Let’s start with a few definitions:
Path dependence. If a system has path-dependence, then the results are cumulative. Drop two leaves next to each other in a river, and the next day the two leaves could be miles apart. Or right next to each other. But they are on their own paths, and everything they experience is cumulative - it all depends on what happens before.
Path independence. If a system is path-independent, then it’s easy to correct for previous mistakes. You could call this self-healing. An ant colony is not path dependent - whatever happens, the ants don’t have to live with it, they fix it.
Adaptive means that participants adapt to what other participants do. Volcanoes may seem random, but they are not adaptive - volcanoes don’t respond to things we do to try to mitigate their effects.
Linear systems have evenly spaced steps, a beginning, a middle, and an end. Most of manufacturing is linear. Very few things in nature are linear, though our minds are good at thinking otherwise.
Nonlinear systems don’t have to be adaptive. A flower grows nonlinearly, so does ice, so do bacteria.
Complex systems have many interactions and dependencies that make it impossible to determine the outputs given the inputs. We can model them, but our models are always simplifications of reality. A complex system would be tectonic plates moving and causing earthquakes, or a famous experiment about grains of sand piling up and slipping. Those systems don’t continually learn and improve.
Ecosystems are complex systems - often several overlapping complex systems - where the rules can and do change over time. A forest is an ecosystem where the rules change slowly (modulo the odd, 70-million-year extinction event). Business is an ecosystem where the rules can change quickly.
In some sports, participants can choose defense or offense and switch back and forth easily. In others, it’s mostly offense. In a bike or running race, there is very little defense. In a soccer game, the team that is ahead can switch to full defense and change its style of play in a second. This is true of all “goal” sports. In tennis, as in chess, you have to balance offense and defense - you can’t be too far one or the other.
In a running race, there is some interaction, but generally it’s a race against the clock.
In a bike road race, it’s not against the clock, it’s against other riders. Relative positions matter, and anything can happen to change the outcome at any time. One characteristic of complex adaptive systems is that tiny differences between participants can magnify and determine winners from losers. In the Tour de France, every second on the road counts for 19 days of racing. So if you lose two minutes in one race, that’s two minutes you lose for the entire race. BUT - because it’s a complex adaptive system, everyone adapts to those two minutes. You can’t say that your final time would have been two minutes more, because all the other teams are adapting to the reality every day, you can draft other riders, and everything is cumulative (path-dependent) for everyone.
A golf tournament is similar - every stroke counts, from the first to the last day. The score doesn’t matter - what matters is the score against your competitors.
In the World Cup soccer tournament, if you lose a game you go on and try to win the next one. Having lost the previous game, whether by one point or six points, doesn’t change your chances of winning the next one. We say it is not path-dependent. A soccer tournament is a kind of hybrid, where within a single game you have a complex adaptive system, but from game to game it’s not path-dependent, so it’s more structured and less complex.
In baseball and basketball, where most competition is in a series of several games, we have the same situation: it’s somewhat, but not completely, path dependent. You can never get to the end of a game that was won by two points and say “Oh, if they had only done this or that differently, they would have had four points and won,” because the other side would have responded differently. At the same time, once you have lost, you get to start over fresh for the next game.
In tennis, the scoring system strongly affects the outcome. This is a complex system where you have to pay the most attention at critical points, and you can often relax during non-critical points.
Sports are easy. Now think about war, love, tribes, politics, business. These are ecosystems.
Ecosystems are complex adaptive systems with several systems interacting, and where the rules can change. In an ecosystem, the rules change - not by a governing group but by themselves. In business and society, the rules are often part of the adaptation - they change to reflect political processes. In a rainforest, on the other hand, the rules change quite slowly. Most ecosystems are in rough equilibrium that is constantly pushing the boundaries. Ecosystems are characterized by:
Hundreds of simultaneous arms races, many of which are invisible
Auctions, in which people make irrational, emotional choices
Beauty contests with winner-take-all economics
Moving, even elusive targets
Black-swan events, unprecedented surprises from unknown unknowns
Implicit games with unwritten rules
People gaming the system
Others pre-gaming and re-gaming the system in response
Lots of data, signals, statistics, information, and numbers
Solutions that are temporary at best
Adversaries and allies, many of whom are difficult to distinguish
The fast rise of new frontiers
Uncertainty, ambiguity, and volatility = the red-queen effect
This list is important. You don’t have to memorize it, but you should be able to differentiate a complex adaptive system from a normal system. You should recognize path dependency and understand that when something is path-dependent, a tiny difference in the input can mean a large difference in the output. In a complex adaptive system, what worked last time won’t necessarily work next time.