Complicated vs Complex Outcomes

I've been asked some questions on complex outcomes so I thought I'll blog it. Question: whats the difference between complicated and complex outcomes/systems and what's the difference between performance and outcome-based contracts?

Some of you who are systems-inclined/educated people would know the answer to this. Here are a few examples of complicated outcomes:

1. Getting your baggage from London to Sydney

2. Designing and constructing a village/township

3. Brain surgery

4. Putting a man on the moon

Here are some examples of complex outcomes

1. Giving you a good experience from London to Sydney (customer experience)

2. Designing and creating a community

3. Health

4. Bringing up a child

Whats the same? Both complicated and complex outcomes have multiple components and entities. They also have many moving parts that interact. But the key differences between the 2 are (1) no 'mission control' (non-determinism) and (2) emergence

Let me elaborate on this. In brain surgery, the doctor is in charge. in putting the man on the moon, Houston is in charge. in getting the village/township up and ready, the town planner/architect is in charge. These are complicated outcomes but there they could be determined with good algorithms, calculations, specifications, implementation - and there is a command and control structure. In complex outcomes, there is no mission control. These outcomes are achieved because they are co-created, collaborative, interactive outcomes that emerged from the system. Yet, very often, these are the outcomes we want - customer experience, communities (think facebook), nationhood, a family.

Traditional science and engineering has taught us to reduce everything and then put them together to get the outcomes we want. That's good if we want complicated outcomes. Not so good if you want complex outcomes because in complex outcomes, the entities are autonomous (think of the recalcitrant child, or the villagers), and the outcomes we want require collaboration and co-creation without any explicit control mechanisms. We would like our children to co-create a family, we want the villagers to co-create the community but we dont have rights, controls or powers over their co-creation resources.

Moving to the commercial world, that's the essential difference between performance and outcome-based contracts. Performance is complicated. I can get the performance of a supply chain of an aircraft by putting together people (who follow processes), processes, assets, etc. and I can determine that performance by ensuring everything works smoothly so that the plane is available and 'fly-able'. However, I can't get the outcome - flight from london to singapore without the help of the pilot, the engine, the avionics - usually provided by different firms or even the passengers (who may be late); so the availability or 'fly-ability' of the plane is a complicated (performance) but the flight from london to singapore by a plane is complex (outcome).

Does that mean we cannot design for complex outcomes?

Ah, now we go into my world. This is the world I inhabit. Value creating Socio-technical systems for complicated performance and complex outcomes. There is interaction between the two of course and often you can't really tell between what is complicated and what is complex. Achieving complex outcomes may sometimes lead to achieving good complicated performance. And sometimes not. Sometimes achieving good complex outcomes could result in greater complication in 'output' performance or even reduced 'output' performance - think NHS whose targets are hugely 'performance' and not outcomes (don't get me started on metrics.... sigh). What this means is that sometimes complicated performances are aligned with complex outcomes. Sometimes they are not because complicated performances could result in perverse behaviours leading to poor complex outcomes. Example? Easy. Imagine measuring a doctor's performance based on how many people he treats. Worse metric in the world (but many healthcare people already know that). It incentivises the doctor to 'treat' and count the numbers treated rather than maintain good health and well being in the community (which of course reduces the number of people being treated). you get my meaning.

So the first thing to do with any system is to check what is complicated and what is complex. What is the value or outcome each actor/entity wish to get from the system, how do they co-create it and how is each actor/entity's co-creation aligned to the system outcomes. Is the system outcome complicated (deterministic) or complex (emergent)? how are the complicated performances aligned with the complex outcomes? How do they interact? What are the resources to co-create the complex? or complicated? are they human or material (stuff)? who are the 'actors' or 'entities' that integrate these resources that co-create that outcome? That is the heart of where my current work sits. And why SDLogic (Vargo & Lusch 2004, 2008) is a useful lens for such environments. Some of my current research into contexting, enabling platforms have actually made some advances so watch this space.

Oh, dont forget the very human tendency when we talk about outcome to only like to talk about the 'outcomes' we can control. It took me ages in a national library project to get them understand that their true outcome is their contribution and alignment towards achieving the nation's literacy (which they don't control). they preferred to talk about their outcomes as book browsing, lending etc (which they do control).

Increasingly, we see governments, firms, institutions trying their best to 'engineer' or 'specify' so that complex outcomes could be achieved. to them, i say - 'which part of emergence did you not get?' We have spent the last 100 years doing complicated rather well. We can pat our backs on putting the man on the moon, doing brain surgeries etc. We are now moving to a world where complex outcomes matter and this is a new capability. This capability uses different words. We can determine complicated outcomes. We can only enable complex outcomes. We can specify complicated systems. We can only intervene in complex systems. Often, the best way to think about whether a system is complex or complicated is to ask - 'what is the outcome'; 'is it achievable through a command and control structure' and if the latter is no, then it's usually complex.

What has happened in the last 50 years is that we've been trying to use deterministic tools to achieve emergent outcomes, essentially because those are the only tools we have learnt (systems thinkers are still a minority unfortunately). We treat complex systems like complicated systems. we try to design, specify, impose, dictate when we should be designing, enabling, intervening, stablising. The former is a different skill set and have a different set of tools from the latter. And before you think that we can treat all the world as complex, we need to factor in the fact that we have built 100 years of complicated legacy systems, often with some measure of success. The politics and boundaries of complicated legacy systems sitting within complex system/outcomes cannot be ignored. We do not have a clean slate to design systems for complex outcomes.

Yet, if we want communities (think about the London riots and how important the sense of community and engagement is as an outcome), nations, experiences, families, we have to be much much better at achieving complex outcomes, both in its understanding (research) and in its implementation (practice). Where do we start? Fund my research. ;p