Page 26 - The Complexity Perspective 20 02 18

universe as a whole can be reversed. A local
system—the planet, the piece of land, the
ecosystem, the city, or the body—may at times

show increasingly complex patterns of structure
and organization.

Based on: Boulton, Jean G.; Allen, Peter M.;
Bowman, Cliff (2015-07-30). Embracing
Complexity: Strategic Perspectives for an Age of

Turbulence (Page 20). OUP Oxford.

A Note: When is a System Not a System?

Answer: When it is a portfolio.

The text above gives the characteristics of a business system;
essentially, agents grouped inside a boundary organized into a

hierarchy to perform work in pursuit of a common goal. Very large
organizations may contain numerous systems (business units). To the
extent that these all pursue a common operating goal they can be

considered a single system. If they are all or mostly operationally
independent from each other (e.g., a conglomerate) then their only
common goal is financial efficiency usually through cash management.
This is essentially a portfolio aimed at managing an investment

strategy.

A portfolio may not be a system in our terms, but portfolio thinking is
a hugely important tool in a strategic analysis as it seeks to match cash
absorbing investments with cash-generating investments and harvest

or kill off those that generate losses. It is a tool used both to manage
investments in whole companies (Boston Consulting Group) and
entrepreneurial investments in product development (Moore).

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