and the "Learning Organization"
in Complexity, Vol. 2 No. 5, 1997)
performing, creative teams which thrive in complex environments represent the
most exciting yet least understood phenomenon in business today.
Improving management's ability to cultivate and sustain such teams is
both a business and a cultural imperative.
Managers must get in touch with, and re-examine their presuppositions
on how organizations create and deliver value as our "fabricative"
work approach is subsumed by "creative synthesis" in the knowledge
models emerging from Dynamical Systems and Complexity research are opening the
door to more insightful ways of perceiving and managing business and work.
This note makes "rough and ready" use of these models in exploring
the nature of learning organizations, from team to economy.
While the "fit" may be less than perfect, it might best be
assessed relative to the goodness of fit of currently employed linear models.
The intent of this disclaimer on the manner of use of these nonlinear
models is best expressed via a quote from Wittgenstein , "My
propositions serve as elucidations in the following way: anyone who
understands me eventually recognizes them as nonsensical, when he has used
them, --- as steps --- to climb up beyond them.
(He must, so to speak, throw away the ladder after he has climbed up
Dipolar Value of Teams
overall value (V) of the team can no longer be measured and rewarded solely in
terms of "fabricative" tangible results (F).
The latent value of group-creativity (C), which may emerge in tangible
results, must also be measured and managed.
A problem presents itself here in the tendency of management processes
to consider only the "real" component of value and to ignore
"emergent value". That
is, the value of creative teams may thought of in terms of a complex variable;
V = F + iC. Rewards and
reinvestment schema which do not account for the complex value in
"learning organizations" may retard or inhibit their evolution.
"learning organization" is the conceptual plasma anointed to deliver
solutions to rising complexity in business.
One way to envision the "learning organization" is with
respect to chance and chaos, ... in terms of "creative interference"
within a network of collaborating people through the interplay of purpose,
knowledge and random business perturbations.
Complexity models emanating from research into the behavior of
"simple" physico-chemical systems, appear ripe ground for the
gathering of insights relevant to the "learning organization".
important bridge between business teams and complexity theory can be found in
their common systems structure. That
is, business teams employ dual "polar" modes of thinking and working
which seem to equate well to the concepts of equilibrium (stable periodic)
systems and nonequilibrium (chaotic) systems.
Teams, like most natural processes, are capable of both
"fabricating" results through local rule-based assembly processes
and/or "creating" results through ad hoc "spatial"
"dipolar" qualities can be seen as being both complementary and
the former pole associates with the adding up of "incompatible"
(non-interfering) events, while the latter pole associates with the spatial
interference of "independent" events.
While the traditional emphasis has been on "fabricating",
increasingly complex environments are demanding a higher emphasis on
"creative" work modes. This
shift in emphasis is well depicted in the film Apollo 13 when the team,
confronted with a life-threatening technical disaster, subordinates their
linear, equilibrium "fabricative" mode to their nonlinear
"far-from-equilibrium" "creative" mode.
fundamentally differing process modes of "fabricating" via linear,
non-overlapping assembly and "creating" via nonlinear interference
appear to be archetypes in productive processes, and will provide the
"backbone thread" in this discussion.
The term "interference" is used in preference to
"interaction", to imply the degree of participative commitment
observed in high performing teams. Interference
and interaction express the relative degree of commitment to teamwork, as does
the pig or the chicken, respectively, to a bacon and egg breakfast.
convenient way for introducing these productive archetypes in the context of
chance, may be to review the classic quantum behavior experiment in which
electrons pass through one or the other of two slits on their way to a target
the probabilities in the case (a) where "we look" at which of two
alternative slits the electron passes through, and the case (b) where "we
don't look" at which slit it goes through, we get the following result;
 (where big P is probability
of the event and little p is probability amplitude).
