 Good afternoon. We run. Good afternoon. This session is Mastering Complexity. The theme itself overwhelms me, actually. And complexity is a word that people may say that, well, we have always lived in a very complex world, and it's everything is complicated and complex. So what's new? Today, I have a very, without me, a very esteemed and distinguished panel, and first of all, I'd like to introduce everyone before I start the session. To my right, left, sorry, to my left, is Professor Albert Laszio Barbarzi. He's the Director for the Center for Complex Network Research. He's an expert on network science. And next to him is Mr. Brian Gallagher, President and CEO of United Way Worldwide. It is the largest privately supported NGO. 1,800 independent NGOs operate worldwide under this name. And Doctor, if I can pronounce this correctly, Ernesto Zedillo Ponce de Leon. He's the Director of Yale Center for Study of Globalization. And he was the former President of Mexico. And lastly, a Dr. Angel, no, Angel Cabrera. He's the President of George Mason University. He's the author of Being Global, and he's an expert on cognitive science. So here's the panel. Now, leaders say and researchers have shown that most CEOs seriously doubt their ability to cope with rapidly escalating complexity. There's the level of interconnectedness, the level of interdependency is unprecedented. Therefore, it makes the world more volatile, more complex, more uncertain. And increased connectivity has created strong and often unknown interdependencies. But do we really know what that really means? I mean complexity. People may have all different imaginations when they hear the word. So I'd like to start out by sort of setting a common platform for everybody to understand the nature of complexity we face today by asking Mr. Dr. Barbardi László to explain to us sort of the nature of the complexity we face today. Can you start out by telling us? That's a big role that I explained. But let me just start saying that complexity is really a big word and has lots of different meanings. And I often say it's a bit in the eye of the beholder. Different communities and different individuals may have a completely different interpretation of what complexity means. We need to distinguish, as we heard, between complexity and complicated. There are lots of complicated systems around us. Our phone is very complicated down the line, you know, and so is a car and so are many of the technologies that we use, but yet we do not call them complex. And the major difference between a complicated and a complex object is that in a complex system you don't always know what are the outcomes of the interventions. The interventions, these systems are highly nonlinear. They are not predictable using traditional tools of science. That doesn't mean, however, that they are random. And the reason probably we are here today is because there is a consensus not only on the importance of understanding complexity and confronting complexity, but there is an increasing consensus that big data with advances in the fundamental fields of science like network science and complexity science, we started to get and develop the tools to handle them in a quantitative manner. So complexity is slowly moving from being a metaphor towards being a science, something that can be measured, something that perhaps could be actually predicted and down the line maybe controlled. I think it scares leaders to face complexity because we can often hear about the word the butterfly effect. Small decisions made by leaders can have unpredictable and very grave consequences somewhere very far away. I mean, can you... Sure. I mean, that's exactly part of the fundamental paradigm complexity that you don't always know what are the outcomes of the interventions. A classical example obviously is the butterfly effect. Interestingly, within the domain of quantitative complexity we don't think of the butterfly effect as being actually a signature of complex system. It is actually a signature of what we call a nonlinear system. But it emerges very regularly in complex systems as well. That being said, the very idea that I intervene in a complex system and I don't have a full predictability about the outcomes of that intervention is really probably the most fundamental property of complex systems. So if you cannot predict what your decision could mean to the whole system or your whole organization or your whole industry, leaders I wonder who face decision making do they feel like the learning curve is very steep? Do they feel more insecure? Are you more fearful? Brian, you lead a big, big NGO. How do you feel about this world of facing complexity? Well, you know, just to understand it, we've got 1,800 local affiliates in 41 countries and they're all independent corporations, either operating as the United Way or operating in a co-branded sense. And so what that means when you have 1,800 that are technically independent, there are things that can go wrong in Moscow or in Mumbai or in New York and it will affect the rest of the world. And there's no way you can keep track of everything that's going on in all those cities. I'm not fearful of it, but we have had to change our approach as we've gotten more integrated in our work across the world which means you start by values and competencies, making sure that you've got alignment, making sure that you've got the right talent in the right places. So for instance, while everyone's independent, everyone shares a governance standard, a financial management system, an information system, and we work hard to bring in folks who are collaborative in nature, purpose-oriented. So you're not in one business in one city and another business in the other city. So it's easier to get alignment if you agree on the same business and then make sure that the talent work that we do and that we recruit people who are collaborative and results-oriented, network-oriented, relationship-oriented, because what I've learned is that you actually have to give up some control in order to manage a more complex system that you can't continue to control from the center the way that you used to be able to control