THE LSE COMPLEXITY SEMINAR

'Complexity and Business Success'

28 OCTOBER 1999

Presenters : Prof. Roger Lewin and Birute Regine.

Director of Research : Eve Mitleton- Kelly
London School of Economics
Houghton Street
London WC2A 2A

Abstract: Business organisations are human complex systems. Forging connections in the web of relationships both within the business organisation and the larger economic community engages non linear processes that are fundamental to a complex adaptive system.Viewing organisations from a multirelational perspective and seeing them organically rather than mechanically requires a different style of leadership which engenders team working and influences the values and therefore the behaviour of individuals. When a sufficient number and diversity of connections are made a collective soul and purpose emerges which gives people a desire to contribute to the common good
and a feeling of fulfillment in their work. This increases the organisation's ability to innovate, adapt and evolve. These notes follow the talk by Roger Lewin and Birute Regine and the ensuing discussion together with extracts from their book: 'The Soul At Work'.

Compiled For The L.S.E. by Geoffrey J.C. Higgs

Introduction

Rapid technological innovation, particularly in computational power and communications has thrust the business world into an environment of constant and unpredictable change.Faced with this leaders and managers are finding that many of their background assumptions and time honoured business models no longer work efficiently nor provide sufficient feedback of information to deal with situations as in the past. The traditional hierarchical and 'clockwork' models which enabled a fair degree of predictability and control are having to be replaced by a more organic and non linear way of working and thinking where limited control is accepted as a way of life.

Changing Viewpoint

In the classical paradigm of Newtonian science the universe was seen as 'working like clockwork'; the earth went round the sun, matter was attracted to matter by the force of gravity and if only we knew enough about what individual particles of it were doing we could predict the future. But the belief that we can fully understand something by merely looking at its parts has been replaced by a more holistic approach and a realisation that most processes that go on in the world are not explainable in terms of linear chains of causality. Living organisms are extremely complex biological systems which cannot be understood in mechanistic and reductionist terms. Identifying which genes, for example, result in which characteristics will tell us nothing about the dynamics of embryo development or the evolution of new species. This change in the scientific method is now being applied to our understanding of human business organisations.

The Complex System

Most dynamic systems in the world exhibit non linear behaviour and are complex, not in the sense that they are just complicated but that through interaction of their component parts they generate properties that could not be predicted from the parts alone. The process by which such properties or patterns arise is known as emergence and previous attempts to explain it have taken the form of systems theories and later chaos theory which in turn has led to complexity science.The rise of complexity in an interacting system can be understood in terms of three different phase or state changes:

STATIC STATE                                  COMPLEX STATE                      CHAOTIC STATE

Interaction simple and non              Evolving with emergent             No apparent patterns or order.
    evolving.                                                      patterns.

Computer models show that as the number of components is increased and the interactions are made more diverse so changes occur in a non linear way. This means that small changes can lead to large ones very quickly, but set within a defined set of interactions (rules) stable states or attractors are attained when the system is evolving as a whole. Beyond this state the introduction of further components or more diverse interactions leads to a chaotic or disordered situation.
When a component of a complex system is evolving by changing the way that it interacts with other components in the system it is known as a complex adaptive system. Systems which consist of such co-evolving wholes are like biological ecosystems where species adapt to other species and the environment. Each system is 'nested' in some larger environment to which it must adapt. Co-evolution requires that organisms reach a state sometimes called the far from equilibrium state or the edge of chaos in which new patterns of order arise. This is the phenomenon of self organisation or creative adaptability.

The Business Organisation As A Complex Adaptive System

The economy is an ecosystem and businesses are complex adaptive systems that interact with each other like species in nature. This means that managers have to get used to thinking of their companies as more like living organisms than mechanical machines and adapt their organisational skills accordingly. In such a world things are not simple, predictable and settling to equilibrium but complex, unpredictable and often far from equilibrium. It is not just competition but predation and population fluctuation that gives rise to the dynamics which shape the business community.
Complex adaptive systems have the following characteristics:

(1) They consist of agents whose interaction is a source of emergence.
(2) Agents are governed by 'rules' which are practices or shared values.
(3) Small changes can have large consequences.
(4) Diversity of agents gives rich emergence.
(5) It is not possible to predict what will emerge.

Depending on how they are managed, so they can shift between the three states mentioned above. Too much 'command and control' pushes the business towards a non evolving state, too little definition of rules and boundaries and chaos ensues.
The form of management required is one that engenders human orientated practices and a culture that strives towards a genuine humanity and care which gives the possibility of personal fulfillment alongside business success. It is the manager's job to create the conditions that will nurture creativity but not to try too assiduously to direct it otherwise it may be stifled rather than enhanced.

The 'Far from Equilibrium' state.

Equilibrium states can be illustrated by imagining you have a bowl with a ball rolling round the sides. In a simple case the ball proceeds to the bottom of the bowl and then stops. It has reached one kind of equilibrium state. On the other hand if the bowl was spinning in a regular manner as on a potters wheel the ball would settle to an unvarying circuit of the bowl. That would be another kind of equilibrium. Now imagine that the bowl is made of rubber and distorted so that the ball describes another path. That would be a shift from one equilibrium to another. A company introduces a product to a stable market and happily sells it unchanged for a period of time. This is rather like the settled regular path of the ball in the bowl. When new competition or technology forces a shift in the nature of the product the company makes the adjustment and settles to a new equilibrium. In the past business could often be seen like that. But suppose the rubber bowl is subject to constant pushes and prods. The ball tries to settle to an equilibrium but it never can. The more it is pushed and prodded the farther it is from attaining equilibrium.

Properties of Ecosystems

Ecosystems used to be seen in terms of 'The Balance of Nature', in which they were seen to rest at equilibrium until disturbed when they settled to another. The change was attributed to genuinely unpredictable factors in the external world such as fluctuations in climate. Today more and more ecologists are coming to see change as coming from the internal dynamics of the system itself. Ecosystems have three main features: 'mutual protection', 'webs of connections' and 'co-evolution'.

Mutual protection

Once an ecosystem of co-adapting species is established it is extremely difficult for an invader to penetrate it and become established. Stuart Pimm, an ecologist at the University of Tennessee gives as an example the highland and lowland regions of Hawaii. In the former which is still pristine, the plants and birds have formed a tight network of connections over a long period of time. Relatively few species have recently managed to invade there. In the lowland region however, the human settlement has disrupted established communities and species manage to penetrate because the eco-network is poorly formed. Pimm has seen such a system level effect both in real habitats and computer simulated ones. The invader has to be very much more competitively superior to its potential rival if it is to surmount this protection of the incumbent species.
Such a ability to exclude a would-be invading species is mirrored in the Harvard Business Review 2 article by Brian Arthur in which he comments on the commercial failure of Steve Jobs' NeXT computer workstation. A network of connections often informal between key companies such as Microsoft, Hewlett Packard and Intel successfully repelled the invader. As Arthur says: 'A new product has to be two or three times better in some dimension - price, speed, convenience - to dislodge a locked in rival'.

Web Connections

The interaction between species in biological communities has largely been described in terms of food webs involving primary producers, herbivores, carnivores, parasites etc. Factors which affect this kind of model are the length of food chains and the ratio of predator species to prey species. But because of the complex network of interdependence that these deceptively simple patterns represent it is extremely difficult to predict the outcome of simple changes in a community such as the introduction of a new species. Sometimes the community may be affected very little, while at other times it might cause cascades of local extinctions.

The equivalent of food webs in the business world are economic webs which describe the ways in which companies do business with other companies. In today's fast-moving, high-technology economy the patterns are not only more complex but they change more rapidly as well, as companies break off old alliances and form new ones in their quest to survive and thrive. Stuart Kauffman, pioneer in complexity theory and co-founder of BIOS a business consultancy company, suggests that the way to think about economic webs is in terms of niches around some kind of activity:
'In the days before the automobile, transport centred on the horse drawn carriage, which required wheelwrights, blacksmiths, saddleries, wayside inns and so on.' This was the horse-drawn-carriage ecosystem. 'When automobiles arrived, a whole new ecosystem co-evolved, requiring paved roads, gas stations, motels and so on, which replaced the previous ecosystem.'

If a wheelwright could not transform himself or herself into something else, perhaps as a maker of wine barrels or rustic furniture then he or she would become extinct as the niche shrank. Today, high technology, computer hardware and software and the Internet are producing even more complex economic webs.

