The Complexity of Simplicity

There have been a number of posts over the last few weeks that touted the importance of ‘creating simplicity’ for making BPM successful. To be honest, I see most of those posts as shallow in their understanding of the real-world business impact. Perceived simplicity is not created by making things simple, but requires substantial complexity. I even propose that it needs to be complex and not just ‘very complicated.’ Those who just enforce simplicity in rigid processes for cost reasons ignore accepted scientific knowledge.

Complicated versus Complex
The English Thesaurus unfortunately treats the terms complex and complicated as synonyms. A system is complicated if it is difficult to decompose in its constituent parts or if it is difficult to assemble. The complexity (complicatedness?) of a SINGLE object, named after Soviet Russian mathematician Andrey Kolmogorov, is a measure of the computational resources needed to specify the object. It is also referred to as descriptive complexity, Kolmogorov–Chaitin complexity, algorithmic entropy, or program-size complexity. In ‘Complex Adaptive Systems’ (Holland, Lansing, et.al) it means that the system cannot be fully understood or created by simple assembly. CAS describes an inner function of a system that is created by emergence, meaning the combined functionality cannot be predicted from its parts. Complex adaptive systems typically have a chaotic element, meaning that processes are susceptible to initial conditions. Without changing the inner function the outcomes vary when initial conditions change. Initial conditions cannot be used to predict or calculate outcomes. CAS are used to describe many natural phenomenon such as biological and social structures. CAS are defined as individually acting entities/agents whose interactions are only loosely coupled. They can be statistically observed but that does not produce data that predict behavior because of the chaotic component. Social Networks are CAS and thus one cannot slap social communication onto a rigid process management infrastructure and ‘hey, presto – its social.’ Flowcharts are complicated and social networks are complex! The science of social networks doesn’t enhance BPM, but should be heard as the bell that tolls for flowchart illusions.

The Economy as a Social Network
Social Networks aren’t really as new as they seem to be. All social species use them one way or the other. Already in 1908 Georg Simmel wrote about the aspect of social types and connections. Technology empowerment allows us see them and thus they can grow exponentially without person to person contact. But the technology does not change how social networks work, it just makes them broader, with different, mostly weaker relationships and generally more diverse. Mark Granovetter wrote in 1973 an article in the American Journal of Sociology that started it all: ‘The Strength of Weak Ties’. Duncan Watts, Stanley Milgram, and Albert-Laszlo Barabasi created over the next years what is understood today as Network Theory. Network Theory has improved our understanding about how revolutions, terrorism, ecology, economics, and organizations work. Watts found that networks go through a kind of phase transition as they grow outwards and form clusters until they reach a kind of equilibrium of local network communities that are widely linked by people’s weak ties. Barabasi found that the ‘power law‘ or Pareto principle applied, in that only a small percentage of people need to be active and strongly linked for a network to flourish. The one thing that does not improve a social network is control or enforcement beyond some principal rules. Social Networks can be analyzed once they have formed but they can’t be deterministically influenced because they are CAS. I propose that the same is true for all of economy and it is also true for human-interactive IT systems that are not just number crunching.

Influence is weak and indirect
Christakis and Fowler analyzed the impact of social networks in their book Connected. The results are counterintuitive. Surprisingly, we can influence such social clusters (usually smaller than the Dunbar Limit of 150) by reaching out to the friends of our friends rather than trying to get in there ourselves. And this works in reverse too. The friends of our friend’s friends have through their indirect influence a dramatic effect on our perceptions and perspectives. Now consider how this understanding of social networks should impact business management. This is not about using Facebook or Twitter as an advertising medium. Amazon is successful because their customers form a social network who share product information freely. Org charts, in difference, don’t show how influence takes place in a business. In reality businesses don’t function through the organizational hierarchy but through its hidden social networks. Modern management approaches already try to utilize that principle. Social networks are about understanding the human aspects of doing business  that are not taught in MBA programs. More on that in a minute.