you. Instead, you have to think horizontally and actually facilitate the learning and information exchange and monitoring of a network that goes horizontal, not vertical. Ernesto, you are in politics. I wonder if politicians are more hesitant or more sort of become more indecisive in decision-making because the decision that they make for solving one problem could have a very, very grave effect in aggravating another problem because everything is sort of interconnected. What is your feeling? Well, I think complexity has been there all along in every field and of course in policy-making. Perhaps today we have the tools to express, to analyze, to represent complexity as we didn't have before. But at the end of the day, if you are in government or if you are in the private sector or in any other field, you have to take decisions. So the question is, how do you react? Even if you have a better tool to understand complexity? I think for me that's the fundamental question from the perspective of somebody who had to take sometimes very tough and difficult decisions. And it seems to me, however, that despite this new capacity that people like Laszlo provide us with this representation and analysis of complexity, we always should go back to basics because we must be humble. Even if we are able to identify a complex system, actually we cannot respond to a complex system with another complex system of decisions because most probably we would lose control of that system. So we have to be focused on really a rather limited number of control variables. So that I think applies not only from my experience in politics and government, but now that I am director of a few global companies as director, if I try to have a framework to analyze everything and to give opinions of everything, I will be totally useless. So my effort, my intellectual effort has to be on trying to identify some critical variables which I will follow carefully and try to insist on those. I may be wrong because anybody, any person can be wrong, but based on my experience, I go for that. And in my experience, if you try to do that rather than be a control freak of everything, you are more successful. You take a decision and say, okay, I'll go this way and I have a higher probability of being useful. Angel, you are a specialist in cognitive science and I wonder, leaders have to make timings of essence. They are uncertain, but they have to make decisions and take the right steps. I wonder some of the cognitive traps that leaders could fall into when they are facing very uncertain, sort of ambiguous, but have to make decisions. In fact, to paraphrase Don Ernesto here, the problem is you cannot be a control freak to deal with complexity. Unfortunately, we are built as control freaks. The cognitive system we've been endowed with in fact make us seek order, seek oversimplification. We're built to find, we're bumper sticker thinkers. If you think about even now that we're in a presidential campaign in the United States, the complexity of the social issues we're dealing with and yet we're sort of programmed to try to distill all that into some very basic ideas to deal with it. The way the mind works is we find basic theories that help us explain and predict what happens around us and then make us stick to those theories. We defend those theories. We seek evidence that help reinforce those theories. And it turns out the world we live in, as you have heard, is multi-connected. It is non-linear. It is not random, but it is very, very hard to predict. And that requires a type of leadership for which we're not necessarily programmed. If you take sort of classic management training books, we talk about sort of top-down analytical, strategic decision-making. You look at your reality. You analyze options and you stick to a plan and then you roll it out and try to execute on it. Whereas, in fact, that type of thinking is intrinsically at odds with the complex interdependencies that we're dealing with. And perhaps the only type of leadership and sort of management that can help us deal with complexity is one that allows multiple experimentation, multiple solutions, one that allows organizations to not just have one simple explanation of reality, but maintain simultaneously multiple views, suspend disbelief, maintain even contradictory views about reality. That's the only way you have to deal with it, but that's not the way we're programmed. So I think the world we're dealing with, yeah, it's always been complex, except that now because of what we have built around as the level of interconnectivity, it does create unprecedented complexity. And yet, I'm not sure we have fully developed the systems, the management leadership systems to deal with it. Can I tie those two together? First, Ernesto's point about making tough decisions. The best leaders I've ever seen are those that set a very clear direction. Could be a policy direction, could be strategic direction in a corporation, which then allows for the multiple scenarios and risk-taking to happen within that decision versus, let's say in the NGO world, you're in the AIDS business and a big opportunity comes along in the education business. You have to say, you can experiment all you want in the AIDS work that we're doing. We're not in the education business. So we don't want you over there. So it allows you to push down decision-making and risk-taking, but it gets set by the leader first or the leaders. That then, in my experience, then allows you to push down into an organization this idea of trying to innovate within the direction. I think there is something very important that comes from the title of the session. Mastering complexity. You know that? That's an oxymoron. If something is complex, you are not going to master over it. I think you have to start with that principle. I mean, you can understand the complexity. You up to a point. But you don't master the complexity. You manage the complexity. And in order to manage that complexity, yes, you try to rely on the most sophisticated tools. But at the end, if you really want to manage that complexity, you have to narrow down to a very limited set of tools your decision-making. Otherwise, you