EVOLUTIONARY BIOLOGY OF SPECIES AND ORGANIZATIONS

http://www.orgs-evolution-knowledge.net

1

OASIS SEMINAR – 27 JULY 2007

Time Value of Knowledge

—time-based

frameworks for Valuing knowledgeWilliam P. Hall, PhD

Australian Centre for Science, Innovation and Society

University of Melbournewhall@unimelb.edu.au

Peter Dalmaris, PhDFutureshock Research, Sydney

Steven Else, PhDCenter for Public-Private Enterprise,

Alexandria, VA

Christopher Martin, PhDand

Wayne Philp, PhDLand Operations Division, DSTO, Edinburgh,

SA

Slide 2

Some questions

What is knowledge?What is an organisation?How is knowledge important to

organisations?How can knowledge-intensive organisations

value knowledge and knowledge-related activities?

How does this value change and depreciate with time?

We need a vocabulary for considering how cognition, knowledge and time interact!

Slide 3

Introduction

My own background– evolutionary biology, epistemology, computers,

defence industry content and knowledge management

– emergence of knowledge in complex adaptive systems

Background to this project– a day of brainstorming at DSTO Land Ops Division

• biologically based paradigm of organization– Karl Popper’s epistemology– Maturana and Varela’s autopoiesis

• need to gain & maintain strategic power in competition• bounded rationality and limits to organisation• improving knowledge intensive organisational processes

Slide 4

Paradigms and today’s presentations

Thomas Kuhn’s (1962, 1982) concepts– scientific paradigms held by communities– paradigmatic incommensurability

this presentation a product of an emerging community developing a biological theory of organizational knowledge– KM consultants/practitioners working in industry– most with PhD’s – academically unaffiliated (but looking for a home)

planning a workshop, “Theory, Ontology and Management of Organizational Knowledge”, to bring players together

the group framework combines several paradigms from the fringes of theories of knowledge and organisation

Slide 5

Epistemology paradigm

Karl Popper’s (1972) evolutionary epistemology– Knowledge is solutions or claims to solutions for

problems of life– All claims to know are fallible (knowledge is

constructed, its truth cannot be proven)– Three ontological worlds

• W1 – uninterpreted physics and dynamics of reality• W2 - cybernetics of life or the dynamics of subjective

experience; “dispositional” and “subjective” knowledge• W3 – objectively codified products of knowledge (e.g. the

logical contents of DNA molecules, books and libraries, computer memories), the “built” environment

– Knowledge grows through trial & error elimination

Pn → TT/TS → EE → Pn+1

Slide 6

Popper's “general theory of evolution”

Knowledge building cycles

Pn a problem faced by an entity

TS a tentative solution/theory.Tentative solutions are varied

EE a process of error elimination (e.g., selection, criticism)

Pn+1 changed problem faced by an entity incorporating a surviving solution

The whole process is endlessly iterated

TS1

TS2

•••••

TSm

Pn Pn+1EE

TS1

TS2

•••••

TSm

Pn Pn+1EE

TS1

TS2

•••••

TSm

P Pn+1EE

Knowledge is constructed by living systems TSs may be tacitly embodied in in the structural dispositions of the individual

entity, or TSs may be explicitly expressed in words as a hypothesis subject to

intersubjective criticism Objective expression and criticism lets our theories die in our stead Through cyclic iteration, tested solutions can approach reality

iteration

Slide 7

Organisational paradigm

Maturana and Varela (1980) Autopoiesis (cognition) is the definition of life

Criteria after Varela et al. (1974)– Bounded (demarcated from the environment)– Complex (identifiable components within boundary)– Mechanistic (driven by cybernetically regulated

dissipative processes)– Self-referential (boundaries internally determined)– Self-produced (intrinsically produces own

components)– Autonomous (self-produced components are

necessary and sufficient to produce the system).Organisations are complex living systems

(Hall 2005)

Slide 8

Bounded rationality & limits to organisation

Need for knowledge-based decisions & actionsLimited time & resources to process

information in a relentlessly changing worldBounds to individual rationality (Simon

