"Science tells us that any dynamically complex system (be it an economy, a natural ecosystem, an organization or a community) tends to go through fundamental phases of adaptation throughout the course of its life cycle. There is even a name for it. We call it the co-evolutionary cycle. There are four phases in this cycle: growth, consolidation, collapse and renewal.
The initial growth phase is characterized by an openness to a range of possibilities. As the system composes itself into being, a creative energy opens up all manner of opportunities, roles to be filled, innovations to adopt, paths to take and partnerships to be explored. The potential for growth is rich and seemingly infinite at this stage.
After a while, however, the system begins to coalesce. Activities become fewer and less diverse. Efficiencies are sought and innovation diminishes as a consequence. As the system matures rules bind everything together in ways that restrict further options. During this consolidation phase the system grows and becomes more stable. It may also appear to be indestructible. In fact it is becoming ever more vulnerable to forces outside of its control.
The Achilles heel in any large sprawling system is inherent in this consolidation phase. As soon as each agent is braided into an entangled whole, a seemingly tiny adjustment in a remote part of the system can cascade catastrophically throughout the whole. Think of the arsonist’s match at the edge of the small Victorian township of Marysville or a tiny spark in a local generator that brings down an entire section of a power distribution network.
As we experience dramatic shifts in extreme weather, we can appreciate just how, in an overly mature system, disruptions that start small can escalate rapidly, sometimes spinning totally out of human control. For example, as the amount of atmospheric carbon dioxide increases the oceans become more acidic. At a critical, albeit unknown point, this could potentially shut down entire food webs. Given our reliance on the oceans for food and carbon sequestration this would be sufficient to generate a crisis in its own right. But at this stage we are doing nothing to prevent such a disaster.
The question of ocean acidity also illustrates how easy it is to cross thresholds (even just a small increase in carbon dioxide can precipitate catastrophe) and fall into self-reinforcing feedback loops. Large consolidated systems are particularly vulnerable to such runaway scenarios. Think of the domino effect within the densely connected global economy where a financial product built on thin air (credit-default swaps) and fuelled by greed, led to the collapse of Bear Stearns, then Lehman Brothers, Merrill Lynch and AIG. What appeared to be hardly credible one day eventually happened with such extraordinary speed the next.
The third phase in the typical co-evolutionary cycle is collapse. Collapse generally occurs because of a lack of resilience – the capacity of any socio-ecological system to withstand shocks, deal with disturbances and persist by navigating change and, where feasible, shaping future conditions.
Like strategic foresight, whole-system resilience has been a field we have largely overlooked. Instead we prefer to stubbornly cling to the hubristic delusion of command and control. I suppose when I was a boy, at a time when resources seemed limitless and economic growth became the dominant paradigm, such neglect was explicable. But we are now beginning to feel the impact of such casualness and lack of foresight. Because everything is intertwined, when mature systems go into a state of distress the ensuing collapse feels like an earthquake rather than erosion. This is precisely what we are beginning to feel now we are aware of the immense damage we have inflicted on our natural environment and that sustains all life.
Although it may be tricky to detect during the mayhem and commotion of systemic collapse, enormous amounts of energy are generated in this phase of the co-evolutionary cycle. Indeed it is this energy that leads to the potential for renewal – the final phase. After seeds are cracked open by a forest fire, seedlings thrive in the nutrient-rich loam. They soak up newly available sunlight where the forest canopy has opened to the sky. Then, as those open spaces start to fill, the growth phase begins anew.
It is important to understand that collapse will not inevitably lead to regeneration as we would ideally design it. On the contrary, this phase actually creates bifurcation points where many unknown paths and trajectories become possible once again. Collapse can also lead to rapid transitions and shifts into qualitatively different situations and configurations. At other times it may give rise to an entirely different and unwanted regime. There can be no guarantee – which is why adaptation and the ability to navigate become so vital.
Fire, for example, can renew woodland by clearing debris and resetting the ecological clock. On the other hand, when combined with a prolonged drought, it can set the scene for desertification. In social systems we can influence whether the outcome is positive or negative by designing with intent: establishing desired goals, providing encouragement and incentives, creating liberating policies that promote diversity, resilience and long-term viability, continuously monitoring the results and taking corrective action. We call this adaptive leadership.
Once we are able to tune in to the phases of the co-evolutionary cycle, we see them unfolding all around us. At first they may seem overwhelmingly complex, especially when compared to the tidier, more linear models that shape conventional ways of seeing the world. But ignoring that cycle as you build an economy is akin to denying gravity as you build a skyscraper. Aborigines know this. They understand the co-evolutionary cycle better than any of us white fellas. Perhaps it is time to take more notice of their sagacity and wisdom." (http://fiveliteracies.typepad.com/richard_hames/2009/05/practicing-adaptive-leadership.html)