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Books : Surfing the edge of Chaos ( Financial )

Surfing the Edge of Chaos

1. Complex Adaptive System are propelled forward by a confluence of three streams of inquiry: breakthrough discoveries in life sciences (biology, medicine, and ecology); insights in social sciences; and new developments in math, physics and information technology.

2. A complex adaptive system is formally defined as a system of independent agents that can act in parallel, develop models as to how things work in the environment, and refine those models through learning and adaptation.

3. The four principles that establish the bedrock of complex adaptive systems are: equilibrium is the precursor to death, higher levels of creative innovation and experimentation are found on the edge of chaos; when this excitation takes place, the components self-organize and new forms emerge from the turmoil; the challenge is to disturb them in a manner that approximates the desired outcome.

4. The world is not chaotic; it is complex.

5. Self-organizing groups spark dozens of breakthrough innovations and a staggering reduction in costs.

6. Corporation around the world spent $50 billion in fees for change consulting not included in the fee total are write-offs, severance cost, and information technology. Yet, consultants, academic surveys, and reports from the changed companies indicated that 70 percent of those efforts failed. Social engineering does not work; characterized by centralized intelligence, planning based on predictable futures, initiatives rolled out from the top to the ranks.

7. The best organizational principles are based on living systems. Living systems provide the best map for a mental framework for seeing order in disorder; powerful distinctions that accelerate change; mental hooks to rely on as we scale the cliffs of the worn-out business model to reach the business model of the future.

8. The Law of Requisite Variety, a law of cybernetics, states that the survival of any system depends on its capacity to cultivate variety in its internal structure.

9. At an individual level, equilibrium occurs when a organism matches the requirements of its environment while meeting its own needs with the available resources. Prolonged equilibrium is a precursor of disaster, whether it happen unwillingly or by intent. Prolonged equilibrium dulls and organism’s senses and saps its ability to arouse itself appropriately in the face of danger.

10. Five years after “In Search of Excellence”, half of the forty three companies were in trouble. Organization fit failed. Excessive imposition of the fit meant that it was impossible to change any single element of the system without changing every other element. Organization fit lack robustness and flexibility that existing in living systems.

11. When the rules become to rigid or too numerous, the system freezing into inactivity.

12. From the vantage point of the larger complex adaptive system, selection pressures constantly enforce an ecological upgrade.

13. Sexual reproduction maximizes diversity. Chromosome combinations generate permutations and variety in the offspring.

14. It is critical to protect the reliable core of an organization’s business platform while one simultaneously plants and nurtures the seeds of revolutionary change.

15. Human are endowed with conscious awareness and are capable of perceiving intellectually a threat before it materializes and through the exercise of intent respond to it before it is too late. Living systems usually respond to disequilibrium threats by attempting to restore stability.

16. Adaptive leaders don’t move on an issue too quickly or reach for a quick fix. They communicate the urgency of the adaptive challenge, establish a broad understanding of circumstances creating the problem, hold the stress until leaders come forward with a solution.

17.Biologist have documented that nature favors cooperative traits over competitive traits.

18. The human gentic system, parallel process constituets elements in the order of 10^30 combinations.

19. Staurt Kaufmann promoted self-organization and complex networks as the means span DNA space combinations, stating there are far to many permutations even after four billion years of experimentation to cover even the tiniest fraction of possible mutations that natural selection could bring forth.

20. Self-organization and emergence flourish with simple rules and structure. Emergence needs a ripe issue

21. Self organizing potential of living systems is enhanced by devolving power to the nodes, establishing rich connections to form networks (cross pollination of ideas), and enriching the networks with valuable information.

22. Silicon Valley is home to one third of the 100 largest technology. Silicon Valley businesses generated 150,000 new technology jobs. The region loosely includes Marin County, San Francisco, Oakland, Berkeley, Palo Alto, San Jose, and Santa Cruz.

23. Information-age warfare provoked the Army to harness self-organization as part of its central doctrine. The advent of distributed information allow the foot soldier or tank commander in the field to know roughly as much about what's going on as the generals in the command center.

24. The key is to focus on arenas where there is lot of noise or heat and where conversations and structural inconsistencies resemble interestellar debris that hasn't quite coalesced into a planet or star.

25. The key to self-organization resideds in a field of tension between discipline and freedom.

26. Juxtapose people from different fields and backgrounds and let their varied work histories enrich the potential of self-organizing networks.

27. The leader is a context setter, the designer of a learning experience-not an authority figure with solutions. The works can create their own answer, get after it quickly and aggressively, and it works because the worker knows what is going on.

28. Seven disciplines: 1. infuse understanding 2. straight talk 3. manage for the future 4. reward inventive accountabilty 5. Harness adversity by learning from prior mistakes 6. foster relentless discomfort 7. cultivate reciprocity.

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