Millemann Mark - Surfing the edge of chaos: the laws of nature and the new laws of business

Copyright 2000 by Richard Pascale

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the publisher.

Published by Crown Business, New York, New York. Member of the Crown Publishing Group.

Random House, Inc. New York, Toronto, London, Sydney, Auckland
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Crown Business is a trademark of Random House, Inc.

Library of Congress Cataloging-in-Publication Data

eISBN: 978-0-609-50409-3

v3.0

CHAPTER 1

MANAGEMENT AND THE SCIENTIFIC RENAISSANCE

T here is a new scientific renaissance in the making. It will usher in new industries, alter how businesses compete, and change how companies are managed. This book explores the managerial implications of this new renaissance.

Scientific discovery shapes managerial thinking. Principles identified more than two hundred years ago, during an earlier scientific renaissance, have had wide influence on how managers think today. Derivative ideas from Newtons laws of motion and his early work on gas thermodynamics were literally lifted, equation by equation, and applied to the emerging field of economics. When they were extended into the realm of enterprise, these applications shaped the practice of management and todays deep-seated beliefs about change.

We are entering another scientific renaissance. The magnets for the inquiry are called complex adaptive systems. Also known as complexity science, this work grapples with the mysteries of life itself, and is propelled forward by the confluence of three streams of inquiry: (1) breakthrough discoveries in the life sciences (e.g., biology, medicine, and ecology); (2) insights of the social sciences (e.g., sociology, psychology, and economics); and (3) new developments in the hard sciences (e.g., physics, mathematics, and information technology). The resulting work has revealed exciting insights into life and has opened up new avenues for management.

Efforts to understand life are as old as humanity itself. For uncounted millennia, they centered on the selective breeding of animals and plants to improve yields and reduce susceptibility to disease. By the time the first scientific renaissance ended in the 1880s, geneticist Gregor Mendel had unlocked the secrets of heredity. Selective breeding, formerly an art, fell within the grasp of science.

A second milestone of great consequence was the discovery, in 1953, of the double helix of DNA by James Watson and Francis Crick. By the end of the twentieth century, the vast new frontier they had opened was closing in on both understanding, and possibly altering, the biochemistry of life.

For several decades after Watson and Cricks discoveries, efforts to decipher DNA sequences and other facets of living systems were thwarted by their enormous complexity. But powerful computers and arcane technology for observing microscopic organisms and genetic dynamics permitted considerable progress. A trickle of breakthroughs began. Among them was the capacity to identify particular genes that made a plant or animal resistant to disease or amplified desirable features. By the 1990s, Genenech, Amgen, Immunex, Monsanto, and a host of other firms were developing biotechnology to the point where patented pharmaceuticals and seeds had become commercial realities. These nascent capabilities are accompanied, in turn, by new challengesbusiness, ethical, and social.

Living Systems and Organizational Change

Many subterranean streams have combined to form the current flow of interest in living systems. Most attention is galvanized by the extraordinary economic potential of biotechnology or the social consequences of vanishing rain forests and global warming. However, another tributary will prove as important as all the rest: Understanding the mysteries of life will alter how we think about organizations, management, and social change.

Businesses, it turns out, can learn a great deal from nature. Besides providing an account of pathbreaking applications of living systems theory to management, this book reveals how cornerstone principles of the life sciences have been translated into practice and have considerably improved the odds of success in achieving discontinuous change.

The New Life Cycle

The industrial revolution was fueled by the earlier scientific renaissance. It was predicated on the machine model of take make break: taking raw materials, converting them into products, and eventually breakingin two meanings of the wordboth breaking environmental and social balance through high-impact extraction and production techniques, and by fostering a spiral of obsolescence in which the products are used and discarded. Clear-cut forests, rusting machinery, and the heaping detritus of salvage yards are the fossil remains of this era.

The emerging life science model unfolds like a species in a new ecological niche: innovate proliferate aggregate. Nature favors adaptation and fleet-footedness. Most species compete when they must, but organisms strive, when possible, to reproduce more rapidly than their rivals and to dominate by sheer strength of numbers. Economists call this increasing returns. Discovering a new niche and proliferating rapidly fosters ubiquity. One witnesses it in commerce when Microsoft Windows, or a brand franchise such as Amazon.com, or the QWERTY sequence of a keyboard becomes the lingua franca for an industry or technology. Major families may join forces to create self-reinforcing arrangements. In nature, in the benevolent exchange between insects and plants, nectar is swapped for pollination services. In business, the merger of AOL with Time Warner is an effort to establish supremacy through aggregation in the e-business and communications industries.

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.