uncertainty not risk

We need to shift from seeing the world as composed mainly of

MACHINES

to seeing it as composed mainly of

COMPLEX SYSTEMS

Whereas MACHINES• can be taken apart, analyzed, and fully

understood (they are no more than the sum of their parts)

• exhibit “normal” or equilibrium patterns of behavior

• show proportionality of cause and effect, and• can be managed because their behavior

predictable . . .

COMPLEX SYTEMS• are more than the sum of their parts (they have

emergent properties)• can flip from one pattern of behavior to

another (they have multiple equilibriums)• show disproportionality of cause and effect

(their behavior is often nonlinear, because of feedbacks and synergies), and

• cannot be easily managed because their behavior is often unpredictable.

We have moved from a world of

RISK

to a world of

UNCERTAINTY(unknown unknowns)

So, we must move from “management” to

Complex Adaptation

These slides are adapted from an excellent presentation by Thomas Homer-Dixon

The full presentation and podcast can be found here (follow link):

"Uncertainty, Lags and Nonlinearity: Challenges to Governance in a Turbulent World“

There is much to be learned about business, in particular, business resilience from the natural world…