Complexity as an engine of innovation

This post was written in conjunction with Carl Lyon of the QoE.

A customer's journey is often made up of both intended and unintended outcomes, but customer experience is 'the real outcome'. Or to put it another way, what actually happened rather than what should have happened. But as complexity increases in large organisations, it is becoming increasingly difficult to identify and control all the variables that can impact on the customer journey.

This issue arose during our March QoE discussion which focused on The Art of Simplicity in large organisations. The engaging two-day event highlighted many factors that can exacerbate the problem of complexity, including technology, employees, vision, acquisitions, and leadership. But if complexity is here to stay, perhaps what is needed is a shift in our perspective to help us tackle the problem from a different angle. If we can view large organisations through a new lens, perhaps we may be able to derive value from complexity and use this to improve customer experience.

The hierarchical model of workplace organisation that emerged in the early 20th Century continues to shape the structure of large organisations. But the suitability of the hierarchical model for an era of hyperconnectivity that has been instigated by the internet and mobile technology is increasingly under scrutiny. It is becoming increasingly apparent that we are attempting to solve complex, 21st Century problems with solutions derived from last century's industrial model.

So how can we take a different perspective? Consider for a moment that a large organisation is not a hierarchy of people, but is instead a collection of networks. This is the perspective put forward by Christopher Vitale, who proposes that in order to cope with a hyperconnected age we need to view our reality as networks of networks. Informed by research on complex systems science, Vitale observes that complex, dissipative systems 'consume energy and turn it into waste, dissipating potential in order to produce ordered complexity' (Vitale, 2015, p.23).

If we adopt this perspective, we can interpret a large organisation as a complex system, dissipating much of the potential of its employees by forcing them to operate under a hierarchical model that is poorly suited to the complexity of the modern world. But if we shift our perspective to view an organisation as a network of networks, then every employee is a participant in a multitude of networks incorporating other people, information, and systems. An organisation consists of networks of employees, information, and systems, and the organisation itself is part of a network of other organisations and systems. In this network-centric paradigm, the actions of the organisation have an impact on the networks both within and outside the organisation.

How does this help? Well, according to complex systems science a complex system also contains a huge amount of 'energetic potential', and this energy has the potential to transform and enrich its immediate environment. If we view a large organisation as a complex system then the implication is that complexity is a positive force, and tapping into the latent creative potential of the network will provide opportunities for creativity and innovation . What is needed is a way to effectively harness the energetic potential of the network in order to drive innovation, and a way to understand those areas of the organisation benefit from complexity (e.g. R&D) and those that may be damaged by it (e.g. customer experience).

Vitale also highlights the principle of 'robustness' in complex systems science, which can be understood as a way to produce more and better forms of growth. Sustainable growth is both an aspiration and a priority for almost every large organisation, and it is therefore possible to argue that achieving and maintaining a state of 'robust complexification' should be a key strategic driver. If we shift our perspective to view an organisation as a complex network of networks, an important aspect of leadership in large organisations then becomes how to achieve and maintain a state of robust complexity. By taking complexity to be an asset consisting of the creative potential residing in all employees, there are significant opportunities to harness this potential in support of the aims of the organisation.

If customer experience is the 'real outcome' of an organisation's efforts, then it is essential for leaders and managers to understand where problems of complexity in their organisation are having negative impact on the customer journey. By viewing the organisation as a network of employees, each containing creative potential and each having a unique insight into specific areas of the organisation, there is scope to mine this wealth of knowledge and use it to improve the customer experience.

Source: The QoE March 2015, Carl Lyon. Written : Tony Reeves, University for the Creative Arts.

A New Year's Day educational message from Seth Godin

I've had an enjoyable break from Twitter over the Christmas break. But having switched on the computer on New Year's Day I came across this thought-provoking video from Seth Godin in which he outlines the reforms he believes are needed for compulsory and post-compulsory education. In questioning the fundamental philosophy which informs current approaches to pedagogy, Godin's observations echo those of Sir Ken Robinson in highlighting the need for a fundamental reevaluation of the educational system.

Why aren't more governments and educational policy makers listening to people like Seth Godin and Sir Ken Robinson? History shows that resistance to change never succeeds in preventing change from occurring. It seems evident that the sooner governments, universities and schools embrace 21st century educational thinking the more likely they are to ride (and potentially profit from) the wave of change. And yet report after report is written highlighting the problem of entrenched views hampering the uptake of new pedagogical approaches (see, for example An Avalanche is Coming, Innovating Pedagogy 2013).