Innovation and Change are Natural
The most profound element of change is innovation. I would even say that innovation is the only true human-driven change taking place, beyond catastrophic events. Many seem to believe that they can control or manage change/innovation or feel that they have to promote it. The opposite is the case. Change can not be promoted but just be prohibited, mostly by trying to control it. People do not resist change or innovation, but they resist the insecurity created by change beyond their influence. Artificially enforced organizations resist change, because people are insecure in their role in the structure. Social networks grow and change without anyone promoting that in particular. Change happens naturally and always as long as the environment is friendly. If there is enough pressure change happens in unfriendly environment such as revolutions. Product innovation like from Apple is driven by highly motivated individuals who are NOT interested in money. Their innovation is just gradual improvement too. Steve Jobs did not invent a single thing. He just took existing products (PCs, MP3 players, laptops, phones, tablets, Napster and now even the Cloud) and made them incredibly user-friendly! So this is not about Darwinian evolution in economy and business or being a technology pundit. Let me simply turn your thinking upside down because innovation in economy (as business) and technology are intertwined whether we like it or not. This understanding makes BPM as a management methodology ONLY a waste of time!

The Nature of Technology
Economist W. Brian Arthur discusses in his book the core principles of technology innovation from an economy perspective. Technological progress is linked to discovering the workings of natural phenomenon and putting them to use in ways that are desirable to people. Beyond the invention of the wheel, virtually all technology is complicated, meaning the functionality is progressively building on previous discoveries. See my previous comment on Apple. Once we reach a certain level of dependency we are no longer able to predict how the numerous discoveries will together form the basis for further innovation. The combinations of technology are not driven by additive functionality but by applying human creativity to the possible recombinations of technology. The technological advance as it impacts the social landscape becomes complex and goes through a phase transition – rigid crystal structure turns into weakly cohesive molecules each one exhibiting Brownian motion. It starts to resemble a CAS! Apple could not predict which Apps the now 300.000 developers for the AppStore would develop. They just created the infrastructure for a huge, fairly open social network of developers and customers, only providing the security for money and information. They also made it simple on the surface, while the underlying technology is immensely complicated. But the Appstore ecosystem does not prohibit social complexity. It is now obvious as a hindsight that 300.000 motivated programmers would easily outsmart those rigidly organized Microsoft software labs who don’t really listen to consumers.

Everything is Obvious (Once You Know the Answer)
Duncan Watts also wrote a book by the above title in which he vividly shows that most of the explanations that we invent to explain something that has happened in social networks are utterly useless. He provides a grandstand historic view of why most tries to manipulate human interaction fail. Watts argues that we do not have usable models of human motivation for individual or collective behavior to predict outcomes of such manipulation. Like Dan Pink, Watts also presents the case that most people aren’t motivated by incentives (ie. to hit KPIs) but by autonomy and recognition (AppStore developers will take the money too).

So what am I leading up to? Let me assure you that this is perfectly applicable to the subject of process management. The analysis of business processes is no more than an ‘Everything is Obvious’ illusion of WHY something happened. Trying to control that process in its execution produces more rule beating behavior rather than well-defined outcomes. It is the law that makes the criminal and it is the rule that produces the transgression. Each rule requires an enforcement mechanism that carries a substantial cost and it needs a verification and innovation bureaucracy that is even more expensive. Clearly rigid rules and processes do not save money! They only produce expense and thus we need the least possible number to ensure compliance. No more. Using technology empowerment to motivate people to pursue well-defined goals autonomously, while receiving recognition for a job well done is a lot cheaper than process enforcement. Because businesses are social networks too, it means that technology empowerment rather than rigid processes will be effective and efficient. Let me remind you that empowerment is about authority, goals and means.

