Developing a Theory for an ICAS Organization
The Intelligent Complex Adaptive System Model for
Organizations
by Alex and David Bennet
Overview submitted for Knowledge Area 4ICAS Organizational ModelThe
Fielding InstituteHuman and Organizational SystemsThe Intelligent Complex Adaptive System Model for
Organizations
This paper proposes a new model for organizations
that live in a dynamic, complex environment. Due to
space limitations the model will not be detailed but rather the major
characteristics and most important aspects will be addressed. While the
framework should be clear, the overall integration and examples of operation
will not be described. The model proposes to represent a new theory of the firm,
one that starts with the fact that organizations are not metaphors of living
systems but are living systems. As such, they have the potential to take
advantage of those facets of living organisms that have proven efficacious
throughout evolution. By that I mean that evolutionary survival has repeatedly
shown that complexity in the form of variety, selectivity and adaptation have
been the hallmarks of successful organisms throughout evolution, especially when
their environment was changing and threatening.
While it is impossible to predict the future, there are major trends driven by fundamental underlying forces that may give one some ability to at least comprehend its possibilities, identify probable scenarios and better prepare organizations for forthcoming chaos and turbulence.
For example, while progress in science
and technology is nonlinear, long-term advances in these fields have
consistently led to an increase in knowledge, and advances in their application
have created the present world economy and standard of living. The technology to
access data, information, and knowledge is growing rapidly over time and may
well overwhelm our limited human ability to find, identify, and retrieve the
data and information, and develop the knowledge we need in time to interpret and
apply it to fast-changing crises and opportunities.
Many
years ago Herbert Simon proposed that humans make decisions that are based on
bounded rationality. That is, the human mind has limited processing power ant
the senses react only to a small amount of the incoming data. Throughout
evolution the mind has been able to factor its external world into separate
elements, and using observation and reason to resolve
situations and problems. (Simon 1979, Simon 1983) While this process was
obviously successful in the past where most situations could be reduced to
linear cause and effect, there arises a serious question as to its efficacy in
the modern, nonlinear, complex world. Along with
accelerating change and rising turbulence, has come the major
challenge of recognizing, understanding, and anticipating the behavior of both
our own organizations and their environment.
Our
new world is composed of a large number of complex systems that contain
nonlinear feedback networks with various time delays and transient behavior that
negates our ability to predict their behavior and challenges our ability to even
comprehend them. ( Forrester 1971, Simon 1982, Diehl & Sterman 1993,
Wagenaar & Timmers, 1978) These
Rresearchers have demonstrated that people
have great difficulty dealing with even simple feedback loops, short time delays
and estimating the effects of exponential growth functions in complex systems—systems that
have a large number of agents (people) that interact through multiple
relationshaips. For an excellent survey paper on the difficulties of
learning in and about complex systems see Sterman,
1994.
The
challenge of the future is to find ways of observing, interpreting,
understanding and co-evolving with the dynamic and complex systems that are
appearing and growing throughout our environment—from the economy to the
Iinternet to social disruptions to terrorism to
biogenetics. In his latest book, Peter Schwartz, a well known
futurist, in his latest book addresses some of the major issues with
the increasingly complex
environment and concludes with the stimulating statement that, “The
great risk of our time is being overtaken by inevitable surprises….We can’t stop
disruptions from happening, but we can cope with them far better than we have in
the past.” (Schwartz, 2003, p. 236) In his book Inevitable
Surprises Schwartz catalogues and explains a number of likely problems and
surprises lying ahead and in the last chapter offers some ideas for individuals
to better prepare for the future. While his suggestions are good advice, they do
not address the two major issues:
This paper proposes a model of an
organization that is designed to answer this last question.
All
organizations exist at the behest of their environment in the sense that laws,
regulations, customers, competitors and technology, etc.
significantly affect their options and actions. We I
will first look at the environment facing business and government
organizations. From above is should be clear that an assumption of this paper is
that the current and future world is one of accelerating change, rising
uncertainty and increasing complexity. It is within this context that we
I suggest a framework of high level characteristics needed by a
firm to survive and co-evolve with its environment. We I
then briefly address the structure, culture, strategy, leadership, and
knowledge worker characteristics that would best support an organic,
self-organizing, adaptable organization. We I call such an
organization the intelligent complex adaptive system,
ICAS.
The Five Major Drivers in the Environment
Recognizing that a great many factors and forces impact our
organizations, and that their number will increase in the future, I suggest five
drivers behind the change, complexity and uncertainty that currently cast a
shadow over many institutions that represent fundamental forces that will
challenge future organizational survival. These are: connectivity; data,
information, and knowledge; speed; access; and digitization. In addition to
impacting how firms structure themselves and the strategies and form they
take on, these drivers also impact employees, customers, legislative
policies, and international relationships, all of which carry over to influence
every organization’s ability to meet its objectives.
The
first major force of the future environment is connectivity: the number
and ease of connecting computers, different individuals, and different parts of
the world. Technology has provided totally new ways of moving and transferring
data, information, and knowledge among individuals, organizations, and
governments. Anyone in the world can talk at any time to almost anyone else in
the world in real time through the Internet, satellite, or fiber-optic cables.
Virtual conferences and video cameras are commonplace and will soon be
ubiquitous.
The
second driver impacting organization is data, information, and knowledge.
In addition to possible overload from saturation, organizations will have
technology and human systems that search and seek the data, information, and
knowledge needed to meet their objectives. These systems must validate the
information, categorize it, identify the context and develop the best
interpretation, thereby laying the groundwork for knowledge creation and
application. This driver also challenges individuals to learn how to learn,
create, leverage, and apply knowledge faster than the environment can
change.
