Rick Nason, author of It’s Not Complicated: The Art and Science of Complexity in Business, talks fidget spinners, Donald Trump, and more when discussing complex vs. complicated.
What the heck does the colossal failure of New Coke in the 1970s have to do with a useless yet quirky toy, a flock of birds, and the improbable rise of Donald Trump from reality TV to the Presidency of the United States? The answer is that all these phenomena are, for the most part, the consequence of a relatively unknown but incredibly important social phenomenon called complexity.
So what exactly is this thing called complexity? For starters, let’s make it very clear that things that are complex are not complicated; at least not with the scientific use of the terms that we are using here. The terms complicated and complex may be synonyms in common usage, but we want to use the scientific definitions of the words. For some time, scientists have been classifying phenomena as being either simple, complicated or complex, and the three classifications are very different, with very different implications for their management.
Things that are simple, follow very basic rules, or recipes if you will. The rules for a simple system are robust, or in other words the recipes do not need to followed exactly to achieve a deserted result. For instance, take the example of baking a cake. To bake a cake you can follow a recipe, but as we all know from watching experienced cooks they are not extremely precise in their measurements and often go more by feel or intuition rather than exactness. For example if you are short a little bit of flour, there are several different ways in which an experienced baker can compensate.
A complicated issue also follows rules, but the rules are very precise. For instance, in getting an astronaut to the International Space Station one needs to carefully, and with extreme precision, follow the known rules and laws of physics. Approximation will result in the astronaut going to Mars or worse. Since a complicated issue is so precise, it also means that it is reproducible. If you follow the exact same steps then you will achieve the exact same result. Dropping a pencil means that it will fall to the floor each and every time you drop it. The laws of gravity do not vary.
Things that are complex are different. Things that are complex exhibit a property called emergence. Emergence is a leaderless set of patterns that essentially are random. A wonderful example of emergence is a murmuration of starlings in the sky. In a murmuration, the birds are flying as a clearly defined pack or flock, but the flock itself is moving in close unison darting first one way, and then another. It is a graceful, highly coordinated and at the same time completely random series of patterns. (If you have never seen a murmuration of starlings, conduct an internet search and you will quickly find a wonderful collection of videos that illustrate this beautiful, yet mystical bird behavior.)
In real life we see clear murmuration type effects. Patterns of fashions come and go; styles of music become popular and then fade away; certain social media videos go viral only to be replaced a few days later with totally different viral videos; the stock market trends up, and then it darts down; our circle of friends continually changes; and so on.
Complexity, and its associated emergence, arises when agents (think starlings, consumers, investors, political voters), have some way to connect with each other (for example, newspapers, email, social media), and can adapt or change their behavior. When these three simple elements are present, a form of leaderless patterns develop and we get emergence.
Complexity creates a conundrum for the business manager. Emergence is leaderless, and given its random nature it also cannot be controlled or planned for. However the rise of emergence just might mean the difference between a product becoming a huge hit, such as the current craze for fidget spinners, or a complete dud like the introduction of New Coke in the mid 1980’s.
Consider first the case of New Coke. The Coca-Cola Company has created perhaps the most famous brand of all time – namely Coca-Cola, perhaps better known as simply Coke. However in the 1980’s Coke was losing market share to rival Pepsi. Pepsi’s marketing team came up with a very successful campaign called the Pepsi Challenge in which cola drinkers tasted Coke versus Pepsi in a series of blind taste tests. The majority of cola drinkers preferred Pepsi to Coke, so this, in part, was a catalyst for Coca-Cola to change its iconic recipe for the production of Coke. Obviously, a multinational company like Coca-Cola was not going to do this on a whim, and without proper product testing and consumer analysis. Coca-Cola was an experienced consumer marketing company and new product introductions and line extensions were their forte. Thus, Coca-Cola did the necessary product testing, comprehensive consumer testing and developed a very elaborate and well supported marketing campaign; and it all failed! The introduction of New Coke was a disaster. Although most consumers preferred the taste of “New Coke”, a small, but determined group of “Old Coke” drinkers began to hoard cans of “Old Coke”. As the media slowly caught on and started to report on the plight of the fans of “Old Coke”, a series of movements began to bring back “Old Coke”. Again – this was despite the well established fact that most of the fans of “Old Coke” preferred the taste of “New Coke” when they did a blind taste test. It made no sense, but the interaction of “Old Coke” drinkers created a movement – created emergence – that the vast marketing efforts of Coca-Cola could not overcome. Within a short period of time, Coca-Cola was forced to abandon their new and improved formula and restore the “Old Coke” formula. It remains one of the classic business cases illustrating the follies of the best laid plans of mice and men and marketing departments.
Contrast the history of the introduction of “New Coke” with the current craze of fidget spinners. In case you are one of the few people who are not familiar with them, they are a simple “toy” that you place between your fingers and spin. That’s it. There are a few very basic tricks you can do, but in essence it is a three pronged piece of plastic that you spin between your fingers; nothing more. There has not been a major promotion campaign; there is not a major corporate backer, and no paid celebrity endorsements. However thousands of websites and videos have sprung up on social media about the toy and stores are having a hard time keeping them in stock. Due to the power of social media, the connections that young people make through social media, and the adaptability of young people, this incredibly simplistic toy has become a huge hit by “accident”. However, just as “New Coke” failed by emergence, it is emergence that is causing fidget spinners to succeed. Presumably a few people posted a short video to social media with their fidget spinner, and the connections that social media create produced a winning emergence for this somewhat pointless toy. There is no leader to this craze; there is no promoter; indeed one could argue that there is not a logic or rationale for it. The reality is that this most simplistic of toys has become a huge fad. How long it takes for its popularity to fade is anyone’s guess (as is it anyone’s guess as to when a flock of starlings will suddenly and without warning change their direction of flight).
Now we come to the emergence of Donald Trump. Regardless of your political beliefs, it was almost universally accepted that Donald Trump was an unlikely candidate for President at the beginning of the Presidential Primaries. However as the campaigns started, so did a slow, but perceptible form of emergence. As Donald Trump started tweeting, a movement began as the opportunity for more people to connect with him presented itself. The more unorthodox his campaign become, the stronger and more pronounced the emergence effect became. Of course Donald Trump is now the President of the United States and not simply one of a large group of early pre-primary hopefuls. The well established election “machine” and infrastructures of both leading political parties were helpless against the complexity of the elect Trump movement. Intentionally or not, it is easy to argue that Trump was elected by complexity.
Complexity is not an abstract theory dreamed up in an ivory tower. It is something that affects our personal day to day actions and has implications in the larger social, political and economic context in which we live. As globalization gains in importance, as social media makes us ever more connected, and as we as individuals strive to adapt to our rapidly changing world, an understanding and appreciation of complexity and its associated emergence becomes more important and valuable.