The Work-Place (Culture)

This section explores the organizational culture of vitality. It investigates workplace drivers of enchantment and disenchantment, including the respect for human diversity, the safe space criteria for autonomy and creativity, leadership and trust issues, anxiety containment, power distribution, information flow and collaboration. This will include the role of the grammar of conduct, ethical pluralism, morals and values in an association of constitutionally grounded citizenry. This constitutional project enables employees and stakeholders to participate in an association based upon communicative action.

Diversity's Role in Emergence, Vitality, and Balancing Stakeholder Interests at the Edge of Chaos

In the past several years, we have seen a lot of attention paid to the importance of organizational stakeholders. The role of stakeholder relationships in sustaining business viability is a direct outgrowth of the principles of relatedness that are an integral element in the survival of a complex adaptive system. Although it may seem trite to state, companies do not operate in isolation. That obvious observation, however is belied by the manner in which a great many companies manage themselves. Many organizations focus a great deal of energy on the internal workings and dynamics within the organization itself, but either ignore (or perhaps deliberately keep their employees ignorant of) the perturbations in their environment caused by outside influences, or they expend just as much energy trying to avoid or neutralize the internal effects of those external perturbations.

The choice of the word "perturbations" here is intentional. In astronomy, perturbation is used to describe the deviation of a celestial body from its regular orbit due to the presence of one or more other bodies that act upon it. This action may be the pull of gravity of adjacent objects or impact with bodies ranging in size from subatomic particles to large bodies. Most often, these perturbations consist of merely a short-lived waver in the path of the body, although this may occur on a regular basis. This phenomenon is, in fact, a way that astronomers can deduce the presence of unknown stars, planets, and other bodies by observing repeated perturbations in a known body's path. Once in while, however, the influence is strong enough to deflect a body into a new trajectory, perhaps captured into orbit around a larger body, or, in the case of entering too far into the gravitational pull of a black hole, pulled into a destructive trajectory from which there is no escape. Celestial bodies, or course, have no capability of recognizing when such influence is occurring, nor to either deflect or take advantage of the presence of the influencing factor. Organizations, too, are subject to deflections from their path by external forces that are often unknown or unseen.

The external caused perturbations most likely to vary from an organization's expectations are those springing from entities linked in some way to the organization - those that are within the company's stakeholder constellation. Those emanating from elsewhere are not likely to be of immediate or long lasting concern. Eliminating this dissonance, however, is not in the organization's best interest. These perturbations are exactly the outside factors that, when recognized, assessed, and responded to, provide the means to build upon and sustain the inherent vitality of the organization. The key to taking advantage of this possibility is to develop an ability to understand the sources of these variances and disturbances, and to accurately assess their nature and ability to disrupt current patterns and assumptions. These understandings can then be the springboard for ideas on how to successfully adapt to the occurring changes and for the creative development of both individual and organizational capabilities. This article discusses a complex adaptive systems perspective on this question, and highlights the necessity of diverse agents in actualizing this creative capability.

Adaptive Walks On Embedded Landscapes

Picture a topographic map that plots the comparative advantage and disadvantage of all possible strategies for survival within a given system. You would see a pattern of peaks and valleys of differing height and depth. The peaks represent points of comparative advantage and the bottoms of the valleys represent comparative disadvantage. This is the fitness landscape for the system in which you exist. The company which employs you is such a system. As an autonomous agent within that system, you sense and act upon your environment, trying to fulfill a set of goals in the complex, dynamic environment that surrounds you. Your goals may be short term or long term, and your objectives may take a variety of forms. For instance (1) you are satisfied with your current situation and wish to maintain your position for the foreseeable future (desired local states); (2) you are shooting for that next promotion, and perhaps the one after that, or are pushing to improve your marketability so that you can jump to another firm at a higher level position or compensation (desired end goals); (3) you are focused on current performance in order to ensure that next bonus or avoid the next layoff (selective rewards to be maximized); (4) you wish to maintain a particular work/life balance and are resistant to moves that require an undesirable amount of time and energy for work as opposed to your other interests and activities (internal needs or motivations that need to be kept within desired bounds). You process the information that is available to you, attempting to anticipate future states and possibilities, based on your internal models (which are often incomplete and/or incorrect), so that you can make the appropriate moves to accomplish your strategy for success (or survival).

