Esko Kilpi on Interactive Value Creation

The art of interaction, the design of digital and the science of social complexity

Tag: Marcial Losada

Complexity

The way we want to make sense of the world around us often has to do with causality. The question we ask is what caused “it” to happen. The mainstream approach is that an arrow, or arrows, can be drawn. There is a variable, the “it”, that happened, that is now to be explained. In scientific study this variable is regarded as dependent. An independent variable, or variables, that cause it are then sought. Causality means that X causes Y. If there is more X there will also be more Y. This is the if-then model of management. In organizations, a familiar explanation for success is that a particular manager or a particular culture caused it.

But there is something significant happening today. Scholars are increasingly pointing out the fact that this view of the relationship between cause and effect is much too simplistic and leads to a very limited or even faulty understanding of what is really going on.

Cybernetics recognized a much more complicated causality. In this kind of system the arrows, the links, between cause and effect can be distant in terms of time or place. The system can be highly sensitive to some changes but very insensitive to some others. For the first time, it was understood that it is a non-linear world.

Complexity challenges the assumption of earlier systems theories that movement in time can be predictable in the sense that X causes Y, or that the movement follows some archetypes. The modelling differs significantly from all previous systems models.

Complexity means a different theory of causality.

The most important insight is that it is often not possible to identify specific causes that yield specific outcomes. Almost indefinite number of variables influence what is going on. The links between cause and effect are lost because the tiniest overlooked, or unknown, variable can escalate into a major force. And afterwards you can’t trace back, you can’t find the exact butterfly that flapped its wings. There is no trail that leads you to an independent variable.

The future of a complex system is emerging through perpetual creation. Complexity is a movement in time that is both knowable and unknowable. Uncertainty is a basic feature of all complex systems. It is a dynamic in time that is called paradoxically stable instability or unstable stability. Although the specific paths are unpredictable, there is a pattern. The pattern is never exactly the same, but there is always some similarity to what has happened earlier.

In the end it is about the combination and interaction of the elements that are present and how absolutely all of them participate in co-creating what is happening. None of the elements cause the end result independently. From this standpoint a lighted match does not cause a fire. Rather, the fire took place because of a particular combination of elements of which the lighted match was just one. In the same way, a rude remark does not start a fight. The argument starts as a combination of an offensive remark and a coarse response.

The big new idea is to reconfigure agency in a way that brings complex relationships into the center. The task today is to see action within these relationships.

Complex relationships cannot be understood through spatial metaphors such as process maps or network charts. Unhelpful or wrong models and metaphors are often a big obstacle to moving our thinking forward after the technological constraints are gone.

We need to move towards temporality, to understand what is happening in time.

An organization is not a whole consisting of parts. There is no inside and outside. An organization is a continuously developing or stagnating pattern in time. Industrial management was a particular pattern based on specific assumptions about communication, causality and human psychology.

Recent developments in psychology/sociology have shown that human agency is not located or stored in an individual, contrary to what mainstream economics would have us believe. The individual mind arises continuously in communication between people.

The focus of industrial management was on the division of labor and the design of vertical/horizontal communication channels. The focus should now be on cooperation and emergent interaction based on transparency, interdependence and responsiveness.

Looking at communication, not through it, what we are creating together.

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Thank you Ralph Stacey, Ken Gergen, Doug Griffin, Jim Wilk, Marko Ahtisaari and Katri Saarikivi

Resilience, rationality and how we make decisions

We have been studying companies’ connections and disconnections for more than twenty years and have worked inside a huge number of them. Across all this research, common themes have emerged and intensified during the past few years: good communication in the era of the Internet and the new interactive tools does not mean any more that companies should listen carefully to their customers or that leaders should talk clearly with their subordinates. The linear view of communication, the movement of messages or sharing of content between people is giving way to a totally new understanding of what interaction, and work, are all about.

The first emerging theme is that communication is in fact a process of continuous coordination and knowledge creation. Knowledge is not shared as contents, but arises in action. Knowledge is never transmitted from one mind to another. It is a change from the movement of messages to a joint movement of thought. The future and viability of an organization depend on this process.

