Chaos: How it works in HR Analytics

In my previous article, Data is Poetry, I have talked about the limitations of Quantitative Analysis in HR Analytics and how Data Driven Analysis has failed to predict the rather not so predictable nature of human beings. An attempt to overcome this limitation is made by applying Chaos Theory in HR Analytics.

What is Chaos Theory?

Chaos theory is a branch of mathematics focusing on the study of chaos—states of dynamical systems whose apparently-random states of disorder and irregularities are often governed by deterministic laws that are highly sensitive to initial conditions.

Chaos theory is an interdisciplinary theory stating that, within the apparent randomness of chaotic complex systems, there are underlying patterns, inter-connected scenarios, constant feedback loops, repetition, self-similarity, fractals, and self-organization. The butterfly effect, an underlying principle of chaos, describes how a small change in one state of a deterministic nonlinear system can result in large differences in a later state (meaning that there is sensitive dependence on initial conditions). A metaphor for this behavior is that a butterfly flapping its wings in China can cause a hurricane in Texas.

Small differences in initial conditions, such as those due to rounding errors in numerical computation, can yield widely diverging outcomes for such dynamical systems, rendering long-term prediction of their behavior impossible in general. This can happen even though these systems are deterministic, meaning that their future behavior follows a unique evolution and is fully determined by their initial conditions, with no random elements involved. In other words, the deterministic nature of these systems does not make them predictable. This behavior is known as deterministic chaos, or simply chaos. The theory was summarized by Edward Lorenz as:

Chaos: When the present determines the future, but the approximate present does not approximately determine the future.

How do we apply the concept of Chaos in HR Analytics?

Three professionals — an architect, an accountant, and a human resource professional —were contemplating a profound existential question. What, besides the obvious, was the oldest profession?

The architect spoke first: “God created the world in six days, and that took a master design. So, obviously, architecture is the oldest profession.”

“Not at all,” replied the accountant. “You misunderstand what God really did. What He did in those six days was to create order out of chaos. And that is what accountants do, so accountancy is obviously the oldest profession.”

But the human resource professional had the last word: “And who do you think created the chaos?”

Organizations need more chaos, at least the kind of patterned chaos that is described by the new science of that name. And further, most human resource professionals do not create enough of it.

Unpredictable human beings make the entire structure random and non-deterministic. This is often understood by the Butterfly effect in Chaos theory where a butterfly flapping its wings in Pune can bring about a hurricane in New Delhi. Getting into the root cause, we find the role of resonance and multiplicity of events taking place which ultimately lead to yielding huge outcomes from minuscule changes in the structure.

Small events may tend to give drastic results within an organization and unfortunately, such events are outside the ambit of HR Analytics which is more or less dependent only on past data and statistical determinations. The very essence of human beings is unpredictability and trying to assess the outcomes based on data and analytics completely eliminates the random nature of human beings. Larger Organizations which invest in Culture Building often attempt to engage Behavioural Scientists for HR Analytics and this act is appreciable to the extent that it attempts to go beyond Data in Analytics but the greatest question that bothers here is:

To what extent is the integration possible between Data and Human Behaviour?

What is the compatibility of a qualitative aspect against a quantitative one?

What is the scope of Chaos Theory?

All the three questions indicate one big concern as to the degree of accuracy expected while analyzing human beings at organizations and the answer remains the same that a particular theory may only attempt to establish a nexus and not give accurate findings, Analytics, that too when it comes to human beings will always suffer from inherent limitations owing to the unpredictable nature of human beings no matter how far the integration may go.

Artifical Intelligence no matter how evolved it gets, will always fail to answer ALL the questions human beings have!