When really innovative ideas are needed, when the
future is very uncertain, traditional approaches to planning are of limited utility. An
alternative approach involves the use of generative relationships. In this approach new
ideas and strategies emerge from such relationships inside and outside the organization.
The role of the leader is to foster generative relationships and learn from the results,
letting direction emerge instead of being "set" in advance by a central
The developers of the concept of generative
relationships, Lane & Maxfield, identify three types of future scenarios confronted by
organizations: clear, complicated and complex foresight horizons.
When the future is clear - simple, stable and
predictable - they suggest traditional approaches to setting strategy are appropriate
since an organization can identify, rationally evaluate and select alternative courses of
action designed to achieve some desired end. On the other end of the spectrum, when the
world is characterized by "cascades of rapid change, perpetual novelty and
ambiguity," they suggest an alternative, an approach based they have termed
generative relationships. In this process, strategy and direction (which cannot be
foreseen) emerge through ongoing interactions inside and outside the firm.
The two key elements of
their approach are:
Making sense, according to Lane & Maxfield, entails
examining what is happening inside and outside the organization, interpreting this
information from many viewpoints throughout the organization, not just in headquarters,
and doing this all the time. This process must unearth and challenge basic assumptions
about the organization and its environment. This work is best done through conversation.
It is the contention of Lane & Maxfield that these practices will help an organization
better understand itself, detect changes in the structure of its environment, make sense
of these shifts and, therefore, open up space for possible future actions.
With this understanding generative relationships
enter the picture. Lane & Maxfield define a relationship as generative if it produces
"new sources of value that cannot be foreseen in advance." But if you can't know
in advance what a relationship will create for the organization, how can you decide which
relationships to build, to continue. Complexity theory suggests some essential
preconditions, some characteristics to look for or build into relationships.
Good enough vision
Tune to edge
Preconditions for building Generative Relationships:
Look back in time in your organization and think
about how new direction actually emerged, where new program ideas came from. Were they all
anticipated, "set" in advance in the strategic plan or were generative
relationship at work?
Notice the increasing number of "strategic
alliances" happening in the business world. Consider whether the conditions for
generativeness were in place.
The ROLM Story
A great example of the power of generative
relationships is the story of the ROLM company as told in the generative relationships
article by David Lane, an economics professor at the University of Modena and an faculty
member at the Santa Fe Institute, and Robert Maxfield, one of the founders of ROLM. In the
1970s, a little computer company, filled with a few young electrical engineers focused on
making minicomputers for the military decided it needed to diversify to grow. These
engineers came up with the concept of marrying the computer with the telephone switch.
With a basic system in hand ROLM sought out to build relationships with the executives
responsible for telephone services in medium sized firms. Many were afraid to try out this
"risky" new technology. But some made the switch and as a result of the
significant savings and better, more flexible service they were rewarded with promotions,
increased responsibility and encouragement to continue their efforts to bring down phone
costs. These executives, with their understanding of the computer controlled PBX concept
and their relationships with the ROLM account managers, began to search for new
opportunities for savings and productivity gains. The resulting conversations between
these company executives and ROLM representatives led to many product enhancements which
led to an entirely new conception of the PBX - an "intelligent interface between a
company and outsiders" instead of just an old fashioned phone system.
Notice that this innovation did not come from the
computer or phone company giants of the time, IBM and AT&T, but a small company that
happened upon the strategy of generative relationships. ROLM was acquired by AT&T for
a billion dollars.
The VHA Example
The staff person responsible for VHA's leadership
initiative, Curt Lindberg, had the good fortune of meeting David Lane and Bob Maxfield at
a session on complexity and strategy at the Santa Fe Institute. With an up close and
personal acquaintance with the concept of generative relationships he decided to tap this
approach in the "plan," to bring complexity thinking to VHA member leaders. As
such, he sought out relationships with a wide range of complexity faculty (from
biologists, to computer scientists, to organizational theorists and consultants) and VHA
member leaders (physicians, CEOs, nursing execs, females and males) who were searching for
new management constructs and could be categorized as "early adopters." This mix
of people satisfied a number of the preconditions for generativeness - heterogeneity,
aligned directedness, an interest in recurring interaction (because the researchers were
looking for organizational types who would try their "complexity ideas" and the
practitioners were looking for partners to help them understand and use "complexity
inspired" management approaches). After getting acquainted in a series of educational
sessions and workshops, quite a number of relationships developed - between the hospital
leaders and complexity faculty, among the hospital executives themselves, and among the
faculty - which have made a difference -produced new sources of value, surprises, new
connections, and real progress on the use of complexity thinking in management and in
health care organizations. For instance:
Some relationships did not become generative; they were
Copyright © 2001, Curt Lindberg,
Complexity Management, VHA Inc.