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The Sense of DissonanceAccounts of Worth in Economic Life
By David Stark Daniel Beunza Monique Girard János Lukács
PRINCETON UNIVERSITY PRESSCopyright © 2009 Princeton University Press
All right reserved.
Chapter OneHeterarchy: The Organization of Dissonance
Search is the watchword of the information age. Among the many new information technologies that are reshaping work and daily life, perhaps none are more empowering than the new technologies of search. With a few keywords at the toolbar, we can access enormous databases to find an obscure article by a long-distant colleague, identify the supplier of a critical component, read about the benefits and side effects of new pharmaceutical products or medical procedures, or find the fact that immediately settles a dispute about the performance of an opera, an athlete, or a mutual fund. Whereas the steam engine, the electrical turbine, the internal combustion engine, and the jet engine propelled the industrial economy, search engines power the information economy.
Search is among the key concepts of this book because search is the process that best exemplifies the challenges of contemporary organization. Ironically, those challenges cannot be solved by the search technologies that are transforming how we work, how we shop, and even how we locate ourselves in social and physical space. Certainly, new search technologies have become invaluable for how organizations manage knowledge. But the results they yield are of precisely the wrong kind to answer the more fundamental problems confronting organizations today. The more challenging type of search does not yield coordinates for a preidentified entity or category, as, for example, when I search for an e-mail address or for a recent paper that I heard presented at a conference. Nor is it even a search for solutions to clearly defined problems. The fundamental challenge is the kind of search during which you do not know what you are looking for but will recognize it when you find it.
Academics are familiar with the process. In fact, to distinguish it from the search for the already known, we have a ready term: research. In other fields, the process goes by a different name: innovation. John Dewey, one of the founders of the pragmatist school of American philosophy, used another term: inquiry.
Dewey was emphatic that inquiry, as a distinctive mode of search, should be distinguished from problem solving. His clarification merits quoting at length because it so nicely turns our attention from a well-defined problem to the more interesting case of a perplexing situation:
[I]t is artificial, so far as thinking is concerned, to start with a ready-made problem, a problem made out of whole cloth or arising from a vacuum. In reality such a "problem" is simply an assigned task. There is not at first a situation and a problem, much less just a problem and no situation. There is a troubled, perplexed, trying situation, where the difficulty is, as it were, spread throughout the entire situation, infecting it as a whole. If we knew just what the difficulty was and where it lay, the job of reflection would be much easier than it is.... In fact, we know what the problem exactly is simultaneously with finding a way out and getting it resolved.
Dewey's evocation of perplexed and troubling situations will ring true to any reader who has faced the challenge of knowing that sometimes you must search even when you do not know what you are looking for. We grasp the difference between an assigned task, as Dewey labels a simple search, and a challenging situation. We sense that there is a difference between occasions when we look for solutions within a set of established parameters and other occasions (Dewey would say situations) rife with uncertainty and yet, precisely because of that, also ripe with possibilities. Life would be blessedly simple if we could solve our searching questions with a few clicks at the toolbar. But it would be neither interesting nor satisfying.
In their study of new-product development in cellular telephones, blue jeans, and medical devices, Richard Lester and Michael Piore succinctly capture the difference between the two types of search. In the analytic mode, the task of the good manager is to clearly identify the problem, break it down into independent components, and organize a series of decisions about how best to solve them. But Lester and Piore conclude that the most important component of innovation is a process that is not directed toward the solution of well-defined problems. This second mode is characterized by interpretation. Whereas problem solving involves the precise exchange of information, the interpretive model fosters open-ended, unpredictable conversation. Where the former seeks clarity, the latter seeks spaces of ambiguity since the challenge is to integrate knowledge across heterogeneous domains. Lester and Piore demonstrate that each of their cases of radical innovation involves combinations across disparate fields: Fashion jeans are the marriage of traditional workmen's clothing and laundry technology borrowed from hospitals and hotels. Medical devices draw on the basic life sciences as well as clinical practice. And cellular phones recombine in novel form radio and telephone technologies. They conclude that "without integration across the borders separating these different fields, there would have been no new products at all."