Planning creates Risk
Considering the above there are few who realize the true connection between planning and risk. Most people will say without thinking that more planning reduces risk. That is however not correct at all. It is the planning that creates the risk. Risk assessment is not about reducing an arbitrary risk of the unexpected, but about creating awareness what risks are being created by the plan. The more assumptions a plan makes the more risky it is. The deeper the planning hierarchy is, meaning the level of dependencies of planned outcomes, the riskier a plan is. The more time passes between planning and completion, the more risk the plan creates, mostly because the target context will change whether one plans for it or not. BPM defined processes are no more than ‘repeatable plan fragments’ that are assumed to guarantee outcomes. The process analysis uses many ‘terms’ to describe the plan, carrying over the risk of term confusions. Business rules create the risk of event/context mismatch. Process monitoring uses a measurement assumption the increases the risk of self-fulfilling prophecies. Each rigidly defined process increases the risk of business execution not producing intended outcomes through term confusion, assumptions, late monitoring and contextual change over time.

But isn’t good planning the epitome of good management? Isn’t using well established methodologies the reason for teaching them in MBA programs? I propose that inept management tries to create predictability where there is none (see my post: Design: Art applied to Productivity!). Henry Mintzberg is a former professor at McGill University who was teaching MBAs at MIT in the early Ninetees. In his book ‘Managers, Not MBAs‘ he describes a profound disconnect of MBA graduates between the practice of management and MBA teaching by words such as ‘mindless’ and ‘arrogant.’ Mintzberg focuses his sight on high-level processes such as strategic planning and sees the same problem that I see in BPM: “the assumption underlying strategic planning is that analysis will produce synthesis: decomposition of the process of strategy-making into a series of articulated steps, each to be carried out as specified in sequence, will produce integrated strategies.” Mintzberg proposes adaptive strategy-making that is capable of incorporating emergent opportunities. His exact words, not mine!

The Complexity of Simplicity
The foregoing elaboration (I apologize for its necessary length) shows that we are entering a world of visible and fast changing, social complexity in which simplistic methodologies of strategic planning, business and process management fail to take into account the economic phase transition of complexity that we are going through. While simplification for the user is the key to technology adoption it is the underlying social complexity (not just complicated technology) that enables it. Technology is not making our world more complex as many claim, but it simply shows to us the true complexity that exists. Technology does however cause a shortening of time scales and therefore challenges today’s slow strategic planning cycles. It clearly challenges the proposition that process analysis will enable synthesis in realistic timescales. Rather than relying on analysis, rely on technology empowerment for social business interaction. Do not forget: Economy and technology are Siamese Twins.

Conclusion

This shouldn’t be surprising to anyone interested in more than just flogging their product. Information Theory was created by Claude Shannon in his 1948 paper ‘A Mathematical Theory of Complexity’ that also defined the ‘bit’. So it all started out by understanding complexity. Benoit Mandelbrot took the next important step when he focused in the early 1960’s on the randomness of data channels and identified what he called persistent trends (Joseph effects => structured => bell curve) that describe incrementally dependent information, and sudden events (Noah effects => unstructured => power law) that create discontinuity.

A Mandelbrot Set

Mandelbrot sets of simple rules can be utilized to reduce the Kolmogorov complexity of life-like models, which is vital in computer graphics. Mandelbrot sets are unpredictable, but clearly exhibit recognizable patterns in all levels of hierarchy. Therefore, I see pattern matching as the future of process mining and not algorithmic processing (aka rules) of analysed past causes that will hopefully repeat themselves in another context in the future. The phase transitions that are inherent in Complex Adaptive Systems also mean that a change in scale (company or market size) dramatically reduces predictability.

IT is however mostly about algorithmic data processing and even predictive analytics can only identify the trends of Joseph effects. But correlation is not causation and even if we can create a simple rule set it cannot model the emergent phase transitions of CAS. Rather than simplicity and predictability, we ought to focus on manageability as we can’t avoid the inherent complexity in social structures by defining rigid processes. Enforcing structure for predictability is expensive and stops innovation. Technology empowerment for adaptive processes reduces term confusion, planning depth, late monitoring of outcomes, and time scales. Use a Business Architecture with value streams to define strategic objectives, operational targets, and process goals, but do not nail down rigid processes that assume outcomes. While unpredictable Noah effects are unavoidable in business processes they tend to follow recognizable patterns that we can identify and highlight.

