In the previous post, we discussed the fact that companies that grow out of alignment to the world around them will gradually lose their effectiveness — tobacco companies being a prime example. The choice those companies face is to transition what they do, so that they re-align themselves with society, or face extinction.

To recap, the boundaries that define a company as a complex system are as follows:

• staff
• shareholders
• customers
• community
• society

The changing nature of the world has changed the way that these boundaries work. In The World Is Flat, Thomas Friedman makes the case that there is no longer any difference between Baltimore and Bangalore, between Seoul and Silicon Valley. Ever-increasing connectivity has dissolved distances and removed barriers.

So if barriers are gone, does that mean there are no more boundaries? Far from it. What it actually means is that our alignment across all focus areas is more important than ever — particularly our alignment with community and society.

In the old, non-flat, protectionist world, domestic manufacturers didn’t experience the friction of foreign products. Domestic unions were free from the friction of cheap overseas labor. Large publishing houses didn’t suffer from the friction of upstart bloggers.

In a flat world, all of these things are in contact with each other.

Imagine a ball rolling along a carpet. In the old model, the ball hovered above the carpet — the buffers of disconnectedness, isolation and protectionism meant that our actions didn’t provoke the friction with the outside world that they otherwise might.

Over the past few decades, all of those buffers have been ripped away. Thanks to the Internet, bandwidth, teleconferencing, and inexpensive travel, our behavior — which used to be compared only to our immediate neighbors — is now interacting with (or rubbing up against) the behavior of people halfway around the world.

So it’s more important than ever to have an inclusive focus across all stakeholders and boundary areas. The flat world means that we can’t ‘get away with it’ anymore. The highest global standard is the standard we are held accountable to. And, like the law, ignorance is no excuse for noncompliance.

How have the changing boundaries of the world affected your business?

Last week, I wrote about the boundaries of complex systems. Essentially, they work like gears with ratchet teeth: the more consistent the direction of travel, the more efficient the system itself. Here’s the picture:

The book Built to Last, by Jim Collins and Jerry Porras, describes many fascinating characteristics of visionary companies, with the overall gist of the book being that companies that align themselves around a shared purpose and values outperform those that don’t. One of the more interesting of the authors’ observations is that it doesn’t seem to matter what that purpose and those values might be.

In particular, Built to Last uses as one of its reference companies Philip Morris. Regardless of your feelings about smoking, few people think the words ‘values-driven’ and ‘tobacco’ go hand in hand. But Collins and Porras describe a strongly adhered to and clearly articulated culture, passionate about freedom of choice.

While those values are consistent with the outside world, the company will flourish. While they are inconsistent, the company will suffer. Good/bad, healthy/unhealthy… these subjective concepts make no difference in this equation. What matters to company performance is what matters to the stakeholders, all of them: staff, shareholders, customers, community and society.

If the staff is passionate about their values, the shareholders are getting a good return on investment, the customers love the product, and community and society are supportive or not opposed, then the company will do well.

It is only in the past few decades that cigarettes began to be considered a vice—and the tobacco companies have paid for it. Increased PR expenses, litigation costs, decreased revenues… you can see the challenges that can be created in a company when it falls out of alignment with the society around it.

So this is the concept for today: self-alignment is not enough. Customer service is not enough. Taking care of relationships is not enough. Our companies—our lives—are governed by the totality of our focus.

Have you observed this in your own experience? I’d love to hear about it.

I am totally unique.

Nobody on this planet is exactly like me. Nobody thinks my thoughts, dreams my dreams, or lives my life. In so many ways, I am a snowflake: an utterly unique, totally individual, mold-breaking creature.

And yet, I am vastly predictable. For example, I am guaranteed to cry at any and all opportunities — and I mean ANY. An episode of The Simpsons where Homer feels bad about not being a good father. Lethal Weapon 4 where Joe Pesci talked about Froggy. This ad for New Zealand Post (I have to change the channel when it comes on, or risk breaking down into an incoherent sobbing mess).

I am guaranteed to cheer, loudly, at sporting and theatrical events. I am guaranteed to want to see the latest big-budget action flick. I am guaranteed, in short, to behave in certain ways, ways that can be tapped into and understood and used to identify me as a potential customer.

So am I unique or aren’t I? In Sunday’s Guardian, a variety of thinkers sounded off on the Pros and Cons of a Google World. Adam Curtis, the director of The Power of Nightmares (a TV documentary on terrorism), had this to say:

The millions of searches that engines like Google record and store reveal the shifting desires and fears of individuals. They’re leading to a new fragmented sensibility among millions of people in the way they see and experience the world. Machines like Google know something about us as human beings that we really don’t want to know - that we are not individuals: ‘If you like this then you will like that…’. So Google is a paradox. It gives us the feeling we are wild and free individuals, powerfully reinforcing an idea of us as heroic figures in the consumer age. Yet at the same time it is powerfully proving the opposite - that we are completely predictable. Out of that is going to come some very interesting political ideas of how to organise society and also new artistic ideas. The really interesting question is whether it is really a cult….