Speed is the next force behind the accelerating world: speed in
the movement of goods and services, in the creation of new ideas through virtual
collaboration, in the spread of information through increased bandwidth, in
smart search engines and learning software, and in the sharing and diffusing of
knowledge. Speed shortens time and creates a demand for faster decision-making.
It also increases uncertainty by limiting the time available to comprehend what
is going on. In general, the pace of everything will continue to
accelerate---while simultaneously demanding that the human mind keep up.
Access is a recent problem emerging from the confluence of the
three previous phenomena. It has several aspects. The first is how to identify
the context of the information so that understanding can be extracted and
relevant knowledge created by the user. The combination of large amounts of
information coming from multiple networks using high-speed transfer systems and
workers who need rapid, quality decisions makes this “context” extraction a
difficult problem. Connectivity, speed, and large amounts of information from
everywhere on earth will seed the culture of the future. How the above
characteristics can be turned into shared understanding and knowledge
application for the good of the organization is unanswered at this time. A vital
question is: “Can organizations adapt and learn and act fast enough to keep up
with the environmental changes driven by these forces?”
The
fifth driving force, perhaps underlying the other forces, is
digitization. The digital economy, as it is popularly known, describes
the overall movement to make maximum use of digital technology to create new
technology products and increase efficiency. The scope of impact is almost
unbelievable, covering computers, telephones, publishing, banking, education,
medicine, and cyberspace.
An overall consequence of the above forces can conveniently be described as rapidly
accelerating change, rising uncertainty
and increasing complexity. These three then create within individuals an anxiety
that amplifies the difficulty of coping. This brief description can be
compressed into an acronym—CUCA, change, uncertainty, complexity and anxiety.
The challenge of the organizational model is to survive, grow, and maintain
sustainable high performance, or in the case of businesses maintain sustainable
competitive advantage in the CUCA environment.
The Intelligent Complex Adaptive System
(ICAS)
The
ICAS is a conceptual model developed to bring out the most important
capabilities necessary to live and contribute in an unpredictable, dynamic, and
complex society. As an
idealization, it is described in somewhat pure forms and perfect structures,
neither of which is found in practice. The variation in human experience and
behavior, together with the practical demands of the workforce and natural
difficulties in communication create a reality that is often far from ideal.
Nevertheless, new concepts, perceptions, relationships, and communications are
essential if our organizations are to keep up with the pace, direction, and
demands of society in the age of complexity.
Definitions and Assumptions
The
term complex system means a system that consists of many
interrelated elements with nonlinear relationships and feedback loops that make
them very difficult to understand and predict. The ICAS, as a complex organization, is
composed of a large number of individuals, teams, and socio-technological
subsystems that have nonlinear interaction and the capability to make many local
decisions while striving for specific end states or goals. These components
build many relationships both within the organization and external to the
organization’s boundaries that may become highly complex and dynamic.
Together, these relationships and their constituents form the organization and
its enterprise. The word adaptive implies that
the organization and its subcomponents are capable of studying and analyzing the
environment and taking semi-autonomous actions that internally adjust the
organization and externally influence the environment in a manner that allows
the organization to fulfill local and higher-level goals while concomitantly
adapting to environmental shifts and perturbations.
The
ICAS is composed of a large number of self-organizing groups and individuals
that seek to maximize their own goals but operate according to rules and in the
context of relationships with other components and the external world. The
organization may be composed of semi-hierarchical levels of workers, which can
take the form of teams within teams, divisions or other structures that have
common bonds. While workers are empowered to self-organize, they are not
independent from the corporate hierarchy. Along with the increased freedom to
organize and act at the lower levels of the organization comes a responsibility
for awareness of local situations, organizational goals and values and the
ongoing activities and available knowledge throughout the rest of the
organization.
Though complex adaptive systems have been
formally studied for several decades, current understanding of them can best be
described as “work in process.” Nevertheless, numerous examples of them include
ant colonies, cities, the brain, the immune system, ecosystems, computer
models, and, of course,
organizations. There are some basic properties common to many complex adaptive systems. Examples
are some level of self-organization, nonlinearity, aggregation, diversity, and
flow. See Holland (1995), Battram (1996), and/or Stacey (1996) for particularly
lucid explanations. For more in-depth analyses of complex systems see Kauffman
(1993), Axelrod (1997), Morowitz and Singer (1995), and Axelrod and Cohen
(1999). There are a number of biological systems that possess
capabilities needed by organizations to survive and compete. Neo-Darwinistic
survival has produced organisms with modes of behavior that most organizations
would consider unattainable. For example, cells and organs in the human body do
their job and cooperate closely and continuously with other cells and organs.
Because of their level of development, humans are not easily kept doing
their job day-by-day and working without complaint or rebellion. However, they
are individually and collectively far more innovative than cells and organisms.
Thus, there exists a challenge to take advantage of the strengths of people
while getting them to cooperate and collaborate to leverage knowledge and
maintain unity of purpose. This balance will be the topic of further
discussion (see Chapter 12). Nonetheless, I find it useful to use living
systems as a source of metaphor and insight in developing our organization for
the future.
Research on complex adaptive systems has found
that they have the ability to exist and operate in a state that is between pure
stability and complete instability in a region that contains both stability and
instability. In this mode, the organization is able to be innovative and
creative, while concomitantly keeping its identity and cohesion (Stacey,
2000). According to Stacey, this state is achieved
only when each of three parameters (: information/energy
flow, connectivity, and diversity of perspectives and ideas among
workers), have the right levels. What these levels should
be for any given organization and situation is a matter for research and
trial-and-error to determine. Certainly they are all sensitive to culture,
situational context and external forces. Note that if any (or all) of these
parameters become too high, the organization may be pushed into saturation,
confusion, or chaos---leading to an inability to respond and adapt to the
environment. If all of the parameters are low, for example if the information
flow among workers is low, people work in isolation and as in a classical
bureaucracy everyone follows the boss’s orders without question, there will be
little change, and no new ideas. The result would be an organization optimized
for productivity in a stable, deterministic environment. Clearly, such an
organization will not survive long in the age of complexity.
