‘International organizations and structures have had difficulty keeping pace with today’s hyper-connected, globalized world. Iconic 20th century global institutions, born in the aftermath of two brutal world wars, a global pandemic, and a worldwide depression, were created in the hope that humanity would never again face such unimaginable horror and destruction. These institutions have enjoyed some successes… (Yet the 21st century) presents far more complex, interconnected and interdependent challenges, which today’s global governance institutions seem unfit to tackle within their current configurations and cultures’ – Oxford Martin Report Now for the Long Term
We live in interesting times, one that is often contextualized as being a transition period as on the one hand our traditional industrial age systems of organization reach the end of their life cycle, show signs of faulting and becoming redundant, while on the other new networked information-based systems of origination are being born and this chasm between the two is nowhere more prominent than within the domain of social governance. The world of the 21st century presents us with a plethora of challenges that hardly need listing we are so aware of them, in the face of the complexity of these challenges our industrial age systems of organization appear fundamentally incapable of offering solutions, their inherent logic seems to stay bringing us back to insurmountable contradiction.
The rise of information technology is presenting us with new possibilities for social organization that were previously unavailable, they replace a dependency on centralized organization and enable much more direct person to person, peer-to-peer, forms of collaboration out of which networks emerge in an organic bottom-up fashion. These networked organizations are much more dynamic and normalized for the nonlinear volatile environments we are increasingly presented with. In these new forms of networked organization we can see the future and an alternative to the mass, centralized systems of organization inherent to the industrial age, they represent a new form of organization that seems aligned with the emerging context of the information and knowledge age.
The question then turns to how do we bridge the gap between industrial age institutions of governance and these new forms of network organizations? In this post, I will talk about what it might mean to apply complexity thinking to governance.
What Is Governance?
The need for social governance emerges naturally out of the interdependencies between social actors, what one actor(or group of actors) does effects others, this can be both in a positive way where actors combine or coordinate their resources and activities in order to achieve a combined effect of greater value than if all acted in isolation, what we call public value, but equally social governance arises naturally out of a need to regulate negative externalities through laws.
We will loosely define governance then as the system through which a group of people manages themselves, it is a combination of both a political process through which a society makes collective decisions and some form of administration that is responsible for implementing policies and regulating the public sector. A form of government refers to the set of political systems and institutions that make up the organization of a specific government.
What Is Social Complexity?
We can understand complexity as something that has many, interdependent and autonomous parts that are highly interconnected. Under this definition we can reason about the complexity of a social system along a number of different parameters:
Number of actors within a social system. By the number of actors we mean the number of autonomous individuals and groups, the more actors, the greater the complexity.
How interdependent are these actors? Interdependencies create complexity in that they represent very specific configurations with feedback loops, when we affect one part of the system it generates feedback and may affect other parts.
How connected are the individuals and the overall system? The more interconnected actors are the more complexity a social system we are dealing with
How dynamic and adaptive are individuals and institutions? Dynamic and adaptive systems can take many more states over time than static systems making them much more complex.
Gradually throughout human history, the power to steer society has diffused away from the chieftain or king towards a broader base of elected representatives, managers, bureaucrats and interest group leaders. Movement along this long-run trend has been far from linear or painless, and no one decision-making model has prevailed. Over time, however, economic growth has combined with changing values and institutions to reshape the nature, scope and means of exercising authority throughout society – in government, firms, associations and families. – OECD Governance in the 21st Century
The first major form to define the organization of societies is the tribe, which emerged in the Neolithic era some 5000 years ago. A tribe is viewed, historically or developmentally, as a social group existing before the development of, or outside of, states. A tribe is a distinct people, dependent on their land for their livelihood, who are largely self-sufficient. Its key organizing principle is kinship—initially of blood, and later also of brotherhood. Tribes are relatively undifferentiated and egalitarian with few levels of social stratification. Tribes are based upon limited or no communications technology with social and political relations being mediated through face to face contact.
