Strategic alignment of firms and realm of complexity science

Complexity has always pricked the brains of the best men throughout human history. Is there one unique way to define what complexity really means to organisms? In a utopian world, perhaps yes. It means different things to different areas of science.
To my mind, complexity captures the realm of dynamism and configuration change. The area of science that tries to find answers to some of these complexities is what is known as complexity science. Complexity science if viewed as a system could be paraphrased as: Complex Adaptive System (CAS) as the system needs to bring in a certain degree of adaptability to successfully respond to the unexpected changes that are thrown up by the various complexities.

 

Many great minds have tried to explain CAS using mathematics, as it has been widely believed that the field of mathematics can explain everything in nature. I believe there is an exception to this rule and this is where one wanders into the world of complexity science.
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Let us try to understand this field by taking an example of the Orissa super-cyclone of 1999. One of the worst cyclones to have hit our country, this cyclone had a special characteristic. The world of mathematics and physics had predicted the path of the cyclone to be from coastal Andhra, through Orissa, into West Bengal and finally into the Bay of Bengal. The math proved right for the greater part of the cyclone where the trajectory was as per expectations, but when it was almost about to cross Orissa something happened and there was a reversal in its direction and this time the cyclone was more ferocious than when it was on its onward path. It hit speeds of 160 miles per hour and caused heavy damage to both life and property. This is where math failed. This is where we talk of configuration change. This is where we dive into the world of the unknown i.e. complexity science.
 
In today’s world, this field is gaining importance day by day and one of the main reasons for this phenomenal rise is that, it finds applicability in almost every field known to human kind. Whether it is the stock markets, developing economies or even the human body, analysts today are looking up to complexity science to find the answers.
 
Firms are very much like the human body. They need to be handled very meticulously. With growing competition and ever-rising challenges of sustainability (which is the prime focus of any business in today’s world), firms need to strategize and factor in the various configuration changes that it might witness over the course of its existence. The human cornea replenishes itself from the molecular level every 24 hours and yet continues to provide the same functionality day after day. In fact with that degree of regeneration, it is indeed a miracle that we have a continuous stream of vision. The same needs to happen at the firm level. Whether it is recruitment, lay-offs, mergers, acquisitions, downsizing etc., the firms must have a strategy in place to make sure that their functionality doesn’t go haywire.
 
Another important aspect which complexity science talks about is the system of governance. The normal human body temperature is 37 degrees centigrade. Without an internal governance function the body temperature would have oscillated with changing environmental temperatures as per the general laws of thermodynamics. Hence, the presence of the governance function ensures adaptability and the same needs to happen with firms. The strategy, firms have in place should factor in a self-governance function, which keeps the deviation between epistemology (Knowledge of reality) and ontology (Reality) fairly low. In the end, this should be the guiding mechanism of success for every firm. The lesser the deviation, the higher the control and hence better the chances of sustainability.
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Strategic alignment of firms and realm of complexity science

by Avinash Pullela time to read: 3 min
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