Nature's Bottom Line

• Share

Anyone who pays at least cursory attention to the financial markets has surely divined what stock analysts share with meteorologists, evolutionary biologists, astrologers and, heaven knows, political pundits: no one can say with certainty that he has any idea what will happen tomorrow.

That's a big problem, whether you're managing astronomical sums of other people's money or just deciding what to pack for London. It might seem another problem altogether to spend your time reconstructing that fateful period 3.5 billion years ago, when protein molecules dancing through the earth's primordial foam collectively spit forth the first proto-bacteria, life's earliest ancestors. You know the rest.

But for Stuart Kauffman--philosopher, medical doctor, evolutionary biologist and entrepreneur--all these problems underscore a single phenomenon: complex, self-organizing systems continuously adapt to and change with their environments but do so in ways that are impossible to predict. It's a head scratcher. In a universe damned by entropy to gradual dissolution, things sure seem pretty well put together. So, how is it that evolving systems as diverse as the biosphere, your immune system or the global economy have grown from nothing into organizations of imponderable complexity?

That is the question that Kauffman and other theorists have struggled for many years to answer, and their ideas are finally seeping into the business mainstream. "The machine metaphor dominated how we thought about businesses in the Industrial Age," Kauffman says. But now "the biological metaphor--thinking of firms as an ecosystem--is making its way into the business world."

In 1996 Kauffman founded Bios Group, a partnership with Ernst & Young designed to apply complexity science to Big Business. In five years, it has completed more than 50 projects for FORTUNE 500 companies, solving thorny problems of supply-chain management for Procter & Gamble (How do you get the soap from factory to home with optimum results for P&G, its retailers, and consumers?), decimalization for NASDAQ and crowd control for Disneyland (How do you avoid long lines at rides?).

Complexity theory was born in 1984, when brainiacs from the Los Alamos National Laboratory founded the Santa Fe Institute. The SFI remains a cauldron of Ph.D. sorcery, where physicists and biologists consort with psychologists and anthropologists, all in pursuit of the patterns that underlie the adaptive systems around us. "The bigger story," says Susan Ballati, SFI's director, "is not about Bios Group or SFI or other offshoots; rather, it is how a complex adaptive-systems approach to looking at the world is really what will be driving policy, business, education and research in the 21st century."

Roughly defined, a complex system is an organization of individual "agents" in which each acts on his own behalf but collectively they build a network capable of reacting to changes in the system's environment (for instance, the stock market, where you might have lost money yesterday because thousands of individuals, acting independently and spontaneously, sold a stock you also own). Agents may be actual critters--ants are a favorite for scientists--DNA molecules or the units that make up a company's supply chain.