High Performance Business

by eskokilpi

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 easily lead to a handicapping of the higher-level system that these processes are part of. This is because competitive selection leads to exclusion: somebody is left out. Leaving something out means a reduction of diversity. The resulting less diverse system can be 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. Classical physics took individual entities and their movement (trajectories) as the unit of analysis in the same way we have lately analyzed the competitiveness of 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. Higher performance patterns may accordingly occur through the very simple combination of different experiences and enriching interaction. What happens in the interaction between the parts is thus much more important than the parts. The parts are born in the interaction and 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.

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 therefore 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 reductionist, 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.

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Thank you Pekka Himanen and Doug Griffin