Networks and Complexity (1)

Dave Snowden

Complex human systems, such as organizations, communities or economies, go hand-in-hand with networks. Networks can reveal various structures and various layers in complex systems – the connections (links) between the components are key. The grey links show the reporting relationships.

The Productivity Puzzle

Irving Wladawsky-Berger

Economic growth has two main components, productivity growth and the growth of the labor force. I ncreasing productivity is thus more crucial than ever to promote economic growth. But, in the US and other advanced economies, productivity growth has significantly slowed down over the past few decades. From 1987 to 2004 US labor productivity grew at a 2.1% Since 2011, the productivity rate has further declined to 0.6%. . US labor productivity grew at only 1.5%


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AI and the Productivity Paradox

Irving Wladawsky-Berger

But, at the same time, productivity growth has significantly declined over the past decade, and income has continued to stagnate for the majority of Americans. This puzzling contradiction is addressed in Artificial Intelligences and the Modern Productivity Paradox , a working paper recently published by the National Bureau of Economic Research (NBER). Economists have proposed competing explanations for declining productivity growth and so far have failed to reach a consensus.” .

The Productivity Paradox: Digital Abundance and Scarce Genius

Irving Wladawsky-Berger

Despite the relentless advances of digital technologies, productivity growth has been declining over the past decade. Some contend, - most prominently Northwestern University economist Robert Gordon , - that over the past few decades there’s been a fundamental decline in innovation and productivity. We’ve been living in a time of major transformative technologies, - the Internet, smartphones, IoT, big data, AI - whose deployment and impact on productivity growth are still lagging.

Remote Work is Surprisingly Productive, But For Many… Something Is Missing

Irving Wladawsky-Berger

Despite having to switch from face-to-face to audio and video interactions, overall productivity actually went up as measured by several metrics. His article discussed two separate productivity case studies, one focused on working from home (WFH), the second on working from anywhere (WFA).

AI and the Productivity Paradox

Irving Wladawsky-Berger

But, at the same time, productivity growth has significantly declined over the past decade, and income has continued to stagnate for the majority of Americans. This puzzling contradiction is addressed in Artificial Intelligences and the Modern Productivity Paradox , a working paper recently published by the National Bureau of Economic Research (NBER). Economists have proposed competing explanations for declining productivity growth and so far have failed to reach a consensus.” .

No cookie cutters for complexity

Harold Jarche

Five years later, Dave Snowden makes a similar observation, sparked by a KPMG marketing brochure on “cutting through complexity” Dave concludes: If a consultancy firm really wants to help their clients they they should support them in living with complexity, riding its potential, avoiding reductionist approaches, engaging customer and staff in a sensing network. I have noted in the past year clients wanting more products and fewer customized services. complexity

The Complex Nature of Cloud-based Innovation

Irving Wladawsky-Berger

I find it helpful to look at cloud along two key dimensions: as a technology to improve IT productivity, and as a platform for enabling business innovation. A recent McKinsey study on Cloud and Innovation observed that “The problem in many cases is that adopting cloud technologies is an IT initiative, which means that cloud solutions are all around improving IT and IT productivity. Incremental investments in productivity don’t drive growth.

Scale and Complex Systemic Innovation

Irving Wladawsky-Berger

Conventional wisdom these days says that small is better when it comes to innovation and putting new ideas into practice,” writes Mandel at the beginning of the report. They are highly motivated to bring to market new products which offer significantly improved designs and/or lower costs, and thus gain competitive advantage and market share from the established leaders in their segment of the market.

System 163

Build trust, embrace networks, manage complexity

Harold Jarche

We have known for quite a while that hierarchies are ineffective when things get complex. In matrix management people have more than one reporting line and often work across business units. Most organizations still deal with complexity through reorganization. A connected enterprise starts by building a foundation of trust, embracing networks, and then managing complexity. In networks, even established practices like teamwork can be counter-productive.

Solow Paradox 2.0: The Lagging Impact of Technology Advances on Productivity Growth

Irving Wladawsky-Berger

Our aging economies are thus dependent on productivity gains to drive long-term economic growth , future prosperity and higher standards of living. Which is why few topics have generated as much concern among economists and policy makers as the sharp decline in productivity growth in the US and other advanced economies over the past decade, - despite accelerating technology advances. Their average productivity growth in the 5 years between 2000 and 2004 was 2.4%.

How Can We Ensure that Our Complex AI Systems Do What We Want Them to Do?

Irving Wladawsky-Berger

Software-intensive systems are generally quite flexible, - able to evolve and adapt to changing product and market requirements. Things are even tougher with people-centric sociotechnical systems, which not only have to deal with potential software problems, but with the even more complex issues involved in human behaviors and interactions. What is it that makes these systems so intrinsically complex? What purpose does this complexity serve?

System 171

Social Learning, Complexity and the Enterprise

Harold Jarche

Our relationship with knowledge is changing as our work becomes more intangible and complex. PDL – Personal Directed Learning: from Clockwork & Predictable to Complexity & Surprising. Complexity, or maybe our appreciation of it, has rendered the world unpredictable, so the orientation of learning is shifting from past (efficiency, best practice) to future (creative response, innovation). In complex environments it no longer works to sit back and see what will happen.

