Continuing the discussion on complexity – guest contribution by John Tobin

The following post is by guest contributor John Tobin. John has served for many years as the CEO of a community hospital in the US. He earned a Doctor of Management at the Business School of the University of Hertforshire in 2003 and remains interested in the ongoing work of the Complexity Research Group at the University of Hertfordshire and the challenges of bringing that perspective into everyday management practice in a community hospital setting.

Doug, in your first post, you touched on an issue that I find both fascinating and disconcerting, –the increasingly close ties between public officials and special interests, and the mostly unacknowledged role of public policy in creating the current financial mess, a dysfunctional health care system, and other problems.  This interconnectedness is by no means limited to business CEOs and high ranking government officials.  Anyone familiar with the political process in Washington knows that the place is actually run by platoons of bright, ambitious twentysomething congressional staffers.  The staffers become the focus of lobbyists’ attention because they know specific issues better than the Members themselves.  Many of these staffers will go on to careers as lobbyists or elsewhere in government, reinforcing those linkages.  In my home state, legislators are closely tied to the public employees’ unions (the Speaker of our House of Representatives was an organizer for the Service Employees’ International Union before being elected Speaker).  Organized labor is supposed to balance the power between workers and business owners and the professional managers who represent the owners’ interests.  In a government setting, this worthy purpose is corrupted when the workers become the managers, and no one truly represents the owners’ (taxpayers’) interests.  Getting government spending under control becomes next to impossible.

I’m looking forward to your next installments on the ethical crisis in the West and to learn more about your thinking on metis and the knack of management.  However, I really wanted to add a comment on the second post and the responses to it.  Where does complexity science fit into all of this?

I was struck by a recent posting on Edge (http://www.edge.org/), by Emanuel Derman, a physicist who spent 17 years working as a “quant” for Goldman Sachs.  Derman talks about what drew him from physics into the world of finance, touching on ethical issues along the way.  Interestingly, he never comments on the ethical implications of his own work, considering  that over reliance on financial models developed by the quants contributed to the 2008 financial meltdown, other than to say that physicists understand the difference between models and reality, while economists (and, presumably, Wall Street executives) do not.

When he gets to the matter of regulating the financial markets, Derman says he once thought the close relationship between the regulators and the regulated was a bad thing, but now he’s not so sure because the financial markets are so complicated.  He concludes that the bad behavior many of us find so troublesome and hypocritical is just the way things are: 

“Watching that interrogation of the bankers at the Senate hearings, I had the feeling that this is the way karma works in the universe. Everybody is going to do something not quite right as they act out their destiny mechanically, doing what they unthinkingly believe they have to do. The Wall Street people are going to reflexively overshoot and be too greedy. The Senate people are going to reflexively grandstand and be too uninformed and try to rein them in. There isn’t going to be an elegant solution to any of this. That’s the way of human affairs, and in terms of leadership, perhaps the best we can hope for is that occasional, miraculous, moment when people who are in a position to make a difference cease to behave mechanically — to take some recent examples, Mandela and de Klerk, perhaps Gorbachev — and who, rather than fulfilling their preprogrammed destiny, break the cycle of karma.”

While I certainly wouldn’t attribute bad behavior to karma, or good leadership to miracles (well…maybe in my case on those rare occasions), it certainly has been my experience that there is an almost irresistible social pressure to behave in ways that others expect us to, especially in times of stress.  Ralph has written a lot about this.  For business executives, that means acting in accordance with and speaking the language of, mainstream management thinking, because that’s the norm and that’s what our boards of directors, management colleagues and other constituencies understand.  We tend to fall back on habits and old patterns of behavior, even when we know what we are doing is ineffective or, perhaps, even harmful.  My job requires my participation (as a representative of a “special interest”) in a political process where many of the players appear to have lost their ethical bearings.  What does that say about me?

This social pressure is compounded by the difficulty of having “in the moment” conversations about complexity as a basis for thinking about our experience differently, when there is such limited understanding of complexity among our colleagues and business associates.  The application of ideas from the complexity sciences to management practice still remains to some extent at the fringes of academic discourse, and the complex responsive processes of relating approach, unfortunately, even more so.  In the business world, those who know anything about “chaos theory and all that” tend to be in the instrumental camp.  A year ago, I had an opportunity to participate on a panel presenting an introduction to complexity to an audience mostly made up of business school faculty members and Ph.D. candidates.  I talked about the complex social interactions of a project I was currently working on, rather than about butterflies and strange attractors.  While my talk seemed to be well received by the audience, I sensed that I made my fellow panelists—who did talk about attractors and self organization—uncomfortable.  I was an outsider among outsiders.

There is a real need for the thinking going on at CMC to reach a broader audience–“Complex Responsive Processes for Dummies”, so to speak.  Professional doctorate programs, such as the DMan, are an important information conduit between academia and practicing executives.   I presume this blog has that potential as well.  However, those of us out here remain a minority in a skeptical world.  Perhaps all we can hope for right now is that some of us will occasionally summon the courage, as Derman wishes, to step out of our expected roles and act on our convictions.

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