A World in the Throes of Change
The business world is in the throes of revolutionary change, a time when business leaders are preoccupied with change itself. Modern management theory borders on being obsessed with change of one sort or other: how to generate it, how to respond to it, how to avoid being overcome by it. The reason is not hard to find. Pick up any newspaper, magazine, or business book and there it is: chaos reigns. At the cusp of the twenty-first century, we are experiencing structural shifts in our economy brought about by the revolutions in computation and communication technologies.
With this shift, managers are finding many of their background assumptions and time-honored business models inadequate to help them understand what is going on, let alone how to deal with it. Where managers once operated with a machine model of their world, which was predicated on linear thinking, control, and predictability, they now find themselves struggling with something more organic and nonlinear, where limited control and a restricted ability to predict are the order of the day.
Business Theories, Business Theories, and More Business Theories
These turbulent times are reflected in the proliferation of new business books on change. Managers have never been short of advice for new ways of working, of course. The history of the (currently) $17 billion-a-year management consulting business (in the United States alone) is a litany of new techniques that successively offer relief from the old and, by implication, wrong-headed management style. The list is long and includes management by objectives, management by walking around, total quality management, and the biggest of the more recent offerings, reengineering. There have been more than twenty such nostrums in the past few decades, and the pace of their birth and subsequent demise is picking up alarmingly.
Managers are ambivalent about management theories: they want tools to help them manage, but have become skeptical that, as the pace of the birth of successive theories picks up in the way it has, they will barely have time to master the present one before it will be replaced by the next. Managers clearly display an admirable degree of open mindedness in being willing to take on new ideas, but business fads can be crazy making as well. Front-line workers, on the other hand, are less ambivalent, as the popularity of Scott Adams’s Dilbert cartoon attests. An article in The Economist says of Adams that whereas most business writers write for the one in ten people who are interested in management theory, he writes for the nine of ten who hate it.(1)
A Paradigm Shift in Thinking
We argue that managers, consultants, entrepreneurs, executives, other business professionalsindeed, anyone who workscan take some comfort in the fact that they are not alone in riding a bucking bronco of change that demands a different understanding of the world. Science, too, is in the midst of an important intellectual shift, a true Kuhnian(2) paradigm shift that parallels what is happening in business, or, more accurately, is the vanguard of that change. Where once the natural world was viewed as linear and mechanistic, where simple cause-and-effect solutions were expected to explain the complex phenomena of nature, scientists now realize that much of their world is nonlinear and organic, characterized by uncertainty and unpredictability. As in science, managers are discovering that their world is not linear but rather predominantly nonlinear, not mechanistic but rather organic and complex. It’s amazing how far we have been able to take the linear model for understanding the world, both in science and in business. But in the new economy, the limitations of the mechanistic model are becoming starkly apparent. A new way of thinking is required.
Enter Complexity Science
The realization that much of the world dances to nonlinear tunes has given birth to the new science of complexity, whose midwife was the power of modern computation, which for the first time allows complex processes to be studied. The science is still in its infancy, and is multifaceted, reflecting different avenues of study. The avenue most relevant to understanding organizational dynamics within companies and the web of economic activity among them is the study of complex adaptive systems. Simply defined, complex adaptive systems are composed of a diversity of agents that interact with each other, mutually affect each other, and in so doing generate novel behavior for the system as a whole, such as in evolution, ecosystems, and the human mind. But the pattern of behavior we see in these systems is not constant, because when a system’s environment changes, so does the behavior of its agents, and, as a result, so does the behavior of the system as a whole. In other words, the system is constantly adapting to the conditions around it. Over time, the system evolves through ceaseless adaptation.
Complexity scientists are learning about these dynamics of complex systems principally through computer models, but also through observation of the natural world. That’s all fine and dandy for scientists and academicians, one executive commented when we made this point, but what’s it got to do with me and my problems? The point is that business organizations are also complex adaptive systems. This means that what complexity scientists are learning about natural systems has the potential to illuminate the fundamental dynamics of business organizations, too. Companies in a fast-changing business environment need to be able to produce constant innovation, need to be constantly adapting, and be in a state of continual evolution, if they are to survive.