Economics still makes the assumption that individuals, the agents, as they are called, operate autonomously, separately from the influences of others. When choosing something, making a decision from a set of alternatives, the agent compares the attributes of the alternatives and selects the one that corresponds to her preferences. It is a world where independent individuals carefully weigh up the costs and benefits of any particular course of action.

However, scientists have emphasized the limits of our understanding. An important point is that these limits apply to everyone. They apply to politicians, to central bankers and to top executives of multinational companies. John Maynard Keynes once wrote that we have, as a rule, only the vaguest idea of the consequences of our actions. Herbert Simon and Stuart Kauffman on the other hand have argued that the number of future paths open to us at any point in time is so vast that it makes no sense at all to speak of the best or optimal decision.  But we still think the world works like a predictable machine operated by rational agents

Behavior that does not follow an economist’s definition is often called irrational, but it may be that in a world of ubiquitous networks, a proliferation of choice and an abundance of information, the economic definition of rationality has itself become outdated and irrational.

We need a new model of rational behavior and a new understanding of how we make decisions. We need a new decision model!

The second emerging theme is that the assumption that people make choices in isolation, that they do not adopt opinions simply because other people have them, is no longer sustainable. The choices people make, their buying decisions and their political views, are directly influenced by other people. That is to say that we construct our world together in communication. Network scientists such as Duncan Watts and Mark Granowetter have proved that the world comes to be what it is for us in our relationships. In the end it all depends on the company you keep and the conversations you have.

This leads to the importance of emphasizing relations instead of reductionism and separations. Reductionism means that the organization is understood as being split from its environment and one functional team is seen as being separate from another function. The worst mistake we make as a result of reductionist thinking may be that we assess and reward employees as if they were disconnected from other employees.

Links and communication are at the centre of organizational life. Depending on the quantity of interdependent links and the quality of communication, the organization lives or dies. Work is interaction between interdependent people.

The third emerging theme is that communication creates patterns. Words become what they are through the responsive actions of the people taking part. The relational view means in practice that if a conversation goes badly, it is always a joint achievement. On the other side, a conversation can only be successful if both participants join in and make it so as Ken Gergen points out. In management, it means that there is nothing one person alone can do to be a good manager. Good ideas don’t count as good ideas, if other people don’t treat them as such.

New leadership is about an awareness of creative and destructive patterns and having the ability to influence what is going on. In a creative pattern, the participants build on each other’s contributions. The conversation, thinking and action are in a process of forward movement.

Destructive patterns are the most harmful in terms of organizational viability. These patterns don’t contain forward movement but running in circles. People and organizations get stuck! People slow down in bitterness and silence, or even to the breaking of the link. The most destructive patterns often begin subtly, but unless they are worked with soon, not only will relations suffer but the whole network will deteriorate.

Being aware of the patterns includes being aware of the roles that we play. Whenever we speak, we do two things: we subtly define ourselves and define the other. Does the speaker in a company context define herself as one who can talk down to others or as an equal? What we say is important to the viability of the organization but the way we say it can be equally important. Talking down or talking up between people creates an asymmetry that leads to bad decisions and inefficient movement of thought.

The machine metaphor meant that we tended to think that the people “above” us have significant power. They are in control. We thus talked up to them. They should decide. They should do things for us because they were the ones who were responsible, not us. Knowing that they are not in control raises the question of a need for a new distribution of responsibility. Bottom-up as a metaphor is as harmful as top-down when the common goal is resilience.

There is no aspect of work or leadership that takes place outside the realm of communication. Human agency is not located or stored in an individual, contrary to mainstream economics. The individual mind arises continuously in communication between people.

Being skilfully present in the forward movement of thought and relational action is the new meaning of being rational.

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Thank you Ralph Stacey, Doug Griffin, Ken Gergen, Marcial Losada, Katri Saarikivi and Paul Ormerod

Links: “Resilient Performance in an Age of Uncertainty” “Possibilianism” “Stanley Milgram and the uncertainty of evil” “The fluid core“. “On functional stupidity and trust“. “Tulipmania” “Neuroeconomics

Business and complexity

Up to now, we have seen the world around us as systems that, we thought, could be described and understood by identifying rational causal links between things: if I choose X, then it will lead to Y. If, on the other hand, I choose A, it will lead to B. We are accustomed to drawing boxes and arrows between those boxes. We try to model the world as predictable processes based on knowing how things are and how they will be. We want to be certain, and we think we are.

