1. 1 Introduction to Complex Systems: How to think like nature Russ Abbott Sr. Engr. Spec. 310-336-1398 Russ.Abbott@Aero.org  1998-2007. The Aerospace Corporation. All Rights Reserved. Innovation: evolution generalized and bottom-up resource allocation.

2. 2 Innovative environments The Internet The inspiration for net-centricity and the GIG Goal: to bring the creativity of the internet to the DoD What do innovative environments have in common? What do innovative environments have in common? Other innovative environments The scientific and technological research process The market economy Biological evolution

3. 3 Innovative environments The Internet The inspiration for net-centricity and the GIG Goal: to bring the creativity of the internet to the DoD What do innovative environments have in common? What do innovative environments have in common? Other innovative environments The scientific and technological research process The market economy Biological evolution

4. 4 The innovative process Innovation is always the result of an evolutionary process. Generate new variants (e.g., ideas)—typically by combining and modifying existing ones. –This is a random process in nature. –Random or not isn’t the point. The point is to generate lots of possibilities. Select the good ones. (Daniel Dennett, Darwin's Dangerous Idea)

5. 5 Designs in various environments Recorded asCreated by How instantiated Established InternetSoftware Programmers who know the techniques Self-instantiatingBy users Scientific knowledge Publications Scientists who know the literature The publication is the instantiation By peer review Market economy Trade secrets Product developers who know the tricks Entrepreneurial manufacturing By consumers Biological evolution DNA Combination and mutation Reproduction Whether it finds a niche Entities: nature’s memes Implicit designs Construction, combination and mutation Implementation of a level of abstraction Whether it finds a niche All bottom-up

6. 6 How does this apply to organizations? To ensure innovation: Sounds simple doesn’t it? Creation and trial Encourage the prolific generation and trial of new ideas. Establishing successful variants Allow new ideas to flourish or wither based on how well they do.

7. 7 Initial funding Prospect of failure ApprovalsEstablishment Biological evolution Capitalism in the small. Nature always experiments. Most are failures, which means death. (But no choice given.) None. Bottom-up resource allocation defines success. Entrepreneur Little needed for an Internet experiment. Perhaps some embarrassment, time, money; not much more. Few. Entrepreneur wants rewards. Bottom-up resource allocation. Bureaucracy Proposals, competition, forms, etc. When 100% Mission Success is the group goal who wants a failure in his/her personnel file? Far too many. Managers have other priorities. Top-down resource allocation. New ideas aren’t the problem. Trying them out Innovation in various environments Getting good ideas established We save ourselves by spin-doctoring and benign neglect

8. 8 How groups benefit from individual autonomy Exploratory behavior typically requires autonomous individuals. But much exploratory behavior is wasted effort. Success generally depends on more than a single lone inventor. –Successful exploratory behavior typically requires multiple, loosely coordinated, i.e., autonomous, individuals. One may hit the jackpot while the others drill dry holes. For a group to benefit from the discoveries of individuals, there must be mechanisms that bring those discoveries back into the group and allow them to take root. –Establishment is often built into a group’s process. –At the evolutionary level—including our hyper-evolutionary global society—this frequently requires “creative destruction,” which is often far more difficult to accept. Exploratory behavior typically requires autonomous individuals. But much exploratory behavior is wasted effort. Success generally depends on more than a single lone inventor. –Successful exploratory behavior typically requires multiple, loosely coordinated, i.e., autonomous, individuals. One may hit the jackpot while the others drill dry holes. For a group to benefit from the discoveries of individuals, there must be mechanisms that bring those discoveries back into the group and allow them to take root. –Establishment is often built into a group’s process. –At the evolutionary level—including our hyper-evolutionary global society—this frequently requires “creative destruction,” which is often far more difficult to accept. Markets are how we integrate creative destruction into society. Ant foraging; building out the circulatory system. Schumpeter

9. 9 Implications for C2 There is no “commander’s intent” in nature or in the market. But there is something like (commander’s) intent in organisms. How do successful organisms work? A simplified model. –Lower levels discover opportunities through exploratory behavior. Constrained by “rules of engagement,” which protect them from harm. Initiatives often grow from the “edges,” where perception occurs. –Higher levels provide perspective and impose constraints. They do not primarily issue commands. Additional resources recruited as success builds—if it does. But lots of opportunities to withhold support or shape direction. This is a bottom-up model of resource allocation. Decisions about increasingly significant commitments made at increasingly higher levels. If entire organism commits, becomes “commanders intent.” To implement this model one should stay healthy and build skills and capabilities, which can be recruited/applied/committed when relevant. Different from starting with limited and narrowly focused top-level missions, goals, and objectives. Top-level mission is to survive, to build skills, and to ensure an environment within which this process can proceed and the organism can thrive. There is no “commander’s intent” in nature or in the market. But there is something like (commander’s) intent in organisms. How do successful organisms work? A simplified model. –Lower levels discover opportunities through exploratory behavior. Constrained by “rules of engagement,” which protect them from harm. Initiatives often grow from the “edges,” where perception occurs. –Higher levels provide perspective and impose constraints. They do not primarily issue commands. Additional resources recruited as success builds—if it does. But lots of opportunities to withhold support or shape direction. This is a bottom-up model of resource allocation. Decisions about increasingly significant commitments made at increasingly higher levels. If entire organism commits, becomes “commanders intent.” To implement this model one should stay healthy and build skills and capabilities, which can be recruited/applied/committed when relevant. Different from starting with limited and narrowly focused top-level missions, goals, and objectives. Top-level mission is to survive, to build skills, and to ensure an environment within which this process can proceed and the organism can thrive.

10. 10 Ensuring quality: markets vs. centralized control Markets ensure a reasonably high level of quality by letting many variants appear and selecting the good ones. –To do this requires the ability to recognize quality when one sees it means to generate lots of variants the luxury of allowing low quality items come into being and then be rejected. –If these pertain, quality is (relatively) easy. Centralized control ensures quality by rigid oversight. –To do this requires that one know in advance how to produce quality and the means to ensure the knowledge is applied. –This is much harder.