Mastering Agile Business Management

Learn how to blend Agile and traditional project management to

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Complex Adaptive Systems

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 Complex Adaptive Systems

© 2014-2020 High Impact Project Management, Inc. 2

An empirical process control model is an example of a “complex adaptive system” which is the
subject we’re going to talk about next. An understanding of “complex adaptive systems” is
important to understand because it fundamentally defines the process of how an Agile approach
works and, by the way, you’re likely to find a question on the PMI-ACP exam on “Complex
Adaptive Systems”

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Complex Adaptive Systems

“A 'complex macroscopic collection' of

relatively 'similar and partially connected
micro-structures' – formed in order to adapt
to the changing environment, and increase
its survivability as a macro-structure”

Complex Adaptive Systems, https://en.wikipedia.org/wiki/Complex_adaptive_system

© 2014-2020 High Impact Project Management, Inc. 3

This slide shows a definition of a Complex Adaptive System:

“A Complex Adaptive System is a 'complex macroscopic collection' of relatively 'similar and

partially connected micro-structures' – formed in order to adapt to the changing environment,
and increase its survivability as a macro-structure”

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Example of a Complex Adaptive System

© 2014-2020 High Impact Project Management, Inc. 4

Examples of Complex Adaptive Systems are found all around us in nature. One example I can
think of is an ant hill. There may be thousands, perhaps millions, of ants required to build a large
ant hill.

I’m guessing that they don’t start out with a grand plan of what the finished ant hill is going to
look like – it just evolves

And somehow these thousands or millions of ants all work collaboratively together as a self-
organizing team without a lot of direction

And, when the ant hill is finished, it may not be a perfect-looking structure but it satisfies the
purpose it was intended for and it will evolve as needed to fit the overall environment that it is
part of

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Origins of Complex Adaptive Systems

“For many years scientists saw the universe as a linear place. One where
simple rules of cause and effect apply…”

“Scientists believed the universe and everything in it could be predicted

and controlled…”

“However hard they tried to find the missing components to complete

the picture they failed…”
What are Complex Adaptive Systems?, Peter Fryer, http://www.trojanmice.com/articles/complexadaptivesystems.htm

© 2014-2020 High Impact Project Management, Inc. 5

Peter Fryer has developed an excellent explanation of how Complex Adaptive Systems have
evolved: “For many years scientists saw the universe as a linear place. One where simple rules of
cause and effect apply. They viewed the universe as big machine and thought that if they took
the machine apart and understood the parts, then they would understand the whole. They also
thought that the universe's components could be viewed as machines, believing that if we
worked on the parts of these machines and made each part work better, then the whole would
work better. Scientists believed the universe and everything in it could be predicted and
controlled.”

“However hard they tried to find the missing components to complete the picture they failed.
Despite using the most powerful computers in the world the weather remained unpredictable,
despite intensive study and analysis ecosystems and immune systems did not behave as
expected. But it was in the world of quantum physics that the strangest discoveries were being
made and it was apparent that the very smallest sub nuclear particles were behaving according
to a very different set of rules to cause and effect.”

“Gradually as scientists of all disciplines explored these phenomena a new theory emerged -
complexity theory, A theory based on relationships, emergence, patterns and iterations. A
theory that maintains that the universe is full of systems, weather systems, immune systems,
social systems etc. and that these systems are complex and constantly adapting to their
environment. Hence complex adaptive systems.”

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 Complex Adaptive Systems have been found in
many natural environments since the beginning
of time –

What has evolved is not the systems

themselves, but our understanding of them

© 2014-2020 High Impact Project Management, Inc. 6

The important point is that Complex Adaptive Systems have been found in many natural
environments since the beginning of time – what has evolved is not the systems themselves, but
our understanding of them. We need to adopt a similar thinking approach to project
management instead of thinking of projects as a linear place where simple rules of cause and
effect apply, we need to think of it as a much more dynamic organism.

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 A Complex Adaptive Systems model has the
potential to develop much higher performance
teams

© 2014-2020 High Impact Project Management, Inc. 7

If it is done correctly, a Complex Adaptive System approach is a very powerful approach to

project management. It’s like the ant hill example, I suspect that there aren’t designated project
managers among the ants building the ant hill to plan and delegate the work to individual ants.
The individual ants somehow just work together naturally and collaboratively to build the ant hill
without a lot of explicit direction. That’s exactly the way an Agile project works. If it is done
right, an Agile team doesn’t need a lot of explicit direction to be told exactly what to do and how
to do it. With some very general direction, they should be able to figure out what needs to be
done to accomplish the goals that have been established.

