Complexity and defence management

1
Complexity and defence management

• Professor Trevor Taylor
• Cranfield University at the Defence Academy
  Shrivenham

2
Complexity?

• Complex
• Multiple links among multiple variables
• Change within system components
• Difficulty of full system comprehension
• Small changes may cause large effects
• Modelling system operation gives wide variety of
  possible outcome

Simple
Complicated
Complex
3
The traditional approach to dealing with
complexity

• Ignore it
• Many human achievements reflect a capacity to
  build and use models
• Simplifications of reality
• Incorporating key features
• Dörners stress on human use of supersignals to
  extract key elements of reality
• Underpinned by Newtonian thought that universe is
  at heart ordered and predictable, even mechanical

4
In the face of growing complexity

• Some management thought says avoid complexity,
  especially regarding the product range offered
• Complexity of range of product offerings can push
  up cost disproportionately
• Recommendations
• Find out what your customers truly value
• Reduce the variety in corporate offerings
• Monitor creeping complexity within the business
• For every new product or service your company
  adds, eliminate or streamline one from your
  existing portfolio (M.Gottfredson A.Schwedel,
  Cut complexity and Costs Harvard Management
  Update August 2008)

5
But growing management literature

• Building on complexity science
• The universe (and business) is non-linear
• Small changes can matter (do not always average
  out)
• Unlikely events occur
• Fooled by Randomness
• Rather than living with the heightened anxiety
  created by low-probability risk, people simply
  write off the residual risk to zero (Marc
  Gersten)
• World is becoming increasingly complex
• The perfect storm of technology, demographics
  and global economics
• Tapscott Williams

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Growing management literature
Some sources of modern business chaos (Rowley
Roevens) Higher customer expectations Rapid
technological innovation and obsolescence Cross
cultural misunderstandings Rapid organisational
growth and extinctions in some business
units Stringent environmental legislation Talent
bleeding and skill shortages Volatile world stock
markets Newtonian consultants
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Growing management literature
Six things among others drive increasing
complexity for businesses Rapidly interconnecting
networks of ideas and people Disruptive
technology Explosion of choice for
consumers Increasing intangible desires of the
market customer need for emotional
fulfilment Increasing complexity of technology,
systems and processes complexity begets
complexity Legislation financial transparency,
safety, the environment, human rights etc Peter
Sheahan
8
Growing management literature

• Building on complexity science
• The universe (and business) is non-linear
• Small changes can matter (do not always average
  out)
• Unlikely events occur
• Fooled by Randomness
• Rather than living with the heightened anxiety
  created by low-probability risk, people simply
  write off the residual risk to zero (Marc
  Gersten)
• World is becoming increasingly complex
• This needs to be recognised and new behaviours
  adopted
• Formal processes
• Clear rules
• Bureaucratic approach
• Especially if there is a need for
  rapid/continuous innovation

Cannot cope with much contemporary complexity
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Summary of management-related complexity theory
in six minutes?
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Disturbing news for defence?

• The new art and science of wikkinomics is based
  upon four powerful new ideas
• Being open and transparency
• Peering
• Though it is unlikely that hierarchies will
  disappear in the foreseeable future, a new form
  of horizontal organisation is emerging that
  rivals the hierarchical firm in its capacity to
  create information-based products and services,
  and in some cases, physical things
• Sharing
• Acting globally
• Tapscott Williams

Export controls
Ineffective collaboration
Prime contractors
The national DIB
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Disturbing news for defence?

• Rupert Murdoch as flipstar
• July 2005 News Corp bought MySpace for 580
  million
• The precise business model for sustained
  profitability from our digital investments is
  still uncertain at this point. Consequently, in
  some ways, we are embarking on a period of trial
  and error
• News Corporation Annual Report 2006
• Vastly profitable exploitation of the acquisition
  within 18 months
• Peter Sheahan, Flip how to succeed by turning
  everything you know on its head, p.35

Business cases
Main Gate
Initial Gate
12
Disturbing news for defence?