Co-evolution

The co-evolution of businesses can be thought of in terms of adaptive landscapes3,4. A biological species such as an antelope has a number of characteristics such as its speed, and a high ability to extract nutrients from a broad diet. These factors endow the species with a certain 'fitness'; an ability to survive and thrive in relation to its competitors and predators. The adaptive landscape maps how well the species fits into some ecological niche. The place on the landscape where fast speed, broad diet and efficient digestion are highly beneficial is represented by a high peak whereas sub-optimal combinations are represented by small peaks or even valleys. If the antelope is well adapted to its environment it will occupy some place on the high peak. In terms of evolution, a species moves up a peak or acquires a set of mutations that move it from one peak to another. But of course other species which have a direct impact on its success will also be evolving. If the antelope's predator evolves a faster speed then the antelopes 'fitness' is reduced. This means it either has to increase its speed potential or evolve some other beneficial characteristic. Thus a species landscape is constantly changed by the behaviour of other species with which it interacts.
Likewise in a business setting the wheelwright can be thought of as living on an adaptive landscape and having a potential success depending on whether he or she makes wagon wheels, barrels or rustic furniture. In the pre-automobile era making wheels would represent a high peak and making barrels or furniture lower ones. But with the arrival of the car demand for wagon wheels falls though remains perhaps for barrels or rustic furniture. Those peaks could even rise higher than the demand for wagon wheels and the wheelright could make more money.

A business ecosystem consists of a network of companies, each occupying a place in its own landscape of possibilities. But each landscape is coupled to many others: those of competitors, collaborators and complementors. As the landscape of a company changes, perhaps because it increases its 'fitness' through innovation, the landscapes of all those connected to it also change. Some peaks will grow whilst others will get smaller or disappear. A company whose product line is small and whose business environment is relatively stable will have a simple adaptive landscape, with few peaks and little change. A company whose innovation is driving a number of new product lines and where the business environment is anything but stable and predictable will have a 'rugged' adaptive landscape with many peaks that are constantly changing.

'Web Thinking' Versus 'Head to Head Competition.'

'Web thinking', said John Hagel III of the business consultants McKinsey & Co., 'may even represent the opening salvo in the transition from industrial-age to information age thinking.' 5 The existence of complex economic webs or business ecosystems changes the way companies must operate strategically if they are to survive in a turbulent fast changing environment. In this new economy, strategies based on conventional competition and co-operation will give way to strategies based on co-evolution, as companies adapt in concert. As Hagel says: 'The conventional approach dictates firms must first define their own strategy and negotiate alliances that are consistent with this strategy and advance its aims. Web strategy asserts that the two basic choices confronting senior management are which webs [or ecosystems] to participate in (or to form), and what role......to play in them. In other words, firm strategy follows web strategy'.

For many traditionalists in business and economics the death of head-to-head competition as the number-one route to success may seem hard to swallow. The idea that if individuals are left free to pursue their own selfish interests patterns will emerge that serve the greater good, guided, 'as if by an invisible hand', goes back to the Scottish economist Adam Smith in the eighteenth century. In the nineteenth century Charles Darwin incorporated Smith's thinking into biology with his theory of Natural Selection. Competition in this context includes whether one species or another will dominate in a particular ecosystem. Again, individuals acting in their own interest and species seeking to dominate, give rise to the evolutionary patterns we see in the world. Modern economists who embraced Darwinian metaphors, raised the notion of survival of the fittest through bitter competition to the level of a business law, believing that their business theory was inspired by the laws of nature. But even as the prevailing economic wisdom elevated the power of competition to dizzying new heights in the late 1970's and 1980's so ecologists were engaged in a fierce debate about whether competition really was the all-powerful force that Darwinism held it to be. There emerged a new view of the world in which competition is just one of many factors that shape ecological communities. Rich interplay in the network was recognised as at least as important if not more so. Thus whereas in traditional business thinking, based on head-to-head competition the aim is a win/lose situation ('I win , my competitor loses') in the more complex co-evolutionary business environment the aim is a win/win situation in the knowledge the business will succeed if others do. Though companies can benefit from 'species-level' improvements in the Darwinian, self centred sense, this is of limited value long term. The challenge is to create opportunities and adapt to changes in a network of other companies that might sometimes be collaborators, sometimes competitors and sometimes both. A more appropriate and powerful approach requires thinking in terms of whole systems. To end on Hagel: 'Webs emerge from the turmoil wrought by uncertainty and change'. 'They spread risk, increase flexibility, enhance an industry's innovation capability and reduce complexity for individual participants'. Just as many ecologists believe that the more species there are in a community the more productive and stable the community will be so Hagel says: 'the more companies-and customers- that join, the stronger the web becomes.'