Because innovation, in this view, involves bringing together incompatible traditions, we should not expect that the process will be harmonious. With hindsight, it is easy to see that high-fashion faded blue jeans are a recombination of workmen's clothing and laundry technology. If we can say that "of course!" cellular phones are the marriage of the radio and the telephone, it is only because, as Lester and Piore show, the respective communities worked from the starting point of their differences. In hindsight, we infer that they must have known all along what they were looking for whereas, in fact, as Dewey and the pragmatists argued, it was only in the conflictual process of attempting to make a transformation in the world that the problem could even be formulated. Working broadly from within this same tradition, Lester and Piore observe:
In many industries, innovations can be identified that did not, at least initially, address a particular need or problem, or for which the problem became apparent only after the product was in use. In such cases, the product developer frequently starts out without really knowing what she is trying to create. (p. 41, emphasis added)
The search problems that this book addresses are thus different from the everyday notion of exploration, if that term calls to mind a process like exploring for petroleum or similar searches for a good that is known in advance. Following James March, I shall use the term exploration narrowly to refer to processes that break from successful, familiar routines to search into the unknown. That is, if exploring for territory is your metaphor of choice, the challenging searches would be efforts to recognize the terrae incognitae.
Stated as recognition of the incognita, the process of innovation is paradoxical, for it involves a curious cognitive function of recognizing what is not yet formulated as a category. It is one thing to recognize an already-identified pattern, but quite another to make a new association. To take some mundane yet now ubiquitous examples: gas for industrial lighting in the nineteenth century (recognizing a waste product of the process of converting coal to coke as a valuable resource); the shopping cart (a basket on wheels); the parking meter (a hitching post with a clock-type mainspring); the car radio (pioneered by a family firm, now famously Motorola, that had made accessories for carriages and sought a market in accessories for the new automobile); the airport shopping mall (combining consumption and travel); and, more troubling, the megachurch of American exurbia (combining Wal-Mart architecture, televangelism, and highly niched small groups or cells from the repertoire of underground movements to create a new form of spirituality as mass-customized consumption). Each example of recombination or repurposing involved a category switch, obvious now in retrospect precisely because each could be recognized with little cognitive difficulty by the user.
Whether we refer to the process as research, innovation, exploration, or inquiry, the kind of search that works through interpretation rather than simply managing information requires reflective cognition. Whether in science, politics, civic associations, or business, it is not enough just to embark on a search for an unknown breakthrough; you must also be able to recognize it when you find it. And you must present the category-breaking solutions in forms that are recognizable to other scientists, citizens, activists, investors, or users. This is a tall challenge, for the more ambitious the project, the more deliberately ill defined the initial process of search; and the more demanding the processes of eventual recognition, the greater is the discomforting ambiguity facing the innovating organization. Innovation, as Joseph Schumpeter observed, is recombination; but, as Schumpeter argued as well, it is also deeply disruptive of cultural taken-for-granteds and routines of organizational cognition.
We can now appreciate again Dewey's characterization of inquiry as provoked by "troubled, perplexed, trying situations." Organizations facing such perplexing situations have several options. The first temptation for the leaders of science projects, corporate projects, or civic projects is to immediately address ambiguous situations pregnant with interpretive search by using the clearly defined problem-solving strategy of analytic search. But such a managerialist strategy of early top-down control entails the risk of forgoing the big opportunities represented in innovations such as cellular phones, fashion jeans, and breakthrough medical equipment. Although problem solving eventually came into the picture, interpretation was the dominant mode of product development that led to innovative success in each of these cases.
The alternative strategy is more in line with John Dewey's notion of inquiry as a guide for innovation. Dewey's attention to the productive possibilities of situations is the lesson that I try to keep in mind throughout this book. Instead of avoiding perplexing situations, organizations can embrace them. Even more radically, organizations can take the next step: If perplexing situations provoke innovative inquiry, then why not build organizations that generate such situations? Instead of merely responding to external situations as they happen to present themselves, why not foster organizational forms that regularly and recursively produce perplexing situations within the organization itself? Organizations that adopt such forms will then be poised to undertake the challenging task of ongoing innovation.
At the most elementary level, a perplexing situation is produced when there is principled disagreement about what counts. Organizations that seek to generate productive, perplexing situations can work from this basic starting point. Instead of enforcing a single principle of evaluation as the only legitimate framework, they recognize that it is legitimate to articulate alternative conceptions of what is valuable, what is worthy, what counts. Such organizations have heterogeneous criteria of organizational "goods." To signal that this organizational form is a mode of governance that differs from a hierarchy of command and a conceptual hierarchy of cognitive categories, I refer to it as a heterarchy. As the case ethnographies in the following chapters demonstrate, heterarchies are cognitive ecologies that facilitate the work of reflexive cognition.