Certain assumptions were made in developing the ICAS model proposed in
this bookpaper. One assumption is that nature, with her
millions of years of experience through evolution, provides us with insights to
understand the behavior of people working in complex organizations.
Another source of ideas is consciousness and how the brain/mind works. Some
characteristics of the human mind are helpful for understanding knowledge
organizations in more than superficial ways. For example, a key to success in
living organisms is how efficiently and effectively they handle information
within their boundaries and in their interaction with the environment. Similar
capabilities are needed by modern complex
organizations.
Organizations take inputs from their environment, transform those inputs
into higher-value outputs and provide them to customers and stakeholders.
Organizations solve problems (or take on opportunities) by creating options
using internal and external resources in efficient and effective ways that
create added value above and beyond the value of the inputs. Briefly, the
organization solves problems (or takes on opportunities) that create options for
action that then produce some internal or external value. Although they do this
through available resources—people---people, ideas,
technology, funds, facilities, etc.—as ---as we move from
the manufacturing to the information to the complexity age the most valuable
resource becomes knowledge. I define knowledge as the capacity (both potential
and actual) to take effective action in varied and uncertain
situations. This continuous ability to take effective action may require
judgment, experience, context, insight, the right information, and the
application of analysis and logic. Both understanding and meaning become
requisite objectives before taking effective action. This ability to create
value through effective action, i.e., knowledge, whether for employees,
investors, customers, or other stakeholders, will be the driving force
behind survival and growth. When the challenge is not routine the
organization must be creative and generate innovative ways of solving problems
and developing new opportunities. When facing non-routine situations, the
organization, through its people working together or independently, must make
decisions and take actions that produce their intended results. Making good
decisions and taking effective actions each require knowledge; information alone
is not up to the challenge when uncertainty, ambiguity, and non-linearity
dominate the landscape.
While
this paradigm is easy to describe, it becomes very complicated and challenging
in the real world, particularly when things are moving quickly, problems are not
well understood, there are many opinions and options, and a successful outcome
is dependent on uncertain events. Understanding and successfully applying the
four processes of (1) creating new ideas, (2) solving problems, (3) making
decisions, and (4) taking action to achieve a desired result is the major
challenge to all organizations, including the ICAS. The processes themselves
become core competencies that every intelligent organization must
master.
The
ICAS may need to be highly diversified or superbly coherent, depending on its
mission, purpose, and environment. It will need to exhibit a unity of purpose
and a coherence of action while being highly selective and sensitive to external
threats and opportunities. An ICAS may have to rapidly bring together diverse
knowledge located anywhere in (or beyond) the organization to solve problems and
take advantage of opportunities.
Since
only people can make decisions and take actions in a highly uncertain
environment, there will be increasing emphasis on individual worker competency
and freedom in terms of learning, decision-making, and taking actions. These
will be leveraged through multiple and effective networks that provide sources
of knowledge, experience, and insights from others. Dynamic networks will
represent the critical infrastructure of the next-generation knowledge-based
organization. Made available by increased bandwidth and processing power of both
silicon and biotechnology, they will offer the opportunity for virtual
information and knowledge support systems that connect data, information, and
people through virtual communities, knowledge repositories, and knowledge
portals. The foundation and grounding of future firms will be strengthened
through a common set of strong, stable values held by all employees. Such values
not only provide a framework that enhances empowerment but also motivate and
strengthen the self-confidence of the workforce, thereby magnifying the
effectiveness of the self-organized teams within the ICAS. To survive and
successfully compete in the future world, these organizations will need to
possess a number of emergent characteristics that taken together result in
resilience, agility, adaptivity, and learning, all well-known traits of
survival.
Emergent Characteristics
As
organizations change and take on new forms, they often do so through the
creation and development of what complex systems theorists
call emergent characteristics. Mills suggests three criteria for emergence:
“First, an emergent character of a whole is not the sum of the characters of its
parts; second, an emergent character is of a type totally different from the
character types of the constituents; third, emergent characters are not
deducible or predictable from the behaviors of the constituents investigated
separately” (Auyang, 1998)
An Introduction to the Eight Emergent
Characteristics of the ICASThe ICAS, as an organization, must act like
a biological system in
many ways if it is to survive in a rapidly changing, nonlinear, complex, dynamic, and
uncertain world. The eight emergent characteristics of the ICAS help provide the
internal capability to deal with the future environment and ensure that viable
and continuous two way interactions between the organization and its environment
will foster co-evolution through adaptation and communication instead of an
antagonistic survival of the fittest. These characteristics are: organizational
intelligence, shared purpose, selectivity, optimum complexity, permeable
boundaries, knowledge centricity, flow, and multidimensionality.
Organizational Intelligence
Intelligence, according to Webster’s Dictionary (1996), is the
capacity for reasoning and understanding or an aptitude for grasping truths.
When applied to organizations, Wiig (1993) broadens this view of intelligence
and considers it the ability of a person to think, reason, understand, and act.
He further considers intelligence as applying to organizations and includes the
capabilities to innovate, acquire knowledge, and apply that knowledge to
relevant situations. (From an organizational viewpoint, both employees and their
organization can exhibit intelligent behavior.)
I
take organizational intelligence to be the ability of an organization to
perceive, interpret, and respond to its environment in a manner that
simultaneously meets its organizational goals while satisfying its stakeholders,
that is, its employees, customers, investors, community, and environment.
