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The Dynamics of Living Systems:
Restoring Health in Individuals, Families and Organizations

Digest of a presentation by Ralph Stacey, Ph.D
Monday, April 26, 1999

Answers the questions:

  • How can we influence our organizations without inadvertendly exercising control over them?
  • What is the role of human relationships in a complex adaptive system?

A Brief History of Control in Organizations

What is a healthy organization?

That’s a tricky question, and any answer we offer is likely to be full of assumptions. That’s because the ways we talk about organizations are influenced by years of theory and thinking that we may not even be aware of. So before exploring what makes an organization healthy, it is valuable to explore what makes an organization.

Early in the 1950s, systems theories came into prominence. Significantly, a branch known as cybernetics emerged. Cybernetics deals with self-regulating systems. Imagine a heating system, in which a person who is outside of the system sets a standard (such as a temperature of 72º) and then allows the system to adjust up and down to maintain that standard.

Herein we may discern a principle that is core to much of engineering: systems are designed to be controlled.This mental model slipped into organizational theory, as well. Review a budgeting or performance appraisal system, and you’ll likely see a cybernetic system at work.

Around this time, there also emerged other ideas, such as systems dynamics and general open systems theory. Again, each focused on control, in which a system works to reach equilibrium around an externally set standard, within a stable environment.

These schools of thought are consistent with the objective-observer idea, in which someone stands outside of a system and controls what goes on within it. This orientation dominates a great deal of academic thinking about organizations.

It also dominated much of the thinking about thinking. People became concerned with developing “thinking machines.” This was borne of the assumption that consciousness emerged solely from the dynamics of the human brain, through the creation of maps and models of the world. In other words, mind arises from the functioning of the brain, separate and apart from relationships with others. Relating to other people only comes after the creation of consciousness; it is not relevant to its creation. Again, this is consistent with the objective-observer paradigm.

An End to Control, A Call for Diversity
Complexity theory can be thought of as the new wave of systems thinking. Gone is the fixation with control. Rather, complexity theory focuses on a biological perspective, and on living systems. In the natural world, the objective-observer paradigm is an alien concept.

One thing that cybernetic systems cannot do is change spontaneously. The heating system in your home and your company’s performance appraisal system operate in the same way today as they did yesterday. Contrast this with human creativity, which is able to produce novelty and variety. So what is the difference that allows some systems to do this?

The answer can be supplied in one word: diversity. Systems change, adapt and produce creativity when:

  • non-average behavior is present;
  • there is non-average interaction at a microscopic level;
  • members of the system are not all the same, and they are interacting in lots of different ways;
  • noise and fluctuations are introduced into the system.

Many organizations seek conformity, sameness, repetition, and stability. But the ability to change and adapt requires diversity and differences in the ways members interract. This is an important new way to think.

Creativity is a product of non-average behavior. That’s why organizations must nurture the mavericks, the subversives, and the “misfits on the margin.”

This creates a paradox (which is, in itself, an important element that exists in adaptive organizations.) The paradox lies in the coexistence of stability and instability, sameness and difference. The loss of any of these elements results in dysfunction. There is a critical level of “misfits” that must be present.

The lesson for organizations is to become comfortable with losing control, and embrace radical improbability. “What do we do when we don’t know what we’re doing?” is a courageous and important questions that organizations must ask.

A Word of Caution about Complexity

As old theories like cybernetics are increasingly replaced with new ones like complexity, it is beginning to generate a lot of interest from organizations. There is an energy and excitement that is similar to the first wave of systems theory in the 1950s.

But be careful. As the discourse grows, it is very easy to lose the radical insights.

Here’s an example. One of the best known illustrations of self-organization is a computer simulation called “Boids”. Boids’ intent is to simulate flocking behavior in birds. But there is an important characteristic of the simulation that most overlook: in the simulation, all of the Boids are the same. Thus, they are only able to produce just one pattern of behavior – flocking.

