Business and Economic Understanding at Large Scale | Free 'Introduction to Complexity' Article

Sep 27

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Think Big

I. Intro to Complexity

Great introduction to the complex systems science, shared here with permission from one of the authors. (Thank you, Alex!)

"The standard assumptions that underlie many conceptual and quantitative frameworks do not hold for many complex physical, biological, and social systems. Complex systems science clarifies when and why such assumptions fail and provides alternative frameworks for understanding the properties of complex systems. This review introduces some of the basic principles of complex systems science, including complexity profiles, the tradeoff between efficiency and adaptability, the necessity of matching the complexity of systems to that of their environments, multiscale analysis, and evolutionary processes."

"[E]xamples of self-organized behaviors include the spontaneous formation of conversation groups at a party, the allocation of goods in a decentralized economy, the evolution of ecosystems, and the flocking of birds. Such large-scale behaviors and patterns cannot be determined by examining each system part in isolation. By instead considering general properties of systems as wholes, complex systems science provides an interdisciplinary scientific framework that allows for the discovery of new ideas, applications, and connections."

Alexander F. Siegenfeld and Yaneer Bar-Yam, An introduction to complex systems science and its applications, Complexity 2020 (July 27, 2020)

FREE COMPLEXITY ARTICLE (PDF)

READ AND PASS ON.

II.a. Commoditization - Emergent Behavior

Learning Powered by Ofmos: What is Commoditization?

At large societal scales, humans can be seen as intelligent agents, each with an overarching goal that we call "successful existence." Driven to subjectively make the most of their existence, they collectively fuel the emergence of a systemic force. Commoditization acts as the Gravity force of the business and economic world, drastically shaping societies in the long run.

II.b. Economies at Large Scale

As collections of ofmos (offering-market cosmos), which are virtual business spaces defined by a product and a set of customers with the same behavior relative to that product, economies can be analyzed over very long periods of time. Under the heavy influence of the force of Commoditization, they have a natural tendency to "bunch up," changing the very fabric of the society.

II.c. Companies at Large Scale

"Remember that the enduring companies we see are not really companies that have lasted for 100 years. They’ve changed 25 times or 5 times or 4 times over that 100 years, and they aren’t the same companies as they were. If they hadn’t changed, they wouldn’t have survived.”

These are the words of Lou Gerstner, who served as the CEO of IBM from 1993 until 2002, saving the company which drifted into the highly commoditized space of personal computers by adjusting its portfolio toward the higher-customer-value solutions. Simply put, a company must strive to achieve and maintain an alignment between its emerging Center and its fixed Focus.