The 'Law of Increasing returns'

Mainstream economic theory has its roots in the smoking chimney economy of the Industrial Revolution and was based on the production of such commodities as coal and iron. The economist, Alfred Marshall, in the late nineteenth century formulated the 'Law of Diminishing Returns.' This theory states that the more coal you dig, the more you are forced to exploit less favourable resources and so the return on the effort is reduced; and because you are in competition with other coal mines in the same predicament, prices become squeezed downwards, close to the average cost of production. Though the law became the central pillar of modern economics it is quintessentially an equilibrium model of the economic world.

Brian Arthur asserts that a different economic phenomenon for a single product market is emerging which he calls 'increasing returns' or ' the tendency for that which is ahead to get further ahead.' Arthur explains that: 'If a product or company or a technology-one of many competing in a market- gets ahead by chance or clever strategy, increasing returns can magnify this advantage and the product or company or technology can go on to lock in the market.' 6 The company can then make a financial killing even if its product is competitively inferior. The inferior product survives and thrives because it is linked to many other products in the community and thus excludes competitors. Increasing returns do not of course happen on Marshall's world of perfect competition.

An example of this effect is Microsoft's disk operating system (DOS). Widely recognised as inferior to other operating systems it nevertheless prevailed and came to dominate the market. In the early 1980's, DOS was one of three competing systems, the others being CP/M and the Apple Mackintosh system. Though CP/M was first on the market, Microsoft's Bill Gates used some clever tactics which included striking a deal with IBM to supply DOS for its PC. Though each of the three companies encouraged the development of their own separate ecosystems with networks of committed users and software suppliers, DOS came to dominate the market because of the protection within an ecosystem which Microsoft helped develop. Apple lasted in its own smaller ecosystem though CP/M became extinct.

Uncertainties In The Market Place

Biological ecosystems and business ecosystems are not exactly the same. People make decisions in the business community and consciously try to take advantage of their position. But because business communities and ecologies are both complex adaptive systems the parallels are far from superficial. The ecosystem perspective of a modern business community is more than just an analogy and we do not have to venture far into them to be in the midst of uncertainty. The first rule of complex adaptive systems is that it is almost impossible to tell a friend from an enemy. Biological field experiments in which a predator is removed from a community might lead us to expect that its prey, species A, would thrive. But because the predator also has another prey, species B, which is competitively superior, it may push A to local extinction.

In business it is not just the competitive interactions that are important but the entire complex. The benefit of the interconnected system of companies is that it may enable the opportunity of reaping great rewards through the economics of increasing returns and through forming alliances but when everything is connected directly or indirectly to everything else, changes in one part of the system may be propagated throughout the system and organisations may become extinct through no fault of their own. Unpredictability and the possibility of extinction are unnerving to traditional business managers who cherish predictability and control.

The Need For Change

Companies who simply dig a commodity such as coal out of the ground and supply it to a captive market are like the ball rolling round the bowl in an unvarying circuit. In such an unchanging environment past corporate experiences are everything. High efficiency and stability are dependant on compliance and organisational mandates. Loyalty, dependability and a strong work ethic, preserve tradition and heritage - all admirable qualities in an unchanging situation. But such organisations suffer from an ossified thinking which stifles innovation and creativity. When change occurs in the economic environment they risk extinction if they do not see the warning signs which are not always obvious. If traditional management ideas are not working as expected the need for change may be recognised but an insistance on controlling the effort may prevent it from achieving the required result. A mentality that engenders scheduling, compartmentalising, and doing one thing at a time sees change as a step by step process. Periods of rapid economic change however require restructuring and new ideas which do not spring from such a linear approach but need one that is polychronic: one that involves simultaneity, non linearity and is system-orientated and multidimensional.

Mark Maletz, who created a school for change for the computer giant Siemens Nixdorf (SNI) developed the following model: 'Each candidate in the 'change agent' school must have a strong project clearly linked to one of the company's strategic goals and supported by a senior executive.' 7 Maletz believes that it is the change agent's job to create tension rather than balance: 'Ambiguity defines the work of the change agents, not a comfortable balance but a dynamic tension between opposing poles. This state is the 'edge of chaos' or 'zone of creative adaptability' mentioned earlier.
David Clark, who heads the information technology team at W.I.Gore & Associates adds that the informal network is the change agents source of influence. 'People have to trust you, and networking becomes the way you build trust. Once you have it you can initiate change. There are no top down edicts here. It's all informal, based on building your network.' From the complexity perspective this is working with organisations organically and entering their culture rather than seeking a one hundred per cent change effort, it's making small changes that can lead to big effects.