Although data and information are necessary for acting intelligently, it is the
knowledge that is created and acted upon that is the critical factor for the
ICAS. Knowledge, while made up of data and information, can be thought of as
much greater understanding of a situation, relationships, causal phenomena, and
the theories and rules (both explicit and implicit) that underlie a given domain
or problem. Thus knowledge is what each of us uses to determine what
something means. In addition, it should not to be separated from
action or from pragmatic concerns. Recall our working definition of
knowledge is As a working definition for ICAS, I take knowledge to be
the capacity (potential and actual) to take effective action in uncertain
and varied situations.
In
summary, an organization needs to exhibit intelligent behavior to provide the
best response to its environment and to influence that environment in an
effective way. Such intelligence must be coordinated throughout the organization
at every level so there is a unity of purpose and a consistency of history as
the firm evolves and grows through a co-evolution process with its environment.
That is, organizational intelligence is an emergent property that results from
the structure, culture, and leadership of the organization through the
interactions and behavior of knowledge workers.
Unity and Shared Purpose
Unity and shared purpose represents the ability of an organization
to integrate and mobilize resources to: (1) provide a continuous line of focus
and attention and (2) pull together the relevant parts of the organization when
and where they are needed. For a firm to work intelligently, it must be able to
coordinate and unify relevant resources to gain maximum situational
understanding, knowledge, and concentration of energy to act and respond.
Senge
(1990) addresses a partial solution to this problem in his management book,
The Fifth Discipline. He emphasizes the importance of a shared vision
where employees participate in the development of a corporate vision, and can
then make decisions and take actions consistent with the direction set by senior
leadership. One can hardly disagree with this so long as the environment is
reasonably stable and the vision does not change frequently. In the future
world, however, one can expect more changes within every organization that
operates close to the field where knowledge and information are the prime
movers. Under these conditions, structures and relationships must be established
that support and ensure continuous, rapid two-way feedback between key
components throughout the organization and the central nexus where
top-level decisions are made or orchestrated. Faced with a large number of
threats and opportunities and the potential need for quick reaction, the
organization must be able to rapidly reach into, and maintain,
continuous two-way communication with a large number of relatively independent
subsystems. Such a system
can ensure cohesion of subsystem activities and simultaneously communicate and
inculcate the organization’s shared purpose, thereby expanding the
subsystems action space. According to complexity research (Stacey, 1996),
these subsystems of agents should be self-organizing to maximize their learning
and innovation. In addition, self-organizing groups are capable of creating
emergent properties and are better at dealing with surprises and unknowable
futures than the normal organizational structure.
The
need for unity and shared purpose and also for local freedom, empowerment, and
self-organization presents an apparent paradox. The solution lies in accepting
both as necessary for intelligent behavior and in structuring relations among
subsystems and between organizational levels so that there is enough flexibility
and coordination for both to coexist, each rising to meet local and
organizational needs as appropriate.
Note
that self-organization need not imply the lack of rules. A shared vision, common
values, and widespread communication of context information all support
empowerment and self-organization. In any case, both rules and the freedom to
self-organize are needed. The specific balance between rules for alignment and
coherence of operations and empowerment for local work flow optimization and
innovation is both situational dependent and dynamic. There is no set balance
because of the changing environment. This implies that the organization must be
able to dynamically regulate this balance both in time and across the
organization, based on local and global needs and
opportunities.
When
achieved, unity and shared purpose create an integration of internal activities
that makes the whole organization greater than the sum of its parts. The
synergy, differentiation, and variety of its subsystems provide the internal
complexity needed to deal with the complexity of the outside world. To be
effective, this complexity must be able to provide not only a large variety of
responses but any particular response must be coherent (or at least not
inconsistent) with the rest of the ICAS organization. The unity of the
organization’s actions is closely associated with its perception of external
events. This is where the flow of information, knowledge, and experience becomes
so important. Although an organization can be aware of several mutually
incoherent events at the same time, if these are not integrated at some level,
the responses are likely to be inconsistent and deleterious.
Optimum Complexity
Optimum complexity is a new concept in organizational theory.
First, consider the concept of complexity as it applies to
organizations. Complexity is most simply interpreted as being a measure of the
number (or variety) of states/options/choices available to the system,—e
either the organization or its environment. Consider now the two limits of
internal complexity. If every component (worker, team, or group) were to act
independently without coordination, a large number of independent states would
be generated. But this would not be useful to the organization because there
would be no alignment, synergy, or direction; in other words, no coherence, only
isolated independent behavior. At the other extreme, if every component were
constrained to behave in a predetermined way so that the organization became a
rigid structure whose relationships were tightly controlled, the organization
would become a classic bureaucracy and would be unable tocould
not for long deal with today’s rapidly changing markets. It would be
unable to adapt and respond fast enough to keep up with either its competitor’s
actions or its customer’s needs. Neither the strong independent nor the tightly
controlled forms of internal complexity will work. Somewhere in the middle
region lies the organizational state of optimum complexity, the right
level of internal complexity to deal with the external environment while
maintaining overall order and unity of purpose. In other words, ICAS personnel
must have sufficient variety of choices and actions to handle their customers
and external demands. But they also want to keep their own environment as simple
as possible to prevent becoming overwhelmed by unnecessary
complexity.
Selectivity
At
any given moment, every individual and every organization has a huge number of
signals impinging on its boundaries: data, information, sounds, images, ideas,
etc. How the organization avoids becoming overwhelmed with these signals and is
able to select, receive, process, and maintain a balance of unity, variety, and
flexibility is an amazing feat. Yet organizations and people do this every
waking moment of every day. As the external environment becomes more deleterious
through its change, complexity, and uncertainty parameters, the
organization’s first line of defense is to reduce external complexity
by selecting and controlling which signals make a difference.