If we look ..... P_L =
p1**2 + p2**2
If we don't look ..... P_NL = (p1 + p2)**2
= P_L + 2*p1*p2
probability definitions, it appears that if "we look", we concern
ourselves only with "incompatible" events (i.e. probability sums),
or events which can have no overlap. In
other words, if "we look", we get the mechanical sum of the parts.
Whereas if we "don't look", we open the door to consideration
of both "incompatible" events and "independent" events
(i.e. probability products), so that we get a creative lagniappe in the form
of an emergent spatial correlation.
seems that even with electron-teams, we have the choice of looking at their
process as being mechanical or creative.
porting model concepts from the macro level of teams to the micro level of
electrons may seem a bit radical and scientifically questionable, the focus
here is on four "generic" points-of-interest or
"patterns", relevant to "production"
The polar archetypes of non-overlapping assembly (i.e. piecewise fabrication)
and creative interference (i.e. joint creativity) seem pervasive in natural
There is a difficulty at all levels in attempting to model processes as being
either purely "fabricative" or purely "creative"
At all levels, probabilistic spatial correlations, suggestive of
large-scale organizational coherency, appear to be present only in creative
While the "fabricative" archetype is tangible-causal, the
"creative" archetype is latent-emergent, suggesting a relationship
between overall value (V) of the process, and its "fabricative" and
"creative" value poles, "F" and "C" of the form
V = F + iC.
appears to be shifting emphasis from "fabrication" to
"creativity" to the point where a polarity flip is occurring in
which the former is subordinated to the latter.
For example, in the ideal "learning organization", it would
seem that the "real" or "fabrication" component of value
is the emergent offspring of "creative" value.
This is in contrast to the industrial age model where tangible,
quantitatively measured "fabrication" value was "all she
we transition from "fabricating organizations" to "learning
organizations" a number of
questions arise, including; how and when to shift emphasis or reverse
polarity, how to recognize and manage the more elusive creative-emergent mode,
and how cultural factors influence the embracing of one polarity rather than
the other. Each of these
questions will be discussed in the context of macro experience, against a
backdrop of physics and complexity models.
Reversals in Teams
mentioned above, it would be hard to find a better example of a polar reversal
from a dominant linear, non-overlapping assembly orientation to a dominant
nonlinear interfering orientation, than the transformative experience which is
so graphically illustrated in the film "Apollo 13".
Challenged by a technical disaster, the team does a polarity flip from
operating as a hierarchy of local, specialized equilibrium centers, into a
strongly spatially correlated, creatively interfering web enterprise.
Both team performance and the actualization of team-member potentials
make an enormous forward leap.
Apollo 13 as in other such team experiences, this "polarity
reversal" seems to involve an associated "flip" in team
members' modes of perception or consciousness.
Interviews with members of high performing business teams in the
upstream petroleum industry suggest that a similar phenomenon occurs as is
commonly encountered in sports or ballet; i.e. a transitioning from a
piecewise mechanical assembly of thoughts into a seamless creative mental
synthesis. As in the quantum
behavior experiment, it seems that if one persists in "looking" at
the process in a mechanical context, one cannot "get into" the
natural interfering mode at the same time.
is hard not to compare this transitioning between the two modes to physico-chemical
systems transitions as are described by Prigogine and Nicolis , in both a
probabilistic as well as behavioral sense.
The probabilistic aspects become particularly important relative to
appropriate rewards and reinvestment feedback, as will be discussed later.
emphasis in business is on tangible results which are delivered through
"fabrication", both modes of value creation are commonly represented
on business teams. In the past,
where there was a dominant focus on "fabrication", it appears as if
the "creative" mode was seen in a background support role and taken
very much for granted. In the
"learning" organization, these perceptions appear to be reversed.
are at least two problems associated with this mixed mode of working. First,
non-overlapping assembly may have worked fine in an environment which
emphasized manual skills, but in a knowledge-work environment, it tends to
"strip-mine" knowledge workers, extracting contributions which are
narrow with respect to both the overall business process and the natural
potentials of the employee. Second,
having been taking for granted for so long, the "group-creative"
mode, and "organizational learning" are currently neither well
understood nor well nurtured, and tend to be inadvertently suppressed by
deeply ingrained cultural beliefs.