Management thinking is based on the sciences of certainty. The whole system of strategic choice, goal setting and choosing actions to reach the given goals in a controlled way depends on predictability. The problem is that this familiar causal foundation cannot explain the reality we face. Almost daily, we experience the inability of leaders to choose what happens to them, to their organizations – or to their countries. Things may appear orderly over time, but are inherently unpredictable. We live in a complex world.

Complex systems are, as their name implies, hard to understand. Social systems, like organizations consisting of people, are accordingly complex and hard to understand. There is no linearity in the world of human beings. There are no arrows and people are not boxes, or fit inside of boxes. This is why our thinking needs to develop from the sciences of certainty to something more applicable, the sciences of uncertainty, the sciences of complexity.

Complexity refers to a pattern, a movement in time that is, at the same time, predictable and unpredictable, knowable and unknowable. Chaos theory explains how these patterns form. A parameter might be the flow of information in the system. At low rates, meaning no input or more of the same input, the system moves forward displaying a repetitive, stuck behavior. At higher rates and more diversity the pattern changes. At very high rates the system displays a totally random behavior. The pattern is highly unstable. However, there is a level between repetition/stability and randomness/instability. This level where simultaneous coherence and novelty are experienced is called the edge of chaos.

Classical physics took individual entities and their separate movement (trajectories) as the unit of analysis in the same way we have analyzed and rewarded individuals. Henri Poincaré was the first scientist to find that there are two distinct kinds of energy. The first was the kinetic energy in the movement of the particle itself. The second was the energy arising from the interaction between particles. When this second energy is not there, the system is in a state of non-dynamism. When there is interactive energy, the system is dynamic and capable of novelty and renewal.

Interaction creates resonance between the particles. Resonance is the result of coupling the frequencies of particles leading to an increase in the amplitude. Resonance makes it impossible to identify individual movement in interactive environments because the individual’s trajectory depends more on the resonance with others than on the kinetic energy contained by the individual itself.

We are the result of our interaction. We are our relations.

The conclusions are important for us: firstly, novelty always emerges in a radically unpredictable way. The smallest overlooked variable or the tiniest change can escalate by non-linear iterations into a major transformative change in the later life of the system.

Secondly, the patterns are not caused by competitive selection or independent choices made by independent agents. Instead, what is happening happens in interaction, not by chance or by choice, but as a result of the interaction itself.

The new social technologies have the potential to influence connectivity and interaction as much as the sciences of complexity are going to influence our thinking. The task today is to understand what both social business and complexity mean. The next management paradigm is going to be based on those two, at the same time.

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John Hagel on “harnessing the power of randomness” and “resilience

Emergence and self-organization

Many people say that open source software developers have the most efficient ecosystems for learning that have ever existed. What is it, then, that is so special about the way developers do things? Is there something that could act as a model for the future of work, or the future of education?

What takes place in open source projects is typically not the result of choices made by a few (powerful) people that others blindly implement. Instead, what emerges is the consequence of the choices of all involved in the whole interconnected network, “the connective“, as Stowe Boyd puts it. What happens does not follow exactly a plan or a design, what happens emerges. It is about the hard to understand process of self-organization.

We still don’t quite understand what emergence and self-organization mean. The problem is that we believe that the unit of work is the independent individual. Self-organization is then thought to mean that individuals organize themselves without the direction of others. People think that it is a form of empowerment, or a do-whatever-you-like environment, in which anybody can choose freely what to do. But connected people can never simply do what they like. Cooperating individuals are not, and cannot be, independent. People are interdependent.  Interdependence means that individuals constrain and enable each other all the time. What happens, happens always in interaction and as a result of interaction.

According to the present approach to management, planning and enactment of the plans are two separate domains that follow a linear causality from plans to actions. From the perspective of open source development, organizational outcomes explicitly emerge in a way that is never just determined by a few people, but arises in the ongoing local interaction of all the people taking part. For example GitHub “encourages individuals to fix things and own those fixes just as much as they own the projects they start”.

