Over the past few weeks there has been some very interesting stuff on the
LO concerning the purpose of business, Wheatley dialogues, chaos,
complexity, emergence, control, etc.
It seems to me that sustainable sucess is achieved by organisations who
create a virtuous cycle of growth. This cycle of growth suggests that
increased innovation (innovation is used in the sense that Peters and
Waterman used it - to mean not only developing new products and services
but also continually responding to changes in the environment), increases
customer value which increases competitive differentiation, which reduces
price sensitivity, which means that margins are sustainable. This then
enables companies to emphasise their medium term objectives, which enables
them to increase their focus on reducing non value-added costs which leads
to increased investment which leads to increased innovation.
However this cycle is like a Lorenzian waterwheel. (The first chaotic
system discovered by Edward Lorenz corresponds exactly to a waterwheel).
In a Lorenzian waterwheel, water pours in from the top at a steady rate.
If the flow of water is slow, the top bucket never fills up enough to
start the wheel turning. If the flow is faster, the weight of the top
bucket sets the wheel in motion and the wheel can settle into a rotation
that continues at a steady rate. If the flow is faster still, the rotation
can become chaotic. Under these conditions, it is possible for the
rotation to reverse.
Thus, it is possible for a virtuous cycle of growth to become a vicious
cycle of decline.
The achievement of the cycle of growth requires that organisations use
their total competence to simultaneously exceed the expectations of all
their stakeholders.
Progress is only possible because the environment, which reflects the
conditions influencing development or growth, is unpredictable. This
unpredictability is caused by the action of positive and negative feedback
operating on a complex adaptive system. As Chris Langton of the Santa Fe
Institute has shown, one of the interesting properties of a cellular
automaton, which is a special type of complex adaptive system, is that
there is a zone right at the edge of chaos where there is a balance
between order (negative feedback) and disorder (unconstrained positive
feedback) which produces coherent and emergent structures. (In dynamical
systems terms this is equal to "order" =>"complexity"=>"chaos"). This
depends on an intensity factor that reflects an artificial organisation's
ability to adapt to its environment. Brian Arthus, also of the Santa Fe
Institute also has some very interesting things to say about the effects
of positive feedback in the form of the law of increasing returns in the
economy. Microsoft (also featured in some recent LO posts) make very
effective use of the law of increasing returns.
(This next bit draws heavily on the work of Karl Weick)
Organisations are open to, and connected with, their environment. As a
result successful organisations do not simply respond to their environment
but actively participate in its creation.
Organisations resemble Hebb's model of the brain and nervous system.
Individuals are joined together as a network of feedback loops which are
continuously modified by the actions of others. (As an aside, I think Rick
raised the question about whether people can operate as part of a system
that is too complex for any one person to understand. Weick's view is that
it is possible).
Initially, the main connections in the organisation are those described by
the formal organisation. At the same time there are other "informal"
connections. Over time, connections which are used become stronger, whilst
those that are not used become weaker. Thus, the organisation organises
itself into formal and informal "sub assemblies". These "sub assemblies"
govern how the organisation operates and learns.
The overall process of sustaining success is critically dependent on
leaders, NOT managers.I suspect that all of us in our time have met a
leader. Put simply, we have felt better for having met them. On rare
occasions we have felt inspired. Leaders have a rare gift - they make us
feel good about ourselves.
An interesting thing about leaders is that they have visions which appeal
to their followers.Thus, I think the V word is pretty important and am
continually intrigued by Proverbs 29:18 - "where there is no vision, the
people perish: but he that keepeth the law, happy is he".
The water that drives the cycle of growth is the intensity of the
leadership. Leaders use positive feedback to inspire confidence. This, in
turn, develops other people's potential, stakeholder commitment and
goodwill. In this respect, it seems to me that control is all about the
optimum, and balanced, use of negative and positive feedback. My suspicion
is that, certainly in the UK, there is far too much negative feedback in
our lives.
Apologies for the long post - but I haven't had a go for a long time.
Best wishes
Julian Macnamara
Glandore Associates
100317,2417@compuserve.com
<http://ourworld.compuserve.com/homepages/glandore
--Julian Macnamara <100317.2417@CompuServe.COM>
Learning-org -- An Internet Dialog on Learning Organizations For info: <rkarash@karash.com> -or- <http://world.std.com/~lo/>