1955, 1957)– Time– Cognitive processing power

Organisational limitations – Arrow (1974)– Greiner (1972-1998)– Else (2004)

Slide 9

Competition and survival in harsh environments

Living systems (i.e., orgs) are dissipative– grounded in non-equilibrium thermodynamics

Resources to feed dissipative processes are limited– degraded by use

Competition in a finite world– direct– competition for resources

To grow/survive living systems must maintain at least some strategic control over external environment & competitors– knowledge = solution to problems of life

Slide 10

Achieving strategic power in the world

Achieving strategic power depends critically on learning more, better and faster, and reducing decision cycle times compared to competitors. See http://www.belisarius.com.

AO

OBSERVE

(Results of Test)

OBSERVATION

PARADIGMEXTERNAL

INFORMATION

CHANGING CIRCUMSTANCE

S

UNFOLDING ENVIRONMENTAL

RESULTS OF ACTIONS

ORIENT

D

DECIDE

(Hypothesis)

O

CULTURE PARADIGM

S PROCESSES

DNA GENETIC

HERITAGE

MEMORY OF HISTORY

INPUTANALYSIS SYNTHESI

S

ACT

(Test)

GUIDANCE AND CONTROL

PARADIGM

UNFOLDING INTERACTION

WITH EXTERNAL

ENVIRONMENTJohn Boyd's OODA Loop process

Slide 11

Info transformations in the autopoietic entity

World 1

Autopoietic systemCell

Multicellular organismSocial organisation

State

Perturbations

Observations(data)

Classification

Meaning

An "attractor basin"

Related information

Memory of historySemantic processing to form knowledge

Predict, proposeIntelligence

World 2

Slide 12

Processing Paradigm(may include W3)

Another view

Decision

Medium/Environment Autopoietic system

World State 1

Perturbation Transduction

Observation MemoryClassification

Evaluation

Synthesis

AssembleResponse

Internal changes

Effect action

Effect

Time

World State 2

IterateObserved internal changes

World 1 World 2

Codified knowledge

World 3

immutable past convergent futureOODA

stochasticfuture

OODA

calendar time

temporal divergence

temporal convergence

“now” as itinexorablyprogresses

through time

t2

t3 t4

t1+i

journey thus far

the world

perceivableworld

t1chart

×proximal

future intendedfuture

××

×

perceived present

divergent futures

divergent futures

divergent futures

cognitive edge

t1+j

tgs

From the paper

immutable past

the world

t1

t1 – time of observation

t2

t2 – orientation & sensemakingt4 – effect action

temporal convergence

calendar time

“now” as itinexorablyprogresses through

time

intendedfuture

××

×

divergent

divergent

divergent futures

×stochastic

future

convergent futuretemporal d

ivergence

OODA

t4

t3 – planning & decision

t3

Anticipating and controllingthe future from now

immutable past

the world

t1

t2

temporal convergence

calendar time

intendedfuture

××

×

divergent futures

divergent futures

divergent futures

×stochastic

future

convergent futuretemporal d

ivergence

OODA

t4

t3

Perceivable world

Cognitive edge

journey thus far

chart: received and constructed world view that remains extant and authoritative for a single OODA cycle.

perceivable world: the world that the entity can observe at t1 in relationship to the chart. This is the external reality (W1) the entity can observe and understand in W2 (i.e., within its "cognitive edge"

journey thus far: the memory of history at t2 as constructed in W2. Memories tend to focus on prospective and retrospective associations with events (event-relative time) and can also be chronological in nature (calendar time)

chart

“now” as itinexorablyprogresses through

time

recent past: recent sensory data in calendar time concerning the perceivable world at t1 (i.e., observations) the entity can project forward to construct a concept of the present situation (i.e., at t3), or some future situation. Recent past is constructed in W2 based on what existed in W1 leading up to t1.

recentpast

Present: calendar time: when an action is executed.• perceived present: the entity's constructed understanding in W2 of its situation in the world at time t3;• actual present: the entity's instantaneous situation in W1 at time t4.

perceived

present

Proximal future: the entity's anticipated future situation in the world (W2) at t4 as a consequence of its actions at t1+j, where j is a time-step unit—typically on completing the next OODA cycle. This anticipation is based on observed recent past, perceived present and forecasting of the future up to t4.