Three Ways of Being for Constructive Emergence

When people feel part of a community and feel that they belong they are more willing to adapt and be flexible. Roger and Birute identify three practices for engendering business efficacy, innovative ideas and a sense of community in a business organisation: 'paradoxical leadership', 'emergent teams' and 'relational practice':

(1) 'Paradoxical leadership': a way of leading change in organisations functioning as complex adaptive systems.

(2) 'Emergent teams': a dynamic way of working together that keeps organisations on the edge.

(3) 'Relational practice': a way of interacting with co-workers, customers, suppliers and other businesses in the economic web that develops strong and rich connections, and has the potential for creating a sense of community.

Paradoxical leadership

Leadership of a complex adaptive system requires a different approach to the 'command-and-control' model. Change must be brought about by 'working with' and 'working for' the organisation. It requires the placing aside of ego-driven needs and finding gratification and satisfaction in the cultivation of other people. It requires a trust and faith in those you work with and a willingness to embrace the democratic process within the organisation.

The initial step in shifting from the command and control attitude to one of change and adaptability is to see the 'wholeness' of the organisation and the potential of the people within it. Appreciating the wholeness means seeing it more like a living organism, recognising its emergent behaviour patterns, being aware of external influences and envisioning new possibilities.

What also drives both the leader and the organisaton is a clarity of values. The purpose, the ethics and the vision of an organisation is created or 'uncovered' and articulated by a leader who must embody these values by living them, and even admitting when he or she doesn't live up to them.
This kind of leadership is paradoxical in that a leader needs a strong sense of direction, a clear sense of self and definitive values whilst at the same time must be able to let go, be open ended and allow the organisation to evolve. It is a kind of 'leading by not leading' and it creates a tension from which creative solutions emerge. It's not about throwing everything away that you know and do as a leader but placing those skills in the wider context of a new understanding. It's not enough to just sit back and let things unfold. That way entertains chaos. It's not enough to maintain an iron grip. That way enters stasis. The trick is to dance in between.

The bywords in the practice of paradoxical leadership are: 'Allowing', 'Accessible' and 'Attuned'.

(1) Being allowing:

• Allow solutions to emerge without forcing the issue. This is not to say you just sit back, but in order for people to adapt they need freedom to be as flexible as possible. The leader's role is to give vision, provide values, point in the direction he or she feels is right and then get out of the way. Once people understand the values they must be allowed to translate them into actions themselves.
• Allow people to balance themselves between extremes such as working too hard for the company and having too much leisure time. The caring of people for each other coupled with the expectation of solutions should prevent things going too far either way.
• Allow people to experiment in the knowledge that making small changes can result in large effects.
• Allow failures. Failures are points of learning and opportunities for generating greater adaptability.
• Allow mistakes. Mistakes show up weaknesses in the system, and again they should be turned into learning experiences.
  
  

(2) Being accessible:

• Make yourself visible and accessible to both employees and customers. Time spent on developing relationships strengthens connections and generates a more robust and creative system.
• Be emotionally accessible. Leaders should not be limited to rational thinking but show emotion and speak from the heart. They should be open to criticism, listen to what people think about them and address what people need and want.
  (3) Being attuned:
• Know what is going on by the organisation as a whole and be attuned to the interactions between people in the organisation.
• Be able to put yourself in your employees or customers shoes by imagining what it's like doing their job or doing business with the organisation.
• Listen and respond, it is the guide to organisational change.
• Trust your intuitions without being impulsive. Where once decisions could be made in years now they must be made in months. You will never have all the answers. You may hold rational goals but the wisdom of the subconscious also needs to be engaged.
• Use discrimination in choosing employees guided by a sense of the whole and the organisations interactive dimension. People should not only be qualified for the work but useful for the culture.
• Deliberate about the organisation but have faith in the intelligence and capabilities of the people.

Emergent Teams

People in organisations are part of a team in a general sense, but this is not what is meant by an 'emergent team'. A good example of an emergent team is one that happens in a crisis; everybody jumps into action, people intuitively know what has to be done, different people guide the collective action depending on their individual skills and current needs. Everything is done in a spirit of goodwill and care.

