Surfing the Edge of Chaos

Overview

From best-selling author Richard Pascale, a brilliant and powerful redefinition of what everyone in business needs to know about strategy and management.

Business is like nature -- a nonstop battle between the preserving forces of tradition and those of transforming change. There is no permanent winner, only species and organizations coping with crises and challenge as best they can. Through the use of brilliant examples and parallels between business and nature, Richard Pascale...

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Overview

From best-selling author Richard Pascale, a brilliant and powerful redefinition of what everyone in business needs to know about strategy and management.

Business is like nature -- a nonstop battle between the preserving forces of tradition and those of transforming change. There is no permanent winner, only species and organizations coping with crises and challenge as best they can. Through the use of brilliant examples and parallels between business and nature, Richard Pascale provides businesspeople with a new way to think about and act on the challenges they face, one based on original thinking and decades of experience in working with companies around the world.

  • Ten years ago, a huge fire devastated Yellowstone. It was so big and intense because for 100 years the National Park Service imposed equilibrium by quickly extinguishing fires ("Only you can prevent forest fires.") A huge layer of deadfall and debris built up and a lightening strike aided by drought and wind did damage from which Yellowstone is still recovering.
  • Sears was the juggernaut of retailing from its founding in 1880 through the 1950s. But then it began its equivalent of "only you can prevent forest fires." Equilibrium took over and it missed everything in the marketplace until Arthur Martinez began its turnaround in the 1990s.
Sears' demise took decades, but everything now hits the fan much more quickly. Surfing the Edge of Chaos provides an new way to both think about and respond to this rapidly changing world. Pascale's use of living systems as a model for business people isn't just a metaphor. It's the way it is. The managers who see companies as embodiments of nature, not as machines to be engineered, will win.

THE FOUR CORNERSTONES OF LIVING SYSTEMS

  • Equilibrium Is Death: Any system, including your company, that fails to innovate and evolve will ultimately fall prey to one that has.
  • Innovation Occurs at the Edge of Chaos: The most truly innovative ideas in science and the arts—and in business—are found at the fringes.
  • Self-Organization Occurs Spontaneously: Those with talent and an instinct to innovate and collaborate will seize the high ground before slower, well-established competitors even spot the hill.
  • Systems Can't Be Directed, Only Disturbed: The idea that intelligence can be centered at the top and can issue cause and effect directives has never worked.
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Editorial Reviews

Publishers Weekly - Publisher's Weekly
In this breakthrough business book, Pascale, Millemann and Gioja troll the emerging science of complexity for "ideas [that] can produce a concrete bottom-line impact." Extracting key "dynamics of survival" from the life sciences, these three management consultants successfully show business leaders how to turn their companies into agile and adaptable "living systems" that achieve long-term vitality and sustainability in a swiftly evolving environment. Their four "bedrock" principles are "Equilibrium is a precursor to death"; "Living things move toward the edge of chaos"; "Components of living systems self-organize" in response to turmoil; and "Living systems cannot be directed along a linear path." Writing with clarity and verve, the authors illustrate these larger points by comparing the functioning of organic systems (e.g., Yellowstone National Park), the behavior of organisms (dental plaque) and of insects (fire ants) with detailed case studies of five companies (British Petroleum, Hewlett-Packard, Monsanto, Royal Dutch/Shell and Sun Microsystems) and the U.S. Army. Practical-minded readers will appreciate their nitty-gritty insights into the relative advantages of "adaptive" and traditional "operational" leadership, as well as their consistent distillation of concrete business guidelines. While the authors aver that "there is no permanent victory in this eternal cycle of life and death," they make a persuasive case that "understanding living systems does not decisively win the game but, most assuredly, it improves the odds." (Nov. 1) Copyright 2000 Cahners Business Information.
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Product Details

  • ISBN-13: 9780609808832
  • Publisher: Crown Publishing Group
  • Publication date: 12/28/2001
  • Edition description: Reprint
  • Pages: 336
  • Sales rank: 1,034,885
  • Product dimensions: 5.18 (w) x 8.00 (h) x 0.74 (d)

Read an Excerpt

Of Colonies and Companies

Rapid rates of change, an explosion of new insights from the life sciences, and the insufficiency of the machine model have created a critical mass for a revolution in management thinking. The fallout of the scientific renaissance has fostered uncertainty and soul-searching. Executives ask: How do we make practical sense of all this? How do we get the change and performance we need? Clues, it turns out, are to be found in the world of the termite.

Come with us to a remarkable structure: the twelve-foot-high mound of the African termite, home to millions of inhabitants.

