The Strategic Mind and Complexity

How our survival instinct created the five-element model of a position.

The world is more complex that we can consciously understand. Real competition goes far beyond game theory because the job of survival takes place on a board (the ground) of potentially infinite dimensions, with unknown numbers of competing agents (with command), each with their own goals (mission), dealing with unpredictable changes (climate), and constantly evolving number of available moves (methods). This environment goes back to the foundations of our being shaping how our subconscious minds work and see the world. One goal of practical strategy is to make us consciously aware of what our minds are doing so we can use them more effectively.

The mental model of positions is a simplification of the complex, adaptive systems that we call “competition.” Practical strategy explores the special nature of what we now call the "science of complexity." Today this science explains various aspects of biology, economics, ecology, sociology, physics, and many other fields delimiting what is beyond the reach of certainty. Practical strategy simply applies many of these same lessons to the world of competition.

The nature of complex system inherently limits both our knowledge and control over our strategic positions, that is in how our positions are seen by others. Complex systems do not work mechanically in a linear, predictable way. Complex systems are unpredictable because every part of them is constantly adapting to change. Chaotic systems are unpredictable in deterministic ways because they follow fixed rules, but complex systems are both unpredictable and non-deterministic. Fortunately, this is exactly the kind of world in which are minds were designed to operate.

As Winston Churchill said, "Out of intense complexities intense simplicities emerge.” A little understanding of complex systems can give us a big advantage in understanding the mental model of our competitive position. Most people are playing the game of competition with mindsets that assume fixed rules, which are rooted in the past. Successful strategy starts by seeing that this assumption of fixed rules creates the basis for new insights, new possibilities, new moves in the constantly evolving game of life. Yes, all future strategic positions are rooted in the past, but they keep growing.

A Simplification of Competition

  1. Competitive landscapes are determined by the interactions of positions, each with its own mission. 

    These positions are us, or mental models of us in the minds of others, both as individual people and the organizations we form. As independent agents, we each have our own agenda, consisting of our unique goals. We are free agents to the degree we can seek our own ends. The ways in which we interact determines the path of our position, our ability to improve it over time.

  2. Our positions are inherently connected to the positions of others and to a physical reality that is beyond our mental models. 

    These connections consist of the exchange of resources and information. These connections create a many-to-many network, which is our society, our economic system, our position in the workplace, in our private relationships and so on. We each sit at the center of a spider web of connections, with each of us forming an unique, individual center. That web of relationships is real. Our place at its center is both and illusion and the greatest truth.

  3. We work to advance our positions based on our mental models.

    We are both enabled and trapped by our mental models. Our models allow us to see a reality that is too complex for conscious analysis. They determine how we perceive our position and choose our actions. These mental models have memory. They contain a history of previous positions, where our positions are rooted in the past. We use these mental models repeatedly, often without realizing it. Our mental models should change over time as we learn, but we can get trapped in the past if we don’t look consciously for change, for where rules no longer apply.

  4. Our actions generate reactions creating feedback loops. 

    Only our conscious awareness can judge feedback. The unconscious mind decides only to continue what it has done in the past. Positive feedback reinforces successful actions, allowing our mental models to advance. Negative feedback discourages actions or should. Positive feedback encourages actions, encouraging their repetition, magnifying their effect on the environment, potentially discovering emergent properties, novel resources hidden in the ground. Negative feedback discourages actions, decreases their effects, stabilizes the environment, and channels effort into alternative directions. Economic theory assumes diminishing returns, but in complex systems, feedback loops create more rewards and different forms of progress.

  5. As positions multiply in any competitive landscape, they become increasingly diverse, increasing the complexity of the landscape. 

    The uniqueness of each competitor’s viewpoint on their position generates a unique perspective. That unique perspective creates the potential for different mental models, but each of those mental models must conform to the simple model of positions—missions, ground, climate, command, and skills—which is locked into our unconscious mind. Positions differentiate themselves. We develop specialized skills and organizations, increasing the diversity of the environment. This increasing diversity reshapes the competitive landscape.

  6. New positions emerge from competitive landscapes in unpredictable ways. 

    In complex systems, the whole is greater than sum of its parts. Features emerge from interacting agents to create entirely new features and forms of value. This is known as "emergence." More is not just more in complex systems. It is often different. Progress takes the form of a phase transition from one state to another. Potential is unknown. New breakthroughs encourage further developments. In complexity, this is known as "path dependence." We depend upon new paths to create new opportunities. When competitive landscapes create novel features, we describe it as opening new opportunities. In the language of practical strategy, an opening is the same as an opportunity.

  7. Most changes in position will be small, but a few, rare substantial changes are possible.

    Complex systems are non-linear. Small inputs can lead to major outcome swings. Results usually follow the power law distribution rather than a bell curve. The bigger the change, the rarer it will be. The more common the change, the smaller it will be, but slight changes are frequent, mounting inexorably over time. Therefore, practical strategy emphasizes small steps. They are both less costly and risky than large ones.