Complexity and the Nexus of Leadership

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.¹ 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!”

Innovation—it’s a buzzword for the twenty-first century. Creating new services, new products, new processes, new business models, new organizational forms, and new industries seems to be the key to success in this era of business. What drives innovation? Why do some companies achieve innovation more consistently than others? Is it the people? Is it the compensation? Is it the industry?

One of the most powerful findings of nonlinear science concerns the phenomenon of emergence: the coming into being of new structures, practices, and processes. In organizations, emergence is the basis for innovation. Emergence is a central process within the nexus of leadership, precisely because it occurs through an integration of “bottom-up” organizing and the “top-down” influences of generative leadership. Taken in combination, various processes of emergence yield true novelty, such as the creation of a new venture or a renewed organization in whole or in part. Because the resulting forms emerge from the application of changing external constraints on the system’s own capabilities and history, what “emerges” can be far more adaptive than would have otherwise been possible solely through a top-down design.

At the core of emergence—indeed at the core of our book—is how an ecology of innovation can produce unique experiments that have the potential to become seeds for unprecedented organizational action. This is particularly salient in the high-tech industry over the past few decades where an understanding of the workings of an ecology of innovation can explain a most baffling conundrum: why have some companies thrived while others that possess even more resources failed? Consider, for example, the difference between the rebirth of Apple Computer through the phenomenal success of the iPod and iPhone, compared with the unraveling of the “old” AT&T¹ which had been a technological powerhouse at the dawn of the Internet age. Complexity science offers an incisive understanding of why an ecology of innovation took root and was enormously fruitful at Apple but at the same time ran into fatal obstacles at the old AT&T.

In this chapter we begin to describe the specifics involved in creating an ecology of innovation in your organization or community. Thus far we have focused on the workings of complex systems, and we have shown how advances in complexity research over the last quarter century can inform one’s thinking about innovation and adaptation in organizations. In particular, we have pointed to the importance of a kind of leadership that enables change and adaptation in organizations, what we call generative leadership. Earlier chapters described how such conditions can and do encourage individuals throughout the organization to experiment with novel approaches, either in an effort to capitalize on opportunities or to solve problems. We also described how these simple ideas can, under the right conditions, extend and expand a wave of change that spreads across the entire organization. At the same time, we have insisted that these things don’t happen by themselves. Generative leadership is needed to create the conditions that enable success. In this chapter and in the next, we describe specific ways in which generative leadership enables in novation-led success even under difficult and challenging conditions.

Throughout this book we’ve described and exemplified how generative leadership informed by complexity science can work successfully in organizations large and small. Each example has drawn out one or more key insights into how complexity science can be leveraged to create ecologies of innovation. For example, we saw how: