Laws of Physics and 21st Century Management Challenges

Managers often model their businesses using the wrong branch of physics!  We can’t solve the problems of the 21st century with the Newtonian physics that fueled the 18th century industrial revolution.  So what are better mathematical and physical models to use for modern Management Challenges?  The most important lesson business should learn from quantum mechanics is that there are NO CLOSED SYSTEMS!  The observer/experimenter always impacts the test results.  The most accurate models for building organizations are chaos theory and complex adaptive systems.  For some examples of these analyses see “Catastrophic Failure in Close-Coupled Open Systems” .

Managers often think, incorrectly, that they must stabilize and control their organizations.  They want to maintain equilibrium (a Newtonian idea that applies only to closed systems).  You must remember that in nature the only things anywhere near equilibrium with their surroundings are DEAD!  Living systems actively consume energy to defy entropy in what is called a state of dynamic non-change.

Organizations do not resemble a finely-tuned racing car; they are much more like the weather.
An example from Houston’s Hurricane Ike

  • We know there’s a hurricane in the Gulf.
  • We know it will make landfall at Cat 2 to Cat 4 somewhere between Corpus Christi, TX and Lake Charles, LA.
  • We know it takes up to 36 hours to evacuate Houston, if we start with the Galveston coast first.
  • We also know that in areas outside the tidal surge zone, most homes in Houston can withstand a Cat 3 (observed fact-2 in the last 30 years).
  • Much of the coastal flood plain cannot take a Cat 2.

       So, Houston Mayor, which people do we evacuate? when? 

Houston’s Mayor plays the probabilities.

  • Mandatory evacuations in flood plain by 36hrs before landfall – no exceptions!
    (hence few dead cats).
  • Inland, out of the 100 year flood plain, no evacuations – keep your vehicles out of the way of people who must move.
    (unless you have a medical condition requiring electricity and have no generator
    – e.g. evacuate small nursing homes).
  • In a flood plain or an unsound building? – use your own judgment.

This is the sort of thinking that works. (Compare the death toll in Katrina to Ike.)

The failing post-modernist view tells us that the correct replacement model is quantum mechanics, Schrödinger’s uncertainty principle.  They too miss the point.  Ask not whether you can pre-determine if Schrödinger’s cat will be alive or dead.  You must ask why anyone would suggest an experiment whose guaranteed result, if executed, will be to leave the world littered with dead cats.  That said, I often tell my clients that they “can’t repeal the laws of physics, so it’s time to get real.”  Actions do always have consequences.  Futurists easily predicted that the real estate bubble and Wall Street mismanagement would lead to a collapse, leaving the landscape littered with dying financial intuitions. The question was only how deep the bodies were piled.

Post-modernists misunderstand 20th century science.  For example, I continually hear people blithely claim the whole is greater than the sum of its parts.  Not so! The correct statement is that the whole is not equal to the sum of its parts.  In nature, the result of combinations is more often negative.  Look at Wall Street or the auto industry.  As a toxic whole gobbled up more and more, the sum of the parts became less and less, until the system failed.  If we grabbed an individual or a small work group and removed them from the failing environment, they would be much more effective.  In evolution, few mutations lead to butterflies, flowers or birds.  Most are fatal – we call them birth defects and cancers.

It may be accurate to say that we can never know the one best answer.  So what!  The majority of actions being proposed these days are obviously sub-optimal and many are fatally flawed.  In the science of chaotic, complex adaptive systems, it is actually not that hard to identify flawed solutions.  They’re the ones that produce nasty feedback loops that force a system into an irreversible downward spiral (think derivatives).  We don’t need to be passionate about proving the one right answer.  There will be many paths that will be survivable.  What we do need to get passionate about is avoiding the obviously dangerous actions.  We also need to be passionate about disputing the view that inaction is safe.

Post-modernists ask how we can know an idea is fatally flawed.  My first response is to suggest they learn enough basic math and science to understand how systems work.  However, there is a simpler answer.  Where you see dead bodies piling up or ever increasing despair and misery, you know the ideas being taken into action are flawed.  So the post-modernist claims the Taliban has a right to their religious views.  I say, ask the girl who was just raped and murdered for learning to read.  Bad ideas have terrible consequences in the real world.  We need to be passionate about spreading better ones – not perfect ones; just stuff that works to replace stuff that obviously does not.

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