Making Complexity simple: What is it?

This is the first of four articles that will describe why taming complexity offers the biggest opportunity of our generation. This first article starts by simply explaining what ‘complexity’ is.

The phrase ‘Complexity’ is like ‘Strategy’, a catch-all term that means many things to many people. Before the 21st century this generality had little consequence as the world was less connected, but today, with the Age of Interconnectivity in full swing, it has global impact. Those businesses, governments and societies that recognise this will find themselves in a new era of productivity and performance, those that don’t will fall behind, and those who forge the science will have the power to change the world. It is now time that we get specific.

What Complexity is…

Complexity is “The propensity for emergent phenomena to arise due to the interconnected nature of a system.”

What this means is that when things become connected they start to exhibit behaviours over and above the simple addition of their parts (i.e. the phrase ‘greater than the sum of its parts’). In this way, seemingly simple things come to life: brain neurons combine to give intelligence; financial markets wave an invisible hand; and social media posts go ‘viral’.

But just like many of the forces of nature, complexity doesn’t have a moral compass — it simply exists. In this way, it also allows misfiring neurons to cause life-threatening seizures; the collapse of individual banks to trigger global financial crisis; and fake news to drive division throughout nations.

At its heart, complexity is a multiplier that turns common occurrences into global events. It is driven by interconnectivity and as this grows the power of complexity will also grow.

What Complexity isn’t…

Complexity isn’t a number of things:

1.  It is not ambiguity.

2.  It is not difficulty.

3.  It is not uncertainty.

Complexity — if we imagine it as a living entity — only cares about how the world is connected. It does not concern itself with the minor details of individual building blocks. In this way, whilst something may be complicated, it doesn’t necessarily mean that it is complex. To elaborate, imagine that you and I are building a skyscraper:

1.   When we lay the foundations we may not have the designs for the finish of the top floor. This provides ambiguity, but not complexity.

2.  The parts list for our building may so long that we struggle to track it all. This makes our job more difficult, but not more complex.

3.  We may not know the exact cost of individual parts or how long individual jobs will take to complete. This introduces uncertainty, but does not make our project more complex.

But when we are asked the final delivery date for the building, or for a fixed cost, that is when complexity matters. At this point two things usually happen:

1.   We start to combine everything to get the best estimate (i.e. we optimise); and,

2.  We blindly create systemic risk in the process (or, as McKinsey calls it in the banking world, Contagion Risk).

The issue is that we cannot easily identify where the systemic risk is, and if we can’t see something is there it’s very difficult to protect against it. We only have to look back to the crash of 2009 to see that.

"Complexity is real and can be measured"

Complexity also isn’t a qualitative force. Put simply, Complexity is real and can be measured. This is very important because it means that we can perform experiments on it and figure out how to control it (case in point, Cambridge Analytica). However, here lies a red herring. In our quest to control complexity we will be tempted to apply our latest black-box computing methods to skip the learning curve. This is the equivalent of unleashing AI on the human genome before we really understand its nature. This is a bad idea. If we wish to tame complexity, like anything else, we must first understand it.

Complexity will…

Complexity will touch every aspect of human activity, from supply chains to options trading. The perpetual increase in global connections will drive a corresponding growth in what complexity meaningfully affects.

Leading from this, complexity will how the power to drive a significant amount of human growth. The ability to do more with less underpins the development of our society and the ability to meaningfully increase productivity is the holy-grail of investment (think Google or Amazon). The businesses that accept this will be the industry leaders of tomorrow and the ones that don’t will simply be replaced (Note: I know of at least two VC funds that have specific investment thesis’s aimed at how complexity will change industries).

Complexity will be understood. Due to events like the crash of 2009 we have realised that taming complexity is important for the future and we have subsequently made major leaps forward in our understanding. Unfortunately, as the force of complexity acts across multiple domains the research is generally scattered. In the future, when the findings of Complexity Science have been brought together, we will be in a better place. For now, we must make do with what we have.

Note: For those looking for a paper to start with I would recommend the “Domino Effect” (see here). This was written by my close friend and CTO and explains how complexity influences the performance of projects.

Note 2: I’m considering pulling together a selection of the best papers myself and putting them online. If you are interested in this let me know in the comments below.

On the dark side, Complexity will continue to allow the systems we build to amplify individual failures until we learn to control it. The following are examples from the recent past:

1.   Blackouts across Sicily following the failure of a single transformer (2003)

2.  The Global Financial Crash following the failure of select banks (2009)

3.  Supply-chain contamination following the failure of one supplier (UK Horse-Meat scandal, 2013)

4.  Election manipulation through fake news (2016)

5.  Viruses growing into pandemics (Ebola, 2014–2016)

6.  Large-scale project failure stemming from common activity delay (Crossrail, 2018)).

Finally, complexity will absolutely be used for wrongdoing — it is naive of us to think otherwise. Whether it is influencing elections, manipulating the buying behaviours of consumers, or strategically targeting assets for military strike in conflict scenarios, complexity is simply the latest in a long line of tools humanity can use to reach its goals. The only difference is that it is quickly becoming one of our most powerful. Because of this it will be important for us to consider the ethics of how we use it.

Complexity won’t…

Complexity won’t help us on its own. It brings systems to life, but it is not alive itself, nor if it was would it necessarily have any feelings of human altruism. Indeed, if it were alive it would wonder why we never really look at the big picture. For us to reap the benefits of complexity we need to actively manage it. This is how businesses, governments and society will become more productive and this is the opportunity that awaits.

Next time…

In this article I have explained what complexity is and isn’t, and what it will and won’t do. I have described it as a force that brings systems to life, and as one that can be measured and understood. In the next article I will explain how it actually behaves and show why its impact is so powerful and widespread.

If you have an interest in Complexity and would like to get in touch feel free to contact me at [email protected].

Greg is the CEO of Nodes & Links, a venture-backed company that is world-leading in the application of complexity science to business and project risk management. Based in London, the company recently opened its ‘Complexity Laboratory’, with the goal of solving complexity and using its power to make the world a better place.