Complexity Leaders and Knowledge-Based Organizations Drs. Philip McGee and Russ Marion Clemson University

“As we advance deeper in the knowledge economy, the basic assumptions underlining much of what is taught in the name of management are hopelessly out of date… Most of our assumptions about business, technology and organization are at least 50 years old. They have outlived their time.” Peter Drucker (Forbes, October 5, 1989)

“ We’re in a knowledge economy, but our managerial and governance systems are stuck in the industrial era. It’s time for a whole new model” Manville and Ober (Harvard Business Review, January, 2003)

Why Traditional Management and Leadership Skills Often No Longer Work Globalization Speed of Knowledge Increased: Importance of intellectual capital Innovation Electronic business

The Shift from the Industrial Age to the Information Age In the Industrial Age, leaders focused on production In the Information Age, leaders focus on KNOWLEDGE and INNOVATION

The shift from producing THINGS to producing KNOWLEDGE and INNOVATION has brought about a need to develop new philosophies, values, methods and practices that redefine the practice of management and leadership.

Traditional Leadership and Management Concepts Newtonian logic of cause and effect. Managers are designers of economic machines that produce profits. People are interchangeable and disposable, i.e., they are a resource just like machinery, and raw materials. Are based upon:

Traditional Leadership and Management Human Relations approach Authority and Control Top-down Goals, Objectives Strategy as Function of CEO Stability, Order and Predictability

A New Leadership and Management Model As noted at the beginning of this presentation, traditional management thinking and practices are often inappropriate for the new global environment that emphasizes speed, adaptability, innovation and the ability of organizations to deal with and competed in a world that is increasingly complex. This new model for leadership and management is called: Complex Leadership

Complex Leadership and Management Concepts Complexity and chaos theory. Emergence and Surprise. The world can be understood as a network of agents. Managers are designers of environments that enable emergence. Knowledge is a key resource Are based upon:

Complex Leadership and Management Emphasize: 1. Knowledge production by managing worker interactions. 2. Encourage knowledge production by fostering networks of interdependent individuals and groups. 3. The management and distribution of resources in such a way that that support the production of knowledge and innovation. 4. The communication of a sense of urgency (adaptive tension). 5. Creation of indeterminate vision. 6. Culture of creativity and innovation. 7. Rules of interaction, interdependency and tension. 8. “Bottom-up” behavior and heterogeneous vision. 9. Foster external relationships. 10. Strategy: foster organizations that can learn and adapt.

Taking a Closer Look…

1. Knowledge Production by Managing Worker Interactions Because complex leaders are enablers. They design, create, and promote organizational structures that permit, encourage and reward interaction between individuals and groups.

2. Encourage Knowledge Production by Fostering Interdependency Between Individuals and Groups Both a motivating and controlling force Interdependent relationships are… The well-being of each agent affected by actions of others. Flexible in that they promote beneficial adjustments between individuals and groups The end result is a more adaptive learning organization that is more competitive!

3. The management and distribution of resources in such a way that support the production of knowledge and innovation. Informational Resources – data needed to produce knowledge Physical Resources – i.e. money, equipment, and personnel

4. The Communication of a Sense of Urgency Complex leaders create adaptive tension or a sense of urgency. For example, Jack Welch, the former Chairman and CEO of General Electric told his departments, “Be #1 or #2 or you will be removed.” Such statements create tension but do not restrain or direct creativity or innovation.

5. Creation of Indeterminate Vision A vision is a Goal with Soul. Visions inspire and unite. Indeterminate vision does not preempt the future, rather it motivates the present.

6. Culture of Creativity and Innovation Complex leaders promote a climate and environment in which creativity and innovation are encouraged. Hallmarks of these types of environments include: The freedom to make and learn from mistakes Divergent thinking is viewed as desirable Challenging the status quo is the norm Information and ideas are freely shared and exchanged There is a climate of critique

7. Rules of Interaction, Interdependency and Tension Rules promote and define patterns of behavior in complex relationships. Rules enable rather than limit Rules may be grouped into five general categories: - Rules that focus action - Rules that enable interaction - Rules that foster interdependency - Rules that create tension - Rules that encourage bottom-up decision making

8. “Bottom-up” behavior and heterogeneous vision Top-down decision making and control limits the creativity and innovation of the organization to one person or a small group of executives. Bottom-up decision making and control frees and empowers a greater number of people and groups to generate creative and innovative solutions facing the organization. Heterogeneous vision insures a diversity of ideas.

9. Foster External Relationships Leaders of complex organization realize that are not “islands” but rather that they are part of a larger network composed of customers, suppliers, regulatory agencies, and other public and private organizations that provide similar services or products. External networks both support and stimulate the firm.

Strategy: those actions undertaken to enhance to fitness of the organization 10. Strategy: Foster Organizations That Can Learn and Adapt Strategic leadership: foster organizations and networks of organizations that create fitness—i.e., learning and adaptive organizations

A New Approach In order to meet the new demands for increased creativity and innovation being placed upon training departments and corporate universities, we must find and implement new structures and leadership practices. The field of Complex Adaptive Leadership that is currently being developed and implemented by organizations that will help organizations to grow and prosper in the global economy and society of the 21 st century.

Your Presenter Were… Russ Marion – Russ has authored two books: The Edge of Organization and Leadership in Education along with many articles and is considered to be one of the leading experts in the field chaos and complexity theory as applied to leadership and organizational behavior. In addition to his writing he has made presentations in Europe and at the India Institute of Technology. Russ is currently a Full Professor of Educational Leadership at Clemson University. Philip McGee – For seventeen years, Phil was involved in the design and implementation of instructional and organizational systems within education, government, industry and business through his company, Instructional Designs, Inc. In addition to the work he performed through Instructional Designs, Inc., he also served as the Regional Program Director for the Doctor of Business Administration program offered by the School of Business and Entrepreneurship, Nova Southeastern University, and as an Adjunct Professor of HRD for Webster University. Phil is currently an Assistant Professor of Technology and HRD at Clemson University.