Big-Bang Reforms

Abstract

Should organizations reorganize gradually or abruptly? Why does software development often involve episodic, disruptive overhauls? We model a designer who seeks to adapt a complicated system to gradual external change. Systemic interdependencies impede adaptation: small adjustments to the system cause a cascade of painful dislocations. We model such entanglements within a system as a directed network over the set of elements: whenever a system's element is removed, so must its network descendants. With sufficiently dense interdependencies, optimal adaptation involves big-bang reforms: periods of stagnation as inefficiencies accumulate, punctuated by episodes of abrupt change.