What emerges is, paradoxically, predictable and unpredictable, knowable and unknowable at the same time. This does not mean dismissing planning, or management, as pointless, but means that the future always contains surprises that the managers cannot control. The future cannot be predicted just by looking at the plans.

Emergence is often understood as things which just happen and there is nothing we can do about it. But emergence means the exact opposite. The patterns that emerge do so precisely because of what everybody is doing, and not doing. It is what many, many local interactions produce. This is what self-organization means. Each of us is forming plans and making decisions about our next steps all the time. “What each of us does affects others and what they do affects each of us.”

No one can step outside this interaction to design interaction for others.

An organization is not a whole consisting of parts, but an emergent pattern in time that is formed in those local interactions. It is a movement that cannot be understood just by looking at the parts. The time of reductionism as a sense-making mechanism is over.

What we can learn from the open source ecosystems is that organizational sustainability requires the same kind of learning that these software developers already practice: “All work and learning is open and public, leaving tracks that others can follow. Doing and learning mean the same thing.”

The biggest change in thinking that is now needed is that the unit of work and learning is not the independent individual, but interdependent people in interaction.

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Thank you David Weinberger, Ken Gergen, Ralph Stacey and Doug Griffin

More on the subject: the GitHub generation, Sugata Mitra. Video: “Knowledge in a MOOC” Steve Denning on complexity. The mundanity of excellence.

Neuroscience, The Internet and Leadership

The structures of the brain and the Internet look the same. In the brain there are neurons that link as a result of being active at the same time. This firing together creates a connection, a wiring together, that increases the strength of the connection. On the Internet there are wired servers and people that are linked in temporal interaction, sometimes as a result of being inspired and interested in the same topic, firing together. This short-term communication sometimes leads to a longer-term relationship, increasing the strength of the connection. New connections are formed, connections get stronger and connections are lost.

It is not uncommon to think that knowing is something that goes on in the brain. Yet the evidence that it is really so is not quite clear. Some scientists have expressed doubts. The mind, they have argued, is not a thing to which a place can be allocated. Intellectual life is essentially social and interactive, they say. Life is carried on through communication between people. These researchers claim that interactions are not secondary by-products of thinking. They are the primary sites of that activity.

We often think of individuals as independent and self-contained. The view suggested here sees individuals as interdependent nodes of the complex networks they form interacting with others and co-creating themselves and the reality in which they participate.

According to Cathy Davidson, attention blindness is the fundamental structuring principle of the brain. Attention blindness is also the fundamental structuring principle of our society. We see and understand things selectively.

The opportunity lies in the fact that just as we don’t all select the same things, we don’t all miss the same things. If we can pool our insights we can thrive in the complex world we live in.

Amyarta Sen has written that wealth should not be measured by what we have but what we can do. As we engage in new relationships we are creating new potentials for action. Every human relationship, every connection, serves as a model for what is possible. Within any relationship we are in the process of becoming. Each relationship will also bring us into being as a certain kind of person creating a huge repository of potentials. What social technologies are making possible is a much, much richer repertoire than what we were used to before the Internet.

The dominant ways of thinking about the world have their origins in Newtonian mechanics in which the universe was simply the sum of its independent parts. At the moment, this part – whole thinking is being directly applied to the ways we think about leadership. Interdependence plays a minor role and anyway it is seen as the result of a deliberate choice. The Populist political thinking follows the logic that we can choose not to be interdependent.

The old ways of understanding human behavior are not up to the task any more. In contrast to Newtonian traditions, the science of social networks and modern neuroscience offer an entirely new way of understanding the fundamental interdependence of human beings and the human society.

There can be no change without changes in the patterns of communication. Organizations of any kind, no matter how large or how small they are, are continuously reproduced and transformed in the ongoing interaction. These patterns are highly correlated with performance.

In this way of thinking, we leave behind the idea of the self-governing, independent individual for a different notion, of interdependent people whose identities are established and developed in complex interaction with each other.

