Race for the Galaxy: A Study on Emergent Behavior (Systems Thinking and Design, Part 4)

An interesting thing happened in the late 19ᵗʰ, early 20ᵗʰ century India. During their occupation, the British were concerned about the threat of venomous snakes. To deal with this problem, they paid a bounty for each dead cobra they received. The plan ultimately backfired because the British failed to anticipate the ingenuity of the local populace who saw an opportunity to improve their financial situation. Cobra farms began to pop up with the explicit goal of raising venomous snakes just to kill and sell to the British. When this became known, the British ended the bounty and the farmers released the snakes, making the problem worse than when it started. This unintended consequence was the result of misaligned incentives, maladaptive behavior that is rewarded rather than punished, and is an example of emergent behavior. Good managers understand that systems are often complex and take on a life of their own, at times producing unexpected results.

Emergent Behavior

One of the core tenets of Systems thinking is that the whole is greater than the sum of the parts. A car is more than just a collection of metal, plastic, and fluids. When assembled together it is a vehicle for travel and commute. Even if the raw ingredients of a system are the same, deviations in processes will produce different results. Take cooking for example Sugar and water, when mixed together, makes a tasty treat for your pet mouse, but not great otherwise. Add in some heat, and you get a nice sauce to drizzle over your ice cream. Add a bit more heat and you get a lovely chewy caramel. Finally add a lot of heat and you set a hard toffee. Same ingredients, different results. The tasty treat emerged out of the simple combination of sugar, water, and heat, a whole greater than the sum of its parts.

The history lesson in the introduction highlighted a second aspect of emergent behavior: misaligned incentives. While there were many factors that led up to the now infamous Enron scandal, a key driver was the emergent behavior of misaligned incentives.

• Executive compensation was tied to stock price. Rather than create value, it was easier to inflate the stock through fraudulent practice.

• The bottom 15% of performers were fired annually. Rather than drive innovation and improvement, this led to a cutthroat culture and hiding failures.

• Auditors were compensated very well. The old adage goes "Don't shoot the messenger" but Arthur Anderson didn't raise the alarm because it was a lucrative contract and they didn't want to risk dismissal.

The intent behind each of these policies was likely to grow the company and deliver shareholder value. The resulting behaviors and subsequent collapse of the company were unintended consequences.

Race for the Galaxy

Not all emergent behavior is negative. As a system evolves, opportunities can arise. Race for the Galaxy is a tableau builder that exemplifies this. With each planet and development card added to a player's tableau, unexpected synergies and strategies emerge. Skillful players learn to see these opportunities and capitalize on them, adapting their strategies to maximize their points. Of course negative results can also arise and the need to monitor for and correct inefficiencies is of equal importance.

Instagram's Emerging Marketplace

Gone are the days of only using Instagram and other social media platforms to share photos and humble brag about your latest vacation #blessed. Today, social media is being leveraged as a powerful marketing and sales channel. As users began to adapt the platforms to advertise their products and services, the sites leaned into this emergent behavior and developed tools and analytics to support these entrepreneurial content creators. By recognizing these trends and adaptions, social media platforms have evolved to remain relevant and thriving in a competitive marketplace.

Tying it all together

As we can see from these examples, the output of a system is greater, and often different, than the sum of the parts and inputs. Numerous are the ways to cook an egg to different results, so too are the different combos of people, process, and incentives resulting in unexpected consequences. Great leaders aren't disheartened by this prospect of unintended results, but seek to recognize and maximize the opportunities that arise.