I’m sure that you can see how that really has the potential to develop much higher performance
teams over traditional plan-driven project teams that might have to be given explicit and
detailed direction on what to do and how to do it.

This approach has been right in front of us since the beginning of time because it occurs so
naturally and widely in nature; however, we have not taken full advantages of the capabilities of
this model until recently because we’ve tried to superimpose a defined process control model on
what might inherently benefit from a more empirical and adaptive approach.

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How Do Complex Adaptive Systems Work?
Pattern

Feedback Feedback
Regularities

Agents
What are Complex Adaptive Systems?, Peter Fryer, http://www.trojanmice.com/articles/complexadaptivesystems.htm

© 2014-2020 High Impact Project Management, Inc. 8

Peter Fryer has also provided a simple diagram that explains how a Complex Adaptive System
works. “The agents in the system are all the components of that system. In the ant hill
example, the agents are the ants. For example the air and water molecules in a weather system,
and flora and fauna in an ecosystem. These agents interact and connect with each other in
unpredictable and unplanned ways.

But from this mass of interactions regularities emerge and start to form a pattern which feeds
back on the system and informs the interactions of the agents. For example in an ecosystem if a
virus starts to deplete one species this results in a greater or lesser food supply for others in the
system which affects their behavior and their numbers. A period of flux occurs in all the
populations in the system until a new balance is established. “

“For clarity, in the diagram above the regularities, pattern and feedback are shown outside the
system but in reality they are all intrinsic parts of the system.”

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 Properties of Complex Adaptive Systems

Emergence Co-Evolution

• Rather than being planned or • All systems exist within their own
controlled, the agents in the environment and they are also
system interact in apparently part of that environment
random ways • Therefore, as their environment
changes they need to change to
ensure best fit
What are Complex Adaptive Systems?, Peter Fryer, http://www.trojanmice.com/articles/complexadaptivesystems.htm

© 2014-2020 High Impact Project Management, Inc. 9

Here are some properties of Complex Adaptive Systems that Peter Fryer has identified:

• The first is “Emergence” – “Rather than being planned or controlled the agents in the system
interact in apparently random ways. From all these interactions patterns emerge which
informs the behavior of the agents within the system and the behavior of the system itself.
The ant hill is a great analogy for how a pure Agile project might evolve.

• The next is Co-Evolution – “All systems exist within their own environment and they are also
part of that environment. Therefore, as their environment changes they need to change to
ensure best fit. But because they are part of their environment, when they change, they
change their environment, and as it has changed they need to change again, and so it goes on
as a constant process” This characteristic is also applicable to an Agile process. An Agile
project management process is part of a much larger business ecosystem and needs to adapt
and evolve as that business system evolves.

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 We need to recognize the dynamic nature of
Complex Adaptive Systems in our projects and
Also recognize that those systems need to
evolve as needed to fit the environments that
they are part of

© 2014-2020 High Impact Project Management, Inc. 10

We need to recognize the dynamic nature of Complex Adaptive Systems in our projects and also
recognize that those systems need to evolve as needed to fit the environments that they are
part of

Many traditional plan-driven projects fail to recognize and take advantage of the dynamic nature
of the project teams that are part of the project; and, as a result, fail to utilize the full power of
the teams

Many Agile teams focus on optimizing the performance of the team from a development
perspective only and fail to recognize the need to adapt the team to the overall business
ecosystem that the development project is part of.

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Properties of Complex Adaptive Systems

Sub-Optimal

• A complex adaptive systems does not have to be perfect in order for it to

thrive within its environment

• It only has to be slightly better than its competitors and any energy used
on being better than that is wasted energy
What are Complex Adaptive Systems?, Peter Fryer, http://www.trojanmice.com/articles/complexadaptivesystems.htm

© 2014-2020 High Impact Project Management, Inc. 11

• Complex Adaptive Systems are also Sub-Optimal – “A complex adaptive systems does not
have to be perfect in order for it to thrive within its environment. It only has to be slightly
better than its competitors and any energy used on being better than that is wasted energy. A
complex adaptive systems once it has reached the state of being good enough will trade off
increased efficiency every time in favor of greater effectiveness.”