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The management of the social business

The division of labor reduced organizational effort and the cost of work in factory production. The division of labor also increased the quality of work through specialization. This led managers to focus on the efficiency of activities that were separated from other activities. Organizational design was seen as the planning and execution of a collection of independent, but connected jobs forming the workflow system.

Connections were based on top-down command-and-control and horizontal, sequential processes. In both cases the action of one part was meant to set off the action of another. Interaction was understood as one-way signals, a system of senders and receivers, a system of causes and effects.

In the cause-and-effect model of communication a thought arising within one individual is translated into words, which are then transmitted to another individual. At the receiving end, the words translate into the same thought, if the formulation of the words and the transmission of those words are good enough.

Physical tasks could be broken up in a reductionist way. Bigger tasks could be divided by assigning people to different, smaller and fairly independent parts of the whole. For intellectual tasks, it is not possible to find independent parts because intellectual tasks are by default linked and interdependent, creating a totally different work environment. In this new work, communication is not talking about work, but work is communication between people.  This is why a social business follows a very different model of causality.

In this model of complex causality, communication takes the form of a gesture made by an individual that evokes a response from someone else. The meaning can only be known in the gesture and response together. If I smile at you and you respond with a smile, the meaning is friendly, but if you respond with a cold stare, the meaning may be contempt. Gestures and responses cannot be separated but constitute one act. Neither side can independently choose the meaning of the words or control the conversation. Thus you can never control communication.

The cause-and-effect model of management presumes, accordingly, that leadership potential resides within an individual person, who is the cause. From a social business standpoint the individualistic view is fundamentally misleading. One cannot be inspiring or energizing alone. These qualities are co-created in an active process of mutual recognition. An inspiring person is only inspiring by virtue of others who treat her this way. A good decision is only good if there are agreeable people around. Mutually recognizing and mutually supporting relationships are the sources of progress. Actions always emerge in a network of relationships – in co-action instead of cause and effect.

Any higher-value activity involves complementary and parallel contributions from more than one person or one team. Instead of division of labor and the vertical/horizontal communication design, the managerial focus should now be in synchronous co-action and enriching interaction. Communication does not represent things in the world. It brings people and things into being.

Social businesses are about interdependent people working in complex interaction

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Twitter, Facebook and management

Emotional contagion is a fact of life. It means that our moods and even physical health are created in interaction with other people. We tilt either to the positive or the negative as a result of our relations, and the further relations, the people that we relate with have. It is a chain that goes far beyond the horizon. This is why we can no longer see our minds as independent and separate but as thoroughly social. Our mental life is co-created in a larger and larger interconnected network. What we have called the individual mind is something that arises continuously in relationships between people.

Our social interactions also play a role in shaping our brain. We know now that repeated experiences sculpt the synaptic connections and rewire our brain. Accordingly, our relationships gradually frame our neural circuitry. Being chronically depressed by others or being emotionally nourished and enriched has lifelong impacts.

Mainstream thinking sees the social in social business as a platform or a community, on a different level from the individuals who form it. The social is seen as separate from the individuals.

The approach suggested here follows a different reasoning and sees individuals as social. Both the individual and the social are then about interaction, where the individual is interaction inside and the social is interaction outside. The inside and outside cannot be separated or understood separately.

Interaction starts with recognition. It is about granting attention to others and making room for them in our lives. Being recognized has tremendous significance. People in traditional companies were often stuck in narrow, repetitive patterns of communication that provided them with numbing, repressive and even neurotic experiences.

Leading and following in the traditional corporate sense have seen the leader making people follow him through motivation and rewards. The leader also decided who the followers should be.

When seen through the logic of social media, leading and following have a very different dynamic. Leading in this new social business sense is not position-based, but recognition-based. People, the followers, also decide. The leader is someone people trust to be at the forefront in an area which is temporally meaningful for them. People also recognize as the leader someone who inspires, energizes and empowers them.

Another huge difference from traditional management thinking is that because of the diversity of contexts people link to, there can never be just one “boss”. Thus, an individual always has many leaders that she follows. You might even claim that from the point of view taken here, it is highly problematic if a person only has one leader. It would mean attention blindness as a default state.