example, the practice of seeking non-overlapping contributions from
organizational subcomponents, by clearly defining local roles,
responsibilities and quantitative measures, runs directly counter to the need
for creative interference (spatial coherence), which derives from an ad hoc
knowledge sharing environment. In
addition, latent value potentials embodied in creative interference are lost
or abandoned in the single-minded focus on the "tangibles" of
and Managing Latent-Emergent Value
creative interference in the macroworld of teams is difficult to get a handle
on for three reasons; we can't speak directly about it, we can't remember it,
and we can't quantitatively measure it.
can't speak about it directly or remember it because it is higher dimensional
and intrinsically geometrical. For
example, we can't directly describe how we ride a bicycle, although riding a
bicycle is a sustained learning process involving only ten interfering
variables , (i.e. business phenomena can involve far more).
It is impossible to convey in words the information contained in
ten-dimensional or higher, phase space trajectories since business language is
inherently constrained to three or four dimensions (i.e. poetry is typically
can we "explicitly remember" a learning experience such as a bicycle
ride, since we store such pattern-based experience in "implicit
memory" , a type of memory which does not allow voluntary recall but
only a "knowing" when we once again see or experience the thing or
episode. For example, though we
cannot "explicitly remember" and voluntarily recall all 50 faces we
saw at yesterday's meeting, we will likely be able to "implicitly
remember" most of them, or "know them when we see them" if we
view them in a "lineup" in which they are interspersed with
we can neither linguistically describe, nor voluntarily recall nonlinear
interference effects such as organizational learning experiences, ... a
frustrating circumstance for employers (and machines) vying for increased
control over knowledge.
measurement in the fabricative environment is straight forward due to the
non-overlapping constraint, measurement in creatively interfering environments
is complicated by the notion of latent value associated with spatial
correlation. While this is hard
to visualize in complex business situations, a billiards example may serve to
illustrate the effect.
manager of a billiards team (which inherently deals with creative
interference) would look beyond "scoring statistics" to the latent
value implicit in the spatial configurations; for example he/she might ask the
questions; ... is the team moving
towards snookering themselves? ... are they over-emphasizing short term
scoring opportunities to the point that they can no longer extract value from
the residual configuration? ... are the players going for best opportunities
first (re-configuring versus sinking balls) to optimize full cycle team
results, even though their mates may harvest the opportunites they set up?
billiards is a classic case of "deterministic chaos", there can only
be probabilistic measures for the "value" of a billiard ball
configuration. Such interference
configurations apparently fall into the higher dimensional phase space
category, similar to the bicycle-riding system, which cannot be
"explicitly remembered" nor described in words nor quantitatively
measured. The dominant role
of latent, interference value in team-creative situations implies that
honesty, trust and humility will be needed for system optimization.
That is, no-one knows for sure if you choose to sink a ball and forego
a better (with respect to full cycle team results) opportunity to improve the
configuration; you must trust that if you take no ownership of the scoring
opportunities you set up, your teammates will do the same; and if your ego
drives you to go for high personal scores to the detriment of creative
interference, full cycle team performance will necessarily be compromised.
only quantitative results in a creative environment where latent value is tied
up in spatial interference patterns appears likely to drive the system back
towards the "fabrication" model and suppress creativity.
Sporting games such as ice hockey try to
mitigate this exposure by rewarding creative interference in the form
of "play-making" (i.e. assists) in the same measure as scoring (both
a goal and an "assist" merit one point).
Thus it is quite possible to be recognized as a "star" for
creative play rather than for high scoring (e.g. Wayne Gretzky).
In business, however, "play-making" and "assists"
are far less visible to management, and an insistence on honesty, trust and
humility becomes the joint responsibility of the team.