People often use “Boids” as an example of how a few simple rules can generate very complex behavior. “So all I have to do,” one could conclude, “is find out what the few simple rules are in my organization.” But in order to do this, we have to make some assumptions: What is the behavior should create? Then what are the few simple rules? Then how do we get people to follow them? Before you know it, control has crept back into the scene, and we begin creating another cybernetic model. The jargon may be new, but the model is the same.

Another example: There is much talk about trying to push to the edge of chaos. But again, this requires someone to stand outside of the organization, judge where it is now and where it needs to be, and then give it a nudge – often in the form of an imposed crisis. Again, it’s the same old approach, masked by new vocabulary.

Governing Themes
How do we employ learnings from complexity science without falling into the “control trap?” What is needed is a new understanding of human nature. Answers may come from relationship psychology, which emphasizes the interaction between members of the system.

This prompts some radical new thoughts: what if we thought less about the CEO as someone standing outside and pushing to the edge of chaos... but is, instead, a powerful participant among all the others within a system? The implications are difficult and profound.

When in large groups, Dr. Stacey often conducts an exercise in free-association. He gives his audience one simple instruction: One member begins by calling out a random word, and then another responds by calling out an associated word, and then another responds, and so on.

Just as one might expect, this exercise produces highly unpredictable results as audience members call out words. Sometimes they misunderstand a communication and respond with a word that seems illogical to others in the audience; sometimes two or more members will respond at the same time, causing a divergence in the course of the free-association. No one can guess who will say the first word, and who will respond with the next one.

This is a very simple interaction that has the unique property of being unpredictable. But it is, at the same time, very predictable. The same patterns and dynamics tend to emerge time and again in this exercise.

The point of this exercise is to illustrate self-organization in human activity. Each audience member is an agent in the system, organized by the principle of responding to one another. Themes emerge; misunderstandings prompt new emergent themes. Significantly, the experience is not controlled by a person — rather, it is controlled by themes.

And so it is in the real world of work and relationships. We are governed by themes that organize our experience of being together.

In fact, misunderstanding plays an important role in human systems. In the free-association exercise, misunderstandings created new themes. In our relationships, fundamental misunderstanding is crucial. Listen to the meandering, agenda-free conversation at a dinner party sometime. These largely random conversational systems are governed by emerging themes, based on the fact that there are things we don’t know about each other. If we knew each other perfectly, we would lose this ability to have meandering conversations that lead to discovery.

The Emerging Mind
Where is your mind? Some may conclude that the mind (that is, consciousness and identity) resides in the brain. But organizational psychology suggests that mind arises between us through conversation. Mind is far richer than the emergent phenomenon of individual brains.

Observe a newborn. It is completely linked to the caregiver. Its consciousness can only emerge through a “conversation” of gestures and touch. Only later does the infant’s identity become more self-emergent.

This idea of the mind as a social construction is important to organizations, and leads us back to our original question: What is a healthy organization? It is not a stretch to redefine organizational health as free-flowing conversation. Limited conversation is illness. In fact, the basis of neurosis is pattern; When we explore why a depressed person is depressed, we find that it stems from a very limited repertoire of responses. They ruminate on the same few things continuously. Thus, organizational illness could be defined as a private, silent conversation in which the number of roles is drastically curtailed and the conversation is not very rich.

When the way people talk changes, the organization changes. A healthy group is engaged in free-flowing conversation in which many voices are heard. A sick organization is stuck in repetitive ways with limited voices.

The challenge to organizations that embrace complexity is to shift from mechanisms that control, and begin fostering an understanding of conversation.

About the Presenter
Ralph Stacey, Ph.D., is professor, management and director of the Complexity and Management Centre, Business School of the University of Hertfordshire, United Kingdom. He is also a visiting fellow of Roffey Park management Institute.

He is a consultant to managers at all levels at a wide range of organizations in many countries. His books and articles have been translated into other languages. Over the past six years he has developed a way of understanding life in organizations, using complexity science and group behavior theories.

He started his career as a lecturer in economics at the University of the Witwatersand in South Africa, after acquiring a doctorate at the London School of Economics.

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