Christmas Letter
December 23, 2011
2011 was a year of major breakthroughs. The creative economy is here and looks very different from what we have been used to. I try to sum up some of the most important findings of the year.
The industrial logic was most vividly captured in the idea of the value chain. Value creating activities were sequential, unidirectional and linear. In the model, value was not really created but added step by step. The output of one task was the input of another. The image of work was the assembly line, meaning that work could be fragmented and individual performance goals could be set for each worker. The world was all about people and boxes separated from one another.
Physical tasks can be broken up in a reductionist way. Bigger tasks can be divided by assigning people to different smaller parts of the whole. For intellectual tasks, it is much harder to find parts that make for an efficient division of labour. Intellectual tasks are by default linked and complex.
Reductionism does not work any more.
Knowledge workers are often put in a position where they have to negotiate some understanding of what they face. The same event means different things to different people. The cognitive opportunity lies in the fact that as we don’t all select the same things, we don’t all miss the same things. If we can pool our insights in a creative, enriching way we can thrive in the complex world we live in. The challenge is that people often treat the existence of multiple views as a symptom of a weakness and conflict rather than as an accurate and needed sign of uncertainty.
Higher performance occurs through the combination of different perspectives and supportive, enriching communication.
Social interactions also play a role in shaping our brain. Repeated experiences sculpt the synaptic connections and rewire the brain. Accordingly, our relationships gradually frame the neural circuitry. Being chronically depressed by others or being emotionally nourished and enriched has lifelong impacts. Our mental life is co-created in an interconnected network. The human mind is not located and stored in an individual. Rather, what we have called the individual mind is something that arises continuously in relationships between people.
Supportive, energizing and enabling patterns of interaction have proven to be the most important explanation behind creativity and business success. The quality of action is always constrained/enabled by the quality of the interaction. The lines between the boxes matter more than the boxes! Communication either accelerates or slows down. Communication either creates value or creates waste. Communication either creates energy and inspiration or demeans and demotivates.
Communication forms much more than informs.
What is now needed is to unlearn the reductionist organizing principles that are still the mainstream. Knowledge used to be understood as the internal property of an individual. Today knowledge should be seen as networked communication.
Work is interaction between interdependent people and the network is the amplifier, and at best a supportive and enriching enabler.
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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.
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Thank you Pekka Himanen and Doug Griffin
We share feelings much more than we share information
February 10, 2010
There is one universally agreed-upon feature of a good life: enriching relationships. Researchers claim that we take stock of the people in our lives and the “flourishing” we get through being with them. The strategy people normally follow, mostly unconsciously though, is to try to spend more time with the people we resonate with, and less time with the people we don’t resonate with that well. Beyond this obvious solution, an even better possibility would be to create, and re-create, our relationships to make them more mutually nourishing. Emotional contagion is a fact of life. It means that our moods and even physical health are created in interaction with other people. We tilt either to the positive or tilt to the negative as a result of our relations, and the further relations, the people that we relate with have. It is a chain of contagion that goes far beyond the horizon.
We could, in theory, make an inventory that evaluates the “richness” of our relationships. My dear friend Marcial Losada has made breakthrough findings on interaction. The thought provoking model he has created, which is based on decades of research, has three variables and three parameters. The variables are inquiry-advocacy, positivity-negativity, and other-self or external-internal orientation. The three parameters are connectivity, which is the critical control parameter, negativity bias and resistance to change.
According to Marcial, people are most successful when they are well connected, and are able to balance external vs. internal orientation as well as inquiry and advocacy. The relationship should keep a positivity/negativity ratio within the “Losada Zone”, meaning greater than or equal to about 3:1 and not more than about 11:1.
John Gottman on the other hand, has found that in a happy marriage, a couple experience five times more positivity than negativity in interaction. If we take the work of Losada and Gottman seriously, as we should, it would mean that there is a golden mean for any ongoing relationship in our lives, both private and corporate. If the positivity/negativity ratio is below 3:1 it would mean that there is a need for urgent mending. In situations like this, the way we intuitively behave is to end the relationship. But perhaps we should not. Do we know how WE affect the lives of the people close to us? How do WE impact on others? Do we help others to flourish? If not, should they leave us?
The critical success factor of Enterprise 2.0, is to understand that we share feelings much more than we share information.
The unfortunate reality in enterprises is that there is a negativity bias in most in-house communication. Communication is often about solving problems and giving negative feed-back. Organizations are also optimized for repetition. There is an in built systemic resistance to changing communication patterns. It is very safe to assume to start with, that the positivity/negativity ratio is in the red. Thus, the most important management process is enriching the interaction.
Thank you @pekkahimanen and @ Esa Saarinen for meaningful discussions