Since behavioral information is only locally accessible, the
maintaining of large spans of control by management depends on quantitative
measures which discount creative interference contributions.
moving beyond questions of relative optimization to the threat of collapse
into total chaos, it may be worthwhile to revisit the bicycle example.
However, in this case it's more insightful to consider a thought
experiment in which the bicycle is ridden by a team of five tiny but powerful
people, situated so as to manage the dual variables of position and velocity
associated with; handlebars, left pedal, right pedal, drive wheel and front
(braking) wheel. In the absence
of the inevitable potholes in the pathway, this is a ten dimensional
previously suggested, sustained creative interference is needed to keep the
bike upright and on course, which is not describable in words, not
quantitatively measurable and not explicitly rememberable.
Thus a successful bicycle ride by the "tiny-team" would seem
to involve the sharing of a mental view of a family of phase space
trajectories associated with a successful ride.
In this example, after a period of learning, a false movement of the
pedal by one team member can be "covered" by a compensatory move of
the handlebars by another, introducing a degree of resilience into the system.
Thus it was in the Apollo 13 project where diversity and overlapping
capability inherent in the interfering variables delivered a resilience which
averted a collapse into total chaos. And
thus it was that the training of a new team member was a nonlinear,
experiential task, in which words and documents played a support role.
view of the above-described properties of dipolar value creation systems,
there are a number of problems associated with making rewards and reinvestment
programs overly dependent on quantitative measures (as opposed to behavioral
measures). One is that ANY
differential in rewards based on quantitative subsystem measurements (pedaling
proficiency, ball-sinking etc.) is likely to introduce confusion and weaken
spatial coherency necessary for the creative mode.
In the bicycle "tiny-team" case, and as affirmed in
interviews with high performance team members, one must shift out of a
piecemeal mechanical focus on how things work, into an interference
(harmonizing etc.) orientation. If
the pedaler is "looking" at "pedaling performance goals",
he/she cannot at the same time be tuning into high dimensional phase space
problem is that since value builds in creative environments, through creative
interference, at any given stage the value may be more or less manifest in
real results or stored as latent potential (recalling that V = F + iC).
If the focus is exclusively on quantitative results, this equates to
looking only at the "real" component of value and ignoring the
"complex" component. If
assessments are made on a full life-cycle basis (e.g. on the final outcome of
a billiards game), this is not a problem since latent value has at that point
emerged as measurable value. But
if performance is assessed on the basis of the "real" component at
arbitrary intervals, for example as Wall Street assesses companies through
their quarterly reports, this practice may fail to account for latent value
resident in creative interference potentials.
And since rewards and reinvestment are often based on such assessments,
this tends not only to "starve out" creative resources, but also to
encourage a focus on "speed of fabrication", dissipating the spatial
coherency necessary for organizational learning.
of the saving graces of the results-oriented rewards system in the past has
been the physical collocation of "fabricative" and
As organizations become "virtual" through the availability of
network technologies, there is likely to be a progressive diffusion and
decoupling of both "F" and "C", which will make this
compensatory spillover in rewards and reinvestment much less likely, and the
need for behavior-oriented rewards and reinvestment an imperative.
a shift is becoming increasingly evident.
Examples include Southwest Airlines, where CEO Herb Kelleher hires and
rewards "great attitudes"  and Motorola, where Bob Galvin, head
of Motorola's Excom leads an initiative to re-invest through "behavioral
leaders" . In the former
case, hiring programs were developed which cost several times the norm, to
recruit staff who not only possessed the "pedaling proficiencies"
but also the right "attitudes" relative to promoting synergies in
the workplace. In the latter
case, a multi-billion dollar investment has been made, through the vehicle of
Motorola University, to develop "behavioral leadership", or
"role model" leaders who are differentially rewarded and empowered
as investors of company funds, on the basis of their ability to catalyze
learning synergies in the workplace.