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 An Agile process is based on the understanding that
absolute perfection is not necessarily the most
appropriate goal

Ideally, an Agile process seeks to meet the

requirements for a product in terms of minimal
marketable features and only going beyond that level if
it provides business value

© 2014-2020 High Impact Project Management, Inc. 12

This is also true of an Agile process – an Agile process is based on the understanding that
absolute perfection is not necessarily the most appropriate goal. Ideally, an Agile process seeks
to meet the requirements for a product in terms of minimal marketable features and only going
beyond that level if it provides business value.

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Properties of Complex Adaptive Systems

Requisite Variety

• The greater the variety within the system the stronger it is.

• Ambiguity and paradox abound in complex adaptive systems which use

contradictions to create new possibilities to co-evolve with their
environment
What are Complex Adaptive Systems?, Peter Fryer, http://www.trojanmice.com/articles/complexadaptivesystems.htm

© 2014-2020 High Impact Project Management, Inc. 13

Ideally, Complex Adaptive Systems also have what is called “Requisite Variety” The greater the
variety within the system the stronger it is. In fact ambiguity and paradox abound in complex
adaptive systems which use contradictions to create new possibilities to co-evolve with their
environment. Democracy is a good example in that its strength is derived from its tolerance and
even insistence in a variety of political perspectives.

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 A strong Agile team is able to successfully
integrate people of different perspectives into a
very cohesive cross-functional team

© 2014-2020 High Impact Project Management, Inc. 14

Here’s how this pertains to Agile – a strong Agile team is able to successfully integrate people of
different perspectives into a very cohesive cross-functional team. A team of “yes men” that all
think alike is typically not that strong

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 Properties of Complex Adaptive Systems

Connectivity
• The ways in which the agents in a
system connect and relate to one
another is critical to the survival of the
system, because it is from these
connections that the patterns are
formed and the feedback disseminated

What are Complex Adaptive Systems?, Peter Fryer, http://www.trojanmice.com/articles/complexadaptivesystems.htm

© 2014-2020 High Impact Project Management, Inc. 15

• Another important property of a Complex Adaptive System is “Connectivity”. “The ways in

which the agents in a system connect and relate to one another is critical to the survival of
the system, because it is from these connections that the patterns are formed and the
feedback disseminated.

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 Agents in an Agile process are the people on
the team as well as the outside stakeholders
who interact with the team

The success of the process is critically

dependent on the relationships and interaction
among all these people

© 2014-2020 High Impact Project Management, Inc. 16

In relationship to an Agile process, this is extremely important, the “Agents in an Agile process
are the people on the team as well as the outside stakeholders who interact with the team. The
success of the process is critically dependent on the relationships and interaction among all
these people

Ideally, those interrelationships are very dynamic and based on simple rules without being overly
controlled or structured

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 Properties of Complex Adaptive Systems

Simple Rules
• Complex adaptive systems are not
complicated
• The emerging patterns may have a rich
variety, but like a kaleidoscope, the
rules governing the function of the
system are quite simple
What are Complex Adaptive Systems?, Peter Fryer, http://www.trojanmice.com/articles/complexadaptivesystems.htm

© 2014-2020 High Impact Project Management, Inc. 17

• The next property is that Complex Adaptive Systems have simple rules – “Complex adaptive
systems are not complicated. The emerging patterns may have a rich variety, but like a
kaleidoscope the rules governing the function of the system are quite simple.

• A classic example is that all the water systems in the world, all the streams, rivers, lakes,
oceans, waterfalls etc. with their infinite beauty, power and variety are governed by the
simple principle that water finds its own level.”

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 Properties of Complex Adaptive Systems

Iteration Self-organizing
• Small changes in the initial conditions • There is no hierarchy of command and
of the system can have significant control in a complex adaptive system.
effects after they have passed through There is no planning or managing, but
the emergence - feedback loop a few there is a constant re-organizing to find
times the best fit with the environment.

