How to bring complexity into business (and avoid nasty surprises)

There may not be a chameleon on the roof, but there are, in fact, bats in the belfry. At least there are at a university library in Portugal, and even though some may recoil at the flying mammals, the folks in charge are happy to have them there, because they are able to see the implications for the larger picture. The bats don’t both people, especially since they are nocturnal and the library closes in the late afternoon. And they don’t mess with the books. They do leave guano behind, but that is easily caught by fabric placed on the floors and tables each night and cleaned each morning. But the bigger picture, is the benefit they provide. As insectivores, the bats devour pests that would otherwise be eating the books. This bit of symbiosis has been in place for at least a couple of hundred years — if the bats had been displaced in the 19th century, the library today might be spending untold amounts on remediation and restoration.

In order to see the chameleon on the roof, you need to look up, and around. We can’t always see the complete picture, but there are approaches that ensure that we look for it, and acknowledge that a narrow viewpoint won’t predict all outcomes. A quick google search of “unintended consequences” turns up plenty of anecdotes — but I’d argue that in many cases “unintended” should not have meant not foreseen. For instance, as the above list points out “Use-it-or-lose it budget policies ostensibly lead to more efficient distribution of company resources. In reality, it’s not uncommon for managers to blow year end budgets on frivolous purchases so that they don’t lose it next year.” It really should not be hard to predict how budget owners are going to react to a scarce resource they might lose. More recently, Facebook and Twitter have been criticized for their naivete in not foreseeing the negative ways their networks could be used — which many social scientists, including me, feel could have been modeled by people willing to look beyond the rosy scenarios.

The first step in navigating the complexity of the world, and the people who inhabit it is to recognize that there is complexity. Few problems have single solutions and few problems are unaffected by other parts of the system. Acknowledging complexity allows you to then look for it, which in turn requires lateral thinking and a holistic viewpoint.

Once you have recognized that there is complexity, there are several approaches to help uncover those previously “unseen” forces and their implications.

1. Consider all the perspectives you can think of, whether or not you consider them stakeholders now. This should of course include employees, end users, and buyers. But you should go beyond that, who else might your product or service touch or affect, positively or negatively? Ride sharing services did not consider impacts on taxi drivers, traffic, or public transit systems and are slowly starting to see regulatory pushback. Companies pushing for big tax concessions to move to new cities should look at the larger picture of their impact on the community, beyond “job creation.” Make a list, for instance, if you think your product or service is disruptive talk to the people you are disrupting. Have open discussions with community groups or activists, especially if you think they may be opposed to what you have planned — learn why they are concerned. You will soon find that the list of potential stakeholders is much larger than you originally imagined.

2. Take a broad view of what else is going on in the world. Competition may come from unexpected angles. A classic example is greeting cards. The companies printing paper cards had to look out for electronic cards, and many were reasonably quick to create their own online offering. But what about the move to simply send good wishes over social media? Trends can emerge seemingly overnight — #metoo surprised many people, but others saw it coming. New technologies can disrupt, but they can also be buzzwords (blockchain is great for lots of things, but it is great for what you need to do)? Most importantly, broad view also means distinguishing between what is “in the moment” important and what has lasting impact. A hot tweet or meme may fade in a week or two, deep social issues do not go away.

3. With this information — feedback from the broad range of individual perspectives, broad data about the state of the world, start building scenarios. Best case, worst case, far-out case. Once again, include a broad range of people and perspectives in doing this. For instance, looking at data usages should not just include the professional privacy expert. Find someone who in their daily life takes extreme measures to protect their privacy and even stay of the grid.

4. Get feedback on those scenarios. I specifically do not say “validate” your scenarios, because the purpose is not about confirmation, but about revision and ongoing learning. Feedback should come from a breadth of stakeholders — not the same people, per se, but the same range of perspectives. The questions you ask should be:

· What are we missing?

· How likely do you think this is?

· What could increase or decrease the likelihood of this happening?

· What would be the effect of this happening?

Throughout this process, it is crucial to remember that impact goes beyond the economic. There are social, political, environmental, and other considerations. Ultimately many of those impacts can and do affect the bottom line but financial models don’t currently account for them, leading to too many “unintended consequences.”