Though the formation of teams has become a major tactic as organisations seek ways to respond to the demands of the modern, fast changing business environment too many companies have metaphorically or even literally put people together in a room and called them a team, leaving the creation of an effective team entirely to chance. Tightly orchestrated behaviour of individual roles may mean that people go through the motions without a genuine feeling of teamwork. Creating process teams in re-engineering projects was an attempt at nudging creative capacity in people. Managers empowered people to decide how and when work was done, and gave authority to make decisions as well as an ability to create their own slots. Yet re-engineering projects failed 60-70 per cent of the time because people knew that process teams were not initiated in the spirit of encouraging them to learn and grow or as an opportunity for them to influence the direction of the organisation but as simply a ploy to get more out of them. Managers of process teams overlooked the fact that if people thrive , so will the organisation. More strategies, more financial incentives, higher compensation and corporate status climbing work to some extent but they leave the deep well of ingenuity in people, their limitless potential and desire to create, contribute and participate largely untapped.

The difference between emergent teams and process teams is one of intent. The intent behind emergent teams is to cultivate people's competencies so they can be as good as they can be, and to create diverse opportunities for them to participate in and contribute to organisational goals. Some goals may require a linear approach and can be achieved by solving one problem at a time. But complex business problems require a lot of interactive components and a lot of experimentation where different things are tried simultaneously in different parts of the organisation. The intent behind creating emergent teams is to engage non-linear processes which will give rise to those unpredictable non-linear results. Emergent teams exist at the edge and keep the organisation adaptable.They are a way for the organisation to find out what might or might not work and a source for leaders to find out what is new, different and changing in their organisation.

Emergent teams are usually small, less than a dozen people which makes them agile and able to respond quickly. Their strategies and goals are negotiated and renegotiated amongst the members of the team, generating emergent strategies represented by a general but strong direction rather than a specific plan.Teams which emerge in times of crisis prove to be highly effective and the people on them experience fulfilling work. It is not suggested that people can work at crisis pitch continuously but there are certain elements such as shared purpose, urgency, mutuality and care which can be cultivated in the business situation. Where these elements are aligned the organisation is ripe for emergent teams.

In order to bring about and sustain emergent teams managers do not manage but cultivate. In fact, cultivators rely heavily on people managing themselves. They do not streamline processes but connect people so that new pathways of communication lead to streamlining. By creating new opportunities for participation and enriching interactions by connections between resources and people, they gives teams what they need to succeed.

The four elements identified by Roger and Birute in the practice of leader as cultivator are: 'inclusive diversity', 'openness', 'fertilizing connections' and 'holding the space'.

(1) Inclusive diversity:
· Encouraging mentoring between young bright employees with experienced older staff. The interaction goes both ways.
· Provide opportunities for cross departmental teams.
· Hire people from different background disciplines to work with existing departments.
(2) Openness:
· Creating opportunities for people to learn, participate and contribute by opening up projects to self selection.
· Being open with information and resources to nourish collective intelligence and wisdom.
(3) Fertilizing connections:
· Connecting people who might benefit from each others experience and guiding them through difficulties with discussions, sense making, brainstorming and storytelling.
· Nurturing nascent seedlings of innovation and encouraging people to stretch beyond their comfort zone. Inviting even 'crazy' ideas but following up good ones.
· Attending to the health of the collective and pruning those people who take energy away from the whole.
(4) Holding the space:
· Creating a safe space in which people can express opinions and ideas. A context for risk.
· Being there when people are enthusiastic and allowing them to have more freedom and responsibility.
· Reassuring people when they are confused, uncertain, anxious, incompetent and frustrated. Wanting to fix it and not knowing how is an indication that a team is on the edge of creative adaptability.
· Striving to be open and available to diverse perspectives and working to involve everyone equally.
· Being patient with the critical 'mess' from which a common purpose and direction will emerge.
· Keeping the guidelines minimal so that complex behaviour, rich with adaptation and creativity can arise.

The interaction within an emergent team is not unlike the rules in a computer model that simulates the flocking of birds. There is 'collective steering', which is the sense in which all members of the team have an influence on the direction that a project takes and a responsibility within that direction- no one person gets the credit or the blame. The interaction is 'mutual' in terms of equality and respect and there is a recognition that each person has something unique to contribute to the cause regardless of organisational power differences. That each person is willing to learn from the other transforms a 'you and me' situation into an emerging 'us'. As with a flock of birds, emergent teams have not one leader but 'fluctuating authority'. The authority of each team member surfaces at different times depending on who has the experience and knowledge relevant to the issue in hand. People on emergent teams are 'resilient' in the sense that they are bound by a common purpose and don't want to let the other members down. They find their way round obstacles by being improvisational and resourceful. As Liz Rykert, a Canadian consultant and facilitator said: 'If I have more information than you I have an obligation to share it. If I have less information than you I have an obligation to ask.'