‘In keeping with the primacy of kinship and the codes of conduct that stem from it, the classic tribe is egalitarian—its members share communally. It is segmentary—every part looks like every other part, and there is little or no specialization. And it is “acephalous” or headless—classic tribes do not have strong, central chiefs. (The “chiefdom” is a transitional phase between tribes and early states.)’ – David F. Ronfeldt
Centralized states and empires gradually eclipsed tribes as the dominant sociopolitical structure, a state is based upon a large cultural-political community that has become conscious of its coherence, unity, and particular interests. It is a much more abstract community than that of tribes as it goes beyond kinship relations as the basic social cohesion mechanism, it is objectively impersonal, even if each individual in the nation experiences him or herself as subjectively part of an embodied unity with others for the most part, members of a nation remain strangers.
Through centralization and hierarchy they represent a much more complex political system capable of sustaining many levels of social stratification and differentiation. The sociologist Max Weber described the state involving the development of authoritative institutions to govern a society, among other things, administrative specialization and differentiation, the professionalization of office cadres, replacement of ascriptive by achievement criteria, and the development of sanctioned instruments of coercion that spell an end to the egalitarianism of the tribal form. As not all social-political interaction can happen face to face states require more sophisticated information technologies in the form of written text and record keeping.
The modern nation-state rested upon the new-found knowledge of the scientific revolution and the new ideals of the enlightenment, this new scientific knowledge made public administration more technical orientated, new ideas from the enlightenment surrounding human rights provided a conceptual basis for an expansion of those involved within the political process giving rise to representative democracies, a new level of political complexity that came ultimately to be designed to represent all of the diverse opinions and interest within the society, majority as well as minority.
With the advent of industrial technologies such as the steam engine and later the telephone and radio, the mass of society could communicate with people and travel to places far from their indigenous locality. Economic industrialization went hand in hand with the rise of the modern nation-state, as transportation technologies enabled people to experience a wider geographic area as if it was one. National culture was frosted and sustained through the telephone, radio and later television which allowed a geographically dispersed population to share their collective set of ideas and experiences. Today the modern nation-state is the primary macro-scale system of organization in the world. Sovereign states are designed to have supreme and independent authority over a geographic area; all organizations on the regional and international level operate through or are regulated by the machinery of the nation-state.
“Public sector leaders around the world face a daunting challenge to deliver good governance in the 21st century. They are under increasing pressure to deliver more and better services to a growing urbanized population and to manage complex issues, from macroeconomic uncertainty to international conflicts, in an environment of diminishing trust in government, increasing bureaucratic complexity and natural resource constraints.” – World Economic Forum Future Government Report
Over the past few decades (within advanced economies) globalization and information technology have driven a rapid and fundamental change shifting many societies from industrial to post-industrial information and knowledge societies. This can be considered a fundamental transformation in that the basic resource that is being processed within these economies has shifted from tangible industrial goods to intangible information and knowledge services, this has profound effects on all areas of society and makes it comparable to the shift from agrarian to industrial societies.
Today this change in the fundamental resource that post-industrial societies process and the advent of information technology is driving a process of decentralization as it works against many of the powerful forces that drove centralization, mass production and the dominance of large organizations during the industrial age. With the shift in the primary locus of value to information and knowledge and the tools for accessing and processes this placed in the hands of many there is a radical redistribution of power, as individuals become re-empowered the dominance of centralized organization becomes relatively diminished.
On the international level ICT and globalization are enabling the emergence of global organizations as people become interconnected, interdependent and also now have the tools to set up global social organizations relatively easily, new forms of social networked organization are born on the internet that are not bound by geographic constraints but are instead based more upon the interest of group members.
Governments today are being caught in these networks both from the bottom up as individuals can set up their own networks and from the top-down as networked organization proliferates on the global level. In the face of this industrial age political systems of organization have been slow to adapt, resulting in a disengagement from a younger generation. Like many industrial age institutions governments, today require a deep architectural redesign in order to adapt to this changing environment.
“The once uncontested leaders of every arena, from religion to government and from military to finance, are increasingly aware that they face unprecedented constraints in what they can do with the power they have. Power has become easier to get, harder to use and far easier to lose. Big powers everywhere face a reckoning. As insurgents, fringe political parties, upstart citizen media outlets, leaderless young people in city squares, and charismatic individuals who seem to have “come from nowhere” shake up the old order, they are undermining and thwarting the once unquestioned mega players at every turn. This trend has many positive consequences as monopolists and tyrants become easier to challenge. But it also makes our traditional ways of organizing politics and governing ourselves — and the planet — very inadequate, even obsolete” – Moisés Naím
The Industrial Model To Governance
Much of the apparatus of public administration that we inherit today is based upon scientific management that derives from the work of Frederick Taylor. The reductionist approach of scientific management breaks systems down into their individual parts and focuses upon these well-defined components, within management this involves the dividing of an organization or process into categories, departments or stages. By doing this we create component parts that can be isolated and measured.