Such organizations, we shall see, are not frictionless. But friction is not something to be avoided at all costs. We all prefer a smooth ride, but as you and your tire dealer know, when taking a sharp curve, we count on friction to keep us on course. Friction can be destructive. But, as the designers of the U.S. Constitution well understood when they built the friction of checks and balances into our system of government, it can also be a principled component of a functioning system with productive outcomes. That is, having multiple performance criteria can produce a resourceful dissonance. If you are confident that you know precisely what resources your organization will need in the indefinite future to meet stable and predictable markets (or continue to get grants to meet your unchanging mission as a nonprofit or a research operation), then dissonance is an avoidable headache that you need not abide. But for many organizations the "foreseeable future" is not long distant. Where the organizational environment is turbulent and there is uncertainty about what might constitute a resource under changed conditions, contending frameworks of value can themselves be a valuable organizational resource. Entrepreneurship then, in this view, exploits uncertainty. Not the property of an individual personality but, instead, the function of an organizational form, entrepreneurship is the ability to keep multiple principles of evaluation in play and to benefit from that productive friction.
For a Sociology of Worth
What counts? Each of us confronts this question on a daily basis. Faced with decisions involving incommensurable frameworks-work versus family life, career opportunities versus loyalty to friends or attachment to a locality, vacations versus investments for retirement, and so on-we ask ourselves what really counts. What is valuable, and by what measures? As our lives are a search to find out what is really valuable, we try, we fail, and we try again to learn from our mistakes.
In our roles as actors in organizations we face similar questions. In these organizational settings we need to sift through a barrage of information-seemingly growing at an exponential rate-to select what counts, what matters, what is of true relevance. More fundamentally, organizations are engaged in a search for what is valuable. What new products can be brought to market? What new technologies or production processes should be pursued? Which will prove to be valuable and which will be a costly dead end? And how should the performance of units, of teams, and of the individual employees within them be evaluated? Nonprofits might be tax-exempt, but they are not exempt from similar questions. Which campaigns and projects are worthy of pursuit? Will our members, constituents, activists, targeted communities, and donors recognize their value, perhaps quickly, or perhaps too late?
Within the sociological discipline, economic sociology is the specialization that deals with societal and organizational questions of the valuable. The field's founding moment took place more than a half century ago at Harvard, where Talcott Parsons was developing his grand designs for sociology. Parsons's ambitions were imperial, with the aim of reshaping much of the social sciences. But his instincts in academic politics led him to be wary of economics as the discipline that could thwart his agenda if his program was perceived as encroaching on its territory. Whereas sociology, psychology, and anthropology could be claimed outright, economics would have to be maneuvered around. To dispel any doubt about his intentions, Parsons walked down the hall in Harvard's Littauer Center to his colleagues in the Economics Department, alerting them to his ambitious plans and assuring them that he had no designs on their terrain. Thus, Parsons made a pact. In my gloss: You, economists, study value; we, the sociologists, will study values. You will have claim on the economy; we will stake our claim on the social relations in which economies are embedded.
Although Parsons's Pact suggests that we must choose a single vantage point-value or values, economy or social relations-I adopt an analytic strategy of fusing the two notions across this divide. The key concept in this fusion is the notion of worth. The polysemic character of the term-worth-signals concern with fundamental problems of value while recognizing that all economies have a moral component. Rather than the static fixtures of value and values, it focuses instead on ongoing processes of valuation-whether in assessing the value of firms under competing metrics of performance, or in studying the incommensurable assessments made in everyday life. "What are you worth?" is a question that can be unambiguous when constrained by context (as, for example, when applying at a bank for a mortgage). But the same question in an art gallery-"Yes, but what is it worth?"-already suggests that value might be different from price. And when the question comes up among friends-"Honey, do you really think he's worth it?"-we know that several opposed evaluative criteria have been brought into play.
Excerpted from The Sense of Dissonance by David Stark Daniel Beunza Monique Girard János Lukács Copyright © 2009 by Princeton University Press. Excerpted by permission.