Influence of Culture on Work Approach
focus on non-overlapping mechanical assembly processes and rewarding and
re-investing on the basis of quantitative measurements is linear theory based
practice which appears to be deeply ingrained in the culture of many
is, linear theory comes into play in the form of presuppositions which are at
a level lower than the questions we normally ask.
Getting at the root source of these presuppositions is an exercise in
what Argyris  calls "double loop learning".
this case the question is not; "how can we devise more equitable ways to
measure and reward results in creative team environments", but rather;
"are traditional results-based measurement and management approaches
appropriate for creative team environments?"
new questions arise from this level of inquiry, including;
Are traditional statistical estimates of causality appropriate for correlating
business resources/practices with business success?
Is the application of rewards and reinvestment at the local portals of
emergence of results appropriate for nurturing both "fabricative"
and "creative" organizational modes?
America, there seems to be a strong cultural presupposition that, for example;
if cancer is statistically correlated with smoking, then smoking is a CAUSE of
cancer, or; if business success is statistically correlated with Fred's
participation, then Fred is a CAUSE of success.
Business corollaries also appear to emerge as follows;
Those who CAUSE success are the best stewards of re-investment
Investment applied at the local portals of emergence of results will
"trickle-down" through causal channels to equitably nurture
contributory resources and practices.
causal, trickle-down view of business-economy appears to be the son of culture
and the mother of behavior in the traditional business world, and tends to
boost both the ego and pocketbook of those who would "fabricate"
results most rapidly.
is little evidence of concern amongst senior management (or investors for that
matter) that rising complexity in the form of multi-variable interference may
be eroding the presuppositions which underpin statistics-based rewards and
reinvestment schema. Yet
researchers in nonlinear phenomena suggest that the spatial correlation which
emerges in "transition" or "learning" phases is at the
expense of equilibrium statistics in a system.
Such findings seem to jive with the bicycle and billiards examples
above. Questions like; "who
is 'most' responsible for winning the billiards game, ... the highest
scorer?" seem out of place in situations involving creative interference.
the billiards player who performs best in an "organizational
learning" context, by sacrificing scoring opportunities when there are
better overall opportunities to improve the ball configuration, will
necessarily have an inferior scoring record relative to an equally competent
teammate who exploits personal scoring opportunities on any and all occasions.
Thus the practice of "rewarding results" would seem to foster
internal competition and distrust, creating an environment inherently
disadvantageous to the evolution of "learning organizations".
regional and local culture appear to influence the degree to which this type
of thinking is impacting the evolution of "learning organizations".
For example, in Japan where there is a great respect for power, one
might expect to see an even larger "spread" in compensation between
senior management and the average wage. In
fact, there is almost an order of magnitude less of a spread than in the US.
It appears that there is much more "humility" in terms of
causality in Japan. Cultural
"interference" archetypes such as the Zen "sound of one hand
clapping" or "Karma" which "selects" a particular
result out of a diverse soup of interfering potentialities, appear to moderate
the notion of a "statistical causality".
A similar "humility" with respect to the
"causality" of success appears also to be present in high performing
"learning" teams (e.g. Apollo 13).
In this case, "humility" appears to equate to a more balanced
view of the origins of value contributions which incorporates both
tangible-causal and latent-emergent contributions.
Thus an effective "Ego-nomics" comes into play, born from
cultural presuppositions rooted in mathematics, which appears to be modulating
the evolution of "learning organizations".
America, the influence of "ego-nomics" is particularly strong, with
senior management compensation being more than 40 times as great as the
average wage. According to
economist Edward Wolff of New York University , wealth follows earnings and
inequality of wealth now stands at a 63-year high.
"The top 1 percent controls 42 percent of the nation's household
assets and 50 percent of its financial assets, such as stocks and bonds."
are, thus, some very strongly established feedback patterns which suggest that
a review of manager/investor assumptions on "causality" and
"trickle-down" in rewards and reinvestment schema,
and their mathematical underpinnings, may be in order.
