Innovation dynamics and organisational structures

Author and recognised innovation dynamics authority Charles Ehin explains why knowledge workers who want to expand the innovative capacities of their organisations need to pay much closer attention to human nature.

For the past 20 years or so I have been exploring the fundamental interplay of a number of individual and group associated behavioural factors and how they relate to the expansion or contraction of the innovative capacity of an organisation or a social network.

Initially, I took an in-depth look at anthropology and paleontology. What I discovered was that our hunter-gatherer ancestors had gotten along quite well for 99% of the roughly 200,000 year existence of our species without the use of any rigid hierarchical social structures. The irony is that this significant fact is seldom if ever talked about in business schools or in company boardrooms.

In Unleashing Intellectual Capital, I delved into anthropology, sociobiology and evolutionary psychology. I then examined many of the latest findings in molecular biology, social neuroscience, and complex adaptive systems, which I included in Hidden Assets and The Organizational Sweet Spot. What has become quite clear to me is that biological entities, including humans, cannot and should not be fully controlled. They are emergent and constantly evolving complex adaptive systems.

Allowing innovation to thrive

For innovation to thrive, people need to be immersed in flexible biophysical and social environments. Consequently, it shouldn’t come as a great surprise that traditional management concepts seldom work any longer, especially when it comes to knowledge workers. This is mainly due to the continued use of cause-and-affect theoretical constructs. But people are not machines; they are organic, self-organising entities, from their DNA molecules to their interactions with the external world.

If we want to expand the innovative capacities of our organisations, we need to pay much closer attention to human nature. Reinventing traditional methodologies will not help us advance any further, even if they may have given us some success in the past. The new science of the brain and DNA is helping to rewrite not only the origins but also the innate behaviour of humans. From a social systems perspective, that’s where our attention should also be.

Knowledge workers, as opposed to industrial age employees, are an investment rather than an expense because they carry their own means of production (their smarts) with them. Hence, they need to be treated as partners or associates and not as hired hands. As partners, knowledge workers are more likely to share their tacit knowledge (knowledge grounded in personal experience and innate pre-dispositions) with the people around them.

Tacit knowledge is a dynamic resource that is indispensable in the innovation process. People are seldom aware of exactly what unrelated knowledge they possess until confronted with a problem or an opportunity. Therefore, for tacit knowledge to properly emerge, people must first be surrounded by a supportive environment.

Emerging tacit knowledge

As such, we need to develop organisations that continually nurture the collaborative best from all members. The bottom line is that tacit knowledge can’t be “managed out” of people, it must be allowed to emerge. In the process, the more people are given a voice and implicit control in managing a venture, the more the informal networks (which are present in every entity) will begin to function more in the open and start making appropriate connections with other emergent groups.

Most importantly, under the right conditions, the informal components will begin to overlap more and more with the formal elements of an organisation. This overlapping spot, in essence, represents the area where the formal and informal systems of an organisation have reached "a meeting of the minds” over the fundamental goals, policies and processes. 

What is particularly noteworthy about this agreement is that it is not reached through any sort of formal negotiation. Rather, it’s evolving. Essentially, it is in the sweet spot where most of the productive work and innovation takes place.

I have labelled this place of common agreement the “shared-access domain.” More fittingly, this overlapping area is best referred to as the “organisational sweet spot.” Thus, the sweet spot or overlap is a very desirable state for any enterprise. It’s a natural outgrowth of day-to-day interactions or “self-organisation” in the “un-management” realms of a venture.

Un-management

Un-management is the term for a new model of management that I coined in 1995 while participating in a discussion group at an Academy of Management conference in San Jose, California. It refers to the informal side of every organisation that can’t be managed. Un-management allows informal networks to flourish and work openly throughout an organisation through self-managing processes, unlike traditional management in which artificial top-down management methods restrain co-evolving relationships and innovation.

Un-management is based on the concept that human productivity is at its peak in naturally occurring networks and relationships, as opposed to within formal systems where people are stifled by bureaucracy and not allowed to work openly with their counterparts and peers.

Further, the model is founded on the latest research about human nature contrary to running organisations based on an industrial age machine metaphor. Un-management permits relationships to flourish in the open and this ultimately helps an organisation achieve maximum creativity, innovation and productivity.

The sweet spot

Every organisation has a sweet spot or multiple sweet spots. In most, however, the sweet spot is rather small. The reasons for this are twofold. First, many firms still adhere to traditional top-down, tightly controlled management models that worked relatively well in the industrial age but suppress informal communications. That, unfortunately, is a death knell in today’s knowledge age where we are so dependent on continuous sharing of ideas and information.

Second, few managers pay attention to the activities of informal networks present in every organisation. That’s regrettable since most of the work and innovation is generated by these emergent systems. The lack of attention that the informal side of an enterprise gets can be mostly blamed on the absence of such “invisible items” being tracked on formal financial statements, and the fact that the informal networks can’t be managed.

We need to keep in mind that at the sweet spot most activities are based on reciprocal relationships, valued differences, and respected individual identities. Emphasis is placed on constant examination and experimentation that may lead to more challenging and rewarding networked processes.

Constructive dissent

The pursuit of creativity and innovation is enhanced through the persistent encouragement of constructive dissent in an atmosphere of mutual trust. Further, interconnectedness of all proposed actions and continuing activities are diligently scrutinised to ensure effective common results.

One of the great attractions and positives of working in a sweet spot is that everyone is actively engaged in assuring that all activities, resources, and rewards are “equitably” managed by all participants.

It should be clear that when traditional approaches consistently fail to bring success, more pragmatic approaches need to be created and applied. Research shows that multiple perspectives consistently lead to fresh and more insightful solutions than by simply putting new faces on old, failed concepts. Ultimately, it’s all about knowing how to confront the unavoidable realm of “social emergence” and supporting the expansion of organisational sweet spots.