lose control of the system. But as Angel said, that you look at the same things and you can have contradictory realities. That's the puzzlement of the complex world. And how can you try to manage better? Laszlo, do you have any ideas? Sure. Actually, these are very excellent points in a way because we cannot really control a complex system ever. Even though myself as a scientist, I would love to develop tools that allow me to understand the complex system and the intellectual challenge. But down the line, we have to realize that the complex system is a moving target. It's time-dependent components, time-dependent interactions, and so on. So the question is, what is that we can do? And I think that the previous discussion kind of alluded to that. One of them is to aim to control complexity in the sense to limit it. And I believe that's what you were referring to. Setting rules that really limit the perturbations in the way or the other. What really complexity theory is focusing on is to identify what are the basic laws that are common across many systems that are complex. Why do we care about that? Not just because we like, since Newton, to have laws of nature. But the reason why we really like to do that is because we want to know what is it we can change and what is it we cannot change. So what are the variables that are free and what are the variables that we just have to work with? The emergence of hubs or highly connected nodes at very influential nodes in complex systems. It's naturally emerging all complex systems from the cell to the social systems. You're not going to re-engineer that. Or if you want to re-engineer that, you're going to have to make drastic measures and essentially limit the ability of the system to function. And there are all set of laws like that. The natural emergence of communities, the short path lengths, and the lots of properties of networks and complex systems that are so common in real systems and so reproducible that we say that they're really basic to the system. So once we understand that, then I think that what complex system can provide us is that tells us, okay, these are fixed, but they're all the rest of the thing that I can actually modulate. And that's where really mastering complexity starts, really, is that how do I modulate the variables that are free to me, such that I can induce change in the system? So how do you know what can be changed and what cannot be changed? What are the two kits that are available now? Well, there is a whole set of two kits on the line that are increasingly available. The bottom line is that they all rely on data. And that's where really kind of the whole idea of big data and digital world is really kind of coming alive here in this context. Because at the end, you know, the way, you know, one way to think about it is that anyone who claims that can understand or predict a system without data is either a palm reader or a business consultant, but certainly not a scientist in that way. And so we really need to be relying on data. But that being said, we started to have a number of tools coming out mainly from network science that at least let us to see the system, understand their underlying structure and, you know, start to draw conclusions from that. And I think, you know, Hiroko has asked me to present a few slides from my previous talk that I'm happy to do that, just to show an example of how actually is being done in the case of an organization. And I believe that this line should be coming up over there if there are up indeed. And then what you will see here is really an organization, an organization that it's a medium-sized company in Hungary. And what you see is really just a list of the employees. The three colors correspond to the three locations where the employees are physically residing in Budapest in the capital and then two outside locations. And the reason we have this data is because this particular company had a major communication problem. They realized that whenever the leadership made the new decision about the company's direction, whatever that was, the decision somehow didn't percolate down to the workers, despite the fact that this is not a huge company, or often the opposite effect was actually felt at the workers, like the opposite news were spreading of what they really intended. So they turned to kind of complexity science and particular network science to say, let's figure out what is really happening within my organization. And what we did for them is that we said, okay, let's map out really who is communicating to whom. So it was like an online questionnaire where everybody was asked, whom do you get news from about company issues, about reorganization issues, about professional things, whom do you delegate work to, whom do you receive jobs from, and so on. And what it did is that it turned this kind of list of employees into a network. And that network is now telling me where the information is flowing and what you can see naturally, a couple of hops have emerged into the system that seem to play a very central role in the way the information is spreading within the company. Now what I want to emphasize is that these are, this is collective information. It's not that these people said about themselves that they should be hops. Other people have pointed to them and therefore they emerged as hops. Now the natural question is, you know, who are these individuals? You would hope that there are the people who really matter. So to show that we're going to put now the official hierarchical tree onto the network. And the red notes are the top management and the CEO and unfortunately you don't see any red hops over there. Then the next layer is top management blue and there is no blue hop either. And if you really, you know, at the mid-level, at the ordinary management level, actually some hops and the biggest hub in the central of the network is really a gray node which is associated a nice way to say it's a worker. So then the question is, who is this fellow? Because he's truly influential in a sense that, that we could go back, I can go back I guess, because pretty much much of the company is really between two