Relational Practice

Relational practice is not a sham in which, for example, a manager pretends interest on a personal level in his or her interaction with an employee or customer. An overemphasis of ambition at work in terms of achievement, power and success often means losing sight of the fact that business in its most fundamental sense is an exchange in a mutually beneficial relationship. Striving towards self serving goals means a danger of disregarding people and dehumanising the organisation. Thus relational practice is the building of caring and connected relationships, a true affiliation which engages people and brings the balance necessary to generate robust, adaptive and healthy emergence. There have been many studies showing that organisations who pay attention to people are more financially successful because their members feel able to do more and be more and have a revitalised ability to act.

In the fast changing business world we are also inundated with information which often gives rise to an accelerating loss of meaning and disconnection. New technology no longer delivers the edge in business that it used to because faster communication gives faster access to it. Service and relationships therefore become paramount in getting things done and good service relies on knowing the person you are dealing with. Increasingly the affiliative self will be engaged in a narrative type conversation rather than an analysis of the situation. It is stories that illuminate the diversity of a person's experience and capture the flow of changing reality. Informal, non-linear conversations, unlike agendas, are a pathway to the unexpected. Engaging people's stories builds trust. Knowing and sharing hopes and fears, expectations and disappointments, insights and aspirations, insecurities and avoidances, all help to strengthen connections and generate care.
It is also the small things that we say and do in our interactions that can engage or alienate, intimidate or reassure, nourish or deplete. To sum, the four bywords of relational practice are: 'being authentic', 'acknowledging others', 'being accountable' and 'being attentive'.

(1) Being authentic:
· Authenticity is not a static state located in a moment of time but flows from being truthful and open. Because connection comes with mutuality we may find ourselves disconnected from those who are not being authentic. Trying to fake authenticity leads to the playing of games, which in the long run is a waste of energy. We should look for inauthenticity in ourselves and beware of it in others. We should listen out for language that objectifies people because it is a symptom of the mechanistic mind. The demand for simple solutions or quantification, calculation and categorisation may all be indicative of a linear approach which disregards side effects in a complex situation that are in fact integral to the whole. The mechanistic way of thinking exists in all of us in varying degrees. It is the legacy of our scientific cultural heritage and in some ways it may be the unacknowledged and unaware tendency to remove ourselves from the 'messiness' of human relations. But in order to embrace a view of the business world that is dynamic, changing and organic we must come to terms with these tendencies.

· We should say what we think. We may find ourselves in contentious situations but the process of uncovering difficulties through honest and direct discussion means that we don't just cope with difficulties but we 'move through them'. It is necessary to reveal the failures and mistakes, the lack of trust, the need to be heard or the feeling of being excluded. It is necessary to give vent to feelings of tension or resistance or repression. We may ask and challenge ourselves with the question:'Do I dare to say what I really see, think and feel?'

(2) Acknowledging others:
· Loyalty and commitment are closely associated with people's experience of being recognised as a person by the people they work for. Money is an effective motivator but affiliation and connection with others cannot be met with pecuniary benefits but only with acknowledgment. If people feel devalued, or invisible, or not supported they will not give their best regardless of the money thrown at them. Authentic acknowledgment of people for their intrinsic value as human beings in addition to their their functional contributions costs nothing, takes little effort but can make a big difference.
· Certain people carry out relational work which is not part of a job description and often invisible but is particularly valuable in an organisation functioning as a complex adaptive system. These are the 'conduits', 'co-ordinators', 'connectors' and 'coherers':

'Conduits' : people who spread news- the good things others have done, concerns that need to be dealt with. They keep people informed and perpetuate a positive work atmosphere.

'Co-ordinators' : people who organise things off their own bat for the common good.

'Connectors' : those who generously connect people to each other for their mutual benefit.

'Coherers' : those who keep things together and running smoothly by dealing with the details.

Such behaviours should be acknowledged but they are often taken for granted.

(3) Being accountable:
· Admit mistakes. Claiming rather than denying human vulnerability builds inner strength and when people are members of teams, accountability fluctuates between the individual and the collective level.
· Admit when you don't know. People can be very supportive.
· Strive to keep your word.

