Jeffrey Goldstein - Complexity and the Nexus of Leadership: Leveraging Nonlinear Science to Create Ecologies of Innovation

COMPLEXITY AND THE NEXUS OF LEADERSHIP

Jeffrey Goldstein, James K. Hazy, and Benyamin B. Lichtenstein

COMPLEXITY AND THE NEXUS OF LEADERSHIP
Copyright Jeffrey Goldstein, James K. Hazy, and Benyamin B. Lichtenstein, 2010

All rights reserved.
Cover image courtesy of James K. Hazy.

First published in 2010 by PALGRAVE MACMILLAN in the United States - a division of St. Martins Press LLC, 175 Fifth Avenue, New York, NY 10010.

Where this book is distributed in the UK, Europe and the rest of the World, this is by Palgrave Macmillan, a division of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS.

Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world.

Palgrave and Macmillan are registered trademarks in the United States, the United Kingdom, Europe and other countries.

ISBN: 9780230622272

Library of Congress Cataloging-in-Publication Data

Goldstein, Jeffrey, 1949

Complexity and the nexus of leadership : leveraging nonlinear science to create ecologies of innovation / Jeff Goldstein, James K. Hazy, and Benyamin B. Lichtenstein.

p. cm.

Includes bibliographical references and index.

ISBN 9780230622272

1. Leadership. 2. Organizational change. 3. Organizational effectiveness. 4. Complexity (Philosophy) I. Hazy, James K. II. Lichtenstein, Benyamin B. III. Title.

HD57.7.G66396 2010

303.34dc22

2009044862

Design by Integra Software Services

First edition: June 2010

10 9 8 7 6 5 4 3 2 1

Printed in the United States of America.

During the initial panic of the Great Recession of 2009 John Chambers, the CEO of Cisco Systems, told the New York Times of a crucial lesson he had learned nearly a decade before from Jack Welch when he was CEO of GE. Chambers had asked, Jack, what does it take to have a great company? Welch responded, It takes major setbacks by that I mean, a near-death experience!

Well, in 2001, Cisco nearly did die when the tech bubble burst and Chamberss leadership came under question. Yet, in 2003, when it became clear that the company had passed the test, Welch called Chambers and told him that he now had a great company. It doesnt feel like it, Chambers replied. But at that very moment, in responding to Jack Welch, he finally understood what Welch had meant back in 1998: organizations that face and survive serious challenges can emerge stronger. This, of course, is only if they dont fail!

What distinguishes companies that emerge stronger from those that fail? The key lies in how innovation supplies additional capabilities for adroit action in the face of unexpected and rapidly changing conditions. Firms that cant innovate go the way of dinosaurs. As a major ingredient in adaptability, innovation means much more than introducing new products or services, although without those no organization can compete in this economy. Truly adaptable organizations must also innovate their practices, processes, strategies, and structures so that their internal capacities become a match for turbulent environmental conditions. Staying competitive in the twenty-first century requires a higher level of innovation and adaptability than most of us have ever seen, and the bar keeps rising. Achieving this is simply not possible through traditional top-down management fiats, nor by shared or distributed leadership that is being sold by so many books and consultants these days.

So, how can such high levels of innovation be achieved? This book provides a new answer to that critical question by showing how leaders, guided by the insights coming out of complexity science, can create ecologies of innovation throughout their organizations. Leaders in an ecology of innovation encourage and support experiments in novelty, building new organizational pathways that allow these experiments to materialize into novel offerings and improvements. Complexity science thus puts leaders in a greatly enhanced position to help their organizations effectively navigate critical periods of growth and change.

Our book presents a host of insights coming from complexity science about how ecologies of innovation can be created. Over the last decade or so, nonlinear science researchers have developed tools and concepts that more accurately explain how organizations operate, how leaders can be more effective within them, and how innovation really comes about.

In particular, complexity science shows how the typical focus on heroic and charismatic leaders can result in a lack of innovation in modern organizations. In contrast, we reframe leader and leadership as referring primarily to events rather than to people. Through a series of interactions over time, leadership events alter the underlying framework of engagement. They change the rules by which individuals interact, influencing the ends to be achieved, such as where a work group is headed, as well as the means by which it gets there.

A complexity science based view sees leadership as an influence process that arises through interactions across the organization: leadership happens in the space between people as they interact. Through influential interactions, which are happening all the time in every corner of the organization, novelty emerges and is enacted in unique and surprising ways. This means that the true catalysts of innovation are the web of relationshipsin the nexus of interactionsthat connect members to each other and to others in the environment.

We are using the term generative leadershiporganization. Generative leadership focuses on the mutual influence that occurs within every exchange. Accordingly, rather than concentrating on how a supervisor expresses influence over an employee, generative leadership sees them both as expressing leadership. Moreover, generative leadership refers to capturing the benefits of this mutual interplay as a generative processit spawns new opportunities that increase the organizations potential for novelty, flexibility, and growth. As a process that builds progressively, generative leadership tunes into patterns of interaction rather than specific one-time moves that a manager may initiate and carry out.

Generative leadership does not wait fatalistically for the unexpected to happen, but instead actively participates in and coevolves (more on this term later) with the environment and the future. Complexity and the Nexus of Leadership shows the usefulness of this new understanding of leadership through research findings from complexity science and through many cases and examples from a wide range of corporations, entrepreneurial start-ups, social ventures and NGOs, and governmental agencies.

One of the most important takeaways from this book will be just how empowering the new advances in complexity science are for leadership. What we mean by the term complexity is not the same as what most managers are taught to fear, and therefore try to undo. In technical terms, complicated describes, for example, the design and manufacture of a jumbo jet, an exceedingly difficult task involving up to two million separate parts and untold operations. In contrast, complex has to do with the