The situation immediately becomes complicated, because as you are making your moves to your perceived desired position on the landscape, other autonomous agents are making their own moves, based upon their own goals, as well as in response to what they see or know about the moves you and other agents are making. You and other agents interpret these environmental changes hoping to learn and respond to take the maximum advantage. Many of these moves change the comparative advantage of being at a specific point. In other words, as you make your way to a peak that you seek, the landscape shifts and the peak may disappear from under you as you arrive! As a result you spend a lot of effort adapting to the adaptation patterns of others. This is co-evolution. If you fail to move to higher points on your landscape, you may be outpaced by other agents who are more successful in doing so, putting your survival within the system at risk.

A complex adaptive system behaves and evolves according to three key principles:

1. Order is emergent as opposed to predetermined (self-organization - agents spontaneously coordinate their behavior in ways that they believe maximize their individual position, resulting in coherent but unpredictable new patterns of relationships, structures, and behaviors);
2. The system's history is irreversible (a result of emergence - appearance of higher-level properties or behaviors of a system that are neither found in nor predictable from the lower-level properties of that system);
3. The system's future is often unpredictable (due to nonlinearity and sensitivity to initial conditions - which can generate instabilities, discontinuities, synergy, and qualitative changes).

As previously stated, companies do not operate in isolation. The relatedness of an organization's stakeholders is important at both the individual and organizational levels, because all complex adaptive system operate within a hierarchy of complex systems. The hierarchy of systems within which a business operates could be described as follows:

• Political-Socio-Economic/Financial System (the ecological system within which all industries exist)
• Industry (a system composed of product sectors)
• Product Sector (a system composed of firms)
• The Firm (a system composed of functional departments)
• Functional Department (a system composed of employees and work groups)
• Work Group (a system composed of employees)
• Employee (each of us as an individual is a complex adaptive system composed of our biological and neurological processes)

As we look at the various systems within this hierarchy, we can place relevant stakeholders within one or more of these systems:

• Employees [direct agents within the work group, department, and firm systems, and members of all systems hierarchically]
• Management [also members of all systems]
• Customers [members of the Product Sector and Political-Socio-Economic/Financial system]
• Stockholders [members of the Political-Socio-Economic/Financial system]
• Financiers [members of the Political-Socio-Economic/Financial system; high potential influence in the Industry system]
• Suppliers [members of the Industry system; high potential influence in the Product Sector system]
• Competitors [most importantly, members of Product Sector]
• Community [members of the Political-Socio-Economic/Financial system]
• Ecology [the aggregate of the Political-Socio-Economic/Financial system]

The phenomenon of co-evolution extends to the dynamics between various systems within the hierarchy. As Kauffman and Macready state, "Co-evolution is a process of coupled, deforming landscapes where the adaptive moves of each entity alter the landscapes of its neighbors." [Technological Evolution and Adaptive Organizations (Santa Fe Institute working paper), 1995] Their emphasis on 'evolution with' instead of 'adaptation to' changes the perspective and assumptions that underlie traditional management and systems theories. The framework of systemic co-evolution presents each organization as a fully participating agent which both influences and is influenced by the ecosystem made up of all stakeholders including related businesses, consumers and regulatory and legislative agencies. Thus, a system must contain agents who are able to consider both the direct and indirect impact of their moves across their own system's fitness landscape upon every other related system, if the system's choices are to be strategically informed. Only though agents able to attract and establish relationships (connections) with other agents that have strong links within all other related systems will they be capable of effective information exchange that allows them to be well informed and raise the probability of consistent good choices. Accomplishing this requires the acquisition and retention of diverse agents.

Diversity and Vitality Across Embedded Systems

Systems that survive and thrive are those that are pushed away from equilibrium. Being "far from equilibrium" forces the system to experiment and explore alternative possibilities, often within what is called the "shadow system", and to allow new patterns and structures to be exposed to the system's members. The viability of new possibilities is determined through "positive feedback" -- reiterations that amplify and reinforce the perceived variances rather than attempt to restore the equilibrium state. New patterns that are viable improvements upon the old are amplified by their acquisition and constructive use within the system, gaining a constituency (an example of self-organization) that, at some point overthrows the old pattern, resulting in innovation.

Clearly, actions between agents involve the exchange of information and/or resources. These flows are frequently nonlinear, outside the formal system. This flow is enhanced when it includes information and resources from outside the system, for example, from customers, vendors, competitors, or collaborators. Within the system, diverse agents modify the context for all other agents. The greater the diversity of agents contributing to the information exchange, the more potential perspectives, relevant analysis and variety of applications are possible. The greater the access to relevant information and ability to incorporate this into personal actions, the greater the containment of anxiety within the organization, since individual agents are comfortable that they have an ability to make choices that are positive both for themselves and their employer.