Selectivity, or the filtering of incoming information from the outside
world, will always occur. Individual attention is limited by physiology to one
thing at a time (groups may have difficulty staying on a single topic). If left
to itself, natural selectivity may become random and create more noise than
purposeful action within the organization. This is exactly what subsystems such
as teams or self-organizing groups are supposed to prevent. Although
opportunities may be lost due to the non-recognition of the meaning and
consequences of seemingly benign signals, by analyzing incoming information
through internal communication and “group digestion” of unusual
events, the organization can improve its filtering ability.
One approach to signal-to-noise
filtering of incoming information is to establish value systems that are
consistent across the organization, coupled with the unity and shared purpose
discussed above. These provide ICAS members with guidelines and context
knowledge—the ---the basis for effective interpretation
and filtering of signals. Values provide a means of rejecting signals to
whichthat the organization chooses not to respond
to. They Values are preconditions for intelligent
behavior.
Shared purpose and current organizational tactics make visible what
signals the organization is interested in. If people are clear about the
priorities that really matter to the organization, and keep these firmly in
their awareness, they will be able to quickly evaluate incoming signals and make
the appropriate decisions.
Knowledge
Centricity
In
the new knowledge world where ideas are central, knowledge can be
shared, amplified and made available to workers throughout the
organization. Knowledge is one of those rare things you can give away and still
have. Hoarders of knowledge have limited value to the organization and become
the primary cultural barriers to learning. As knowledge is shared through
inquiry, dialogue and conversations, creative ideas and innovative artifacts
spring into being. This sharing relationship must be built on a foundation of
trust, respect and fair treatment of all workers.
A
knowledge centric organization is, quite simply, an organization that organizes
virtually around the knowledge needs of its decision-makers at every level. In a
continuous cycle, it is first a builder (creating websites and database
structures to house and transfer content); then an operator (managing
interactions among individuals, teams, and communities and serving as a media
agent between organizations); then a knowledge broker (directing and operating
the exchange of goods, services, and knowledge
transactions).
As
members of an ICAS, workers will integrate knowledge
sharing into their everyday lives. New employees reporting to work will spend
days acclimating to their new surroundings and learning new processes and
procedures. Using the principles of a knowledge- centric
organization, the ICAS will drastically reduce learning cycle time, ensuring
rapid access to the full scope of the organization’s knowledge and
the ability to quickly and accurately draw upon critical lessons learned.
Knowledge repositories, automated libraries, computer services, databases
will offer the capability for not only storing huge amounts of data and
information but also efficient and intelligent retrieval and assemblage
capability. Powerful search algorithms, intelligent agents, and semantic
interpreters allow employees to rapidly retrieve information needed for
problem-solving and decision-making. Knowledge management will be embedded
throughout the ICAS as a process for optimizing the effective application of
intellectual capital to achieve organizational objectives. Intellectual capital
includes human capital, social capital, and organizational capital, all three
being essential contributors of the organization’s enterprise knowledge, and all
valued at the bottom line, with each employee given, and accepting, the
responsibility for ensuring intellectual-capital growth.
A
knowledge-centric ICAS will recognize the value of information and knowledge in
decision-making. It will connect people to people, people to systems, and
systems to people to ensure availability and delivery of the right information
at the right time for decision and action. The creation, storage, transfer, and
application of knowledge (and perhaps wisdom) will have been refined and
developed such that it becomes a major resource of the ICAS as it satisfies
customers and adapts to environmental competitive forces and opportunities. The
bottom line for a knowledge-centric ICAS is optimal performance. It achieves
this by (Bennet, 1999):
Flow
Flow
enables knowledge centricity and facilitates the connections and continuity that
maintain unity and give coherence to organizational intelligence. The emergent
characteristic of flow can be discussed in terms of the flow of data,
information, and knowledge; the movement of people in and out of organizational
settings; and the optimal human experience. Flow, moving across networks of
systems and people, is the catalyst for creativity and innovation. Social
capital is the medium of exchange in this human framework.
The
flow of data, information, and knowledge is facilitated through teams and
communities, and can be accelerated through event intermediation. Teams, small
groups, task forces, etc., accomplish specific objectives while concomitantly
sharing data, information, and knowledge with other people who may come from
diverse parts of the ICAS. Communities of practice or interest, knowledge
portals, and knowledge repositories also facilitate the sharing of information
and knowledge. Managers are often unaware that the greatest benefit from a
team’s effort is the long-term payoff in future collaboration among team
members. An ICAS that deliberately manages flows will factor this payoff into
team formation and team member selection.
The
fluid flow of people in and out of the ICAS must support the organization’s need
for flexibility in responding to demands of the global marketplace. The
workforce grows and shrinks, engaging free agents, and buying intellectual
capital as needed. Employees will have to be systems thinkers so they can
quickly grasp the context and implications of rapidly changing events in
response to orchestrated mobility throughout the ICAS. A benefit of moving
people will be the increase in variety of talent mixes throughout the
organization. These flows will also prevent long-term rigidity and maintain an
organizational plasticity. In addition, continual change within the ICAS will
maintain a population of new ideas that can make a difference in organizational
performance. A continual flow of employees into and out of the organization will
be needed to stay in touch with the environment and to maintain high internal
standards of performance.
The
concept of autotelic work is tied to the optimal experience of flow, a state
where people are so involved that nothing else seems to matter. An individual,
or a team, is said to be in a state of flow when the activity at hand becomes so
intense that the normal sense of time and space disappears, and all energy is
invested in the task. In a team setting, individuals lose the sense of identity
or separateness during the experience, they emerge from the experience with a
stronger sense of self. Individuals involved in this flow state feel a sense of
exhilaration and joy. As these optimal experiences are repeated, they develop a
sense of experiencing their real reason for being, coupled with a strong feeling
of being in control.