Following is at best a process of active, creative learning through observing and simulating desired practices. Leading is doing one’s work in an open, inspiring and transparent way. Leading is engaging with people and being reflective. Patterns of recognition and patterns of communication are the most predictive activities there are in forecasting viability, agility and also human well-being.

Identity is a pattern in time. The individual and the social are born, and form one another at the same time. You can’t add a social layer to what you do, or to your IT systems – you are social!

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Thank you Ralph Stacey, Doug Griffin, Ken Gergen and Dian Marie Hosking

More: “The idea of following in the age of Twitter

Markets, networks and management

The claim is that the best way to understand complicated systems is to investigate the workings of each of the parts. If a car does not start, the mechanic looks for the problem and finds a dead battery. In a similar way a doctor finds a wounded muscle. The idea is that the best way to understand life is to investigate the workings of the parts separately from those of other parts.

In the economic world, the concept of markets is based on the same idea: autonomous sellers and buyers engage in discrete transactions where each agent is independent from the other agents and each transaction is separate from other transactions. The unit of analysis is the individual agent.

Network scientists have recently made very different claims. They say that all human systems are connected and that connected systems cannot be understood in terms of isolated parts. The study of isolated parts offers little help in understanding how the parts work in combination and what emerges as the result of network connections. The notion of emergence is central. Their aim is to discover emergent patterns: is it really so that individual greed turns into a pattern that can be called public good, as proponents of free markets have suggested following the rhetoric of Adam Smith?

The suggested unit of analysis is now communication and emergence, not entities.

This changes many of the beliefs we have taken for granted. The first change deals with the assumption of a knowing individual, the basic idea of Cartesian philosophy. The individual was understood as having a knowing mind. Individuals were thus treated as if they possessed properties such as expert knowledge. On the bases of her personal properties the knowing individual is then understood as the designer and controller of an internal and external world.

The perspective of network science views knowledge as socially created and socially re-created not as stuff of the mind that can be shared and stored by individuals.  Knowing is a process of relating. From the network-based, relational perspective knowing is viewed as an ongoing and, never-ending process of making meaning in communication.

Management literature typically emphasizes individuals and locates explanatory power in their personal properties. Leaders are the sources of motivation, control and direction. The manager’s perspective is taken for granted as setting the limits of action and what is thought of as right or wrong.

Management theory is based on the same Cartesian assumptions of the self as subject, the other as object and relationships as influence and manipulation. This is why the present management thinking severely restricts what is thinkable and doable in the world of networks.

The potential of social media cannot be realized without a very different epistemological grounding, a relational perspective. Independently existing people and things then become viewed as co-constructed in coordinated networked action. Accordingly, the role of management is different, opening up new possibilities: power in networks is about “power to” or “power with”, and not “power over”.

The emergent pattern changes when the local interactions change. Self-interest in the network economy looks different from self-interest in the market economy; individual success is likely to take place through enriching relationships and being part of networked interaction aiming to facilitate both the individual and the collective effort.

Cooperation is the new competition.

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Thank you Dian Marie Hosking for great conversations

More: Reid Hoffman interview.

Christmas Letter

2011 was a year of major breakthroughs. The creative economy is here and looks very different from what we have been used to. I try to sum up some of the most important findings of the year.

The industrial logic was most vividly captured in the idea of the value chain. Value creating activities were sequential, unidirectional and linear. In the model, value was not really created but added step by step. The output of one task was the input of another.  The image of work was the assembly line, meaning that work could be fragmented and individual performance goals could be set for each worker. The world was all about people and boxes separated from one another.

Physical tasks can be broken up in a reductionist way. Bigger tasks can be divided by assigning people to different smaller parts of the whole. For intellectual tasks, it is much harder to find parts that make for an efficient division of labour. Intellectual tasks are by default linked and complex.

Reductionism does not work any more.

Knowledge workers are often put in a position where they have to negotiate some understanding of what they face. The same event means different things to different people. The cognitive opportunity lies in the fact that as we don’t all select the same things, we don’t all miss the same things. If we can pool our insights in a creative, enriching way we can thrive in the complex world we live in. The challenge is that people often treat the existence of multiple views as a symptom of a weakness and conflict rather than as an accurate and needed sign of uncertainty.

