Nonlinear Organizational Change

Complexity theory has taught us that there are universal patterns for how complex nonlinear organizations change over time. This process of change is the same for any complex system, for ecosystems, for change in technology, for changes in culture, economy or society, or large enterprises. The general model is based around feedback loops, attractors, bifurcations, phase transitions, self-organization, and emergence. By understanding this process we can better use it towards enabling organizational change.

Feedback loops within a system are central to understanding its dynamic behavior over time. Negative feedback works to dampen down change while positive feedback works to drive exponential change. When a system is in a strong negative feedback regime it will be very difficult if not impossible to change it. The resilience and capacity of a system to resist change is largely a function of its networks of negative feedback that balance and stabilize it.

This normal state to a system behavior is what we call an attractor, which is a set of states towards which the system will naturally gravitate, as these balancing feedback forces work to constantly pull it back to its normal state of operations. For example, the fact that most adults have to work so as to support themselves creates a certain pattern in their behavior over the course of a week. Most adults have a work and leisure pattern, we work only so long and then we relax, once relaxed we are ready for work again the next day. We can not go on relaxing for too long because we have to pay the bills for it. This creates a balancing loop that pulls us back to that dynamical pattern of behavior that follows a regular set of states; this is an attractor created by negative feedback.

Change happens when these negative feedback loops become eroded and positive feedback starts to become more prevalent. Every time a negative feedback loop is broken this reduces the strength of the forces influencing the elements to remain within that pattern and make it more likely that some will stray off into other patterns of organization. If we look around us we will see that most systems are in a normal state of development, quite rarely do we see exponential change. Systems have long relatively stable periods before they go through phase transitions that involve positive feedback and exponential change. These happen relatively fast, exponential change cannot last long.

A transition implies that the system will not stay in its current form, the transition will take it into a new way of operating. Transitions do not last longer than a short period of time because they consume large amounts of energy, typically systems cannot go on consuming that much energy for long. During a transition, the global structures or basin of attraction that supported the system previously disintegrate and new attractors emerge. The system can, of course, take many different trajectories in the future, but on a generalized level those trajectories can be seen to occupy one of two different general regimes – the system either disintegrates to a lower level of organization and functionality or integrating to a higher level of coordination.

Potential

The challenge is to find the potential within the system for it to self-organize into that desired higher level of functionality. Making the transition is really about building that new attractor so that it is easier for people to move into it; so that the cost-benefit equation make sense before the system really reaches a crisis and collapses. As always with these complex organizations, you cannot simply create a new pattern. The new pattern or attractor does not come from nowhere it is created out of latent potential within the existing system. Potential is always latent, that is to say, by definition potential is hidden. Look at a forest and we will see lots of trees and we will think that is all there is to the forest, but those trees are already largely dead, the future potential of the system is hidden in the seeds underground. This will be the same for social systems change, the new potential in the system will be out on the fringes hidden from sight and difficult to find.

As systems innovators, our job is to find those seed, to try to understand which ones have real potential and to nurture them. In reality, this is all we can do when dealing with very complex organizations, work with the evolutionary potential in the system. Because transitions are systemic and there is a strong drive towards there only being one systemic pattern, transitions involve the disintegration of the existing model which creates an unsustainable situation and the creation of a new model that draws people through a vision of the creation of a higher level of organization – the disintegration of one basin of attraction and the creation of another.

Orit Gal talks about this when she identifies two drivers of systems change1 – Firstly when there is unsustainable tension, the fact that people can see things colliding in a destructive fashion that will lead to some form of systems crash. One good example of this might be the water-food-energy nexus, those three form an interconnected system but each of them is in some form of crisis. The second is convergence of constructive trends that lead to the creation of a new context which makes possible new things. The system takes on a new coherence. Globalization might be an example of this, information technologies have made possible global coordination at the speed of light, this creates a new set of connections, a new context wherein new forms of organization can emerge.

Paul Raskin who writes about the Great Transition also talks about this in a similar fashion2 “Sustainability is kind of the necessity that pushes a great transition, while a vision of a better life is a magnet that pulls it forward, but to get there the curve of development has to be bent twice, a radical revision of technological means can begin the transition but a reconsideration of human ends is needed to complete it.”  

Bifurcations

Nonlinear processes of change are characterized by what are called bifurcations. A bifurcation is when something divides into two branches or parts. In this case, it is a divide between the old structures and the new ones that emerge. This involves the splitting off of the system into two or more qualitatively different trajectories of development. When an organization is in a normal state there will be one dominant basin of attraction represented by a very strong and large mainstream at the center of the organization and a relatively small fringe that has little direct impact on the mainstream. This is the world that developed economies lived in maybe 50 or 60 years ago, where hierarchies were accepted as the dominant mode for organizing society and networks were seen as marginal, when there was a large and stable middle class in developed economies and things like organic farming and environmentalism were alternative having little effect on the mainstream.