On the Complex Evolution toward Mobile Digital Payments

Irving Wladawsky-Berger

In addition, by reaching out to financial institutions, merchants, application developers and others, Apple is helping bring together the different players in the payments ecosystem, something that’s absolutely essential to succeed in such a complex undertaking. New-market disruptions are new products or services which can reach brand new customers whose needs were previously unserved by existing offerings. .

Become a More Productive, Empathetic, Creative Person With the Help of AI-Based Tools

Irving Wladawsky-Berger

Despite dramatic advances in technology, most of the world’s economies have been stuck in a long period of slow growth and slow productivity. In a recent article in the MIT Sloan Management Review , MIT Research Fellow Michael Schrage proposed a provocative and counterintuitive approach for enhancing innovation and productivity through man-machine collaborations. We’ve long been leveraging technology to help increase productivity.

The Complex Transition to the Age of the Cloud

Irving Wladawsky-Berger

But, after discussing a number of its benefits to business, - individual productivity, group collaboration, information insights and application development, - McAfee points out that the shift to cloud computing has been slow. The IT function of 2015 will bear little resemblance to its current state,” concludes one such report. Cloud computing is a highly complex initiative - at the technical, business and organizational levels.

Per Question Reports

Tony Karrer

We have recently been exploring putting more coursework online and have experimented with the Articulate line of products. First, having worked on custom LMS, LCMS, Authoring projects and being pretty deeply familiar with SCORM, it's easy to blame the LMS for poor reporting on per-question reporting, but its very hard for an LMS to create generic reports that work well across all the variations that you run into. Then you will likely begin to appreciate the complexity.

Report 100

Leveraging Commercial Best Practices to Maximize Government Productivity

Irving Wladawsky-Berger

On October 6, the Technology CEO Council released its report One Trillion Reasons: How Commercial Best Practices to Maximize Productivity Can Save Taxpayer Money and Enhance Government Services. The report identifes a set of recommendations aimed at reducing US government spending by one trillion dollars over the next decade. Both have access to innovative technologies and management practices that can be of significant help in dealing with their complex operations.

The Urgent Need for Wide-Scale Upskilling

Irving Wladawsky-Berger

After working across MIT for over two and a half years, the task force released its final report in November, 2020. Similar conclusions were reached by Upskilling for Share Prosperity , a report published in January, 2021 by the World Economic Forum (WEF) in collaboration with PwC.

Skills 205

The Increasing Economic Value of Digital Capital

Irving Wladawsky-Berger

According to a 2019 research report , the overall value of the S&P 500 in 1975 was $715 billion, of which 17% was intangible. It introduces a set of methods for quantifying the value of digital capital investments, as well as their impact on a company’s long term productivity and growth.

Business or Pleasure? - why not both: The product-to-service.

Martijn Linssen

why not both Home About Contact Saturday, 21 August 2010 The product-to-service financial ratio Yesterday I saw a tweet by Frank Scavo : Chatting with a vendor about implementation cost to software license cost ratios. Back to the topic : there is a clear, direct and fairly linear relation between the initial cost of a product, and the additional cost(s) involved servicing it. In big IT companies, there isnt much enthusiasm to be found for selling Open Source products.

AI Is Mostly About Business Value, Not Technology

Irving Wladawsky-Berger

But it’s much harder to quantify the more complex benefits of AI, such as better insights and decision making. In 2018, PwC released a report on the long-term economic value of AI.

Building Better Jobs in an Age of Intelligent Machines

Irving Wladawsky-Berger

On November 18, the MIT Task Force on the Work of the Future released its final report , The Work of the Future: Building Better Jobs in an Age of Intelligent Machines. An interim report was released in September, 2019. The Task Force comprehensive report covers a lot of ground.

Data 217

Conversation with Tom Stewart: intellectual capital, new reporting, finance and strategy

Trends in the Living Networks

The field of ‘intellectual capital’ proclaims that for many companies the most valuable productive assets are intangibles such as knowledge and business processes, and these need to be measured and managed better. Audit firms see new revenue streams in intangibles reporting. Financial executives must learn new reporting techniques. Until recently the uptake of intangibles reporting has been slow, but the pace is picking up.

How Covid Is Reordering the Global Economy

Irving Wladawsky-Berger

It’s becoming increasingly clear that “the pandemic will lead to immense structural changes in the global economy: less globalized, more digitized, and less equal.” Supply chains will bring production closer to home to cut risks.

Issues 243

The State of AI Adoption - High Performers Show the Way

Irving Wladawsky-Berger

A common theme throughout the report was that the same players who were leaders in the earlier waves of digitization and analytics were the early leaders in the AI wave. Overall, 63% report revenue increases in the business unit where the AI use case is deployed.