17 Comments on “The Complexity of Simplicity

  1. Wow Max. Is this a blog or a research paper? Very intriguing. I agree with your arguments about complexity. I often advise people not to simplify for the sake of simplification. Rather, I think it is wise to ackowledge that it exists and find faster ways to adapt to it. Simplifying complexity can lead to inaccurate process, decisions, etc…

    But, I don’t see how software can “adapt”. That is scary because “darwinism” is too inefficient and time consuming for this fast paced world. So automating adaptation is too dangerous and slow.For example, social networks take time to coalesce after running into many dead-ends. I would much rather advocate a “flow chart” that better informed human decision makers design.

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  2. Max, I liked especially “It is the planning that creates the risk. Risk assessment is not about reducing an arbitrary risk of the unexpected, but about creating awareness what risks are being created by the plan.”

    Mike, I dont agree with your point on “darwinism is to inefficient and time consuming” as even defining the “right” flowchart will be an evolutionary excersise. And still then, the question will be if it will fit each situation as everything changes constantly.

    Adaptation of the Software has not to be read as Software that rewrites itself, but a pattern matching algorithm that observes a certain context (e.g. CASE) and the Actions taken in this context. The question however is if the Context (which is also defined by IT-concepts) will contain the data and actions that lead to Patterns that are being accepted by humans. I always fear that the same happens as with the stock market applications – they also follow a certain pattern (although being programmed) making us lemmings.

    In the world of Genetic Algorithms (back to Darwin) plays the RANDOM event (mutation) an important role, without Mutations there is no differentiation and will it produce always the same outcome. Human decision making in the process could be seen as Random Mutation but maybe we need it to apply also to pattern matching once in a while not choosing the most obvious pattern but flip a random bit.

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  3. Hi Mike, thanks for reading and commenting. I wouldn’t call it research but I always try to find solid evidence for my point of view rather than just being opinionated. I find however that it doesn’t matter. People just believe what they believe, which explains the BPM mess.

    I have tried to explain to several people at Forrester how our software can ‘adapt’. Especially when it comes to processes. Goal-orientation rather than flowcharting is one element of that. Clearly adaptation cannot be automated and I am in any case denouncing the whole idea of automation from the outset.

    If you read my post in detail then you will find that I am not advocating a ‘Darwinian’ approach in which things will work out by themselves over time. What is WAY to slow is the time to anayze, design and then optimize processes through a bureuacracy. What you advocate with ‘flowchart design by better informed human decision makers’ is against the principles of technology-empowered social networks that we can clearly see as very powerful.

    Business don’t work BECAUSE they are well organized but because there are people there who have well-established social network links within the organization. To empower those 10-20% of people needs top-down transparency for objectives and targets and bottom up transparency for process goals and customer outcomes. The other 80% will be linked through the weak ties that link up the active clusters. To focus that on the customer requires an embedded business architecture.

    So what you advocate is a bureaucratic overhead of enforcement of analysed processes that do not by default synthesize the processes that lead to customer outcomes. Monitoring verifies the process enforcement but not the customer outcomes. This is what needs to change and if the BPM vendors and proponents don’t get that, it will simply implode into nothing.

    Just documenting the processes or out-of-the-box, overly-simplified BPM won’t provide the social network dynamics that are needed.

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  4. Hi Freddy, while randomness is also relevant in Darwinian evolution, I see the directedness of the individual agents in the social networks that are ALL weakly linked as the key element. From a certain size and connectedness onwards we encounter the phase transition that makes the soial network into an functioning entity that follows commonly agreed goals despite the lack of a controlling entity. It is that effect that we are looking for in managing a business and BPM does not support it, it KILLS it! Thanks!