links from him and doesn't matter whether which part of the organization that person is. And well, it turns out that he's the person in charge of safety and health within the company. And the reason why he's a hub, because he's the only person in the company whose job is to go from group to top and talk to everyone, he has links to everybody except the higher management. So he's the gossip center of the company. Information through him travels horizontally, never top down, never bottom up, completely horizontally. He picks information up here and passes it over there. Now the question is, what do you do with this? Because first of all, what these two gave you is give you a diagnosis. You know where your problem is. What do you have, you fix it, you fire him? Well, it's not really his problem. It's actually what, it's the higher management's problem that created what we call a structural hole in the network. You know, that really this person by his personality and through his job actually naturally filled in. And you know, the recommendation we often have in these cases, talk to him, tell him what's going on, because now you know who are the few people in the individual that if you inform them about what's happening within the company, then the rest of the company will effectively find it. The only reason we're showing this example is that to show that, you know, there are increasingly tools that can be given in the hands of the leaders by which you can diagnose your problem. You can see what's happening in real time in your company and the beauty of these networks is that despite the fact that the system seems very complex and very volatile in time, these times are very stable in time. Whom you talk to, whom you get, whom you trust for information really doesn't change over a day or a week or months. It typically builds up over several months and lasts for years. People may come, people may go into the network, but the ties remain relatively stable. So there is lots of predictive power in these maps. So, yeah, go ahead. Well, the fascinating case study, that map that you just showed, that terrifies most CEOs. It terrifies most CEOs. Why? Because, again, we're programmed, whether you're a CEO, you're like everybody else, you're programmed to try to build structure to simplify. You want to believe that the org chart you've put in place, which basically an org chart pretty much represents a theory of the organization according to the CEO, you want to believe that that's the right theory. And you want to believe that people that you put in the right boxes have the right level of influence you want them to have. When you take a photo of the reality of the organization, you realize that your theory kind of stinks, that what you had in mind about how the organization works doesn't represent that. And so that's the temptation of saying, tell me who that guy is, get him out of here, because I want to impose my structure as the way that I have to deal with the complexity of that. I actually feel like the only way around that is to dive into that complexity, get into the network. It is in those connections that new solutions are going to come out in that organization that are going to be able to deal with unprecedented challenges. I always use the case of an organization that used to be a terrific organization in the United States called Borders, that was one of the most successful bookstores in America, which is no longer wiped out by an unknown entity called Amazon.com that 20 years ago did not exist. It is impossible for me to believe that in one of those bookstores that Borders had, many of them in colleges where everybody was using the Internet, that somebody in some of those had not thought about the possibility that the Internet could be used to sell books. And yet the structures were not in place to do that. So my sense is, don't fight it, don't try to oversimplify it, just leverage it. Try to invest in the right type of social capital and jump into it. I've been using Twitter for the last few years, it's changed the way I lead, it's changed the way I manage, it's plugged me deep into that network. Other CEOs ask me, why in the world would you do that and how do you even have the time to do that as if Twitter was sort of like a distraction or a game on the side, whereas in fact it's become probably the most powerful tool I have to deal with complexity to sort of embed myself in the conversations with colleagues, with students at the university and so forth. And the bigger the entity now that I moved from a relatively small school to George Mason, which is a pretty large organization, one of the most effective tools that I have at my disposal. Can I just clarify one thing? You're saying that there's overwhelming information and there's so much communication going in the organization, but somehow the CEO may not be getting the insightful information that one of your employees may be having. Is that why, I mean, you have lots of information. Yeah, you're always, as a CEO, you're getting filtered information by other folks who, first of all, you rely on the cognitive limitations of everybody who reports to you and potentially their agendas if they have some. So, honestly, you're in big trouble if that's all you do is in a world that complex like that, if you rely on that. Well, and think of it, it wasn't just the CEO or top management that didn't have a node, it was the level below that didn't have a node. And so the communications usually going down and up and it gets filtered by that level of management that doesn't want it to get to the CEO. And that's at least my experience and that's why I think I hell is so right that finding ways to jump over that layer of management from top management, whether it's social media or even just informal conversations with three levels down and younger people and new employees and so forth is, I was saying before we came out that Facebook is the way that young people in our network, there are 11,000 of us across the world, that's the way they communicate with me. And they go right by their organization, they go right by their management and they just give me suggestions, ideas, complaints. Even