In a typical large organization everybody is a long way away from everybody else. As a result the individual perception of the world is narrow and confined to a small group of immediate acquaintances.

That did not matter in factory type of settings because physical tasks could be broken up. Bigger tasks could be divided by assigning people to different smaller, fairly independent parts of the whole. Hierarchies made sense as a way to modularize work. The worker did not need to communicate with many people. The downside was lack of flexibility. Reconfiguring a hierarchy always created a mess for a long time. And if you had a lot of interaction going on in a ...  Read the article

One of the basic ideas of modern science is that the laws of the material universe can only be meaningfully understood by expressing quantified measurements. Numerical terms are needed, not just words and stories. Instead of ordinary sentences we must use mathematical equations, was the belief.

The values of the measurements at a given starting time are called initial conditions for that system. The Newtonian, deterministic claim is that for any given system, the same initial conditions will always produce identically the same outcome. Life is like a movie that can be run forwards or backwards in time. ...  Read the article

Products that are manufactured the same way with the same product features are often used differently by different customers. Just because a product is a commodity doesn’t mean that customers can’t be diverse in their needs and uses of the product.

Companies used to have no mechanisms for connecting with the end users in order to understand and influence this. Social media and mobile technologies are now changing the model.

A relationship between a customer and an enterprise can get smarter with every interaction. Consider a service as routine as grocery shopping. Suppose that you could turn to your mobile phone and come up with a graph of last month’s or last year’s grocery purchases. Every time a customer buys her groceries, she is not only showing herself and the firm the products she buys, but also teaching the firm the pattern at which she consumes/uses them and implicitly the complementary products she does not yet perhaps know of. The service is creating a history of this particular customer that is virtually impossible for a competing shopping service to replicate.

Interactive value creation is about two new capabilities: the firm needs to be capable of networking with individual customers, and behaving ... Read the article

The mainstream ways of thinking about management are based on the sciences of certainty. The whole system of strategic choice, goal setting and choosing actions to reach the given goals in a controlled way depends on predictability. The problem is that this familiar causal foundation cannot explain the reality we face. Almost daily, we experience the inability of people to choose what happens in their organizations – or in their countries. We live in a complex world. Things may appear orderly over time, but are inherently unpredictable.

Complexity refers to a pattern, a movement in time that is at the same time predictable and unpredictable, knowable and unknowable.  Healthy, ordinary, everyday life is always complex, no matter what the situation is.  There is ...  Read the article

The claim is that the best way to understand complicated systems is to investigate the workings of each of the parts. If a car does not start, the mechanic looks for the problem and finds a dead battery. In a similar way a doctor finds a wounded muscle. The idea is that the best way to understand life is to investigate the workings of the parts separate from other parts.

In the economic world, the concept of markets is based on the same idea: autonomous sellers and buyers engage in discrete transactions where each agent is independent from the other agents and each transaction is separate from other transactions. The unit of analysis is the individual agent.

Network scientists have lately made very different... Read the article

The change towards the creative economy has major implications for the nature of what we have called assets. In the industrial age, the assets were physical resources, plant and equipment. Most of the resources were traded in markets and could thus be valued. Taking care of the value of an organization could be understood as managing physical assets and resources.

Now knowledge and people are seen as the major assets. But since neither of them are efficiently traded in markets, their value cannot easily be measured. Knowledge can neither be understood as an asset that can be managed like a physical asset. This is what many people within the ... Read the article

Although work today is primarily digital, most organizations still have a spatial dimension, and most of those spaces have a designed organizational role. Even in the digital age we still think in terms of space. The key thing is that both the organizational structure and space greatly influence the patterns of work. A few years ago, the typical organization design meant that work was divided into multiple parts that were simply added together to create the product. Individual workers did not need to know much more than what was specific to their individual tasks to complete their jobs.

Today, the results of work are not brought together in the end but are communicated throughput the process. A growing number of people are involved in generating ideas and information and bringing those ideas together in collaborative sense making. Work is interaction. Communication is not talking about work. Communication is work.

There are three archetypes of communication in firms: The first type is communication for responsiveness and coordination. This creates the need for transparency. The right hand knows what the... Read the article

When we think about business structures, many of us picture an organizational chart or the layout of an office building. A structure often refers to the physical arrangement of things, the parts making the whole.  What we have missed so far is an understanding of the business structures that can foster learning and help us better work with information. Conventional structures don’t address knowledge-related challenges as effectively as they do problems of measuring input and output or accountability.

What social media has helped us to do is to link and coordinate unconnected activities and initiatives addressing a similar information domain. There have also been great successes in diagnosing recurring business problems whose root... Read the article

In most games who wins and who loses is the whole point of playing. It would be hard to imagine a more unpopular outcome in a reality TV-series, than an announcement that all the players ended up as winners! It is, of course, beneficial that better-motivated and more enterprising players take the place of the lazy, the incompetent, and the unmotivated.

But zero-sum thinking and the winner-takes-all philosophy does not serve us any more. As there are more losers than winners in our games losers multiply as winning behaviours are replicated in the smaller winners’ circles and losing behaviours are replicated in the bigger losers’ circles.

The biggest problem is that as losers are excluded from the game, they are not allowed to learn. The divide between winners...  Read the article

In our view of the world, we often think that competition creates and secures efficiency. But it may be that high performance is incorrectly attributed to competition and is more a result of diversity, self-organizing communication and non-competitive processes of cooperation. Competitive processes lead to the handicapping of the higher-level system that these processes are part of. This is because competitive selection leads to exclusion: something is left outside. Leaving something out means a reduction of diversity. The resulting less diverse system is efficient in the very short term, but always at the expense of... Read the article