Diversity of agents is recognized as a primary property of complex adaptive systems. Diverse agents are an important element to adaptation because they allow a broad range of perspectives and interpretation of the information being exchanged within and across systems. In the case of organizations, those which, for the sake of economy and efficiency, tend to acquire and retain employees with very similar backgrounds, credentials, experiences, and/or perspectives, make themselves vulnerable to the inevitable stagnation of equilibrium that would result. More diverse agents within an organizational system can provide knowledgeable links to related information sources, both proactively seeking relevant information outside the routine or status quo, and being efficient filters to determine what new or unfamiliar information is relevant or important.

Another benefit of diversity is that it encourages somewhat more redundancy, and it appears that higher redundancy is necessary for adaptation. Redundancy consists of both a broader range of diverse agents and multiple agents operating on the same phenomena. A complex adaptive system as we currently understand it appears to consist of hierarchies of "positions," occupied by agents. When an agent loses its stability within the environment, which includes other agents, it is removed from the system, leaving a hole. In a process which is neither accidental nor random, this is filled in a cascade effect by another agent similar to the former inhabitant. Within a company, this selection is made through a combination of choices made at several levels from the individual to the organizational. If a new agent is going to survive at a particular position within that environment, it must be different enough from its predecessor to avoid reproducing the behavior that caused the previous failure to adapt. But there must also be enough similar characteristics that allow the agent to effectively interpret the environment. For a company, this means the selected agent must have or be able to acquire effective behavior at all levels between the individual and the organization as a whole. Again, this requires the acquisition and retention of diverse agents.

Information Flow and Non-Linear Phenomena

Sometimes organizations put constraints on communication flow between specific agents or nodes. Organizations with high limitations on information exchange have reduced chances to be exposed to and recognize the opportunity and/or need to adapt to changes in their environment. Agent employees at any level are also deprived of information that would allow them to understand both their circumstances and their alternatives more accurately. These organizations tend to degenerate into rigid patterns of behavior that lead to their destruction.

Other organizations may put poorly thought-through or inadequate filtering on the exchange processes, resulting in information overload. Inappropriate or irrelevant information comes from more sources than can be effectively processed, evaluated, and responded to. These systems are too highly connected. In this case, agent employees easily get overwhelmed by information and/or have difficulty differentiating the important from the inconsequential and the useful from the useless. Employees are forced into random adaptive choices of action because of a lack of guidance on selection criteria. The closer to a peak on a fitness landscape you are, the fewer possible choices take you further "uphill." Therefore random choices are more likely to diminish survivability than enhance it.

High connectivity also implies a high degree of interdependence. When related systems are highly interdependent, a shift in position on the fitness landscape of one creates a greater perturbation or disturbance on all the other related entities. As a result, when one entity tries to improve its fitness or position there may be associated 'costs' imposed on other entities, either within the same system or on other related systems. An example of this in organizations is when employees are denied promotion or a requested transfer because they are regarded as 'irreplaceable' in their current role. Their own strategic advantages are constrained because other agents or systems are unwilling or unable to adapt to the associated landscape shifts. These conditions are representative of what the GDI model calls Fragmentation, leading to disintegration. Agents tend to act in their own self interest, and self-organization tends to create factions rather than maximal behavior for the system as a whole.

There are two aspects of information exchange that increase nonlinearity within the system: the multiplier effect and recycling. The nature of interconnectedness in the system can generate multiplier effects on information and resources. These multipliers can be directly related, but often are indirect, making them difficult to predict, and even to perceive after the fact. They frequently have impact across system levels, affecting stakeholders at other embedded levels. For example, imagine a major producer's decision to outsource customer service call centers offshore, saving significant costs, but changing the nature of agents involved. The direct impact of such a choice will be that information exchange provided to the users (customers calling for service/information) may be unchanged, potentially enhanced (willingness to devote more time to the customer due to lower cost considerations), or perhaps deteriorated (language/cultural obstacles). Additional direct impact will be on the employees or vendors who previously provided that information exchange. Some may be reassigned to other roles. Some may be asked to move to the offshore location to provide support for the new providers. Some may be dismissed and have to find new employment. Either relocation or removal involves a significant shift in these employees' own position on their landscape. Other direct impact will be on competitors to the producer, who now face a different comparative profile concerning their own customer service provision, including a different (probably more competitive) cost factor. An indirect effect occurs for any provider of customer service, who faces a rearranged fitness landscape based upon the level of success for this producer's strategic choice. A higher or lower level of acceptance for offshoring may be created as an acceptable and perhaps preferred alternative both within the producer and customer community.

