication et al all attempt to create a unity of purpose around which the various actors will revolve. Alignment was one of the key systems dynamics words and it links to the whole mission statement, common values type stuff that has dominated management thinking for the past three decades. Shawn of Anecdote has a good example of this way of thinking here, with the notion that it is a good thing if all the executive team believe, describe, confirm and support the strategy.

Now on the face of it this is motherhood and apple pie, but I think we need to challenge it at least in part. Not, I hasten to add, Shawn’s point 1 about the ability of a team to describe its strategy without notes and only with the aid of hand drawn sketches. I have always thought that was a universal and taught it as such along with narrative construction methods way back in IBM days. However we need to move on and think about the real implications of dealing with systems where seeking an equilibrium state is either not possible or not desirable.

I want to argue that the equilibrium position is right but not universal. It is correct within boundaries for stable or short term policy initiatives, but under conditions of high uncertainty it is insufficiently flexible to handle rapid change and engender the resilient organisation. My picture at the head of this entry presents a different perspective. One in which the stability is not the whole system but a subset, and given sufficient disturbance the equilibrium point will become irrelevant and a dangerous distraction. Crudely what happens when things pop out of the bowl?

I’ll return to that question tomorrow as I start a short series of postings that cover the agenda of the one day seminar I run around the world on complexity based approaches to strategy. This builds on the HBR article and more recent thinking.

The next series of seminars by the way is in the US in a few weeks and there are still some places left. Details here.

To those who have asked, my apologies for long absence from the blogosphere, personal reasons I’m afraid but now resolved

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