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Leadership in Complex EnvironmentsLearning & Organizational Change Conference

Jeanie EgmonJune 9, 2007

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Storyline• Our Complex World• Complexity Defined• A Simple Illustration • Networks & Complexity• Distributed Cognition• X Factor –

The Prepared Mind

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Types of

Value

Intellectual

Structural

Financial

Safety Belief

Historic

Emotional

Innovation

Social

Reputational

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Iceberg Model

Strategies

Patterns of intent; frameworks

Surface

Tactics

Behaviors, Outcomes, What you see

Core Principles, Concepts

Underlying Conceptual & Assumption Base

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Back

to Nature

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Linear Assembly

Self Assembly

Assembly Line World Wide Web

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Knowledge Capitalization for Competitive Advantage

Type

s of

Kno

wle

dge

Incr

easi

ngly

Diff

icul

t to

“C

aptu

re”

& A

rtic

ulat

e

Explicit

Implicit

Tacit

Types of Knowing

Increasingly Difficult to Copy

Declarative (what) Procedural (how) Conditional (why)

Complex

Simple/

Complicated

Commodity

Provide processes for arriving at known answers & consensus scenarios

Provide known answers

Provide questions for arriving at new opportunities & for

increasing perspective

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STRAIGHTFORWARDData and processes are structuredBest Practices, standard operating procedures apply

COMPLICATEDData and processes are unstructuredSolutions require new information and studyAlternate scenarios focus approach

COMPLEXBroader system considerationsMultiple and interdependent variablesRecognizing relationships,and inter-dependencies Simple rules of thumb define interactionsThe system adapts to evolving situations,changes, Leading to new developments, New opportunity...... Emergence

CHAOSEvents outpace solutionsEvents compoundAgility in response required

Considering a Context for Complexity in Our Work

Uncertainty

Increasing Variables ( Agents)

Incr

easi

ng In

terd

epen

denc

ies

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Complexity is simply….Seeing “what lies beneath”

systems that behave in

sometimes surprising ways because of the non- linear interactions involved in working toward

their goals in the midst of constant streams of information.

These interactions require continuous adaptation and re-assembling of communication patterns based on simple rules to maintain the integrity of the system and co-evolve with its surrounding environments (e.g., traffic, the human body, the earth, markets, groups of people interacting)

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What’s so cool is….Many of the underlying patterns are turning

out to be the same or at least very similar across domains (e.g., human memory and organizational memory; human bodies adapting to stress and markets adapting to stress; diseases spreading and ideas spreading past the Tipping Point)

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Physical & Chemical Systems

Biology & Medicine

Social Systems & Organizations

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Changing

Roles: Birds

Flocking

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Complex Distributed Cognition Systems•

Purpose–

fill niches needed in the larger system

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Essence–

interactions of the agents

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Agents–

interact with environment–

organize themselves often in networks

–

continuously learn & adapt

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Behavior–

emerges from agents following “simple rules”

With

chemical

trail

Without

chemical

trail Time = 1240

Time = 780

show

results

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The worldwide airport network

Guimera, Mossa, Turtschi & Amaral,PNAS 102, 7794 (2005)

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Study of complex systems

Amaral & Ottino, Europ. Phys. J. B 38, 147 (2004)

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Examples of Complexity in Action with Northwestern

• GM Design & Quality Networks• Adaptive Supply Chain• Risk Management• Creativity & Innovation –

Across Scales

• New Oncofertility

Discipline• Co-development & Collaboration Across

Silos

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Complexity Business Examples•

Transportation Agility –

Southwest; Fed Ex•

Mass Collaboration –

Amazon; Google; Wikipedia; e-Bay•

Smart Products –

GE Appliances; US Military Vehicles and Weapons•

Risk Management –

US Intelligence; Capital One•

Cross Boundary Collaboration –

P&G; IBM•

Research Investment Decisions –

NSF•

Adaptive Supply Chains –

Walmart; Toyota•

Creativity –

IDEO•

Consulting –

Coca-Cola Latin America•

Marketing; Engagement –

Republican Party; Starbucks•

Leadership/Personal Growth & Effectiveness –

Phil Jackson (Bulls, Lakers)

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See also Cultivating Excellence Workbook

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Other Examples • Google –

track the links

• Starbucks –

change the rules• IBM –

change the tasks and space to

require virtual network interactions• E-Bay –

change the agent roles

• Coca-Cola –

leverage the hub role• Tipping Point –

design a viral self-

referencing vehicle

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What constitutes complexity?•

A system of individual agents*

with individual interests and general interest whose long-term success is interdependent with:–

Balancing competition & cooperation–

Non-linear information sharing and knowledge creation with other agents and networks beyond their immediate local environment

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The interaction*

of information sharing agents within local and wider networks is guided by simple rules*–

Simple rules are heuristics for decision-making and behavior.

