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Chaos - we have all been there. Nothing is stable - nothing is predictable. Too lively - boiling with activity. A lot of energy until the time of self destruction or, easier to rationalize, until the time of destruction by our competition.
Destructive though it can be, however, chaos is also enticing. It is exciting, busy and hard to lay blame because chaos is not manageable by definition. Chaos is hard to reverse because anything less is seen as a "downer".
Stability, on the other hand, has its own problems with seduction. It is often very comfortable and easy going until the denial has disappeared and dying becomes obvious. Like the frog who will boil to death in a pot of water which is slowly heated and offer no resistance, reversal is difficult because stability is well ingrained. And so it is, the absence of adverse conditions causes an organism to die - a victim of stagnation. Likewise, too many adverse conditions and the organism still dies, unable to adapt and evolve. Either way, the result is the same.
The Edge of Chaos is, and has always been, essential for company life. Businesses share many analogies to biological systems and with the help of modern science, we are beginning to understand why. The Edge of Chaos is the balance between stability that cripples response and chaos that dissipates energy without benefit. At the Edge of Chaos , your company self-organizes into responsive and long living elements that "sense" their needs and respond by naturally achieving improvement. Companies at the Edge of Chaos are guided by a few basic principles and use the energy of information to fuel their evolutionary leaps over competition.
Self-organization is that "magic" that every manager has witnessed sometime in their career. Self-organization is when a group of people applies effort in unison to achieve a task that is in perfect alignment with the organization's needs. We are only now beginning to understand why this phenomenon occurs and how to cause it to occur.
The Edge of Chaos is the ONLY place where self-organizing ability exists and achieves increasing returns for the company. In actuality, systems within the company will be wafting between stable and chaotic states as environment and internal conditions change. These systems will, however, seek the transition state called the Edge of Chaos when supplied with the right conditions. What are these conditions? That is what management is all about. Supplying these conditions is the top leader's job.
A company, like a biological system, is a result of the interactions of its sub-systems or parts. Examples of these sub-systems might include your compensation plan, performance review procedure and new products development process. While your sub-systems are complex in themselves, how they interface and work with each other is paramount to success.
The top leader's job is to integrate the basic sub-systems in the company in an environment that allows self-organization. The top leader must provide a vision, mission, direction, or whatever term your strategic plan uses, communicated and received in every portion of the company. It is this communication, and then the freedom to pursue self-organization, that allows employees to achieve the company's needs. Once the groups start to seek that vision, then leaders simply monitor and make small corrections to keep all on course.
A real example is a company coded Bott Instruments. Bott had an early reputation for product innovation and progress. That was a long time ago with the founder at the helm. With the founder gone, Bott had drifted aimlessly from owner to turnaround artist with only brief periods of sizzling response followed by long periods of backsliding. Bott was dying. The employees knew it; but, each new top manager gave of their energy and revived one or two of Bott's systems only to preserve the company for the next even-greater wave of deterioration.
The Edge of Chaos approach was applied. That provided Bott with lasting prosperity and a bright future with a supportive parent. By knowing to concentrate on the communication and how to integrate the sub-systems of Bott, the newest top leader allowed the organization to return to being a new product and new market innovator. The business grew controllable, its reputation improved and, finally, a supportive parent recognized and used many of the modern principles at Bott to overhaul it's own ability to self-organize. Bott is alive and well today.
The first and the critical job of the top leader is defining where it is the company needs to be - the vision, mission, direction or, in the words I prefer, the Future State. While a group of employees or outsiders can be used to help define this Future State, it remains the job of the top leader to truly visualize the Future State. This is the first and most important of a series of Thoughtful Actions by the top leader.
Once the Future State is a vision, then it is time to complete and get there with content, timing, methods and every other detail. But, the top leader must always remain at some distance just as one looks at a fine painting. For it is up to the real artists - the employees of the company - to actually do the painting of the Future State picture. To be successful, they, not the leader, must choose the medium, the tools, determine the size of canvas, and decide who does what and how they do it.
The top leader either facilitates this process or hires the job done. As with many facilitation issues, it is many times easier and more effective for the top leader to participate as a contributor in the process of vision definition by hiring a facilitator to provide critical guidance to the working sessions. How this is best done may be the second in a series of Thoughtful Actions by the top leader.
The employees will achieve this Future State evolution by self-organizing, deciding what they need and acting to achieve the vision. Each sub-system of employees will be different and each sub-system will effect the other in complex and unpredictable ways. Unpredictable, but not chaotic, depending on how well the top leader fulfills his/her role. The employees will monitor some of this themselves.
The next key job of the top leader is to monitor the complex activities that are happening. To use an old and appropriate analogy, the skipper's job is to monitor the invisible factors of wind, current and time. The modern skipper uses appropriate modern tools to measure the factors in some efficient and value added way that is non-obtrusive to their employees.