Seeking the Deep Nature of Organizations
Oh no, not another fad, one manager said to us. There is always that danger, of course. But if complexity scientists are right in arguing that if complex adaptive systems of all kindsin the natural world and the world of businessshare fundamental properties and processes, then the science offers something that most management theories do not. The argument here is that most management theories are not really theories at all, but merely techniques for managing in a certain way. Complexity science is still nascent as a theory but it has determined certain fundamental processes and characteristics of complex adaptive systems. In other words, when we speak of businesses as complex adaptive systems we are not speaking of a metaphor or a technique; rather, we are saying that by understanding the characteristics of complex adaptive systems in general, we can find a way to understand and work with the deep nature of organizations.
Right, said one consultant. So what do I know that’s different about empowerment, participatory management, and learning organizations by understanding complex adaptive systems that I didn’t know before? We addressed this question by developing deep narratives of people’s experience in a dozen companies in the US and the UK that were structured according to the principle of the science: they were organizationally flat, encouraged rich communication, and valued diversity in the workforce. We found that this new science leads to a new theory of business that places people and relationshipshow people interact with each other, the kinds of relationships they forminto dramatic relief. In a linear world, things may exist independently of each other, and when they interact, they do so in simple, predictable ways. In a nonlinear, dynamic world, everything exists only in relationship to everything else, and the interactions among agents in the system lead to complex, unpredictable outcomes. In this world, interactions, or relationships, among its agents are the organizing principle.
Relationships as the New Bottom Line
Complexity science in the business realm therefore focuses on relationships: relationships between individuals and among teams; relationships to other companies in their business environment, or economic web; and, ultimately, relationship to the natural environment. And because the dynamics of complex adaptive systems are complex and largely unpredictable, accepting businesses as being such systems requires a different mind set: managers and executives cannot control their organizations to the degree that the mechanistic perspective implies; but they can influence where their company is going, and how it evolves.
We are not talking about relationships in terms of networking and the like. Rather we are talking about genuine relationships based on authenticity and care. We knew from complexity science that interactions among agents of a system are the source of novelty, creativity, and adaptability. And we therefore expected that companies guided by the science would in some manner attend to interactions among people in them. But this could have simply manifested itself in a concern for prolific communication. Open and prolific communication was indeed what we found in these companies, but universally it was in the context of genuine care. Those people we spoke to who had worked in companies other than their present ones told us that, in their experience, this is uncommon in the business world.
Care as a Power Action
We can restate this in the language of complexity science as follows: in complex adaptive systems, agents interact, and when they have a mutual effect on one another, something novel emerges. Anything that enhances these interactions will enhance the creativity and adaptability of the system. In human organizations this translates into agents as people, and interactions with mutual effect as being relationships that are grounded in a sense of mutuality: people share a mutual respect, and have a mutual influence and impact on each other. From this emerged genuine care. Care is not a thing but an actionto be care-fullto care about your work, to care for fellow workers, to care for the organization, to care about the community. We saw that genuine care enhanced the relationships in these companies, with CEOs engendering trust and loyalty in their people, and the people being more willing to contribute to the needs of the company. In the context of complexity science, care, which enhances relationships, in turn enhances companies’ creativity and adaptability.
We can see, therefore, that management practice guided by complexity science leads us to a very human orientation, and this was a surprise, counterintuitive. Of course, there have been many human-centered approaches in management before, amongst the more notable being political scientist Mary Parker Follett’s work done in the 1920s and 1930s in the United States, in which there has been a recent resurgence of interest. For more than half a century, there has been a constant battle between human-oriented management and scientific or mechanistic management, with the latter prevailing. But it is only now, and for the first time, that there is a science behind this way of thinking that gives a legitimacy to the whole realm of human-centered management. With complexity science, we have human-oriented management practice emerging from science, a novelty.
(1) The anti-management guru, The Economist, April 5, 1997, page 64.
(2) T.S. Kuhn, The Structure of Scientific Revolutions, University of Chicago Press, 3rd edition, 1996.
Roger Lewin, PhD is a prize-winning author of 17 science books, including the acclaimed Complexity: Life at the Edge of Chaos. He speaks frequently at national conferences on complexity science and business. Contact Roger at 617-492-3082, or firstname.lastname@example.org