Although flow cannot be
turned on and off, individuals and teams can develop the ability to experience
flow and create environmental conditions that facilitate its onset. The
experience of flow has been developed and studied by Csikszentmihalyi (1990)
over the past 30 years and is best described in his book entitled Flow: The
Psychology of Optimal Experience. According to him, the conditions required
for a flow experience are:
The
phenomenon of flow results in individuals and teams giving their best
capabilities to tasks at hand. Team members come away with feelings of
accomplishment, joy, and well-being that influences their willingness to trust
and openly communicate with other team members, enhancing collaboration and team
performance. The bottom line for the ICAS is a high level of performance. The
bottom line for the employee is personal growth and
self-satisfaction.
Permeable
Boundaries
Individual motives and resources, and, within the system (at whatever system level you focus upon)
identities, roles, and shared beliefs provide the elements that will determine
the permeability of boundaries.The virtual world of the ICAS tears down our
historic understanding of relationships and boundaries in terms of time and
space. As people come in and out of the organization driven by increasing and
decreasing demands, over time the “boundaries” of organizations become more
difficult to define. As ideas are exchanged and built upon, the lineage of these
ideas becomes impossible to follow. Add all of this to a fluctuating, complex environment and we
begin to understand just how important permeable and porous boundaries are to
the survival of the next-generation knowledge organization.
The
permeable boundary of an ICAS will allow the organization to optimize its
results through teaming, partnering, alliances, and close relationships with
customers and all stakeholders. Teaming, partnering, and alliances are terms we
give to more formal relationships between organizations. They imply the intent
of one or more organizations to work together to improve the efficiency and
effectiveness of a common goal, and to reduce the costs of
disagreements.
These
formal relationships---driven by economic need and potential---are much like a
marriage. For success, they must be built on trust, open communications, and a
thorough understanding of themselves and each other. The social psychology
boundary model can also be applied to teaming, partnering, and alliances, i.e.,
the elements that will determine the permeability of organizational boundaries
are motives and resources, identities, goals, interdependent sets of roles, and
shared beliefs.
In the
ICAS, distances are closing. Proximity is as far away as the nearest computer,
but built on a human network. Indeed, the social capital of an organization will
determine success or failure. The architectural firm of Thompson & Rose
proposed nomadic, rounded work shells that can be minimized and connected in
groups of varying sizes or disconnected, and distances to provide personal space
(Business Week, 2000). This architectural concept provides an excellent
seating model for the ICAS, providing ease of movement from personal space to
collective space. It also opens personal distance through the elimination of
walls and closes social distance through connected collective
space.
What is
missing from this model is technology. As wires become a constraint of the past,
technology will be more portable, floating at an intimate distance from
employees, that distance reserved in the past for intimate encounters and
physical contact. This hands-on-keyboard relationship will bring private
discussions, business meetings, and presentations over remote distances into closer proximity, but still build on human
networks and relationships. In private discussions, faces will project across
distances; in business meetings visible body movements and the rise and fall of
expressions will provide context; during presentations, dialogue will occur
throughout and exchange of ideas will build intimacy from a
distance.
Multidimensionality
From
the perspective of evolution, man, because of his intelligence, adaptability,
and robustness, has become the dominant species in a world where only the
fittest survive. If the ICAS is to survive in the future environment, it must
have the instinctual ability to sense, learn, and respond with a wide repertoire
of actions. To become the fittest of the fit in the anticipated intensely
competitive organizational arena of the future, the ICAS must be able to
demonstrate agility and robustness at all levels of its
structure.
This
requires the organization to continuously forget and learn; to identify and deal
with risk; to think in terms of systems; to perceive and analyze in terms of
wide scope and long timeframes; and, finally, to keep its identity and unity.
The organization must develop instincts and automatic competencies that are
natural and become second nature at all levels. I label this group of basic
competencies “Integrative Competencies” because they serve to coordinate
actions, integrate thinking and facilitate interpreting and responding to complex situations and
environments. These competencies do not replace the need for individual worker
professional competence. Rather they supplement that expertise, yet are broad
enough to apply to many activities that workers find themselves in as they learn
to respond, adapt, self-organize, make decisions and take actions in the ICAS
organization.
From
an organizational viewpoint, the importance of being able to understand and
analyze systems lies in the perspective afforded by systems thinking and the
ability to look for fundamental systemic characteristics. This ability includes
both synthetic and reductionist considerations, and can greatly aid in
recognizing leverage points both within the organization and in the environment.
Systems thinkers naturally become aware of the surrounding context of their work
and can recognize the impact of actions in one part of the organization on other
parts. With people and teams scattered throughout the ICAS with this capability,
the organization can adapt flexibly and respond within the proper context. System thinking also
encourages a broader perspective in both space and time.
Another competency is that of risk. A robust organization must be willing and able to take on and manage risks in a manner that maximizes the probability of success while at the same time protecting against disasters. This requires the ability to estimate future events and assess the immediate and future result of contemporary changes. The earlier discussion of knowledge would indicate the importance of workers and subsystems having knowledge of their areas of work and being able to accurately judge cause and effects. Understanding the risk of poor management should be an invisible characteristic of the culture—built into the way the work gets done. The areas of probability assessments, scenario development, and simulations are supportive of managing risk. Studies on management risk analysis may also be helpful (see Morecroft and Sterman, 1994; Van Der Heijden, 1996; Bennet, 2000). To be able to shift its frequency of operations, the ICAS must be built around processes and core competencies that are flexible and robust. This means that both the supporting technology and the workforce are capable of multiple tasks and are open to rearrangements through virtual connections or rapid reprogramming. The idea and capability to dynamically adjust subsystem speeds and balance key organizational and program parameters can greatly assist the organization in its flexibility, robustness and response capacities.