To extend the analogy of the skipper, using the sunrise and sunset as time measurement tools is probably too crude by today's standards. However, using the atomic clock for nano-second reporting is probably overkill in most situations. Similarly, causing a reporting structure that cost more time than that being measured, is not a good way to gain subordinate respect. All but the most insecure employees would prefer some time between reports to work.
The top leader's job is complicated by the need to monitor several sub-systems at the same time - or so it seems. In fact, viewed in a positive way, the top leader has a good excuse to leave one sub-system alone while monitoring another. While some sub-systems may overlap and coincide, allowing each sub-system to beat to its own rhythm provides the time each top leader needs to focus on new tasks and needs. Taking this Complexity in Business into account allows the top leader to relax. Relaxation sends a positive message of self confidence to both employees and people outside of the company.
Incorrect monitoring can be seen by employees as the "boss looking over my shoulder". Ideally the monitoring can provide value to the employee as being something they need to know about their sub-system performance. In fact, it would be difficult to think of an instance where the "boss" needs to know something the employees do not need to know about their own sub-system. By sharing and knowing that employees are monitoring their own direction, the top leader can reduce his/her monitoring frequency and save his/her time for more needed items.
The top leader can expect the company will get off course. In fact, returning to the skipper analogy, when the sail boat is launched the expectation that several corrections will be needed to reach the destination, allows the crew to see correction as part of the day's normal activities. No big deal! Wouldn't you love it if your employees would see correction as part of a day's normal activities?
Since correction redirects the activities of the particular sub-system and all of the sub-systems in a company have some effect on one another, correction is no simple matter. It deserves the same respect as an original Thoughtful Action. Since employees are expecting correction, the process goes smoothly and the crew cooperates and knows how to interface with each other during time of correction. Without this expectation and acceptance, each crew member would be blaming another as to "why" a correction was necessary.
Once corrected and again heading toward the destination, the top leader can turn his/her attention to another sub-system needing attention. While this is a never ending process, the steps get easier and, with more time between corrections, the top leader can think about other aspects of his job. But, unless the Thoughtful Action , Monitoring and Correction are done, there are no other aspects of the top leader's job. Either the company will die or the top leader will be looking for another "opportunity".
Since its beginning, the Santa Fe Institute has achieved integration of cross disciplines through modern Quantum Theory Physics. While Economics was first to benefit from the Institute's efforts, Kerry Brock recently has applied the Complexity theories of modern science to management.
The Edge of Chaos was coined by the Santa Fe Institute before 1989 as that zone between the stability that causes a slow and eventually non-competitive evolution and the chaos which causes rapid but uncontrolled self destruction.
We now know that the Edge of Chaos is that zone where organisms naturally thrive. They expand quickly. And most importantly, organisms self-organize in a way that works for their increasing returns. They find new ways to approach a problem and to solve an evolutionary block. Self-organized organisms respond to changes in the environment and survive dramatic, as well as subtle changes, ending in a stronger evolutionary position.
The Santa Fe Institute has worked through these principles in computer simulation, biological samples and in monitoring real events from plants to economies.
Edge of Chaos provides understanding rooted in modern science that works for managing today's complex companies. The theory is simple and expandable to all situations. The application of that theory yields leveraged results that leap-evolve over competition and meet the market needs automatically. While the top leader has a difficult job; understanding what that job really is, makes the top leader's job both easier and more effective.
It is with great respect that the author of this article, along with his seminars and management materials, recognize and acknowledge the pioneering efforts of the Santa Fe Institute.
Kerry Brock is a former CEO of several manufacturing companies both in the US and Europe and has consulted with several companies in Far East and Middle East. Currently living in Santa Fe, New Mexico, Kerry has been influenced by the ground breaking work of Los Alamos National Laboratory and the interdisciplinary think tank, Santa Fe Institute, regarding the subjects of chaos and quantum physics. Kerry has a real drive to apply modern methods to business and management.
Due to his Engineering training and his hands-on management style, Kerry uses many analogies and real life experiences to apply what may be the most simple findings of science to date. The basics of life changed when quantum physics started to observe the building blocks of how organisms interact with one another. Kerry translates those basics to the Complexity in Business.
Kerry also provides clients with specific advice and assists in implementation as needed in Edge of Chaos and sub-system areas including New Products Process, Strategic Positioning and Intensive Interviewing.
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The opinions expressed in the articles published in this section do not necessarily reflect those of Innovaro Pharmalicensing or Innovaro Corporation. No actions including proposals to or agreements with other companies should be taken by any reader without obtaining specific business or legal advice. Neither the publisher nor the authors accept any liability for any actions or activities undertaken by any reader or other third party as a consequence of these articles or for any errors or omissions therein.
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