Surfing the Edge of Chaos: The New Art and Science of Managementby Richard Pascale, Mark Milleman, Linda Gioja
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Every few years a book changes the way people think about a field. In psychology there is Daniel Goleman's Emotional Intelligence. In science, James Gleick's Chaos. In economics and finance, Burton Malkiel's A Random Walk Down Wall Street. And in business there is now Surfing the Edge of Chaos by Richard T. Pascale, Mark Millemann, and Linda Gioja.
Surfing the Edge of Chaos is a brilliant, powerful, and practical book about the parallels between business and nature -- two fields that feature nonstop battles between the forces of tradition and the forces of transformation. It offers a bold new way of thinking about and responding to the personal and strategic challenges everyone in business faces these days.
Pascale, Millemann, and Gioja argue that because every business is a living system (not just as metaphor but in reality), the four cornerstone principles of the life sciences are just as true for organizations as they are for species. These principles are:
Equilibrium is death.
Innovation usually takes place on the edge of chaos.
Self-organization and emergence occur naturally.
Organizations can only be disturbed, not directed.
Using intriguing, in-depth case studies (Sears Roebuck, Monsanto, Royal Dutch Shell, the U.S. Army, British Petroleum, Hewlett Packard, Sun Microsystems), Surfing the Edge of Chaos shows that in business, as in nature, there are no permanent winners. There are just companies and species that either react to change and evolve, or get left behind and become extinct.
Parallels between Yellowstone National Park and Sears show why equilibrium is a dangerous place in both nature and business.
How Monsanto used a "strange attractor" to move to the edge of chaos to alter its identity and transform its culture.
The unlikely story of how the U.S. Army embraced the ideas of self-organization and emergence.
Why the misapplication of linear logic (reengineering a business or attempting to eradicate predators in nature) will inevitably fail.
The stories in Surfing the Edge of Chaos are of pioneering efforts that show how the principles of living systems produce bottom-line impact and profound transformational change. What's really striking about them, though, is their reality. They are about success and failure, breakthroughs and dead-ends. In short, they are like the business you are in and the challenges you face.
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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: "Position yourself 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.
From the Trade Paperback edition.
What People are saying about this
Warren Bennis, University Professor and Founding Chairman of the Leadership Institute, University of Southern California
Dave Ulrich, Professor of Business, University of Michigan and author of Results Based Leadership.
Gary Hamel, author of Leading the Revolution and Competing for the Future
Stuart Kauffman, Bios Group and author of At Home in the Universe
Meet the Author
Richard T. Pascale is the coauthor of The Art of Japanese Management and author of Managing on the Edge. He has written for The Harvard Business Review and for twenty years was on the faculty of the Stanford Business School. He is now an associate Fellow of Oxford University, a writer, and a consultant.
Mark Millemann was a senior advisor to CSC Index and has extensive experience working with CEOs and executive teams of companies around the world, including Sears, Hughes Space and Communications, BP Oil, Borg Warner Automotive, and the Illinois Power Company. He is the founder of Millemann and Associates, a management consulting firm based in Portland, Oregon.
Linda Gioja has consulted with CEOs and executives at such companies as Allstate, Sears, and Hughes Space and Communications. She now leads dialogues in national policy forums at the Aspen Institute and for the California Environmental Dialogue, a group of more than twenty energy companies, automakers, high-tech companies, and environmental organizations working on the state's environmental policy. She lives in Austin, Texas.
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This book is perhaps a bit dated but an interesting read. Essentially, the authors posit much can be learn from the brutality and struggle of survival in nature to improve the probability of success of organizations to work towards an objective. Many of the comparisons to things like ant colonies and the entropy of nature are indeed compelling and to their credit, considering what we observe in the chaotic world of business, many of the asserted parallels are reasonable. On the other hand the idea that humans, through our creativity, introduce a capability to control our environments through technology is not considered. Personally, I find it hard to accept the view that mimicry of nature is an acceptable long-term approach for success, despite the examples the authors provide. Long-term stress of this is not an exciting view of the future. Moreover, I believe we possess the ability to bring order to chaos, simply because we have been doing that for thousands of years, getting better at it as we evolve. Still there are a lot of interesting ideas in this book. Chapter 12 was especially good. It is worth reading.
Managers should closely watch new discoveries in biology, especially the study of self-organization and emergence, particularly as the old hierarchical model of corporate organization becomes seemingly obsolete. Richard T. Pascale, Mark Millemann and Linda Gioja present case histories showing how corporate leaders executed turnarounds and solved critical problems by tapping the insight and intelligence of their organizations¿ members. In many cases, however, their success was only partial. It is to the authors' credit that they do not flinch from describing failures, even as they support the approach. They particularly note that stress can have the positive effect of forcing an organization to change its behavior. Though they first published their observations in 2000, some of their insights seem likely to endure the test of time. We recommend this book in confidence that executives can learn from its concepts about how natural systems can inform management.
In a business landscape dominated by OSFA (One Size Fits All) solutions, Pascale exposes a liberating secret: radical innovation is both risky and essential. Thorough case studies drawn from both business and nature illustrate the chaotic forces at work in complex adaptive systems. This book is a 'gotta-have' resource for change agents, executives, and reactionaries who realize the importance of the next ten years.