Here is the thing: if we were truly unique and truly unpredictable; if our actions were in no way interconnected and in no way integrated; if we didn’t have some means of anticipating, to some degree, the behavior of others — our lives would be ruined.

You wouldn’t have any idea whether your co-workers would show up or whether your spouse would be waiting at home. Events that require critical mass, like rock concerts and political movements, would be impossible. And none of the products that tap into the short head of the marketplace would exist.

In order to function, the complexity of our lives requires repetition, patterns, and short cuts. If we had to make a truly individualized decision for every action we take, we would become paralyzed. If we tried to assimilate all of the data available to us at any given moment, we would go insane.

And so we become hybrids. We are predictable to one degree and individual to another, and the combination of the two produces a unique result that nonetheless overlaps with millions of others.

Thank goodness. If we didn’t overlap, there would be no airlines, no iPhone, no Internet.

So are you happy to be one of the crowd? Or do you see yourself as a unique individual?

P.S. I haven’t forgotten the last post, and my promise of a post on Big Tobacco and complex systems… coming soon! Also hat tip to Brian Hayes for the link to the Guardian story.

In complex systems, the boundaries are what define the size of the system. In the research that generated the VortexDNA algorithm, companies—which are themselves complex systems—were shown to have five boundaries:

• staff
• shareholders
• customers
• community
• society

Each person’s complex system has five corresponding boundaries:

• happiness
• earning respect
• relationships
• community
• society

We’ve explored before the concept that the boundaries are not independent of each other. Those companies, for example, that have an inclusive focus on all five boundaries are the ones that significantly outperform the rest of the market. This makes a lot of sense if you think about it: imagine a company that took really good care of its shareholders, its customers, its community and its society, but that neglected its employees. This fictional company would not have a sustainable model, because ultimately the people who drive the corporate activity would not continue to perform.

In previous posts, I’ve shown the integrated nature of these boundaries by drawing a circle encompassing the five individual boundary circles.

But I’ve recently been visualizing it in a different way, and I wanted to share it with you and get your feedback.

Boundaries in Complex Systems

The reason these things are interconnected isn’t because there’s a circle around them, it’s because each one interacts with the others, and any friction in that interaction affects the effectiveness of the system.

So the boundaries are really more like gears with ratchet teeth, which work really well if they’re all traveling in the same direction. If one focus area starts to go the other way, though, the system faces real problems. So the boundaries might be better visualized this way:

The innermost circle is Happiness, followed by Respect, Relationships, Community and Society. You can easily see how one boundary might be bigger than the next but they all have to work together for the system to function.

In my next post, I’ll discuss Big Tobacco and complex systems. For now, I invite your feedback on this revised model. Does it make sense to you?

As promised, I’ve created a simple video of my presentation at WORLDCOMP’08, the International Conference on Semantic Web and Web Services. The whole thing is around 20 minutes long; I’ve broken it up into three short segments.

You are also welcome to download the PowerPoint slide show here. (Note: It’s just over 5MBs.)

I hope you enjoy the presentation, and I look forward to your feedback in the comments!

Part I: What is a complex system?

Part II: Complex systems at work

Part III: Predicting human behavior

Last week we talked about some of the features of complex systems: emergence and self-organization. The discussion got me thinking about the complex system created by human beings. If we accept that the human network is non-Euclidean, what does that mean for the mathematics of our interactions?

Euclidean Network Geometry

When I think of networks, I tend to imagine two-dimensional diagrams of nodes and connections, the stereotypical centralized, decentralized, and distributed versions:

When you look at the above networks, you can see immediately that they are finite: there’s a border to each one. And, yes, they are simplified and simplistic, but take another look at the image I posted last week, ostensibly a representation of the Internet:

This image looks spherical, but I’ve noticed something important: you’d actually have to cover its outer nodes with a membrane to make it form a sphere. It’s the difference between a soccer ball and a pom-pom.

Non-Euclidean Network Geometry

So here’s something else to think about: what about a network shaped like a soccer ball? One that doesn’t need a membrane to cover it and that doesn’t have any terminal nodes?

It may sound like an innocuous question, but consider this: Euclidean geometry is what we all learned in school; it includes some of the oldest known mathematics. But it took non-Euclidean geometry—not accepted until the 19th century—to allow for navigation of the globe and Einstein’s Special Theory of Relativity.

The basic difference here is straightforward: Euclidean geometry is based on a flat plane, which allows for things like parallel lines and right triangles. Non-Euclidean geometry, specifically the elliptical geometry that refers to spheres, does not allow for parallel lines and allows for triangles with two 90-degree angles.

So think for a moment about the network constructs above. Imagine that each node were a person, and each line a connection between people. Now imagine a network consisting of all the people on our planet. A simplistic model of it might look like this:

So here’s the ultimate question: what are the mathematical implications of a non-Euclidean human network?

I invite your ideas on the matter…

(Updated July 4 to correct a grammatical error I had made.)