Higher performance occurs through the combination of different perspectives and supportive, enriching communication.

Social interactions also play a role in shaping our brain. Repeated experiences sculpt the synaptic connections and rewire the brain. Accordingly, our relationships gradually frame the neural circuitry. Being chronically depressed by others or being emotionally nourished and enriched has lifelong impacts. Our mental life is co-created in an interconnected network. The human mind is not located and stored in an individual. Rather, what we have called the individual mind is something that arises continuously in relationships between people.

Supportive, energizing and enabling patterns of interaction have proven to be the most important explanation behind creativity and business success. The quality of action is always constrained/enabled by the quality of the interaction. The lines between the boxes matter more than the boxes! Communication either accelerates or slows down. Communication either creates value or creates waste. Communication either creates energy and inspiration or demeans and demotivates.

Communication forms much more than informs.

What is now needed is to unlearn the reductionist organizing principles that are still the mainstream. Knowledge used to be understood as the internal property of an individual. Today knowledge should be seen as networked communication.

Work is interaction between interdependent people and the network is the amplifier, and at best a supportive and enriching enabler.

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Networked thoughts and networked emotions

Since our individual views are always biased and since we cannot experience everything ourselves, other people become the co-creators of information, experience and meaning. Relationships, connections with others, create a networked way of knowing.

Because of more and more specialized, narrow skill sets, new ways of doing things with new definitions are emerging. Nobody can be successful without supporting contributions. One new role definition coming from Barry Nalebuff and Adam Brandenburger is a “complementor”. A complementor is not the same as a supplier. The connection is based on a non-hierarchic, voluntary network relationship, not the hierarchic value chain.

Complementary contributions may be the most important explanation of business success today. A classic example of complements is computer hardware and computer software. The greatest hardware engineers are in dire straits without the greatest software programmers. Though the idea of complements is most apparent in ICT, the principle is universal: you can never have in-house all the specialized skills you need.

A complement to an offering is another offering that makes it more attractive. People value sausages more when they have mustard. Because work is specialized, it does not pay to try to make both. The new strategic imperative is to identify complementors and to be inviting to them. To be competitive, is to be selfishly collaborative.

In the world of complementary competences, information becomes a process of continuous iteration and networked negotiation. Information networks are the architecture of work and a valuable, shared resource making the interactive movement of thought possible. These networks are the new commons.

Sociologists call such shared resources public goods. A private good is one that the owners can exclude others from using. Private has been valuable and public without much value during the era of scarcity economics. This is now changing in a dramatic way. On the new commons people with many ties and many complementors are better informed and have more signaling power, while those outside the commons and with few ties may be left behind. This may even be the new digital divide.

Network inequality creates and reinforces inequality of opportunity.

Emotional contagion is a fact of life. It means that not only information but our moods and even physical health are created in interaction with other people. We tilt either to the positive or tilt to the negative as a result of our relations, and the further relations, the people that we relate with have. It is a chain of contagion that goes far beyond the horizon.

We could, in theory, make an inventory that evaluates the “richness” of our relationships. My friend Marcial Losada has made breakthrough findings on interaction. The thought-provoking model he has created, which is based on decades of research, has three variables and three parameters. The variables are inquiry-advocacy, positivity-negativity, and other-self or external-internal orientation. The three parameters are connectivity, which is the critical control parameter, negativity bias and resistance to change.

According to Marcial, people are most successful when they are well connected, positive, and are able to balance external vs. internal orientation as well as inquiry vs. advocacy. John Gottman on the other hand, has found that in an enduring, happy relationship, a couple experience five times more positivity than negativity in interaction. If we take the work of Nalebuff/Brandenburger, Losada and Gottman seriously, as we should, it would mean that there is a golden mean for any ongoing relationship in our lives.

Organizations are patterns of relating between people. The critical success factor for a social business is to understand that we share feelings much more than we share information.

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Thank you Barry Nalebuff, Adam Brandenburger, Marcial Losada, John Gottman and Kenneth Gergen