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  5. Pingback: BPM Quotes of the week « Adam Deane

  6. Dear Max. J. Pucher, in 2008 I started a Masterstudy in Munich called PPW (Philosophy, Politics, Economics), because I became heavily rattled of what happend in Organistions, especially of those in competitve markets. With 10 Years in my own Company (Automotive supplier, 60 employers, sold 2000 after 10 Years) an another 13 Years in Turnaround Management, Consulting, Interimmanagement in over 100 Projects, I couldn´t conceive, why there is absoute Inefficency and continous “broach subjects again an again an again”. People are close to burn out Symptoms and can not deliver, what managment sets on “plans”.
    So I was interessed to find out, what is “behind this”. Information technology tells us about improving and standardising processes, Automation helped us for shure by creating better Prices and lowering costs of Production processes within tayloristic environments.
    But Organisations suffer more and more. So my Intuition and my Studies helped me to “describe und understand” more an more, what the “Mechanics” behind all this crazy behavior was: it was maniac belief in healing an organisational Problem by “leftbrained” logig BPM. It was simply a Religion in believing to find structure and control by BPM. Organisations reacted on complexity with BPM. So I developed a consulting method, to verify Areas of complexity vs. areas of complicated workflow. But Organisations didn´t accept “unstructured Information an processes” as a normal “occurence” in Organisations. They tried to treat complexity as a complicated issue. Prof. Peter Kruse said: “You destroy a complex Problem by treating it as a complicated Problem. On my Researches to all this topics i found the webpage “masteringtheunprdictible” and so I found you. And I am shocked, the Organisations still have not realized this situation- its “socialized”. With a partner I started a business to be found on http://www.wimmerdrum.de (sorry only german so far) to help organisations to find a “synchronisation” of dealing with unstructured and structured processes an find Efficency in both environments. We also have since 2009 an IT- Tool in Progress that will help to manage the “rightbrained” human snippet actions in unstructured environments. We see, that it is necessary, not only to find other ways of interacting in ACM, but also have a BRAINFIT Software with intelligent ways of keeping Informations visible an helps knowledgeworkers by keeping snippets and know how highly available. It is my first bloganswer at all and I apologize for my english. Maybe there is some posibility to swap Ideas.

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    • Axel, thanks for reading and commenting. Your English is actually quite good so don’t worry. We share the same experiences and thus is would be great to exchange ideas. Regards, Max

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  7. I think that we need to rename/redefine the business domain distinctions that we currently call “Management” and “Process”. The alternatives must point in the right thinking direction by acknowledging complexity of the world, like, “Orchestration” and “Synergy”.

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  8. Max,

    An excellent foray addressing a critical business and societal challenge, which is the manageability of organizations, which in turn would be the realization of the belief that organizations are subject to rational control.

    Even if we admit that rationality has its limits, and philosophy and literary criticism over the past century have firmly established the illusory nature of rationalist totalizations, nevertheless it is still I think it is reasonable to believe that management has rational content, and that the practice of management can have real, substantial, beneficial and intended effects.

    If management is real, then it has been my view that BPM, ACM and BRE are the salient force-multiplier technologies for managers. However, these technological artifacts, i.e. models of reality, should not be confused with reality itself, a reality which is so much richer than any model can subsume. Thus your writing clearly marks the limits of these technologies.

    So, now my question, which concerns “language”: Insofar as much business process is about “repetitive” work, such repeated business process instances concern the raison d’etre for much of business. Much of business exists because of repeatable patterns, repeated as work instances.

    And from this repetitive work, we derive process fragments and rules. Perhaps one can think of such process fragments and rules as the “language inventory of a given business”. And like all language, such a specialized business language makes possible the communal life and achievement of that organization.

    Granted, we are painfully aware of the failings of language. But the failings of language must first admit that language exists, and that we all communicate using language. And therefore, in business, it is not a bad thing to construct a language of business which is useful to that business. And the words and phrases one constructs will be likely those that refer to the things which are repeated again and again.