• Most large corporations are still too much like
  monarchies and too little like democracies
• To reduce the costs of change in your
  organisation, you must embrace the principles of
  devolution and activism
• These management principles variety,
  competition, allocation flexibility, devolution
  and activism stand in marked contrast to those
  weve inherited from the Industrial Revolution.
  That doesnt make the old principles wrong, but
  they are inadequate if the goal is continuous,
  pre-emptive strategic renewal
• Gary Hamel, HBR, February 2006
• Complexity guidance includes
• Act before you know precisely what you are doing
• Accept that there will be failures progress by
  evolution
• Short term flexible plans
• Entrust to self-organisation of motivated people

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Complexity behaviour illustrations

• 1968 US credit card industry proliferation of
  cards
• Need for an effective brand while still allowing
  banks to compete for customers
• A design team led by a Dee Hock concluded that a
  system needed to be guided by some (radical)
  principles
• Power and function in the system must be
  distributed to maximum extent possible
• System should be self-organising
• Governance must be distributed
• System to seamlessly blend collaboration and
  competition
• System should be malleable yet durable
• These principles owed more to Hocks fascination
  with Jeffersonian democracy and biological
  systems than to any management textbook

Gary Hamel HBR February 2006
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Complexity behaviour illustrations
Gary Hamel HBR February 2006

• 1968 US credit card industry proliferation of
  cards
• Need for an effective brand while still allowing
  banks to compete for customers
• A design team led by a Dee Hock concluded that a
  system needed to be guided by some (radical)
  principles
• Power and function in the system must be
  distributed to maximum extent possible
• System should be self-organising
• Governance must be distributed
• System to seamlessly blend collaboration and
  competition
• System should be malleable yet durable
• These principles owed more to Hocks fascination
  with Jeffersonian democracy and biological
  systems than to any management textbook
• Result Visa an organisation whose product was
  coordination

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Defence management qualifies as complexa single
machine
Foreign Policy
Generate capability
Today
Future
Air
Training
Prepare
Moral
Equipment
Project
Land
Effects-based, comprehensive approach
Personnel
Protect
Defence Policy
Conceptual
Infrastructure
Sea
Inform
Doctrine
Command
Space
Organisation
Physical
Operate
Information
Cyber
Security Policy
Sustain
Logistics
Execute operations
16
Defence management qualifies as complexa single
machine
Foreign Policy
Generate capability
Today
Future
Air
Training
Prepare
Moral
Equipment
90 of global RD as civil
Project
Land
Effects-based, comprehensive approach
Personnel
Protect
Defence Policy
Conceptual
Growing importance of information
Infrastructure
Sea
Inform
Doctrine
Command
Space
Organisation
Physical
Operate
Information
Cyber
Security Policy
Sustain
Logistics
Execute operations
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MoD recognition of complexity management?The
Departmental Framework

• The extent, variety and complexity of the
  individual tasks which are required to produce
  modern military capability makes detailed central
  control or management both exceptionally
  difficult and very inefficient. Responsibility
  for individual components of capability and for
  supporting and administrative tasks is therefore
  delegated .

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MoD recognition of complexity management?The
Departmental Framework

• The extent, variety and complexity of the
  individual tasks which are required to produce
  modern military capability makes detailed central
  control or management both exceptionally
  difficult and very inefficient. Responsibility
  for individual components of capability and for
  supporting and administrative tasks is therefore
  delegated .

• The need for central strategic direction both for
  military operations and for the peacetime
  creation and maintenance of military capability
  requires a hierarchy or vertical command and
  management structure

MoD enthusiasm for Wikkinomics concept of
Ideagoras? (people are seduced into working for
you for nothing!)
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MoD recognition of complexity management thought

• Grand Challenge for robotic surveillance
• 23 teams entered
• Seven reached final
• Team Stellar winning
• The MoD will now consider which parts of the
  technology it can put on show, but all the
  winners got was a trophy and the satisfaction of
  knowing they did their bit for Queen and country
• The Independent 20 August 2008

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Conclusion

• Many questions about
• The validity of complexity management thinking?
• Writing marked by anecdotes and illustrations
• Not statistical evidence
• The coherence of complexity management thinking
• Its relevance for the public sector?
• Its relevance for defence?
• Does defence need the rapid innovation of much of
  the private sector?