(4) Being attentive:
· Being attentive is a total commitment of looking, listening, sensing, feeling, intuiting and being. It's using the senses to gain common sense, and empathy or resonance.
· Develop seminars on important issues, respond and take action. Being attentive serves to enhance your presence as well as that of others and enables the awakening of the collective soul at work.

Relational practices amplify and bring into being the positive dynamics that enable organisations to function as complex adaptive systems. They are not a substitute for good business practice but they will enhance business efficiency and create a fulfilling, humane and lively workplace.

Care-nections and the soul at work

In the connected economy, driven as it is by the communications revolution, companies find themselves as players in a fluid, constantly vacillating economic web, where their fate is affected by the behaviour of other members to a unprecedented degree. The pace of innovation and the forming and reforming of alliances between companies, driven by the connectedness of the economy creates an environment of urgency in the workplace. With it comes exhilaration but also stress and uncertainty about the future not just for leaders but everyone in the organisation.
Because business organisations are complex adaptive systems and not the mechanical entities that traditional business thinking has assumed, the science of complexity offers a new way of thinking about the company at two levels:

(a) As a living whole which is a member of an economic web.

(b) As a collective manifestation of its people and how they work together.

In 1965, Fortune-500 companies accounted for one fifth of jobs in the United States. By 1998 the figure had fallen to one tenth and continues to fall. In the United States small companies account for 80% of exports and can currently innovate at twice the rate of large ones by being adaptable and agile in a fast changing business environment. In the connected economy of the twenty first century the business landscape will be dominated by dynamic webs of small companies, constantly changing, constantly innovating. According to the Small Business Administration women in the U.S., currently own more than 40% of businesses and start new businesses at twice the rate for men. The style of management practice that most successfully enhances the success of companies as complex adaptive systems includes close attention to genuine relationships and to creating webs of interdependence.
In organisations that are structurally 'Flat' and encourage rich, open communication that is inclusively diverse, there was found a dynamic vortex between five levels of relationships:
1. between individuals
2. among teams
3. towards the Leader or the organisation's purpose
4. with other organisations and the community
5. with the natural environment.

Recognising that businesses are complex adaptive systems means understanding that they fluctuate between different states, from static to chaotic with a zone of creativity in between. Different states are appropriate for different times: a static state can exist when the environment is little changing; a chaotic state may be needed to break old patterns and a zone of creative adaptability when innovation is required.

Many aspects of management practice guided by the principles of complexity science are already in existence either because of people's intuitions or as a result of taking on board business recent theories of human relations management. The principles of complexity science identify an intellectual framework and lead to a deeper understanding of the true dynamics of business organisations because they share many features of other systems which science studies. Complexity scientists often use computer models because they enable simplification of reality. Human social systems, including the business environment are more complex than computer models can hope to simulate, but though we cannot describe organisational behaviour with the rigor that complexity science might require, the business organisation as a complex adaptive system is prescient in understanding the evolution of an economic system.

The twenty first century will be a time when business can exercise enormous power for social change. A single company can build a critical mass of collective awareness and responsibility but the ultimate challenge is for business leaders to find a way to join together as the United Nation's secretary general said recently : ' in a compact of shared values and principles that can give a human face to the global market', particularly with respect to human rights, labour standards and environmental practice. The connected economy is a fact of life but without the private sector's active commitment and support in enacting a set of core values, a connected economy is vulnerable to becoming a collapsed economy.

A machine has a sole purpose but a human being and an organisation both have a 'soul' purpose. When a collective understanding of values and purpose is realised, questions of motivation and productivity drop out of the equation: people know what to do and do it. Engaged in work, bonded by a common and larger purpose, aware of belonging, the soul purpose emerges and generates the spirit of the organisation, team spirit and community spirit.

References:

1. R. Lewin and B. Regine, The Soul At Work, Orion Business Books, 1999.
2. W.B. Arthur, 'Increasing Returns and the New World of Business', Harvard Business Review, July-August 1996.
3. S. Kauffman, At Home in the Universe, Oxford University Press, 1995.
4. U. Merry, 'Organisational Strategy on Different Landscapes', Internet, Dr Uri Merry's website, www.edgeplace.com.
5. J. Hagel III, 'Spider Versus Spider', The McKinsey Quarterly,1996.
6. W.B. Arthur, op. cit., p100.
7. C. Fishman, 'Change', Fast Company, April/May. 1997, pp 64-75.