    It is worth noting that the private language model of business technology has the characteristic of being somewhat “self-organizing”. Human languages evolve, have power and expressivity and are self-organizing, regardless of what any national College of Immortals may say about correct language usage. Language policing doesn’t work. And likewise, as you say, bureaucratic enforcement of business processes and business rules doesn’t work either. Language policing of any kind is expensive, counter-productive and likely futile.

    So, in summary, rational organizational control is assisted by technologies such as BPM, ACM and BRE. These technologies permit the construction and use of an organizational “private language”, which is particularly useful in supporting the repetitive tasks for which most organizations are built. Looked at this way, BPM, ACM and BRE are enabling technologies, and not inherently or necessarily bureaucratic.

    I am curious if the approach formulated here is compatible with your point of view. So, now I submit the proposition now to the glare of public scrutiny!

    John

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    • John, thanks for reading and commenting. If I understood you correctly you have added to what I said in a number of posts here.

      Language in itself is not accurate because it always has to be interpreted by the reader. Each term will produce different interpretations and outcomes based on the readers context. Therefore it is important to create a common business language to improve that but it should not rigidize or standardize the process itself as that reduces the ability to service customer individually. Standardized processes maybe cheaper and seem to deliver quality, but as the quality is also based on individual consumer context and moreover expectation it actually does not guarantee quality as perceived.

      Thus BPM and BRE are not enabling techonologies but they disable individual service while they aid in senseless attempt at control and cost cutting.

      As long as we support a better understanding using a business ontology while allowing for self-organization towards achievement of business goals we are doing great. Once we get into command and control illusions we don’t.

      Thanks again, Max.

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  9. Complexity is best tackled by modularization. Modularization reduces relational complexity. It can be very beneficial. This is proved in the hardware industry, where it is supported by a flourishing hardware components market. It is also shown in nature where evolution and stochastic modular design cooperate to finally create intelligent species. A contra example is the software industry, where modularization is hardly applied.
    See: http://vixra.org/abs/1101.0064, http://vixra.org/abs/1101.0061, http://vixra.org/abs/1101.0062

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    • Hans, thanks for the comment. Yes, modularization works on a physical level. It would and somewhat does work in software. If we talk about complex adaptive systems consisting of uncontrollable individuals we can see that a similar approach using hierarchies works well too. But my point is that complexity is not bad. Complexity is the precursor to emergence that is the true creator of nature and not rational design work. Thanks again, Max

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  10. Max, you are defining the delicate workings and interactions of the entire universe. The way I see it, you are defining economics.

    Mathematics aside, what drives the direction of human energy, or all energy for that matter? What keeps it stable and patterned as in the Mandelbrot example, or as seen in the creation of a snow flake for that matter? Why is it not a clump of frozen unpatterned mush?

    I would suggest the same natural law of energy is at work forming patterns in human organization. I would suggest the “Nature of Technology” will take the same direction as all of nature, and for the same reason: efficiency. Everything moves in the direction of “economy of energy”, or what is most “economic”.

    So while you may not be able to plan for a specific outcome, you can bet the most efficient outcome will win day. Any thoughts on this? Great article.

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    • Lee, thanks for commenting. You are absolutely right about nature chosing the most energy economic path. This can be seen in Fermat’s Principle. I posted the following here: http://isismjpucher.wordpress.com/2012/07/18/process-maturity-versus-the-real-world-of-the-higgs-boson/

      Pierre Louis Maupertuis: “The laws of movement and of rest deduced from this principle being precisely the same as those observed in nature, we can admire the application of it to all phenomena. The movement of animals, the vegetative growth of plants … are only its consequences; and the spectacle of the universe becomes so much the grander, so much more beautiful, the worthier of its Author, when one knows that a small number of laws, most wisely established, suffice for all movements (and thus processes – MJP).”

      All the best, Max

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  11. grasp, or even, allow, the concept of levels of consciousness, and levels of materiality from gross to subtle, and one can see the simplicity inherent in complexity.

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