High performance (social) business

December 10, 2011

In our view of the world, we often think that competition creates and secures efficiency. But it may be that high performance is incorrectly attributed to competition and is more a result of diversity, self-organizing communication and non-competitive processes of cooperation. Competitive processes lead to a handicapping of the higher-level system that these processes are part of. This is because competitive selection leads to exclusion: something is left out. Leaving something out means a reduction of diversity. The resulting less diverse system is efficient in the very short term, but always at the expense of longer-term agility and viability.

Our assumption has also been that by understanding the parts of a system in detail, we understand the whole. This is simply not possible! What happens in the interaction between the parts is much more important than the parts. The whole is the emergent pattern of the interaction, not the sum of the parts. The focus of the high performance organization should be on communicative interaction: what is going on?

Enriching interaction and interactive energy

Higher performance patterns may occur through the very simple combination of different experiences and enriching interaction.

Chaos theory explains how the patterns form. A parameter might be the flow of information in the system. At low rates, meaning no input or more of the same input, the system moves forward displaying a repetitive, stuck behavior. At higher rates and more diversity the pattern changes. At very high rates the system displays a totally random behavior. The pattern is highly unstable. However, there is a level between repetition/stability and randomness/instability. This level where simultaneous coherence and novelty are experienced is called the edge of chaos.

Classical physics took individual entities and their movement (trajectories) as the unit of analysis in the same way we have lately analyzed individuals and firms. Henri Poincaré was the first scientist to find that there are two distinct kinds of energy. The first was the kinetic energy in the movement of the particle itself. The second was the energy arising from the interaction between particles. When this second energy is not there, the system is in a state of non-dynamism. When there is interactive energy, the system is dynamic and capable of novelty and renewal.

Interactive energy may be the single most important factor in business performance.

Every interaction is meaningful

Interaction creates resonance between the particles. Resonance is the result of coupling the frequencies of particles leading to an increase in the amplitude of motion. Resonance makes it impossible to identify individual movement in interactive environments because the individual’s trajectory depends more on the resonance with others than on the kinetic energy contained by the individual itself. We are the result of our interaction.

The lesson is that every interaction of all of the particles is thus potentially meaningful and can lead to the amplification of the slightest variation. Interactive systems with even the smallest variations take on a life of their own. The future form and direction of the system is not visible in the system at any given time. The future is not in the system and it cannot be chosen or planned by anyone.

The conclusions are important for us:

Firstly, novelty always emerges in a radically unpredictable way. The smallest overlooked variable or the tiniest change can escalate by non-linear iterations into a major transformative change in the later life of the system.

Secondly, the patterns of healthy behaviour are not caused by competitive selection or independent choices made by independent agents. Instead, what is happening happens in interaction, not by chance or by choice, but as a result of the competitive/collaborative interaction itself.

The new social technologies have the potential to change the patterns of connectivity as much as the sciences of complexity have changed our perspective and thinking.

Richer, more challenging, more exploratory conversations leave people feeling more alive, more inspired and capable of far more creative action. The focus of the high performance organization should be on communicative interaction creating the continuously developing pattern –  a life at the edge of chaos.


Thank you Pekka Himanen and Doug Griffin

4 Responses to “High performance (social) business”

  1. HI Esko.

    Congratulations for the series of posts around social interactions and knowledge management.

    These last couple of years a new management discipline called ACM, Adaptive Case Management (or other different acronyms like DCM, ASTC …) centered in how to improve how knowledge workers can access information, interact, socialize and execute better.

    The point is ACM relies heavily on IT and it’s forgetting to put at the center neuroscience, psychology and sociology, the true foundations of knowledge management.



  2. Vasco Duarte Says:

    one corollary of your post is, in my view, that “high-performance” is in for a new definition.
    Specifically your point about Competition leading to short term efficiency is a significant knew when it come to the definition.
    In my view there are several aspects of performance that specifically completion cannot address. One of these aspects is “resiliency”. A competition leads to a narrowing focus with the objective of reducing the superfluous. That reduction will lead to reduced diversity as you point out, and by definition to inability to adapt. For competition to be seen as increasing performance it would have to have a much larger impact than ‘focusing a team’. Besides there are better ways to cause that focus like for example: timeboxing in software projects.

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