When the system enters into a transition another basin of attraction forms and the system is split between two different modes of operation. This is the world we live in today, where networks have risen to rival hierarchies, where the middle class in advanced economies has retreated and a bipolar world of very rich and poor has emerged, where alternatives to the mainstream like organic food and alternative technologies like solar and wind sit alongside traditional solutions. This is a biestable system with two basins of attraction, but it won’t stay like this for long. Because of the fundamental issues of interoperability, it creates there are strong forces pushing the system to adopt one single pattern on the macro-level that makes this biestable period very transitory. This is like a political revolution, everyone wants the revolution to come to an end so as to re-install a single global structure that is required to achieve normal functionality within the system; if it does not do that within some period of time it may well destroy itself. The organization will stay iterating and evolve rapidly as these two worlds diverge and we end up predominantly in one or the other. Either the elements will self-organize with the emergence of global coherence and a new level of organization or it will collapse to a lower level of functionality.

Collapse

Organizations ultimately collapse when they can no longer respond to changing environmental conditions successfully; when the environment becomes too dynamic and complex and the internal structure of the organization too inert to respond to that change. A primary cause of organizational collapse is the tragedy of the commons. In all organizations, the institutional infrastructure has to connect the cost and benefit of individual action with the cost and benefit to the whole organization. A failure to do this results in accumulating negative externalities, depleting the resources of the whole and leading to unsustainable processes. An overly complicated system leads to fracturing and compartmentalization which enables negative externalities and the disintegration of the overall organization.

Emergence

During a transition the centralized structures that supported the system in the previous regime become no longer functional, they can no longer be depended upon to deliver the required solutions to problems that extend beyond their level of structural complexity; in the face of such problems, they appear at best paralyzed. In order for the system to maintain its level of functionality or evolve into a new form, new functional structures have to emerge out of the distributed parts. Previously latent functions and capabilities become revealed and become critical to the organization’s future success, this is unlike during normal periods when it is manifest capabilities that are valued. Due to this increased importance of the latent distributed capabilities in the organization, the history of the organization becomes ever more important; it is the choices the organization made in the past that brought it to this current state that really comes to matter.

Without dependence upon the legacy centralized organizations, new capabilities have to emerge out of distributed self-organizing processes. As standard centralized structures become increasingly discredited within the mainstream what was previously marginalized domains and capabilities are recognized as increasingly important. As large incumbent centralized organizations become inert it stops being “the dog that wags the tail” and starts to be “the tail that wags that dog.” Fringe, informal, self-organizing networks emerge and have increasing influence in a turbulent world, marked by exponential change, surprising shocks and extreme events that reveal the fragilities within the existing centralized systems.  

As the mass of members become discontented and disillusioned with the old institutional structures more and more of the system’s potential resources are left unutilized by the incumbent organizations and this creates fertile ground for new forms of organization to emerge and grow rapidly. New connections are formed that once again offer the organization a sense of overall unity, direction and potential that is significantly lacking in the existing institutions. These are times when small actions can have huge implications for the future trajectory of the system and are thus critical points in systems change.

The social scientist Immanuel Wallerstein talks about this process as such“When a system, any kind of system enters a moment of bifurcation and is, therefore, coming to an end, two things happen. The structure becomes chaotic, and secondly, it becomes one in which small input gets great output, as opposed to a normally functioning system in which great input gets great output. This is very important to remember because that means we are in a chaotic, confused situation in which there is going to be real struggle about the new order unlike fifty or a hundred years ago when we worked very hard and organizations worked very hard and didn’t get very far; the revolutions didn’t turn out to be so revolutionary. Now every little input will get very great output, every little touch by us in the next 20 to 50 years is going to have a big impact and it may not be the impact that we want if we touch it in the wrong way”

  1. YouTube. (2018). Workshop: Complexity and Governance – Orit Gal. [online] Available at: https://www.youtube.com/watch?v=XAexMkGiGYM&t=2143s [Accessed 28 Jul. 2018].

  2. YouTube. (2018). Earthland: Envisioning a Sustainable Civilization. [online] Available at: https://www.youtube.com/watch?v=197nLkMZoMI [Accessed 28 Jul. 2018].

  3. YouTube. (2018). Immanuel Wallerstein – Capitalism is reaching it’s end. [online] Available at: https://www.youtube.com/watch?v=EPcryvhSOco [Accessed 28 Jul. 2018].

2018-07-28T15:04:48+00:00