What are Complex Adaptive Systems?, Peter Fryer, http://www.trojanmice.com/articles/complexadaptivesystems.htm

© 2014-2020 High Impact Project Management, Inc. 18

• Complex Adaptive Systems are also based on an iterative process. “Small changes in the initial
conditions of the system can have significant effects after they have passed through the
emergence - feedback loop a few times (often referred to as the butterfly effect). A rolling
snowball for example gains on each roll much more snow than it did on the previous roll and
very soon a fist sized snowball becomes a giant one”.

• Complex Adaptive Systems are also self-organizing. “There is no hierarchy of command and
control in a complex adaptive system. There is no planning or managing, but there is a
constant re-organizing to find the best fit with the environment. A classic example is that if
one were to take any western town and add up all the food in the shops and divide by the
number of people in the town there will be near enough two weeks supply of food, but there
is no food plan, food manager or any other formal controlling process. The system is
continually self organizing through the process of emergence and feedback.”

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 An iterative development approach combined
with an emphasis on self-organizing teams are
both extremely critical for successful Agile
projects

© 2014-2020 High Impact Project Management, Inc. 19

Both an iterative development approach as well as an emphasis on self-organizing teams are

extremely critical for successful Agile teams

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Properties of Complex Adaptive Systems

Edge of Chaos

• A system in equilibrium does not have the internal dynamics to enable it to respond
to its environment and will slowly (or quickly) die.

• A system in chaos ceases to function as a system

• The most productive state to be in is at the edge of chaos where there is maximum
variety and creativity, leading to new possibilities
What are Complex Adaptive Systems?, Peter Fryer, http://www.trojanmice.com/articles/complexadaptivesystems.htm

© 2014-2020 High Impact Project Management, Inc. 20

• Complexity theory is not the same as chaos theory, which is derived from mathematics. But
chaos does have a place in complexity theory in that systems exist on a spectrum ranging
from equilibrium to chaos. A system in equilibrium does not have the internal dynamics to
enable it to respond to its environment and will slowly (or quickly) die. A system in chaos
ceases to function as a system. The most productive state to be in is at the edge of chaos
where there is maximum variety and creativity, leading to new possibilities.

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Stacey Complexity Model

Edge of Chaos
System in
Equilibrium

http://www.portlandwebworks.com/blog/which-project-delivery-approach-right-my-project

© 2014-2020 High Impact Project Management, Inc. 21

This slide shows how that relates to the Stacey Complexity model that was previously discussed.
A process that operates near the edge of chaos might be ideal but there is a risk of it straying
over the line into chaos and losing its effectiveness altogether. On the other hand, a system that
is in equilibrium may not be responsive to changing conditions and may not be very effective at
all. This is a delicate balancing act to choose the appropriate balance.

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 In a highly uncertain environment, an adaptive
approach that encourages individual creativity
is essential

© 2014-2020 High Impact Project Management, Inc. 22

The key point is that In a highly uncertain environment, an adaptive approach that encourages
individual creativity is essential. An over emphasis on control and predictability can stifle the
adaptivity and creativity that may be needed to deal with a highly uncertain environment.

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Properties of Complex Adaptive Systems

Nested Systems

• Most systems are nested within other systems and many systems are systems of
smaller systems

What are Complex Adaptive Systems?, Peter Fryer, http://www.trojanmice.com/articles/complexadaptivesystems.htm

© 2014-2020 High Impact Project Management, Inc. 23

• The final characteristic of Complex Adaptive Systems is that “Most systems are nested within
other systems and many systems are systems of smaller systems. If we take the example in
self organizing above and consider a food shop. The shop is itself a system with its staff,
customers, suppliers, and neighbors. It also belongs the food system of that town and the
larger food system of that country. It belongs to the retail system locally and nationally and
the economy system locally and nationally, and probably many more. Therefore it is part of
many different systems most of which are themselves part of other systems.

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 It is important to optimize the performance of a
project team within the broader context of the
business ecosystem that it is part of rather than
just within a narrower project development
context

© 2014-2020 High Impact Project Management, Inc. 24

A key point is that it is is important to optimize the performance of a project team within the
broader context of the business ecosystem that it is part of rather than just within a narrower
project development context

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 NEXT LECTURE…
DESIGN THINKING

© 2014-2020 High Impact Project Management, Inc. 25

In the next lecture, we’re going to start a new section on Design Thinking and the first lesson in
that section is on What Is Design Thinking?

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