 Self-organisation is one of the major themes within complex systems and a pervasive phenomena in our world. Complex organisations like schools of fish and colonies and car traffic manage to organise themselves into emergent patterns without any form of global coordination. And this is somewhat counter-intuitive to our traditional assumptions where we tend to assume that organisation and order need to be imposed by some external force, but self-organisation fascinates many people precisely because it is generated internally. Hurricanes, consciousness and swarms of bees are other examples of organisation emerging out of the internal interactions between the component parts of a system. Because of the adaptive capacity of human beings, whenever they interact locally, we invariably get some form of self-organisation. Thus self-organising forms of social organisation have always been there, from local markets to the formation of villages and towns. But one characteristic of the modern era has been the formation of large, formal organisations like bureaucratic governments and corporations. As we formed these large organisations, the local interaction between members across the whole organisation was no longer possible in the way that it was in small communities. Given the scale of the organisation and the available communications tools coordinating such large organisations was only really possible through a centralised model. A limited amount of people in the centre understood and formulated plans and directions to coordinate the entire organisation, with information from the local level flowing into the centre and directions flowing back out. Because of economics of scale and other factors, the industrial age selectively favoured these large systems of organisation as they became more efficient. Small, self-organising systems lived on, but largely as a fringe activity as they were never able to get the scale and efficiency to compete with the centralised model as our industrial economies became increasingly dominated by these large, formal centralised organisations, which were up until recently seen as the only viable means for the effective production of value within society at scale. But today, information technology, among other factors, is fundamentally changing this dynamic. Today, we have tools and platforms for connecting people directly one to one, or one to many, at virtually any scale, from a small group of friends all the way up to the global level. And we can do this at a very low cost, and this is truly a game-changer for organisational structure. The reality is that people now have very powerful tools in their hands, and this fundamentally shifts the power dynamic away from large organisations, which were very dominant until recently, towards the individual. This is what Gardner, the consulting company, calls the age of the consumer, and they talk about this as such, quote, to put it simply, the age of the consumer is all about the shift in power between you and your customers. Now that shift is away from you and towards your customer. They are empowered by digital technologies, real-time access to information. With the access to education and information that many now have, and the low barriers to connect and collaborate with others, it is now very much viable for ad hoc, self-organising systems of organisation to form and compete effectively and directly with traditional, centralised organisations. This was previously not possible, and it is both a radical and massive shift in power. Classical examples of this being Wikipedia that have displaced the traditional encyclopedia, or the Linux Foundation, that has a larger market share running web servers and smartphones than any formal business organisation. Whereas the traditional organisation had relatively high overhead costs, it required an almost constant input of finance and other resources to maintain it. With the lowering of collaboration costs, it is much easier to build organisations that are more agile and less dependent on significant investment of capital, and this opens the door to harnessing social value and other motives for creating organisations that are less solely focused on financial outcomes but also more socially engaged, and with this we've seen the rise of the so-called social enterprise or social business. In post-industrial economies, the millennial generation are growing up in a world of relative abundance with an almost over-saturation of things, but they also inherit a world of real problems that are not so easy to ignore. And out of this mix of relative abundance, ease of collaboration and pressing real-world problems, we see this social enterprise arise that harnesses the engagement of people along a number of dimensions. In short, due to the context that they have grown up in, millennials have a new set of expectations surrounding what work is and they're less willing to simply fit in with the traditional model. Acquiring and retaining this talent is becoming more of a problem for traditional organisations as they need to develop a new mentality and a more self-organising bottom-up structure to accommodate the new working force. Whereas the traditional, centralized organisation is a relatively static model, self-organisation is a dynamic process that requires certain conditions. Most importantly, it requires autonomous members densely interacting locally. Autonomy is a very important ingredient here. Self-organisation always comes from the bottom up. People have to be operating and driven by their own motives and agenda, and as long as they are constrained through some centralized organisation, this simply can't happen. This is one reason why self-organising systems can be more flexible and responsive, because everyone is responding locally and can act immediately to what they experience in their local environment, instead of having to send the information to some centralized authority and waiting for instructions to return before they can act. This is part of why centralized organisations are seen as more mechanical and rigid, as opposed to self-organising systems that are more organic and fluid in nature. The autonomy of the members to act locally is a key issue. If we look at the process of self-organisation within a flock of birds or school of fish, we get this emergent self-organising pattern through each fish or bird operating under their own set of simple instructions to follow their neighbour whilst also maintaining a certain distance from them. The important thing to note here is that if you want self-organisation, you have to value and respect the autonomy of the members highly. One needs to be aware that every time you impose an instruction on a member, this has a very high cost in terms of reducing the self-organising emergent capabilities of the system. The second essential element is dense, peer-to-peer interactions between the members of the organisation. Interactions and information needs