Human Organizations as Complex Systems

Human organizations have typically been viewed as complicated systems. As such, the behavior of human organizations has been considered to be by-in-large predictable. New evidence is arising, however, that points toward human organizations being complex, not complicated, systems – and this has significant ramifications for the predictability of organizational behavior.

7 February 2024

Human organizations have traditionally been viewed as complicated systems. However, substantial evidence has arisen in recent years that supports the idea that human organizations are not complicated systems, but complex ones – and this difference has significant ramifications for how organizations should be managed.

Systems are commonly classified into three types: simple systems, complicated systems, and complex systems. Simple systems are made up of a small number of components and operate under a very limited set of easily understood deterministic rules. This makes it typically very easy to predict how a simple system will behave. That is to say, if you know the input to a simple system, it is typically very easy to determine its output. Examples of simple systems range from basic mechanical devices like levers and pulleys to simple electrical circuits.

Complicated systems are nothing more than large collections of simple systems. And, like simple systems, the behavior of complicated systems is completely governed by finite sets of deterministic rules. It is therefore at least theoretically possible to predict the behavior of complicated systems with 100% accuracy. In practice, however, the size of complicated systems often makes it very difficult to predict their behavior without significant specialized training on the system in question. Examples of complicated systems include things like modern cars and aircraft.

Complex systems are very different than simple and complicated systems in one major way. Namely, complex systems exhibit behavior that is even theoretically difficult, and sometimes impossible, to predict.

There are two causes for the unpredictability of complex systems. First, the behavior of some complex systems is governed by deterministic non-linear rules that make such systems extremely sensitive to initial conditions, so much so that all measurement techniques lack the level of precision required to measure the current conditions of such systems with enough accuracy to support the prediction of their long-term behavior. Second, the behavior of some complex systems is heavily influenced by the non-deterministic behavior of the agents (typically people) that compose them. The long-term behavior of this type of complex system is impossible to predict because the long-term behavior of the agents in the system is inherently unpredictable. Examples of the first type of complex system include the weather and certain types of fluid dynamics like turbulence. Examples of the second type of complex system include many human systems like the economy and potentially companies and similar organizations.

The question of whether human organizations are complicated or complex systems is important because the answer determines how predictable the behavior of human systems is, and this has significant ramifications for how organizations should be managed. If human organizations are complicated systems, then it is possible given an appropriate level of experience and training to predict their behavior, and it makes sense to do things like conduct long-term organizational planning and put strict processes and procedures in place to govern the long-term behavior of organizational staff. If, however, as modern complexity science seems to indicate, human organizations are complex systems, then they are intrinsically unpredictable, and the viability of long-term planning and strict processes and procedures is suspect at best.

While the question of whether or not human organizations are complicated or complex systems is far from settled, strong evidence is emerging that suggests they are complex systems. If this is the case, then organizational leaders might want to reconsider how much time and effort they put into things that require the long-term predictability of their organization’s behavior. Time might be better spent planning and managing shorter time horizons.