Change – Complex systems are in a complex state of flux. Focus on what you can control. Do not become attached to one way to do something. Small independent book stores gave way to Barnes and Nobel and other big box book sellers. Then then gave way to Amazon. Something will replace Amazon.
Interdependence – We depend on other systems to operate. Tight Coupling – one system fails and all other systems fail – The heart. Loose Coupling – one system fail does not cause the entire system to crash – a kidney.
Counterparty Risk – The possibility that other parties won’t deliver what they are expected to deliver.
Second order effects – Every action has a consequence, and every consequence has a consequence. Rent control after WWII in New York City. Lack of cash flowing into a building means the owner did not maintain the building. lack of maintenance meant less buildings were rentable. So, Rent control actually resulted in less rental property.
Normal Accidents – Mistakes, breakdowns, and failures happen in every system. Often what we do after the accident is critical. Accidents in rocketing men into space will happen. But, the key is what do we do after it happens. Do we make it safer or more complex as a result.
Deconstruction – Separating complex systems into the smallest possible parts.
Measurement – Collecting Data as the System operates. – Accounting, Sales
Key Performance Indicator – KPI – Not all measurements are equally important. Focus on the critical.
Business Management
Change – Complex systems are in a complex state of flux. Focus on what you can control. Do not become attached to one way to do something. Small independent book stores gave way to Barnes and Nobel and other big box book sellers. Then then gave way to Amazon. Something will replace Amazon. Interdependence – […]
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