Other integrative competencies related to multidimensionality include complexity thinking, relationship network management, knowing, and learning. The ICAS, operating at the leading edge of the age of complexity, will likely be a prototype of increasing knowledge and complexity. Just as being able to recognize, understand, and think about systems has become a hallmark of many of today’s successful professionals, being able to recognize, understand and deal with complexity is the challenge of the immediate future. Complex systems are different from simple or complicated systems. Complex systems are difficult to predict and control, and continuously change and interact with their environment. Complexity thinking helps develop a roadmap for the ICAS organization. Complex adaptive systems are partially ordered systems that unfold and evolve through time. They are mostly self-organizing, learning and adaptive. To survive they are always creating new ideas, scanning the environment, trying new approaches, observing the results and changing the way they operate. Intelligent complex adaptive systems have the capacity to prepare for the unknown future, act rationally and make use of all of their cognitive capabilities.
Knowing is seeing beyond images, hearing beyond words, sensing beyond appearances, and feeling beyond emotions. It focuses on methods to increase individual sensory capabilities and increase the ability to consciously integrate these sensory inputs with our tacit knowledge. By exploring our sense of knowing we expand our understanding of ourselves, improve our awareness of the external world, and increase our skills to affect internal and external change. Knowing offers a framework for developing deep knowledge within the self and sharing that knowledge with others to create new levels of understanding.
Relationship network management focuses on fully using and increasing the social capital of an organization. Each relationship network is a matrix of people that consists of the sum of a knowledge worker’s relationships, those individuals with whom the knowledge worker interacts, or has interacted with in the past, and has a connection or significant association. Relationship network management occurs when we recognize the potential of these relationships and use them to share and learn, creating and sustaining a conscious give and take movement, or flow, across the network. The individual manages their relationship network through: (1) recognizing the value of relationship networks; (2) identifying their personal network of relationships; (3) consciously choosing to develop, expand and actively sustain these relationships through continuing interactions; and (4) staying open to sharing and learning through this relationship network.
In an organization where understanding and the ability to take effective actions are major challenges because of the organization’s environment or the nature of its work, both knowledge management and organizational learning become critical factors in its long-term survival. Organizational learning is contingent upon a number of factors such as leadership, structure, strategy, environment, technology and culture. Knowledge management helps to create and nurture these factors to make optimum use of the organization’s knowledge. In today’s rapidly changing, erratic and increasingly complex environment, knowledge creation, acquisition and application through continuous learning are likely to be the only solution to survival and excellence.
Workload and resource problems must be amenable to quick resolution, with all parts of the ICAS working together in support of a response to outside perturbations or opportunities. A rapid shift in operating tempo is where the unity and shared purpose are tested for truth.
In summary, the range and depth of
outside forces that the ICAS can effectively respond and adapt to is a
fundamental measure of its survival capability. At the same time, its
sustainable competitive advantage will be measured by its robust ability to take
advantage of a wide range and depth of opportunities, originating both within
and external to the firm.
A New Way of
Thinking
The above characteristics cannot be decreed by management, but rather will emerge in the organization as a result of the day-to-day leadership, management and working environment. These characteristics, taken together, are mutually supportive in creating and maintaining the ICAS organization as a complex adaptive system. To facilitate the emergence of these eight characteristics requires a new way of thinking about structure, culture, leadership, strategy, processes, and knowledge workers. These operational factors play a critical role in the success of ICAS and should facilitate the following objectives: a) creation of the eight emergent characteristics and b) implement the ICAS as a viable, long lived, organization capable of entering into a symbiotic relationship with its dynamic, complex environment while retaining its own vision and unity of purpose. I will address each of the operational factors in turn.
Structure
The learning structure was designed to ensure continuous learning and rapid response to external events. The basic structure consists of the use of teams within teams and communities to facilitate collaboration and leverage knowledge. The existence of an operations center---together with a knowledge center, learning center, and career management center—help ensure unity of the ICAS actions, effective use of knowledge and continuous learning. Action teams, communities and networks are embedded throughout the structure to provide rapid and diverse response, assisted by Meshes as needed. Meshes are special groups of individuals drawn out of on-going communities and teams that have a deep knowledge in specific areas and are available on short notice. The levels and balance of authority, responsibility and accountability given to leaders, managers and workers is designed to provide the right balance between the occasional need for a hierarchal decision-making and the continuous need for collaboration and local empowerment and decision-making.
Culture
Culture
The action culture is the invisible medium through which the ICAS knowledge worker seeks, interprets and analyzes information, creates and shares knowledge, makes decisions and takes action on issues and market opportunities. This culture plays a significant role in energizing and helping each worker make the right decisions and take the best actions. The action culture has the characteristics of widespread trust, continuous learning, high integrity and fair treatment of all workers. In addition, it encourages creativity, allows a high degree of self-determination and supports knowledge sharing and collaboration, all within an equalitarian base. The culture is action oriented, flexible and responsive to surprises. Since all cultures emerge from their organizations and cannot be predetermined, the action culture is nurtured, guided and supported in a manner that will push it in the right direction.
Collaborative Leadership
To ensure that the ICAS workforce possesses the knowledge, experience, freedom and self-confidence to identify problems and take effective action in their area of responsibility, leadership must take on a significantly different role than that presented in classical organizational theory. Two major differences are: (1) leadership cannot be controlling, but rather must be nurturing, supportive and collaborative and (2) leadership must be implemented at all levels throughout the organization. This collaborative leadership, while maintaining accountability and responsibility, shares authority with knowledge workers and, through fostering a collaborative workplace, ensures the ability to make decisions and quickly respond at the point of action.
Strategy
The ICAS strategy prepares the organization for the complex, unknowable future. The highest-level ICAS strategy is based on three factors. First, because the future is unknowable, knowledge, knowing and insight become vital to success. Second, those closest to the boundaries and the external environment have the knowledge and capability to make the best decisions. Third, the process of interacting with the environment is a trial-and-error process, with quick, rapid feedback and evaluation providing selection criteria for the next sequence of actions.
