“The universe has a nature, … and its nature is to combine, and to build, and to become more complex. … In the western science it is called the tendency towards complexity, and it is the way the universe works.”
Abdel Khader Khan in Shantaram by Gregory David Roberts
The human experienced world is one of accelerating complexity and change. It is hard to overestimate the pace at which change is occurring. Take a look at the exponential explosion in the amount of knowledge, the number of organizations, the level of wealth and the production of artifacts. As Figure 1 shows, these measures, among many others, show what type of world we are creating and experiencing. The system that these curves measure shows no sign of slackening in its accelerating rate of change.
Figure 1 –
- GDP Growth: The total wealth available, as represented by monetary assets, is a measure of accrued value that is the result of human activityFigure 1 – Indicators of the Growth of Complexity[1]
- SKU Growth: The results of continuous innovation indicating of the number of new artifacts introduced into the world.
- Information Growth: The number of ‘bits’ are being created stored, transmitted, managed and available for use as a measure of knowledge creation.
- Organization Growth: The number of organizations in the world, businesses and firms as well as non-profits, NGOs, governmental and religious organizations.
On top of this dynamic is the dynamic of the world’s population. The world’s population has undergone geometric growth rates over the past couple centuries, but the consensus is that, by 2100, the world’s population will stabilize at around 9 billion people. The distribution and makeup of these people will be very different than it is today, but the total number of people in the world will stop growing and, some believe, may even start to decline. Figure 2 shows the population curve with the other curves.
Figure 2 – Per-capita Complexity
Ignoring the cause and effect for a moment, what these curves are telling us is that there is happening right now, over the past decades and for the decades into the future, a dramatic per-capita increase in complexity. We as individuals have, on average, more stuff to deal with, more ‘bits’ to consider, more organizations that impinge on our lives (by choice and otherwise) and more wealth available (although unequally distributed) to experience those artifacts that affect our lives. Our per-capita complexity is increasing exponentially while our ability to deal with and handle this complexity remains constant. We are, after all, human, with a brain whose capabilities are not changing all that much. Compared to the curves shown in Figure 1, the curve showing the increase in our brain’s capabilities is flat. Yet all we have to deal with the increase in per-capita complexity is our brain and the artifacts that we create to help our brains experience the world.
Consider the smartphone. Virtually no one who uses one of these devices would argue that it has made their lives simpler – better yes, but not simpler. The ability to talk to anyone at any time, send and receive e-mail and text, to Tweet, to be ‘location aware’ to do any one of literally hundreds of things at any time, takes attention and effort. This is certainly a different, and more complex, experience than where we were 20 years ago blissfully unaware of the possibility and unable to do any of these things. So complexity is not bad, and is often desired, but it also must be managed and dealt with.
“Technology builds itself organically from itself … it creates itself out of itself … A technology does something, it executes a purpose.”
Brian Arthur
It is interesting to take a moment to consider what is causing this complexity dynamic. Why are we, as humans, creating this for ourselves? We are both the agents and the victims of this situation and so there must e something fundamental to our nature that causes us to want to change the world and also to want to satisfy those wants. This self-reinforcing feedback loop will, by its nature, create the exponential dynamic we see. The cause of these exponential increases derives from the way knowledge builds upon itself and the ‘evolutionary’ pressure to differentiate, survive and thrive in the human created econosphere. This self reinforcing feedback loop – increasing knowledge enables and causes increasing differentiation creating increasing complexity creating a new environment with new needs and desires, creating the need for new knowledge and new artifacts to satisfy these needs and desires – is not going to end anytime soon. Complexity is our destiny.
What are some of complexity’s ramifications? For organizations wanting to thrive in this environment, there are several implications:
- There is more dynamism than ever. This means both more to build on and more to potentially blow up in your face. More combinations create more unique possibilities but it’s harder to discern the signal from the noise.
- There are more gaps and more barriers. There are more pitfalls and potential attacks. The multiplicity of options make it both harder to differentiate and harder to defend any differentiation.
- Managing and organizing complexity, making it as simple as possible, is and will be more and more of a strategic, competitive advantage. Organizations that do this well (think Apple) will outperform those that do this poorly.
- For those that master the complexity dynamic, there are more opportunities than ever. Opening up and tapping the multiplying sources of knowledge, strategically protecting the right knowledge and using it to create advantage are not only now more important than ever, they are more possible than ever.
It is from this world of increasing complexity that disruption will emerge, suddenly and unexpectedly and more frequently. It is harder to see these disruptions, especially when they are at their early stages of emergence. Some disruptions emerge relatively slowly as technology enables new types of devices that become adopted, slowly at first, then with exponentially increasing speed. Other disruptions, such as the passing of the new US Healthcare Act of 2009, can occur with amazing speed, totally changing the competitive landscape in a matter of months.
In order for individuals and organizations to thrive in this environment, they need to pay attention to all forms of complexity acceleration and learn how to manage complexity. Knowledge and technology have not only created the complexity dynamic, they have also created the means to address it. Complexity can be harnessed, complexity can be hidden, complexity can be elegant, complexity can lead to simplicity – if it is managed and packaged in the right way.
[1] Sources: United Nations: World Population Prospects; J. Bradford DeLong (www.j-bradford-delong.net); Eric Beinhocker, The Origin of Wealth; James Gleik, The Information, Paul Hawken, Blessed Unrest