The mound is an architectural marvel. Naturalist Richard Conniff has described its perfect arches, spiral staircases, nurseries, storage facilities, and living quarters that vary with the status of individual termites. Tunnels radiate out from the mound more than 160 feet in any direction. These structures enable the termites to forage for grass, wood, and water within an 80,000-square-foot area without being exposed to predators.

Within the mound, a ventilation system--operated by opening and closing vents--creates a motion similar to respiration. Oxygen is "inhaled" into the twelve-foot tower of mud, and carbon dioxide is "exhaled." The system also holds the internal temperature steady (plus or minus one degree Fahrenheit) even though the external climate ranges from freezing winters to 100-degree-plus summers. Humidity is constant at 90 percent.

This organizational wonder--which evolved over 100 million years or so--is a tribute to an elaborate social structure. Every inhabitant obeys a series of genetically programmed rules, such as: "Positionyourself between the termite in front and the one behind, and pass on whatever comes your way." As a whole, members of the mound constitute a sophisticated society that makes it possible to meet the ever changing needs of the colony.

Entomologists have known about the workings of the termite for centuries. In the past two decades, though, a group of leading scientists has offered a different, intriguing perspective. They see the mound as a stunning example of a complex adaptive system.

A complex adaptive system is formally defined as a system of independent agents that can act in parallel, develop "models" as to how things work in their environment, and, most importantly, refine those models through learning and adaptation. The human immune system is a complex adaptive system. So is a rain forest, a termite colony, and a business.

Over the past several years, substantial literature has introduced the new science of complexity. This is a broad-based inquiry into the common properties of all living things--beehives and bond traders, ant colonies and enterprises, ecologies and economies, you and me. In aggregate, the coverage on this topic to date has achieved two significant things:

1. It has evoked wonder and excitement about the living world around us--how life surges and declines; how nature competes, cooperates, and thrives on change.

2. It has whetted some managerial appetites for a new approach that might help to unshackle the potential of people and organizations and has begun to challenge the machine model as a suitable management platform for the information age.

We aim to take a step beyond. This book describes a new management model based on the nature of nature, but it also does what no other book has done before. It distills, from the science of complexity, four bedrock principles that are inherently and powerfully applicable to the living system called a business.

In brief, these principles are:

1. Equilibrium is a precursor to death. When a living system is in a state of equilibrium, it is less responsive to changes occurring around it. This places it at maximum risk.

2. In the face of threat, or when galvanized by a compelling opportunity, living things move toward the edge of chaos. This condition evokes higher levels of mutation and experimentation, and fresh new solutions are more likely to be found.

3. When this excitation takes place, the components of living systems self-organize and new forms and repertoires emerge from the turmoil.

4. Living systems cannot be directed along a linear path. Unforeseen consequences are inevitable. The challenge is to disturb them in a manner that approximates the desired outcome.

If properly employed, these principles allow enterprises to thrive and revitalize themselves. In contrast, the machine-age principles, although familiar and enduring, often quietly facilitate the stagnation and decline of traditional enterprises that are faced with discontinuous change.

The choice is that simple and that stark.

Complexity and chaos are frequently used interchangeably, even though they have almost nothing in common. The world is not chaotic; it is complex.

Humans tend to regard as chaotic that which they cannot control. This creates confusion over what is meant by the term chaos. From a scientific point of view, chaos is that unlikely occurrence in which patterns cannot be found nor interrelationships understood. A swarm of bees or the ants that overrun a picnic blanket may seem chaotic but they are actually only behaving as a complex adaptive systems. E-commerce and the upending of traditional business platforms may feel "chaotic," but, technically, these innovations are complex.

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Table of Contents

Chapter 1 Management and the Scientific Renaissance 1
Part 1
Chapter 2 Equilibrium Is Death 19
Chapter 3 Disturbing Equilibrium at Sears 43
Part 2
Chapter 4 Surfing the Edge of Chaos 61
Chapter 5 Monsanto: Walking on a Trampoline 77
Chapter 6 Amplifiers, Dampers, and the Sweet Spot 93
Part 3
Chapter 7 Self-Organization and Emergence 113
Chapter 8 Self-Organization and the Corporation 129
Part 4
Chapter 9 Disturbing Complexity 151
Chapter 10 Herding Butterflies 171
Chapter 11 Design for Emergence 197
Chapter 12 The Extreme Sport of "Discipline" 229
Chapter 13 Reciprocity: Bringing Life to Organizations and Organizations to Life 263
Endnotes 287
Acknowledgments 303
Index 307
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