Why is there so much fear of change, particularly in the Higher Education sector which for centuries has been at the forefront of intellectual thought and new knowledge?

We are already entering a post-digital world where ubiquitous access to information should inform a fundamental reevaluation of 19th and 20th century working and pedagogic practices. MOOCs represent the tip of the iceberg in terms of a new view of education, and Thomas Friedman has issued a stark warning to universities that they should strongly consider moving away from a model of 'time served' and towards one of 'stuff learned'. Friedman believes that "increasingly the world does not care what you know. Everything is on Google. The world only cares, and will only pay for,  what you can do with what you know". Those institutions that are able to adapt their provision successfully will most likely lead educational innovation well into the the next decade and beyond.

Seth Godin, Sir Ken Robinson and all those offering an alternative view of education for the 21st century should be congratulated for continuing the march on the ivory towers of educational practice.

Knowledge + knowing = innovation

I've just finished reading a dense yet highly insightful article by Cook and Brown (1999) about the nature of knowledge and its relationship to organisational innovation. Although the article was written in a pre-social media age (hard to imagine now), like any great research it contains powerful insights that are highly relevant in today's world where use of social tools by businesses is growing exponentially. This post is an attempt to interpret aspects of their article and apply it to social business, but I would highly recommend reading the original research (reference at the end of the post).

Cook and Brown argue that there are four different types of knowledge: explicit, tacit, individual and group. Each type of knowledge is distinctly different and each fulfills a function that the others cannot.

• Explicit knowledge can be understood as "knowledge that can be spelled out or formalised"
• Tacit knowledge is associated with skills or know-how
• Individual knowledge is that stored in the minds of individuals
• Group knowledge constitutes the 'body of knowledge' possessed by a specialist group or community of practice

 
'Knowledge' and 'Knowing' are also understood as two separate concepts, with each enabling the other. Knowledge can be viewed as something that individuals or groups possess, and Knowing constitutes the application of this knowledge in a form of action by groups and individuals interacting with each other and the physical world. In this sense, Knowledge is positioned as a tool of Knowing with each enabling the other.

The key aspect of this interpretation is Cook and Brown's belief that the interaction between knowledge and knowing constitutes a powerful driver of innovation in organisations. Of particular significance is their argument that "harnessing this innovation calls for organisational and technological infrastructures that support the interplay of knowledge and knowing" (1999: 381).

Why is this relevant in the age of social media?

The use of social media tools in organizations can be seen as constituting precisely this sort of infrastructure, as these tools enable employees and managers to access, manage and make use of the "intellectual capital" of the organisation. Implementing a means to access the tacit and explicit knowledge that resides in both individuals and groups enables managers to tap into the creative potential of the workforce. This rich knowledge can then be applied to help the organization generate innovative ideas, products or solutions. The ease with which organisations are able to tap into this creative potential is likely to increase their competitive advantage and ultimately render them more innovative.

The recent report by the Altimeter Group about the Evolution of Social Business suggests that there is a distinct gap between businesses that are implementing a social media strategy and those that are 'deeply integrating social media and social methodologies throughout the company to drive real business impact' (full report below). The research indicated a truly social business has an approach to social which:

1. is clearly aligned with strategic business goals of an ogranisation
2. has organisational alignment and support that enables the execution of that strategy.

After surveying nearly 700 social media professionals and executives the research also found that only 34% of businesses believed that their approach to social media was connected to the goals and objectives of the business. And more worryingly, the report uncovered that 'half of all executives are not informed, engaged or aligned with their company's social media strategies in any capacity'.

There is a clear need for senior executives in businesses and organisations to understand the competitive advantage that social tools can leverage. The alignment of social tools with strategic objectives can significantly increase the potential for an organisation to harness the rich creative potential of its workforce. Using social tools, organisations can access the 'knowledge' residing in individuals and groups and turn it into the 'knowing' that can bring real innovation.


References

Cook, S. D. N. and Brown, J.S. (1999) Bridging Epistemologies: The Generative Dance Between Organizational Knowledge and Organizational Knowing. Organisation Science, Jul/Aug 1999, Vol. 10, No. 4. pp.381-400.

Li, C. and Solis, B. (2013) The Evolution of Social Business; Six Stages of Social Business Transformation. Altimeter Group 

The Evolution of Social Business: Six Stages of Social Media Transformation, by Charlene Li and Brian Solis from Altimeter Group Network on SlideShare