Western science, like all of our institutions, thrives on novelty. New theories and new sciences abound: quantum physics, computer science, network science, string theory. The lines of inquiry are always extending beyond yesterday’s boundaries.

One recently developed science is complexity and complex systems. In a reversal of the traditional reductionism in science – which looks for explanations at ever smaller micro-scales, from molecules, to atoms, and now to hadrons and quarks – complex adaptive systems theory looks at the world holistically as systems, including systems embedded in systems embedded in systems, and asks how they perform at the system level. The economy is a system, society is a system, a firm is a system, a city is a system, a brain is a system, and so on. A system can be contrasted with a collection of objects that are disconnected, like a bag of marbles or nails.

There’s a particular focus on Complex Adaptive Systems (CAS): a class of systems found in many fields such as economics, biology, and social sciences, characterized by a collection of individual agents acting independently and constantly reacting to what the other independent agents are doing. These agents interact locally with each other at the micro level in unpredictable ways, and through these interactions, system-level structures and patterns emerge without central control. 

The concept of emergence is key: unpredictable outcomes occur, without any traceable cause-and-effect links. The scientists’ favorite word in this context is non-linear. Their treasured linear equations are of no use in predicting future outcomes in a complex adaptive system. That means, for example, that the policies politicians and bureaucrats prescribe to fix what they perceive as economic and social problems are useless when viewed through the lens of efficacy, and damaging when viewed through the lens of the independent agents – people – interacting within the system. Their freedom of interaction, the essence of the system, becomes impeded by policy.

Complex Adaptive Systems open up another cause-and-effect problem in business. How can we celebrate the great achievement of hero CEO’s if outcomes emerge, rather than tracing back causally to the decisions and actions of the great business leader?

How do we deal philosophically with the idea that outcomes emerge, without any traceable cause? That’s anathema to Western science. Perhaps Eastern philosophy offers a better approach. In Daoism, the Dao is The Way. The focus is not so much on the outcome, more on the way or the path. There is no outcome, only constant change. The images of Daoism include water and river imagery: the river flows over boulders and pebbles, between mountains and banks, bends left and right, and becomes bigger and bigger, and never stops. Heraclitus famously said that a person never steps in the same river twice, because each time, the person has changed and the river has changed. Change is the essence of existence. The way is universal, we follow it – go with the flow.

Complex adaptive systems that constantly adapt to the changing environment and to the interactions of independent agents are said to be self-organizing. They follow The Way, as the way emerges. They exhibit dynamic change, never stepping into the same river twice. The appropriate observation point is holism rather than reductionism – interconnected Eastern thinking rather than analytic Western thinking.

The pursuit of the Dao – the Way – entails harmonizing with this process rather than controlling it. Embracing harmony is key for adjusting our philosophy. Thus, in CAS parlance, the trade-offs between different levels and agents within a system would need to be inclusive rather than controlling, for the classical concept of harmony is one in which diverse interests prevail in a dynamic balance. Harmony is understood as the ‘unity of any nonidentical objects’, which in their diversity allow for ‘the possibility of new things arising’. Translated into CAS, harmony is inclusive of discord but not overtaken by it. If discord does overtake the system, dynamic harmony loses its integrative quality and breaks up into chaos; alternatively, when it is stifled by uniformity, harmony ceases to exist.

Seen through the lens of business, CAS and The Dao require changes in standard business thinking. Control and prediction have been the twin pursuits of business management. But harmony results from balance, not control. Pursuing innovation in a linear fashion through R&D investment in projects can exclude “the possibility of new things arising” in an emergent way, because it uses reason and analytics to favor some investments and excludes others. Emergence is not even contemplated.

Western science and business management tend to prefer the identification of causal change – or that which we can attempt to control and seek to predict. The new science of complexity is less mechanistic than the standard model, and closer to Daoist intuitive thought. Complex Adaptive Systems, in its nonlinear treatment of change, provides a bridge between East and West, an integrative perspective.