as simple as these old list serves, I sign up for all the list serves of all the United Way professionals around the world just so I can watch what they're saying and I watch them communicate back and forth and they don't even think that I'm in the network watching and listening and then occasionally I'll pull something out and take it back to our team and say, you know, what everybody's talking about is this, not what we're talking about at the management team level, we need to address it. I couldn't agree more, we've got to dive into the mess, if you will. So, I mean, what I want to also emphasize is that we shouldn't really use this one as this you can do only within organizations. What I wanted to really show here is the power of mapping and mapping can be used at many levels, can be used within an organization, can be used to see what is George Mason's position and the whole network of learning and understanding intellectual life can be used to see where a country is actually between the other countries and you can use this type of tools to take particular issues and map it out and see where the position is because we have a tendency to be ego centered. That is that we rightly so we are the center of our network and in order to see what the other other players are seeing you need to see where they reside in the network compared to you. You can see your competitors, you can see where you stand in the industry by correct mapping. That's right, I mean, and that's pretty much that's the only objective way to do that and the challenge is, you know, you have to spend the money and energy and resources and so on to do that and turn your mind around that this is valuable, I can learn from that. But I want to insist on the next step and I think it's important because what has happened in my own profession in my own field in economics the degree of, let's say, mathematical statistical sophistication that from a perspective of pure knowledge has my discipline today as compared to 50 years ago you would say it's amazing how sophisticated we are but then when we see how dramatically we have failed as a profession and the evidence is in front of us. By the way, you work for the Bank of Mexico, you were the finance minister. Yes, but I'm talking about the most recent events the global events then you got to ask yourself what is wrong? Why is it that we claim to have a capacity to model and to compute our models that we didn't have before and yet our profession seemed to be less useful than it was many years ago and I think the moral the lesson from that is that you have to be very careful you have a very sophisticated tool but if you are in a situation to take decisions then you better be selective about your first question whether your model is really dealing with the complexity and second whether if you are going to try to introduce that reality whether you really can do it by trying to introduce a complex, a two complex system of decision making I think that's since I am interested in policy and results I think that's the next step that we need to make. This is a fascinating conversation because what you're seeing is on one side there are great tools for analyzing complex systems maybe mapping is one of those a few days ago a colleague of mine who studies geographic information systems came to show me his latest analytical tool where he's layering social network information on top of geographic information system where he's now been able to display not just how good or bad our brand is but like a real life analysis of what conversations are happening where about our university and so on so there is the analytical piece but I think what the other side of this argument is when you're in it when you're leading united way or George Mason or Mexico not on the analytical side but on the acting on the leadership side when you're trying to make decisions mapping is useful the argument I'm making traditional models of management and leadership are just awfully inadequate to deal with it actually Ernesto you also raised a very good point on those lines because I think that complexity theory is about to undergo a transformation for the same reasons that you mentioned traditionally complexity theory was like economics which is have simple models that have complicated behavior that was chaos theory that was fractal theory and then kind of interpolate the behaviors to see to the complex systems so it was fundamentally model breven and we prefer the models that are mathematically solvable which inherently were simple what is big data really changing is that we less and less rely on models and we more and more rely on real time dense behavior of what is going on in the real systems so modeling has changed from simply having two differential equations that describe the system to taking this big flow data that coming from Ortsme and try to understand the relationship between them and try to have a real time spatially distributed picture of what is going on the system and then make decisions and I think that's really a fundamental change that the technology has allowed us that was not there 10 years ago I think the technology and the tools are fantastic the question is how we are going to use that tool to take decisions that are meaningful in the direction that we need them to be eventually you have to be heuristic you have to rely on experience you have to rely on those tools you have to rely on many things my warning is to do it until you know with a model that can be very elegant but that is assuming that we know more than what we know in fact if it strikes so true I remember sitting in Davos in 07 as we heard everyone from the stage talk about how clearly they understood where the financial world was going and where the world economy was going and then 08 the next year I remember sitting in the audience I'm a social worker and have my MBA but finance and economics is not my thing but I remember so I'm sitting in the audience and I thought to myself oh my god the smartest people in the world don't know what's going on that's literally it's gotten too complex and either that or they're believing their models which are inadequate for