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Zones



My 2 Bucks

This weekend, gas prices in Detroit leapt above the magic $2.00 per gallon mark.

This weekend, gas prices in Detroit leapt above the magic $2.00 per gallon mark. Personally, I wish I could have predicted this unfortunate turn of events before I traded my Saturn in on a gas-guzzling Wrangler this spring. Oh well, I'm not known for having very good timing (just ask anyone around the office about my ability to meet deadlines). The thing is, I should be forgiven for making this impending blunder of a purchase. After all, I'm just a stupid consumer who couldn't be expected to know that a pipeline failure, reformulated gas legislation, and typically heavy summer consumption would cause gas prices to spike to record levels.

Fortunately for me, I also own a gas-sipping Miata, so my immediate solution is to park the Jeep and continue enjoying the sunshine. And though I fear that this isn't a long-term fix, at least I'm probably in better shape than the car companies. Last time I checked, the "Big Three" were managing near-oversupplies of some models of trucks and SUVs; despite that, they seem deeply committed to building more at current levels or higher. While it's easy for analysts to spin the "Americans will drive trucks at any cost!" line, if consumers perceive gas prices remaining this high for some time, there's going to be quite a few executives in Detroit asking how long it'll take to convert all these truck plants. (Either that or lobbying G.W. to "do like his daddy done.")

This leads me to my real point: Aren't the big shots at the car companies paid those ridiculous salaries to see these things coming and steer their leviathans around the potential disasters? Obviously, no one can know for sure whether the truck crash will actually happen, but there's certainly credence to the notion that the industry should be prepared if it does. Some might even say that the industry should actually be ready to take advantage of it as an opportunity.

Yes, you read right. That's one of the ideas behind Harnessing Complexity : Organizational Implications of a Scientific Frontier by University of Michigan professors Robert Axelrod and Michael D. Cohen (The Free Press; 184 pp.; $26). To break it down, this book seeks an answer to the eternal question, "What in the hell do I do now?" Or, to quote the authors: "In a world where many players are all adapting to each other and where the emerging future is extremely hard to predict, what actions should you take?"

While it might be easier reading if this were one of those simple business management books filled with lists and a catchy buzzword to throw around like a pre-adolescent with a spit-wad, it's not. This is, after all, a "scientific frontier," and the authors are experts in something called "complexity theory." This area of research has a direct relevance to business management because complex systems (like organizations, markets, and production processes) all "have a good deal of structure and permit improvement by thoughtful intervention."

The authors contend that many managers spend a great deal of time trying to control complexity, usually by eliminating it, which inevitably fails. (I contend that even more of them live in fear of complexity and stick their heads in the sand, hoping it magically goes away.) This is because, of course, not even Michael Dell or Bill Gates can predict the future. But rather than this shortcoming causing great consternation, the authors insist that it can actually be turned around and made into a competitive advantage (sort of an "intellectual judo," as they put it). This is because it is possible to understand the framework of most complex systems and take actions within this framework that are more likely to have positive outcomes. This framework is what the authors outline in the book.

Now you're probably waiting for me to reveal the great secret, but in all honesty, there is none. Rather, the authors present a way of thinking that can be applied to any complex system and used as a reference point for analysis. Sad, but true, no one is going to read this book and become a legitimate Kreskin. However, the research chronicled within has astounding implications, especially in the context of the Internet. Much of the scientific basis for complexity theory comes from computer models; in fact, the authors use a fairly detailed example of the Linux development process to make a number of points about how components of complex systems interact. Furthermore, given the rapid pace at which the Internet has accelerated change in our society, the level of complexity that we must deal with on a daily basis only shows signs of increasing. Forget about avoiding complexity and start embracing it.

Finally, because most people tend to read more book reviews than books, consider this quote from the book that's particularly apropos to the looming exsanguination of the truck and SUV market: "Even though one action seems best, it usually pays to maintain variety among the actions you take so that you can continue to learn and adapt." (And in this context, variety doesn't mean a pickup with four doors, an SUV with two doors and a bed, a hybrid SUV-truck with four doors and a bed….)

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