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This interactive behavior of combining and recombining information gives rise to self-organization* into a web of information sharing networks* underneath the formal organizational structures

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What constitutes complexity?

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From the interaction within and between networks emerges* specific non-linear intended and unpredictable outcomes –

Intended Outcomes Examples: new methods and procedures and policies

–

Unpredictable Outcome Examples: new relationships, concepts and insights

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The information from these emergent ideas, patterns, relationships even structures feedback* into this complex system, and to the wider market, and generate new avenues for growth, discovery and

adaptation*–

Example: New markets & “Tipping Points”

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Complexity in Business FAQ’s

What is the relationship of networks and complexity?

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.......AND.....

Values....

Colleagues ...AND...Governance

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internet protein

interactions

disease

contagionhigh-school

dating

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McCormick Collaboration Network

(Wally Hopp, IEMS)

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Network rolesNodes/Agents

Boundary Spanners Knowledge Brokers

LinkagesHubs

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Network Risks

Random

network, node

failure

Linkages are typical of hierarchies, connectedness is achieved.

Scale-free

network, node

failure

Linkages are typical of free information flow, Connectedness responds to efficiency with a few highly connected “distributors” and many receivers

Key idea: careful of super-hubs or lone integrators

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Complexity in Business FAQ’s

Can we design complexity and networks in a system?

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Distributed Cognition

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Using the “surround”•

Knowledge is embedded in the “surround”

–

e.g., structures, reward systems, policies

•

Surround factors as their own knowledge representations, often tacit & implicit

–

Instead of independent variables affecting knowledge creating and sharing

•

To change the complex behavior of the system, question or make small changes to factors in the system: information, people, goals, things & rules interacting

•

Be prepared to adapt with emergence

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Knowledge Mediation ModelIndividual

Organizational

Social

Information Technology

Practice

**Arrows represent knowledge flowing

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Model Explanation•

Knowledge is mediated–

Created

–

Organized

–

Shared

–

Used

–

Transformed

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By individuals, groups, organizational artifacts & information technology interacting with each other

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In the midst of practice–

Doing some activity that requires an integration of knowledge(s) to produce a desired result

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Network Links PRIME Network Activation

PRIME Activators:• Products/Artifacts• Relationships• Ideas• Motivations• Events

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X-Factor Workforce

Technical

Skills

TranslationalSkills

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Expert Knowledge FrameworkTechnicalAnalyze client’s problem, deliver solution, and manage project

InterpersonalUse interpersonal and communication skills to ensure pleasant service experience

ContextualUnderstand the context of the current problem

Business DevelopmentAttract business and maximize benefits for the consulting firm

Problem PreventionPredict and prevent problems

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Functional expertise

•

Project management and expectation management skills

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Listening skills•

Client sponsor’s needs and emotions

•

Enhance client engagement

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Project history and stakeholders

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Organizational context: political factors, cultural issues, organizational structure, market, etc.

•

Relationship between the project and the context

•

Sales strategies: establish client confidence

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Negotiation strategies: learn about client budget, potential competitors, etc.

•

Qualify client •

Plan steps ahead to predict landmines in the project work

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Shape client needs, push back on key issues to ensure success

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Weaving a Complex Network of Ideas

High

Low

Low High

Functional/ Disciplinary

Technical Skills

Translational & Situational Application Skills

Expert Insightful Catalyst

SocializerTechnical Informant

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Industrial Age Leadership Model

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Expert•

Answers

•

Boss•

Primarily Quantitative Analysis

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Decide & Act•

Control the parts

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Insightful Catalyst•

Questions

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Boundary Spanner •

Quantitative & Qualitative Analysis

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Interact & Decide•

Enable a larger view

Prepared Mind Leadership Model

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Complexity in Action

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What is a situation you are in now that could benefit from the systematic use of complexity thinking and methods?

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What are the 3 best questions you use when you are playing the role of the insightful catalyst?

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Contact Information

Jeanie Egmonegmon@kellogg.northwestern.eduMobile: 847-571-5203