The Current State of Cloud Computing

Irving Wladawsky-Berger

A few months later, The Economist published a special report on cloud computing with several articles on the subject. Companies should neither embrace a quick and cheap “lift-and-shift” transition strategy, nor a time-intensive and costly cloud optimization of a complex application workload.

Data 176

Is Work-from-Anywhere Here to Stay?

Irving Wladawsky-Berger

In 2013, a year after it instituted work from anywhere, the USPTO was ranked highest on the Best Places to Work in the Federal Government survey.” Happier workers are also more productive. The USPTO’s WFA program increased individual productivity by 4.4%

New Directions for Government in the Digital Age

Irving Wladawsky-Berger

Companies - especially large, global corporations - have leveraged digital innovations to improve their productivity and competitiveness and adapt better to these powerful technology and market changes.

AI Technologies Are Fundamentally Changing How Work Gets Done

Irving Wladawsky-Berger

To the contrary, automating the more routine parts of a job will often increase the productivity and quality of workers by complementing their skills with technologies and tools, thus enabling them to focus on those aspect of the job that most need their attention.

The Collapse of Complex Business Models ? Clay Shirky

Clay Shirky

The Times’ Paywall and Newsletter Economics » The Collapse of Complex Business Models. In 1988, Joseph Tainter wrote a chilling book called The Collapse of Complex Societies. Every one of those groups had rich traditions, complex social structures, advanced technology, but despite their sophistication, they collapsed, impoverishing and scattering their citizens and leaving little but future archeological sites as evidence of previous greatness. Clay Shirky.

The Pace of Creative Destruction is Accelerating

Irving Wladawsky-Berger

According to the Innosight Forecast report , a few key megatrends are responsible for the market turbulence behind the changing makeup of the S&P 500. Complex Systems Economic Issues Innovation Management and Leadership Smart Systems Society and Culture Technology and Strategy


Dave Snowden

It also picks up on the way in which you scale a complex system which is not by aggregation or imitation but by decomposition, to the lowest point of coherence, and then recombination in context. Agile Anthro-complexity Reflections

Why Business Transformation Efforts Often Fail

Irving Wladawsky-Berger

It’s very hard to transform a large complex organization through business-as-usual objectives, - e.g., growing revenue and profit, cutting expenses, improving quality, developing better products and services.

The Urgent Need to Strengthen the Nation’s Resilience

Irving Wladawsky-Berger

These included a significant expansion of government support for scientific research in universities and R&D labs, leading to product innovations from the private sector and better weapons from the defense industry, - and making the US the most prosperous and secure nation in the world.

Issues 224

Why Some AI Efforts Succeed While Many Fail

Irving Wladawsky-Berger

Winning with AI , - a 2019 report based on a survey jointly conducted by the MIT Sloan Management Review and the Boston Consulting Group , - found that 90% of respondents agree that AI represents a business opportunity for their company.

Survey 204

The Internet of Things is Changing the World

Irving Wladawsky-Berger

IoT promises to bring many benefits, including a whole new generation of innovative products. IoT has been ushering a whole new class of smart connected products. A recent report by GSMA Intelligence said that smart homes are rapidly evolving from niche to mainstream by 2025.

Change 163

Blockchain - the Networked Ecosystem is the Business

Irving Wladawsky-Berger

Their presentation was based on their recently published report Building your blockchain advantage. The essence of blockchain, notes the report , is that the unit of competition is the networked ecosystem , no longer a single enterprise. “As blockchain adoption continues to gather momentum, organizations must approach their blockchain strategies with the same rigor and commitment as any other new and transformative strategies.

the end of control

Harold Jarche

Too much control leads to filtered information, making it more difficult to deal with complex problems. Authoritarian regimes then are less able to address complex challenges — like an epidemic. Will these regimes be forced to become more open because a complex world demands it?

Report 198

How Will the Pandemic Reshape Labor Markets?

Irving Wladawsky-Berger

Autor and Reynolds are cochairs of the ongoing MIT Work of the Future task force, whose interim report was published in the (pre-Covid) Fall of 2019. The final report of the MIT Work of the Future task force will be published later this year.

Issues 171

The State of AI in the Enterprise

Irving Wladawsky-Berger

Davenport was a co-author of both reports. 44% of respondents cited “enhanced current products” as the top AI benefit to their companies, followed closely by “optimizing internal operations” at 42%, and “make better decisions” at 35%. Around 40 % of respondents cited implementation difficulties, integrating AI into the company’s roles and functions, and data privacy and related data issues as their top challenges, not surprisingly for a complex technology in its early stages.

Survey 183

The Business Value of Augmented Reality

Irving Wladawsky-Berger

We generally think of products as physical entities built with a combination of mechanical and electrical components, - e.g., appliances, cars, agricultural machines, industrial equipment, - some quite simple and some highly complex. Smart connected products are radically reshaping companies and exposing them to new competitive opportunities and threats, while altering industry boundaries and creating entirely new industries.

power shifts

Harold Jarche

The report defines power as, “the ability to shape consequences” They identify three extreme forces that will affect the next decades. The IFTF report includes many tools for organizations to start to make sense of these power shifts. Complexity Technology