The other source of nonlinearity in information exchange is recycling, a reiteration of activity that results in the aggregate behavior of a diverse array of agents becoming much more than the sum of the individual agents. The key to this occurring is in fact the diversity within the array of agents. Undifferentiated agents lack different enough perspectives to see sufficient possibility in process iterations. Obviously, a necessary element for differentiated aggregate behavior is an encouragement of reinterpretation and a willingness to hear and evaluate new ideas and approaches that spring from the process. Rule-bound organizations tend to place too many constraints upon agent employees to allow this process to unfold. However, the other end of the spectrum is just as destructive. As discussed in reference to information flow, unbounded differentiation results in inability to take cohesive action. Some boundaries are necessary if activity is to remain differentiated enough to be creative, and at the same time, directed enough to be able to sort the useful from the irrelevant, to maintain an acceptable level of resources expended in unsuccessful experiments, and to recognize wild goose chases.

Diversity throughout the stakeholder system can assist in the creation of one such constructive boundary as long as constructive communication between related agents occurs. This helps define the network and identify the critical interactions, both locally and across systems, placing limitations on major connections. In other words, information is not withheld, but its dissemination has guidance. This implies that assimilation of diverse characteristics is counterproductive. Differentiating characteristics must be recognizable to the various agents within the embedded systems, yet bounded by the common purposes and objectives of each system at its own level. This allows the adaptive processes to select beneficial interactions, and minimize those that are superfluous. In other words, agents with useful identifiers spread, while agents with dysfunctional identifiers cease to exist. For the appropriate information needed to accomplish this to be exchanged, there must be recognized reciprocal benefit between the various embedded system levels, and each level must work at continually refining its system through effective integration of new information. Essentially, diversity within the system is thus optimized, accelerating its benefits by making constructive use of the inherent abrasion that earmarks the presence of diverse agents. This recognition of and interaction between agents at different system levels also promotes the formation of aggregates, or meta-agents (who can exist both inside and outside the boundaries of a given system level) which help distribute and decentralize functionality, and help determine the rules of interaction concerning how information and resources flow. In this way, functioning boundaries allow both diversity to thrive and specialization to occur.

Boundaries, Trust, and the Containment of Anxiety

The dynamics at any level of an organization, even when complex and chaotic, always gravitate towards a well-defined purpose of the organization as a whole because its inherent 'grammar of conduct' informs, motivates and inspires the whole rich spectrum of activities and behavior carried on by the organization. A well-defined and consistently reinforced purpose becomes an attractor whose structure permeates all levels of the organization's internal functioning (divisions, departments, project teams, work groups, individual employees), and is recognized by and creates a bond to the related systems who comprise its environment -- its stakeholders. A purpose that is vague, confusing, or seen as superficial cannot accomplish this. How strong and dependable an attractor these core values are will depend upon how effectively and consistently these core values are articulated and communicated both to internal agents and external stakeholders.

In a truly vital (healthy) organizational system, the true purpose of the system is closely aligned with the values, beliefs, and motivators of its employees (agents), as well as with the purpose and values of other systems in the hierarchy. This alignment makes the organization an Employer of Choice for those individuals, and provides the behavioral attractor that allows differences inherent in a diverse employee population to result in aggregate behavior that is consistent with the common pursuit of that organizational purpose. The purposes of the individual agents working in an organization crucially depend on their personal values, beliefs, and motivations, their individual sense of identity. Their response to challenges and events are inevitably coloured with emotions and psychological response tied to that identity. When trust exists, there is "a safe space for creativity" that invites contribution from diverse agents, and to which those agents respond. When anxiety is contained, agents, although desiring relative stability, are open to changes and evolutionary ideas and willing to apply them in manners that are consistent with what they hold as meaningful and true. They are able to operate at "the edge of chaos" where they are trusted to evaluate new information and to make choices in how to apply knowledge and resources under the guidance of commonly held purpose and limits. This is Vitality in the GDI model, where creative behavior can result in innovation that improves the fitness of the system. In the absence of trust, anxiety runs rampant, and agents either withdraw into safe, conformist behavior, or spin off into factional activity that is directed solely to their own self-interest. Both of these trajectories lead to system death.

Diversity then is essential to effectively extricate value from the nonlinear nature of embedded systems of the business environment. Ideally the business will possess a heterogeneous population of employees and other stakeholders who are both competitive in order to generate multiplier effects, and cooperative, in order to recycle resources. The heterogeneity of these agents must provide constructive linkages to the spectrum of related embedded stakeholder systems, from the most local to the most global, if the business expects to have access to the information and alliances that allow it to be truly competitive within its own fitness landscape.

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