What Leaders Can Learn from Order and Chaos
“The crucial skill was insight, the ability to see connections.”
— M. Mitchell Waldrop, Complexity
Before the 2008 financial crisis, we planned 300 branches for UniCredit Romania. When the crisis came, we canceled the expansion.
Three hundred branches represent a concrete ambition. You can put it into a presentation, assign responsibilities, and measure progress. What you cannot do is hold the world still while you carry out the plan.
That experience comes to mind when I consider M. Mitchell Waldrop’s “Complexity: The Emerging Science at the Edge of Order and Chaos” (1992). Following researchers around the Santa Fe Institute, Waldrop explores how interactions produce patterns that no individual participant has designed.
Writing about economist Brian Arthur’s challenge to conventional thinking, he puts the difficulty plainly: “The world isn’t stable.”
Of course, we know that. Yet our plans can quietly assume otherwise.
The Organization Between the Boxes
An organization chart shows who reports to whom. It cannot show who trusts whom, which disagreements remain unspoken, or how quickly bad news travels upstairs.
Those relationships matter enormously.
Imagine a bank rewarding branches mainly for lending growth. Managers pursue their targets. Credit teams come under pressure. Competitors respond with more attractive offers. Customers take on additional borrowing. Each decision may look reasonable on its own, but together they make the entire system more vulnerable.
Complexity asks us to pay attention to how these actions connect. In particular, emergence describes patterns arising through interactions among participants.
For a chairman, this changes where to look when something goes wrong. The immediate temptation may be to find the responsible manager. Sometimes, that is appropriate. But I would also want to understand the incentives, the information available, and the pressures we ourselves helped create.
Otherwise, we may replace the person and reproduce the problem.
Culture works in much the same way. A board can encourage openness, but people watch what happens to the colleague who challenges a powerful executive. Their response to that moment may shape the next six months of conversations.
What Success Can Hide
Arthur’s work on increasing returns is especially relevant here. An early advantage can attract further support, strengthening that advantage. Waldrop condenses the mechanism into a memorable phrase: “Them that has gets,” meaning that those who already have an advantage gain even more.
I can see an organizational version of this. A successful division receives more investment, recruits stronger people, and gains greater influence over strategy. Success becomes easier to repeat. Gradually, people may judge every new proposal against their way of thinking.
There are good reasons to back successful people. The difficulty begins when confidence in their record becomes immunity from questioning.
Waldrop describes Arthur’s frustration when respected economists dismissed his ideas. That episode makes me think about how easily experience can become a filter through which unfamiliar evidence never passes.
Around a board table, the strongest argument may belong to someone with the least impressive record. We still have to hear it.
I would be concerned if a management team could explain every success but struggled to name an assumption it had recently abandoned.
Room to Adapt
The book’s phrase “edge of chaos” can tempt us into romanticizing disruption.
Its scientific background includes Chris Langton’s research on cellular automata, which suggested that a transition between ordered and disordered behavior could create favorable conditions for processing information. Applying that idea to leadership requires judgment; those models don’t establish a universal rule for organizations.
The question it raises for me is practical: how much room do people have to adapt?
Too many approvals can make an organization painfully slow. Constant restructuring can make an organization as ineffective as it was before. People need time to develop competence and working relationships. They also need permission to change a routine that no longer serves its purpose.
Banking makes the tension particularly clear. Accurate reporting and reliable controls are essential. Within those boundaries, teams still need discretion to solve customer problems and improve how work gets done.
I would be reluctant to prescribe the same degree of freedom everywhere. The consequences of an error matter. So does the experience of the decision-makers.
Understanding Takes Work
One passage I find useful concerns Arthur’s early consulting experience. He describes testing explanations against what people inside a business actually knew, then returning to the problem, “clarifying and clarifying”.
There is patience in that description. It gives understanding time to develop.
A board receives information at a considerable distance from everyday work. By the time the meeting receives a problem, someone has usually selected, summarized, and organized it for discussion. That is necessary, but something can disappear along the way.
I would want to hear where the explanation is unclear. What did the customer say that does not fit our account? Why did the same initiative work in one branch and fail in another?
Where possible, a limited experiment can help answer such questions. Agree on what to observe, how much exposure is acceptable, and when to review the result. Then permit people to report disappointment without disguising it as progress.
Returning to our abandoned expansion plan, I think the uncomfortable part of leadership is accepting that a decision can have been reasonable and still need to change. They have committed resources. People have worked hard to achieve their goals. Pride enters the discussion whether we acknowledge it or not.
Waldrop’s book makes me more attentive to that difficulty. We remain responsible for deciding, even when our understanding is incomplete.
I would like to believe that, faced with the next uncomfortable piece of evidence, I would make room for it before defending the plan.
If you’re interested in exploring this book further, you can find it available here on Amazon.
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