By breaking a process up in this way we are also able to isolate the organization’s components sufficiently to identify simple linear interactions of cause and effect, we can then use these simple cause and effect interactions to influence or control how the components function. We can measure its efficiency and control its output by manipulating its input. By using this method we can divide up a complex system like a large government into simple components that can be measured, controlled and thus managed in a top-down fashion.
This breaking down of the system into individual components then inevitably requires, at some stage for us to put all the parts back together so as to achieve the end product or result. In order to achieve the traditional organizations build a hierarchical pyramid right at the top of which is one element that is responsible for integrating the whole system. Below this are a small set of positions responsible for managing and integrating the primary domains of the organization and farther down more people are responsible for more specialized areas and so on until we get to the front lines of the organization. Each level is responsible for the integration of the different set of functions beneath it.
In this way the organization can be coordinated from one centralized position, all components can be controlled through a direct line of command and measured through a defined set of metrics relevant to their domain. In order to manage the people within these positions, that are in themselves inherently complex, reductionism depends upon a model of the individual as extrinsically motivated. Key to this is the idea of rational choice, that is when faced with a choice between one or more alternatives, human actors will make a “rational” decision based only on maximizing what economist call their ‘utility’ in consequence their individual and collective behavior can be manipulated through the creation of incentive systems that harness this.
This model of the industrial organization was developed in response to a particular environment that required the large scale, mass production of standardized products and services, in a stable and predictable fashion. Within this context, the industrial model for organizations has in many ways proven itself highly successful. But faced with the changing environment of the 21st century its limitations are becoming increasingly clear to us, so let’s take a quick look as some of these limitations before we move on.
Focused on Static Components
Firstly, Reductionism focuses on the static components of an organization and the metrics we apply to valuing them, in so doing it systematically diminishes the space around and between them that is not measured, thus the system can become reduced to a simple set of metrics that are depleting some resource that may be more difficult to quantify but is equally required to maintain the system in the long term. A good example of this is the failure of our metrics for economic growth to incorporate the natural resources it depends upon. The net result of this can be a short-term profit at a long-term expense making the system unsustainable.
Top-down Information Flow
Secondly, Inherent in the command and control paradigm is the idea that a person or few people in charge give the solution, that it is the only solution, to other people, who are in charge of implementing it. Thus the organization is heavily dependent upon the limited cognitive and information processing capabilities of a few individuals at the top of the hierarchy. This also reduces the capacity for the majority of the organization’s members to take initiative, act autonomously and respond to local-level information.
Static System of Organization
Lastly, the reductionist model to organization is built on the axiom of a relatively static system in a relatively static environment, the primary focus of this form of control is to remove surprise, to dampen down change and keep an organization moving stably through time according to the prior intentions of its members. All of these features mean that these systems are resistant to change, innovation and evolution, and thus inept at dealing with dynamic and volatile environments.
Vectors Of Change
All organizations operate within an environment and have to adapt to that environment in order to remain relevancy, here we will analyze a number of key vectors of change that are fundamentally reshaping the sociopolitical environment that governments operate within today. The 21st century takes us into a more complex environment that is more heterogeneous, more interdependent, more interconnected, more dynamic and volatile. In this section, we will be taking a quick analysis of each of these vectors of change that are transforming the sociopolitical environment.
1. Increase In Quantity Of Autonomous Actors
Today we have more political elements (individuals and organizations) interacting on many different levels from the local to the regional to the national and international, the current environment is not only characterized by the proliferation of elements but also of diversity between these actors, resulting in a much more heterogeneous environment than previously existed.
On the local level information technology has empowered individuals with collaborative tools enabling them to set up their own networks of collaboration, it has given individuals and small groups powerful tools for mass communications that were previously only available to the elite.
