The Hindu Business Line : Where chaos and complexity rule

Our ordinary view of the world is founded on an early 17th century formulation by French philosopher Rene Descartes comparing the universe to a clockwork, in describing his observations of the cosmos. We imagine the cosmos to be a controllable, and understandable mechanical device rather like a timepiece. Little wonder that this conception still dominates the minds of many senior managers mostly brought up in the traditions of engineering and the exact sciences, in addressing matters organisational.

Their belief is that for every issue there is a clear-cut, single right answer, and every other answer would be clearly wrong. By removing or setting right a root cause, we feel we can resolve the problem, rather like replacing a fused bulb with a fresh one, which brings the light back on. The truth is, however, that as in electric bulbs, organisational problems have a way of resurfacing under some other guise eventually. It is as if we have not recognised the real reason for bulbs going off is the sharp spikes in the voltage due to poor quality of power even where the supply is uninterrupted. This in turn is due to other causes that are more systemic and perhaps capable of resolution but not at the level of the neighbourhood electrician.

This approach, unfortunately, does not allow for the fact that there are few direct cause-effect relationships where markets and people are concerned. A single cause, say `C' does not lead to a single effect `E', mathematically expressible as C' E'. Rather, every cause in turn is an effect of some other cause and every effect causes something else. You see this for example on TV when experts question the Finance Minister on the dis-inflationary impact or growth effects of budgetary measures proposed by him.

In the end, he has to take recourse to hope and an "it depends, we shall have to see" kind of apparently weak retreat from the discussion. There are three features of large systems which account for this seeming frustration and confusion. In large complex systems, such as the ecosystem, the economy, the capital market or the global climate, there are always many causes for every effect, which in turn has many side effects; secondly, some effects are weak, and some strong; thirdly, the relationships are neither linear nor in one direction and thus not always predictable or measurable by the familiar statistical tools.

In forecasting how the agricultural sector, which is so crucial to the economy's continued buoyancy, will behave in response to subsidies and credit and so on, the measurement of results is even more problematic because both nature and people are involved. Incentives and subsidies are some popular and readily available tools with which the economic policy maker (and the manager) tries to achieve his goals. How a population will respond to them is ever a matter of conjecture. And past behaviour is not always a reliable basis for predicting the future.

Yet, all is not lost. One does not have to simply pray or toss a coin and hope for the best. Some ways can be found to model the behaviour of large systems — but these have to be only approximations and probabilistic estimates. Physics, the domain that has always been thought of as the home of the highest levels of scientific precision, has recognised the probabilistic nature of the behaviour of particles at the sub-atomic level for some years now. They have also accepted many other strange aspects of reality thanks to the quantum mechanics a field that few still understand fully. If this is the state of a field where all is considered inanimate matter, how much more so should this be true of the more complex field of social science, which comprises institutions made up of rules of behaviour meant to regulate human groups — from a small company to a huge economy?

Thus the intelligent approach to an organisation is one that accepts complexity as integral to the nature of the beast. One cannot hope to deal with problems of improving sales or brand image or employee attitudes to change, to productivity and other facts of industrial life with the same certainly with which one sets right a defective machine or a layout. To say that a business cannot afford the vagueness of complexity is futile. Unfortunately, the name chaos theory suggests meaningless randomness, which it is not. It is half way between mechanical precision and total disorder. As Nobel laureate Murray Gell-Mann put it, it has "surface complexity arising out of a deep simplicity". The illustrious physicist David Bohm would call its origins the `implicate order' — from which everything including Time, Energy and Consciousness arises and into which everything subsides.

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