Esko Kilpi on Interactive Value Creation

I took part in a high-level workshop on the future of work. One of the questions raised was: “If machines can replace people’s minds in knowledge work as well as machines replaced their muscles in manual work, what will ultimately be left for human beings to do? Are we going to run out of jobs?” My answer was that this concern is based on a totally incorrect assumption. Working life does not consist of a finite number of problems and opportunities to which the human mind and human effort can be applied.

The good news, or the bad news, is that the challenges that confront us are unlimited. Every solution to a problem generates several new problems. No matter how many are solved, there will always be an infinite number ahead of us. Although modern technology has reduced the number of things that in the past had to be dealt with by human beings, it increases the complexity of the challenges that require our attention now and in the future.

But technology does change what people should be doing and how organizations come to be what they are. This is why we need to revisit and rethink our conceptualizations of work.

When the Industrial Revolution began, the dominant Newtonian worldview meant that what was happening in the world was thought to be understandable without any reference to the environment in which things happened. Physical laws described what things following a linear, rational causality would do. The dominant view was that there are no significant uncertainties, or unknowns, messing things up. Most academic experiments were constructed accordingly, with the effect of the environment being eliminated. The aim was often to study the effect of one known variable on another.

Business enterprises were consequently thought of as machines. Enterprises conceptualized as machines, like all machines, didn’t have a will of their own. They were serving the intentions of their creator, the owner. The principal purpose was to obtain a return on the investment. Employees were, of course, known to be human beings, but their personal intentions were seen as irrelevant. People were retained as long as they were needed to fulfill the intentions of the employers.

The biological, systemic conceptualization, although it was not always called that, then replaced the notion of an enterprise as a machine. One reason for this was the changing structure of ownership. When a firm went public, its creator disappeared. Owners were seen as anonymous, and too numerous to be reachable. The Industrial Revolution turned into the managerial revolution we are still living through today.

The managerial revolution changed the thinking around the purpose. Like any biological entity, the enterprise now had fitness and longevity as raisons d’être of its very own. Profit came to be thought of as a means, not an end in itself. Success came to be measured by growth. It was seen as essential, just like in nature.

The systemic view was a profound change in thinking compared with the mechanistic view. A biological organism is not goal-oriented in the sense of serving external purposes or moving towards an external goal. The movement is toward a more fit or more mature form of itself in a particular environment. An organism can adapt, but cannot choose to be something else. But humans are creative and humans can choose. In this conceptualization the managers were the ones who exercised free will. Employees did not. The managers were the subjects and employees were the objects.

But things are changing again. The sciences of uncertainty and complexity have helped us to understand that organizations are patterns of interaction between human beings. These patterns emerge in the interplay of the intentions, choices and actions of absolutely all the parties involved. No one party can plan or control the interplay of these intentions. But even without being able to plan exact outcomes, or control what others do, people accomplish great things together. The thing is that people can only accomplish their work in the necessarily uncertain and ambiguous conditions through ongoing conversations with each other. This is why the next revolution is dawning.

The social revolution is about deeply rethinking the value of human effort. An increase in value can only occur if the “parts” of a system can do something in interaction that they cannot do alone. Social business may be more about complementarity than collaboration.

An enterprise that is conceptualized as a social business should serve the purposes of all its constituents. It should enable its parts to participate in the selection of both the ends and the means that are relevant to them personally. If the parts of a system are treated as purposeful, they must have the freedom to choose and to act. This means that the defining characteristic of a social business is the increased variety of behaviors that is available. It is not necessarily about common goals or shared purposes any more.

Linear/mechanistic and systemic/organic concepts of an enterprise reduced variety. A complex/social business concept increases variety. This leads to greater responsiveness and agility. Instead of people interacting selfishly with each other simply to achieve a goal or in order to survive, people are understood as interacting with each other for the sake of an emerging identity and differences are seen as potential for learning and creativity.

The way our organizations are conceptualized has a great effect on what people do, and what they do affects the way organizations are conceptualized. Enterprises have always consisted of people who have ideas, intentions and purposes of their own, although it was not appreciated. This, in the end, is what makes people different from machines. Human beings working together cannot be seen as objects, but as subjects, interacting with others in the co-evolution of a jointly created reality.

What used to be seen as irrelevant is going to be the most valuable thing tomorrow.

.

Background:

Kevin Kelly: “dream up new work that matters”. The Atlantic: “The Robot Will See You Now”. Russell Ackoff on Systems Thinking. David C. Aron on Systems Thinking, Complexity Theory and Management. Changing the social contract of work. Gary Hamel on the invention of management. McKinsey Quarterly: “The next revolution in interactions”. MIT Technology Review: “The brain is not computable and no engineering can reproduce it”. Race against the machine by Brynjolfsson and McAfee. Greg Satell blog post. Ross Dawson and John Hagel on the humanization of work.