OODA

t1+j

proximalfuture

Intended future: the entity's intended goal or situation in the world farther in the future (at tgs, where gs is a goal-state and tgs is the moment when that goal is realised). Intentions are not necessarily time specific but are always associated with an event or goal-state (i.e., the arrival of a set point in calendar time can also be considered to be an event).

tgs

• convergent future: the entity’s mapping of the proximal future against an intended future in which tgs can be specified. t1 and t1+j can also be mapped to tgs and then tgs+1 forecasted in the form of some subsequent goal.• divergent future: a world state where the entity’s actions in the proximal future (t1+j) failed to achieve the world state of the intended future at tgs.

Slide 16

Utility value of knowledge

Pattee (1995)– “Knowledge is potentially useful information about

something. ... By useful information or knowledge I mean information in the evolutionary sense of information for construction and control, measured or selected information, or information ultimately necessary for survival”

Utility value of knowledge (Cornejo 2003)– Direct

• direct relationship with improvements in processes and operations, usually derived from the knowledge acquired by members of the organization.

– Indirect• When the organization knows that it is benefiting from the

acquired knowledge but can’t identify the mechanism with clarity, and it therefore can’t find a reliable way to measure and value it.

Slide 17

Value and time

Knowledge value function – claim’s accuracy reflecting the true state of

existence (i.e., the degree that rational actions based on the knowledge produce predictable results)

– claim’s applicability to particular circumstances– quality and effects observed when knowledge

enacted

Time issues– relentless advance– temporal lag of constructed W2 vs actual W1– old and multiply tested knowledge vs depreciation – tacit (uncriticisable) vs explicit issues

Slide 18

OODA cycle times and strategic power

Concerns in the decision & action cycle– rationality bounded in time– decision risk– intimidation and dithering about uncertainties– Danger of stuck OODA (“analysis paralysis”)

• decisions by “running out of time” or “fiat”• paralysis blocks dependent decisions

– Knowledge that is not refreshed depreciatesMinimax

– increased observation time gives more detail for a larger perceivable world and a more accurate model of it

– striving too long to reduce uncertainty gives more time for random events and other actors to create a stochastic future diverging from the intentional future, leading to less relevant world views and less effective control information

Advantage from changing world before competitors complete their own OODA loops

Slide 19

Conclusions

Delaying decision & action without new observation and orientation depretiates the knowledge on which they depend– increasing unpredictability of results of actions– Operating inside a competitor’s (OODA) loop breaks its external

bonds with its environment and creates mismatches between the real world and its perceptions of that world.

– Initial confusion and disorder can degenerate into internal dissolution that erodes the will to resist.

Current world-knowledge doesn’t age well, but… – Some kinds of knowledge can become more valuable with time.– The most valuable knowledge may be “old” knowledge that has

survived testing in many OODA loops as cultural heritage. – Rapid decision also benefits from cultural paradigms that don't

have to be revisited often (Boyd)– At the tactical level, one needs to deal aggressively with

latency issues.

Slide 20

Any questions?

Slide 21

Cybernetics and emerging complexity

“Cybernetics" is the regulation, communication and application of control information, beginning at the biophysical level

“System” is a set of distinguishable components that dynamically interact to facilitate and cybernetically regulate the flow of information, matter or energy

“Complex system” a system whose emergent behavior cannot readily be predicted from the behaviors of its components (i.e., non-linear/chaotic)

“Levels of organisation”. Systems may be complex at hierarchically different levels of structure (Salthe 1983)

“focal level”. A selected level of analysis for observing a system in a hierarchically complex world. System may include sub-systems at lower focal levels as components and be a single component in a complex system at higher level of focus (Salthe 1983, Gould 2002)