Survival of the Fittest
by Pat Craig
from the Winter 2002 issue
of the Complexity Management Chronicles
The October 18, 2001 edition of the Wall Street Journal featured a front
page article with the headline, “Banks and Regulators Drew Together to Calm
Markets After Attacks.” The article recounts the independent actions taken
by many people on Wall Street to stabilize the financial markets after the
September 11th attacks. The Fed poured money into the banking system, brokerage
firms discouraged short sales and analysts suspended ratings on stocks rather
than downgrading them.
The article quotes Mr. Komansky, the CEO of Merrill Lynch, “I think there
was a widespread feeling by people not to take advantage of the market. It was not organized.” (italics ours).
These actions serve as a terrific example of a complex adaptive system functioning well.
What is a complex adaptive system? It is a newer, more encompassing version
of Darwin’s theory of evolution and Herbert Spencer’s “Survival of the Fittest.”
Many agents semi-autonomously adapt to environmental changes, they self-organize,
they learn, and they coevolve. Thus we introduce this newsletter on complex
adaptive systems (CAS), part of the new science of complexity. This web site
version of our newsletter contains more background about CAS (listed at the
end of this newsletter).
Some of our earlier newsletters focused on highly prolific groups or departments. CAS is an increase in scale. CAS knowledge helps you build a business case
about the crucial importance of a steady stream of new and follow-on products
and/or services. This newsletter, the first in a series of two, will review
management practices from 3M, a long term CAS in action. 3M has been constantly
evolving and reinventing itself with a stream of new products.
James Collins and Jerry Porras profiled 3M in their book, "Built to Last".
Their book analyzes large, prosperous firms in business for approximately
50 years and expected to last for at least another 50 years. Any large firm
that has steadily thrived must adapt to a changing environment.
Although CAS was not a formal body of knowledge until fairly recently, some
of the companies profiled in “Built to Last” have been employing CAS principles
for many years, with 3M being the most notable. 3M’s business practices apply to running
a robust business and to successful software development.
The company’s relevant “best practices” follow:
1. Fostering proactive environmental adaptation to significantly increase the
2. Supporting reactive responses to environmental changes to further increase
profitability and guard against erosion in the revenue base,
3. Expeditiously transferring knowledge within the company regarding new ideas
4. Harnessing entrepreneurial drive, and
5. Reinforcing adaptive behaviors.
More detail on 3M’s business practices follows.
To foster proactive environmental adaptation, 3M has the “15 percent rule”
that encourages technical employees to spend up to 15% of their time on projects that
they choose for themselves.
3M’s “Problem Solving Missions” support reactive responses
to changes in the environment. These resemble Joint Application Design/Joint
Application Requirements (JAD/JAR) in the software industry. Small teams
from 3M visit customer sites in response to specific problems. Customers
work with technical personnel to solve a business problem. Successful product
development depends upon customer commitment.
Space limits our ability to provide more examples of management practices.
Our next newsletter will take up where we left off on these important new
Complex adaptive systems theory concerns how organisms, organizations, or
economies adapt to the environment and prosper. An important feature of CAS
is their ability to self-organize.
The Santa Fe Institute, a group of economists and scientists devotes itself
to seeking out the natural laws underpinning complexity and CAS. M. Mitchell
Waldrop wrote a compelling and easy-to-read book about the Santa Fe Institute
and its work entitled, "Complexity." Waldrop’s book is published by Touchstone/Simon
& Schuster and contains a terrific Bibliography. Stuart Kaufman, a
member of the institute, wrote a book entitled "At Home in the Universe".
Dee Hock, founder of VISA, discusses CAS in his book, "Birth of the Chaordic Age."
Rodney A. Brooks, the artificial intelligence guru at MIT, touches upon CAS in his work.
Finally, Jay Forrester, founder of system dynamics, along with system dynamics champions,
Peter Senge, John Sterman, Daniel Kim (among others) get involved with CAS in their
system dynamics work.
We have discussed system dynamics and Rodney Brooks in earlier newsletters.
In conclusion, we suggest you read this landmark book for other terrific ideas.
©2002 by Complexity Management
Somerville, Massachusetts, in Metropolitan Boston
Complexity Management Chronicles, a newsletter for software quality
assurance professionals, is published in print form four times a year.
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