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Table of Contents
Chapter 1: Heterarchy: The Organization of Dissonance 1
Searching Questions 1
For a Sociology of Worth 6
Entrepreneurship at the Overlap 13
A Metaphor for Organization in the Twenty-first Century 27
Worth in Contentious Situations 31
Chapter 2: Work, Worth, and Justice in a Socialist Factory 35
The Partnership as Proof 36
Distributive Justice inside the Partnership 52
Maneuvering across Economies 64
Chapter 3: Creative Friction in a New-Media Start-Up 81
An Ecology of Value 84
The Firm and the Project Form 91
Distributing Intelligence 97
Organizing Dissonance 102
Discursive Pragmatism and Bountiful Friction 108
Chapter 4: The Cognitive Ecology of an Arbitrage Trading Room 118
Studying Quantitative Finance 120
Arbitrage, or Quantitative Finance in the Search for Qualities 126
The Trading Room as a Space for Associations 130
The Trading Room as an Ecology 135
The Trading Room as a Laboratory 142
The Pursuit of New Properties 151
Chapter 5: From Field Research to the Field of Research 163
From Classification to Search 166
From Diversity of Organizations to the Organization of Diversity 175
From Unreflective Taken-for-Granteds to Reflexive Cognition 183
From Shared Understandings to Coordination through
From Single Ethnographies to the Broader Sites of Situations 195
What People are Saying About This
At a time when global crises have shattered standard accounts of economic life, David Stark's The Sense of Dissonance offers powerful alternative explanations of economic activity along with specific prescriptions for twenty-first-century economic survival. Taking us into the varied worlds of Hungarian toolmakers, Manhattan Silicon Alley new media workers, and Wall Street arbitrage traders, Stark deftly grounds theoretical insights with marvelous ethnographic accounts. This book instructs and inspires.
Viviana A. Zelizer, author of "The Purchase of Intimacy"
This is an important book about an important topicand it has a strong narrative and impressive, engaging ethnography.
Michele Lamont, Harvard University
For many readers, the most powerful demonstration of the ever-present duality of value and values will be Stark's field research on the impact of the 9/11 tragedy on one financial firm that lost hundreds of employees that day. Stark recounts the process by which the firm rebuilt its business through the painful and cathartic narratives of those lost and of those who survived. A moving analysis that redresses Dewey's paradox of the emotive and evaluative.
Bruce Kogut, Columbia Business School
This wonderful, lively, and personal book is packed with insights for economic sociology and general sociological theory. A mature statement by a leading sociologist, it is also a delight to read.
Walter W. Powell, Stanford University
"In this book, Stark takes the reader on a fascinating journey of discovery, from the socialist factories of Eastern Europe to the new media companies and financial trading floors of Manhattan. The Sense of Dissonance is equally a book about how organizations really work and how we should think about the problem of organization—a great accomplishment."—Duncan Watts, author of Six Degrees: The Science of a Connected Age"For many readers, the most powerful demonstration of the ever-present duality of value and values will be Stark's field research on the impact of the 9/11 tragedy on one financial firm that lost hundreds of employees that day. Stark recounts the process by which the firm rebuilt its business through the painful and cathartic narratives of those lost and of those who survived. A moving analysis that redresses Dewey's paradox of the emotive and evaluative."—Bruce Kogut, Columbia Business School"At a time when global crises have shattered standard accounts of economic life, David Stark's The Sense of Dissonance offers powerful alternative explanations of economic activity along with specific prescriptions for twenty-first-century economic survival. Taking us into the varied worlds of Hungarian toolmakers, Manhattan Silicon Alley new media workers, and Wall Street arbitrage traders, Stark deftly grounds theoretical insights with marvelous ethnographic accounts. This book instructs and inspires."—Viviana A. Zelizer, author of The Purchase of Intimacy"This wonderful, lively, and personal book is packed with insights for economic sociology and general sociological theory. A mature statement by a leading sociologist, it is also a delight to read."—Walter W. Powell, Stanford University"This is an important book about an important topic—and it has a strong narrative and impressive, engaging ethnography."—Michèle Lamont, Harvard University
In this book, Stark takes the reader on a fascinating journey of discovery, from the socialist factories of Eastern Europe to the new media companies and financial trading floors of Manhattan. The Sense of Dissonance is equally a book about how organizations really work and how we should think about the problem of organizationa great accomplishment.
Duncan Watts, author of "Six Degrees: The Science of a Connected Age"