to be flowing horizontally, not vertically. One needs to create the conditions for connecting people locally. Dense interactions are important because all of the members may start out with divergent opinions, activities or agendas but the more they interact, the greater the requirement to co-ordinate their states. As long as we build a big wall separating us, we can all go on doing our different things without any co-ordination or emergent organisation. But when we take down that wall, we may all come into initial conflict but it will be more difficult for us in the long run to maintain our divergent activities and there will be a much higher reward for co-ordination. We might say that this is one of the dynamics at play in our world today. Globalisation and hyperconnectivity have taken down the barriers that previously divided societies and cultures that enabled them to remain divergent for a prolonged period. But with this connectivity they are brought into contact and often conflict but at the same time it is making common consensus more valuable and remaining divergent more costly. It is this dense peer-to-peer interaction which fuels the process of self-organisation. What we find then is that these members that interact more often and come to some form of consensus or co-ordination then form an attractor. Because they are now working together, they are now more effective than the other members in the organisation, thus generating better results which makes it more attractive for others to join that organisation because they will get a greater reward from it. We now get a positive feedback loop as the more people that join the organisation the more valuable it becomes for future prospective members to do likewise. This is the social network effect that is driven by positive feedback. It is behind the rapid expansion of many forms of organisation such as financial markets where the more people there are in the market the more liquidity which reduces transaction costs which attracts more traders and so on. Another classical example would be the spread of English as a global language whereas previously we had many different societies speaking different languages with the increase in global connectivity it has become more valuable for us to have some common global language. Now that English has largely occupied that position there is a positive feedback loop around it the more people that learn it the more valuable it becomes for others to learn. Even though only a small percentage of the global population speaks English natively and even though there are other languages that are spoken natively by many more people English will likely remain the global language because of its initial head start and this feedback loop that drives its development. The net result of this process is the emergence of some global pattern of coordination. A large section of our management paradigm is built up around the idea that the function of management is to get people to do what they would not spontaneously do and this makes sense because if people spontaneously did what you wanted them to do then you obviously would not need management in this sense. So within this traditional paradigm the idea of self-organisation looks totally contradictory to the whole endeavour of management. It might be legitimate to ask then do we need management if we have self-organisation. The answer is of course yes or there'll be little points in this whole course but management in this new context has to be redefined. As we've discussed it's all about leading by creating or designing the future context and this is where design thinking fits into management we are designing the context instead of directly controlling or coordinating. David Snowden talks about managing self-organising systems as being like managing your child's birthday party. One would take a very different approach to managing a child's birthday party as one would to managing a traditional organisation. We would not specify the roles for each child that comes to the party, get them to clock in, set them deadlines for completing certain projects and so on. The reason you don't do this is because you're not looking for a direct outcome to this organisation. What we're hoping for is a self-organising emergent outcome where people interact and out of that interaction we get the emergence of the children enjoying themselves a child's party. But even though we're not trying to manage the system in a formal fashion if we want the desired outcomes we still need to organise the party it's not going to happen at all otherwise. And what we're doing when we do that is creating the context that will induce the children to interact and self-organise. We put toys out we make a little sports field out back where they can kick a ball around we get a clown some balloons put some music on all of these are creating the context. We create this context and put all these things out but we don't tell the children which ones to play with. What we'll see is that attractors will spontaneously form around some of the things and the children will be drawn into that for some time and during that time we will get the emergence of the fun party that we hope for and we can see from this how self-organisation is a dynamic process. Another example of this approach to management would be Google giving their employees time off to work on projects of their own interest. Google isn't of course doing this out of the pure goodness of their heart but of course hopes for some desired outcome namely new innovations but they know that the development of new ideas takes time and space like learning it is a self-organising process new different ideas have to be tested interacts and combined before some coherent functional pattern may emerge. In order for Google's management to enable this they have to create a space that engages people's self-motivation for the process to take place. They can then later on reap the benefits of what emerges out of this. In this video we've been looking at the process of self-organisation a major theme within complex systems where organisation emerges out of local interactions. We firstly gave a little context to this discussion by talking about the rise of information technology as an enabler of peer-to-peer interactions that shifts the balance of power from traditional centralised organisations to more informal self-organising systems. We then went on to give an overview to this process of self-organisation talking about the need for the members to have the autonomy to adapt to local events the need for dense interactions that will require them to find some form of coordination and then how out of this we get the emergence of an attractor and global coordination driven by positive feedback. We lastly noted how the practice of organisational management has to fundamentally change when dealing with self-organising systems from specifying outcomes to designing the input context.