The ICAS must be a robust organization capable of changing within itself and responding to many different and surprising events in the environment. Simultaneously, when the environment is relatively stable, it must be capable of maximizing its output performance and maintaining a steady state or system that is in balance. The concept of dynamic balancing means that leaders and workers throughout the organization will continuously balance a number of opposing forces or demands such as control versus freedom, short-term versus long-term, information versus knowledge, stakeholder needs, corporate alignment versus local responsiveness, and generic versus individualized learning. These balances will rarely remain constant for very long, hence leaders will continuously monitor and change the balance of forces in their areas of responsibility to maintain local effectiveness.
A good strategy identifies the major strengths, or forces within the organization, and those that meet day-to-day changing external threats and opportunities. The forces the ICAS needs to correlate are considered in light of the following assumptions:
There are four fundamental forces in the ICAS strategy: the Force of Direction, Force of Intent, Force of Knowledge and Force of Knowing. The Force of Direction serves as the compass for the organization as it moves into an uncharted and uncharitable future. It both limits ICAS activities within some action space surrounding the chosen direction and conserves energy by defining what areas the ICAS is not interested in. The Force of Intent is an act or instance of determining mentally upon some action or result, thereby focusing the energy and knowledge of the organization. It is the power and consistency that overwhelms competitors and gains the admiration of the marketplace.
The Force of Knowledge consists of the creation, sharing, dissemination, leveraging, and application of knowledge. In the ICAS it is supported by knowledge centricity and the active implementation of knowledge management. The Force of Knowing is a blending of the cognitive capabilities of observing and perceiving a situation, the cognitive processing that must occur to understand the external world and make maximum use of our intuition and experiences, and the faculty for creating deep knowledge and acting on that knowledge. While knowledge represents the ability to take action on what you can see ahead, knowing represents the fog lights into the future, penetrating the haze of complexity by allowing workers to think beyond normal perception and dig into the meaning and hidden patterns of a complex world.
In a turbulent environment there are holes that offer opportunities, what we call the environmental opportunity space, a window of opportunity in terms of space and time. A correlated organization has a consistent direction and a comprehension from what knowledge and knowing have provided about the environment. While the company may not be able to define this space, nor can it go there before it exists, the organization’s direction is such that it can take advantage of the environmental opportunity space as it emerges.
Processes
The organizational processes---creativity, problem-solving, decision-making and implementation---are embedded within the ICAS culture and become a natural part of how the work gets done. By formalizing and inculcating these processes throughout the ICAS, knowledge workers and teams are able to leverage knowledge quickly and efficiently and greatly improve their adaptivity and response.
Knowledge Worker
At the forefront of the ICAS organization is the knowledge worker, those individuals whose work is centered around creating, sharing and using knowledge. Each and every worker is an integral part of the organization. It is the knowledge worker, moving in and out of teams and communities as needed by the organization and for their career enhancement, who is the ultimate source of knowledge. As discussed above under the emergent property of multidimensionality, the multidimensionality of the organization is dependent on the multidimensionality of its knowledge workers, who have the capability of working in multiple domains simultaneously, refocusing those domains as needed and combining the physical, the mental, the intuitive and the emotional to continuously expand their knowledge, capabilities, capacity, networks and perceptions. To be successful in ICAS knowledge workers possess a high-level of competencies. They:
To be successful in the new world requires Knowledge Workers to have new competencies, competencies that promote collaboration, understanding and the integration of action. These competencies, discussed above under multidimensionality, include knowledge management, learning, critical thinking, risk management, systems thinking, complexity thinking, information literacy, relationship network management and knowing.
These integrative competencies provide connective tissue, creating the knowledge, skills, abilities and behaviors that support and enhance other competencies. They have a multiplier effect through their capacity to enrich the individual’s cognitive abilities while enabling integration of other competencies, leading to improved understanding, performance and decisions.
Releasing the power of the ICAS model
The real power of the ICAS comes from the alignment and integration of its strategy, structure, culture, processes, leadership and its people and their competencies. ICAS survival depends upon the sum of all of the daily actions of employees, with each of these actions consistent with the organization’s direction and supportive of local and organizational goals. Structure, culture and knowledge worker competencies fully support local knowledge and actions, such that every individual at the organization’s boundaries takes the best action possible.
At a global level, this alignment and integration creates the emergence of organizational intelligence, unity and shared purpose, optimum complexity, selectivity, knowledge centricity, flow, permeable boundaries, and multi-dimensionality. While emergent properties of complex organizations---arising out of multiple, nonlinear interactions---cannot be controlled, actions can be taken to influence the system’s behavior in such a way that the desired emergent properties, or something close to them, will emerge. For example:
In the new world, many organizations are moving forward at a fast pace, with a vision and strategy, but without a predetermined path. The path has been and will continue to be forged by dedicated professionals in each organization, working individually and collectively, but always aware of the organization’s mission and vision. The ICAS vision is to ensure that every single individual in the organization has awareness of---and is committed to achieving---the vision of the organization. As this vision turns and changes in response to the turbulent environment, the understanding of individuals within the organization will turn and change with it. This focus on people ranges from the creation of theory and the building of shared understanding to the development of knowledge centricity and the infrastructure to support individual and organizational learning. Enterprise-level leadership ranges from promulgating guidance and policy, to providing tools, to rewarding success. Effectively, this complex change strategy cannot help but encourage a natural progression toward the ICAS across and within the organization, contributing to the cultural change essential to take full advantage of the opportunities offered by the ICAS, and facilitating the connectedness of choices through the sharing of new thought in a fully aware and conscious process.
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2000 book is the right one for this statement… Stacey, R. D., D. Griffin and P. Shaw. Complexity and Management: Fad or radical challenge to systems thinking? New York: Routledge, 2000.