Within the international environment we have also seen the proliferation of significant actors and diversity amongst them, with the rise of the emerging markets and G20 the Breton Woods framework for global governance that is composed of a limited number of culturally, socially and economically homogeneous actors is giving way to a much more diverse and heterogeneous nexus composed of many more influential political actors that represent very different cultural and economic backgrounds. Coupled with this has been a dramatic rise in the number of NGOs representing a wide variety of interests.
2. Heightened Interdependency
Increased interconnectivity has driven increased interdependence, in an interdependent world what is good for others is good for me, both within society and between societies, this works to reduce zero-sum games and make competition a less viable strategy. On the international level this is encapsulated within the theory of complex interdependence, which looks at how globalization and the proliferation of trade relations have created a network of interdependencies that have reduced conflict(and its likelihood) between developed countries, this is supported by empirical data that shows the reduction in wars since the fall of the Berlin Wall.
With the tools for real-time communications and collaboration individuals can now self-organize into networks without the expensive overhead costs that were previously required, again making collaboration a much easier and viable strategy, organizations are less defined by a hierarchical structure but increasingly horizontal in design giving individuals greater autonomy, within the traditional organization components are constrained in a top-down fashion but with these collaborative organizations people retain some degree of autonomy. The sharing of information enables identification and development of collaborative frameworks around situations that would otherwise gravitate towards competition, people are using these new tools to self-organize around global challenges that affect all from climate change to economic inequality.
3. Heightened Interconnectivity
Information technology and globalization have networked our world, reduction in collaboration costs and increased connectivity across the boundaries of organizations is opening them up, making them porous and less well defined. This reduction in interaction costs means systems of organization can be unbundled and distributed out into networks, as we have seen with the emergence of a global supply change where the reduction in transportation costs, tariffs and increased ease of collaboration has worked to unbundle the production process and distribute it out across many countries.
Heightened connectivity is enabling much more informal systems of organization to emerge. Centralized organizations with high organizational overheads had to be formalized in order to constrain components and achieve sufficiently high enough levels of productivity. The formal industrial model had a threshold to productivity bellow which value creation was not incorporated into the model, with increased connectivity much more informal networks of collaboration can be setup on-the-fly, (such as during disaster recovery or during the development of political movements and protests) value can be gained from the mass of people that were previously excluded by the formal model with crowdsourcing being an example of this, again this reduction in barriers between producers and consumers is working to reduce the definition to the boundaries of organizations and opening them up. Reduction in barriers to the flow of goods, services, people and information means events can spread at a much faster rate and have a nonlinear effect, small events in some remote part of Asia can end up having a significant effect within the global economy and society, how real events play out like the spreading of diseases or financial crisis is increasingly effect by networks of connections that cross borders, networks that are often(at best) un-regulated or even unknown.
4. Volatility & Dynamics
The pace of change has greatly increased over the past few decades and volatility is the new norm that organizations need to be able to adapt to. Industrial age systems of organization are designed to operate in fundamentally stable and predictable environments and typically resist change being defined by static and stable structures of organization, departments, positions etc. Innovation both social and technological is driving rapid change and organizations need to be built around processes and functions and less around components or structures.
I.T. is enabling a world of real-time systems, Big Data and event processing can detect and respond to events before they happen, the next generation of technologies and organizations enabled by I.T. are greatly more adaptive and flexible being capable of configuring and reconfiguring themselves in response to a changing environment, this is an event-driven world where organizations are no long-held in one predefined homogeneous configuration but are able to adapt to and respond to events as they happen, a very different world to the one we are used to.
Another vector of change under this theme is an increased shift from linear to nonlinear systems lifecycle. The industrial model was linear, a one way progression from cradle to grave but the rise in the paradigm of sustainability is driving a reassessment of this model and promoting an awareness of the value to a more cyclical model, key to this is the idea of harnessing the mechanics of evolution in order for systems to stay innovating and regenerating themselves in order to adapt to change.
The world of the 21st century is fundamentally more volatile and dynamic than that of previous centuries when the apparatus of our governmental systems were developed, reshaping these institutions in response to this will require a degree of disaggregation to their monolithic design, a structure that worked well in more stable and predictable environments but is not well suited to this more dynamic environment of contemporary reality.