both the opportunities that were being created now the challenges that had been created couldn't agree more it was so clear that we just didn't know I mean the good news here of course is that complexity theory will never replace the two of you which are the leaders what it will do is that it will provide you better tools so that you can make much better empirical decisions about what is next so it gets you a better view of what's going on, helps you make better decisions or let me offer an alternative I actually even question this idea that there is a smart decision maker at the top that upon seeing all those fancy analysis and maps and whatever actually has the right decision I question the very idea of there being a right decision when you're dealing with complex systems and my sense it's only sort of a vague intuition based sense but that I think is confirmed when I hear Gary and other leaders which is you need to sort of not find complexity but in fact embrace it and allow complexity to even unfold in your organization empower many others to make decisions faster the creation of internal connections of social capital allow and train people to connect, to build bridges to bridge, build bridges between cultures, between disciplines and hope for the best and hope that something will happen so then the question is then do we really need people like us doing our job and I think Gary had a profound statement at the beginning which is probably the most important thing a leader can do in an environment like that is to remind everybody of the values of the sense of long-term direction not of living in this illusion that we are the smart decision makers but to embrace the fact that there is not a right solution to just remind everybody of what is the long-term plan what is the long-term goal what are the values of the organization and ensure you're creating an environment with those solutions hopefully will bubble up to the top very different from what we've been trained to in business schools and in the like so you're saying that the leadership competencies that are needed is not like strong leadership more sort of delegating authority I mean how do you make your organization more increased dexterity making more creative making everybody more collaborative what is the style of leadership that is needed what is the competencies that are needed Brian do you have an idea of how to improve your organizations to increase opportunities from complexity that when we recruit into our organization certain things you can develop certain things you can't but it's pretty simple we look for people who are purpose driven and that can be in business government NGOs are you are you really engaged in the purpose are you results oriented importantly are you collaborative and relationship oriented and are you a kind person that whenever I say that people say the leaders have to have vision they have to be team builders they have to be able to help create networks they have to be able to give up control but we always look for good people as well because bottlenecks happen in organizations because you have people acting not in the best interest of the purpose and so even if you're purpose driven but you're not really a very good person you actually can test those things when you're hiring folks in you can't make somebody go from being self centered and so forth to being collaborative but you can test it when you hire it and so we do everything we can to make sure we fill the organization both young talent coming through the pipe identifying those early career, mid career and making sure that we're trying to move people up in the organization so it's not like me when I went to MBA school in the 1980s it was all management by objective and command and control and top down and occasionally we talked about ethics but it's so I have to learn how to give up control and give away credit and it's just you have to give away credit credit only comes back to you if you give it away if you want to take it you really don't get it in today's organizations Brian sorry I called you Gary earlier the when we wrote this book pardon the plug the being global book we interviewed folks who seem to be getting it right and trying to distill sort of what are the the sets of competencies that allow them to succeed we try to build a really simple theory of a very complex phenomenon but what came out to your point was first of all one of those competencies is this ability of being able to suspend disbelief to hold different perspectives of reality at once to be able to relate to people who may provide a very different perspective on one set of phenomenon which is not very natural we try to surround ourselves by people who confirm our view of the world not people who are affected so that's one set the one is the entrepreneurship piece people who are able to connect the dots and use that connectivity with others to find creative solutions but the third one which in fact I think confirms what you just explained is this notion of values which we call global citizenship in our case but it is the question of values so from the standpoint of leader if you're bringing folks are committed to the sense of purpose whose values are aligned with the values of the organization who have the ability to develop that kind of connectivity inside or outside of the organization who are able to suspend their disbelief to collaborate with folks who come from the other side of of a silo that is the role of leadership is how do you bring that kind of talent into an organization and then set them loose the best thing you can do so it's interesting this discussion and in a sense that the leadership qualities have focused entirely on the notes perspective and that's exactly what we face as a challenge in dealing with complexity is that our cognitive limit is such that we believe and because we don't have any better tools that if we want to make an organization better we just put good notes in there and we don't really have the tools to decide is this note really fitting in that environment partly because the environment is changing in time the players change and so on and so the question is can