Incompleteness and Cognitive States
suggested earlier, high performing, "learning teams" appear to make
greater than normal use of pattern-oriented knowledge synthesis.
This is articulated by team members in the context of shifting from
"factory" to "creative" cognitive modes.
intention here is not to get into cognitive theory but simply to try to
reconcile experiential data coming from highly successful teams with the
"mathematics" which underpins cultural presuppositions.
examining why the latent value in "organizational phase space" tends
to be ignored by business managers, Gregory Chaitin's suggestion  comes to
mind, that the incompleteness expressed by Goedel's theorem may be more
pervasive and significant than previously assumed.
The proposition that "all Cretans are liars", which provided
an avenue of attack for Goedel's original proof, seems relevant to the topics
of "learning organizations" and "creative interference",
since the proposition presupposes both consciousness (i.e. one must first
"know" truth in order to lie), and interference (i.e.
"lying" inherently involves interference between two or more
order to prove that "all Cretans are liars", a proposition that
implies both consciousness and interference, it appears that we need more than
unconscious, non-interfering axioms. That
is, the Cretan proposition appears to be "complex" or
"dipolar" while syllogistic logic is "real" and
the "incompleteness" alluded to in Goedel's theorem is also playing
havoc in the domain of management. The
counter-intuitive shockwave that hit mathematicians in 1931 may be only just
now knocking at management's door.
in the case of quantum behavior and mixed mode teams, if we "look"
(or "manage") in such a way as to guarantee non-interfering
subsystems, then we constrain ourselves to a linear summing of non-overlapping
parts. However, if we "do
not look" (i.e. we empower self-managing teams), we open the door to
creative (and/or destructive) synergies.
How "tangential" we can get (i.e. to what extent we should
constrain C/F) would appear to depend on questions of diversity and resilience
to business perturbations. A
time-based plot of C/F for the Apollo 13 team would probably show a very large
peak following the technical disaster, implying a closer encounter with total
chaos than most teams would be capable of recovering from.
summarize the "logical completeness" issue; for managers to
understand "organizational learning", a process which implies both
consciousness and interference, the manager will need more than
mechanical-causal axioms. As
emergent business trends seem already to be saying, "organizational
learning" is best measured and managed in terms of "behaviors"
which promote synergistic interference (large-scale spatial correlation) and
through which "cycles of learning" can be progressively improved
upon. In other words, the
move to "behavior" as the prime management parameter, by definition,
equates to the employing of conscious, interfering axioms.
shifting of rewards and reinvestment away from a pure "results" base
seems unlikely in companies where the egotism of senior management is high,
since the notion of "responsibility for success" (i.e.
"statistical causality") and therefore the degree of
"spread" in rewards, is likely to be severely diluted.
Executive compensation may have to go through the same "stochastic
analogue of bifurcation"  as is described in complexity theory, as the
system properties which business most values and rewards transition from a
unipolar manual skills orientation, to a dipolar knowledge management
and companies who lead the way in transforming themselves into "learning
organizations" seem graced by leaders who sense the "emergent
value" of empowered teams and who possess more than average measures of
honesty, trust and humility.
Wittgenstein, Ludwig, "Tractatus Logico-Philosophicus", 1921
Prigogine and Nicolis, "Exploring Complexity", 1989
Feynmann, Richard P., "Six Easy Pieces", 1963 (published 1994)
Stewart, Ian, "Does God Play Dice?", 1989
Schacter, Daniel, "In Search of Memory", 1996
Kelleher, Herb, "Quality Awareness", Dallas, Oct. 9, 1995
Galvin, Robert W., "The Learning Organization", Keynote Address,
"Knowledge Advantage II Conference", Chicago, Nov. 16, 1995
Argyris, Chris, "Education for Leading-Learning", 1993
Bryant Quinn, Jane, "A Paycheck Revolution in '96", Newsweek, Feb.
Chaitin, Gregory, Web site: http://www.research.ibm.com/people/chaitin/