we go to the next level and I'm not so sure we have answers to that but this is the type of questions I think we need to ask when we look at this big data is that could we really think in not now only from the perspective of the note which is given that we try to hire the best but also how does it fit into the organization from a network perspective exactly from the organization of perspective I think that's a fair point maybe I should ask the floor if they have any questions can you sort of raise the lighting in the room ah okay I see a few hands going up first I'd like to start with this gentleman you have basically characterized what are the values for the next generation of leaders and that sounds very good but my question is for political leaders are these values attractive for basically the population for voters can you say who you would like to address the question I would like to address it to the former president of Mexico well let me answer to your question by making reference to this idea that was mentioned right at the beginning which is we live in a much more interdependent work we live in globalization we have incredible connectivity the way in which we produce sell, consume has changed dramatically and I would say that people are not really aware of how complex this system has become partially because the political speech is not yet made to inform people of these of the consequences the good the many good consequences and also the downsize of that interdependence if you listen to political speeches all over the world today we still have the same instance we had 40 years ago whenever something goes wrong in your country you try to blame others for what went wrong you have an unemployment problem you and I say it here immediately you try to blame China you know China is being successful so I think there is a there is a vacuum between this new reality which we communicate with people we are still relying in all notions perhaps they were always wrong but it's easy to say that and it's easy to get agreement in people what you were saying they listen what they believe so it's a process of mutual reinforcement but this is extremely dangerous because by reinforcing these wrong notions political leaders may be narrowing their capacity to execute good policies and I think a good example is what's going on right now in Europe despite the fact that Europeans have built the most impressive project of economic and I would say political integration in human history and it's something that should be to deserve our admiration and recognition the political speech has been such that now that they have to take further decisions to deepen this project they are in a sort of death end political death end and we have continued to tell in Germany I don't know we have this problem because the Greek are lazy or the Spanish go to too many fiestas or this and that not to speak about other factors and that I think is very bad I think political leaders have the responsibility certainly to understand this complexity their language and their communication so that they create the political space to have capacity to act particularly in times of crisis so I think that's Ernesto I think I'd like to ask sort of a follow-up question why do governments sort of fail to create mechanisms for cooperation I mean it's such a collaborative world but the polarization seems to be increasing and you know I think there are things that governments can do and they should collaborate even more but the mechanisms for collaboration has failed there are many reasons and let me put it a little bit in conceptual terms when we speak about international cooperation international cooperation for what well you need an international cooperation to produce what we economists call global public goods and these are goods that cannot be provided by the action of a single country and in fact no country individually will want to produce alone that because it's always in your interest to wait for others to put their part to generate that public good and also because in order to produce one of these public goods somehow you have to share your sovereignty and this is politically very difficult particularly if you have been insisting in speaking to your public that you have to preserve a notion of sovereignty that perhaps was valid two centuries ago but it can no longer be valid in the 21st century so you have the problem of sovereignty you have the problem of the free rider and that makes it very hard to begin with to have that kind of international cooperation and that has been produced only when you have either exceptional leadership that goes beyond immediate political interest always acting in your own national interest I don't think you can force any political leader to act against its national interest but you have to have enough foresight, enough vision to say this what we are going to do which in a way takes away some of our own autonomous authority at the end will be in the benefit of our own people so it takes leadership and it also takes imagination to design mechanisms that are acceptable to others and to your own constituencies and sometimes we don't do it simply because we are ignorant thank you any other question gentlemen in the purple shirt I suppose this is a follow up on that discussion given that intellectual honesty and denial is pervasive in the business political and academic arenas in the world we live in how much would you say that intellectual dishonesty and denial is a barrier to any understanding of complexity I don't call I mean there are cases of intellectual dishonesty I don't call our failures to deal with complexity I don't call that intellectual complexity I call that limitations of who we are and how our cognitive systems are built as I said we are built to produce to reinforce and to defend simple theories of how the world around us work if you're trying to run a campaign it's to your point a mess though and to the question of what would you do with health care you say well it's very complex and there is not a single answer and if you just do this then there are side consequences if you do that then there are side consequences and in fact if you do this we have no clue what will happen until you run this experiment and you pass the early primaries you don't even make it to the end so we have a system that basically reinforces the production of bumper stickers that oversimplify what's a very complex reality and not all of that is intellectual dishonesty so for example in the case of the elections going on in the United States it seems like you either have to say government is awful and everything it does is bad there is some hope for government and that produces a polarization what I'm very intrigued by in fact this conversation gave me some ideas and maybe some hope is whether there are any tools that people like you Laszlo and other researchers of complex systems were there tools that could be used to explain complex systems to the general public to enrich conversations to at least bring people along to a conversation and I don't know if there are good examples of doing that but boy I would love to see stuff like that happen maybe one more question gentlemen thank you thank you wait thank you English Channel can you hear me great thank you I'm the general from the actually two questions for all the panelists from the conversation the first question is about globalization we've been talking about globalization but in talking about globalization I believe that maybe we'll mention this combination I think that enterprise I think that what is important for the enterprises is to have the localization at the same time you have different policy environment legal environment and oppression environment because in different environments I think that's for enterprises it turns to be very complex and complicated so how would you address this complexity in terms of environment and the other one is that in the private investment that is the policy from the government to go out and invest and include the globalization local currency so there's a tendency that for the FDI from China in R&B but in emphasizing globalization R&B there's a certain risk so from the SOEs investments it's not that successful for the Chinese or local enterprises to invest in foreign countries because there's a difficulty in foreign countries from the local Chinese investors any suggestions or recommendations that was a bit of a difficult question but I didn't fully understand I thought it was very complex very complex question I'll leave the R&B valuation but let me say on the first point the globalization versus localization that the fact is that the only sector of the three big sectors that have globalized is business business is it is a global marketplace right now and government hasn't kept up and civil society hasn't kept up and so to this point about so business finds opportunity they go where the opportunity is if you don't get the kind of cooperation between government governments then you've got different regulations it becomes very complex having said that the most successful businesses understand this need to be local and global at the same time and if you're going to do business in China you're going to have to deal with the political economic cultural reality of China and NGOs the same way that's when you get a decentralized structure and culture inside your organization it's actually a huge advantage because doing business in North America versus Europe versus China versus Brazil is very different so you can have a single business but you have to run each of those local businesses as if you are a local company and those that do it better than others are more successful than others in my estimation Karen I said you want to talk about the internationalization of the RMB well I think I will complement your comment you said that it is given the difference in environments that it is very difficult to carry out globalization well it's true but today conditions are much better than they were 20 or 30 years ago that is why we have seen this amazing globalization of production I think we are going through a second industrial revolution in the world 200 centuries I mean 200 years ago we a little bit longer than that we started the industrial revolution because there was a scientific revolution thanks to Newtonian physics that allow us to develop new sources of energy to create new forms of transportation and communication and that with other things changed the world well now we have new technologies that have given us the possibility of have this connectivity and communication that we couldn't have 30 or so years ago we also had significant changes in the environment because we have had throughout the world a reduction of barriers for trade and investment and that has allowed us to create a very complex supply change that we didn't have before before industrialization was about vertical integration about creating clusters about creating scale and only when you had that you could have some aspiration to become international and to sell in other countries not necessarily produce in other countries well today you can become a global company practically overnight as long as you don't want to produce everything as long as you are willing to specialize as long as you are willing to produce and make sure that that component can be assembled or used in many other parts of the world but that is possible yes because of technology but also because countries have agreed to lower barriers to trade and barriers to services and this is a good news but it's also about news because about news is that governments can also raise again investment and that can destroy globalization and that can destroy opportunities for prosperity that we are enjoying today about the R&B well about the Yuan well it is up to the Chinese government to allow it to make it fully convertible and the day that it is fully convertible then I think we will see much greater possibilities of Chinese investment in the world but of course there has to be also the attitude of other countries to be more liberal towards Chinese investments we are past our time and I hope everybody here tries to challenge their cognitive limits to master through this world of complexity I thank you everybody the panelists and thank you for coming thank you