The War of the Worlds — 4. And the Winner is …

The table below has been constructed to summarize and highlight key differences in the traditional and the modern perspectives. Each pair of terms are not to be seen a binary “either – or”, but rather as the ends of a spectrum. And the distinction between traditional and modern will be not the same for all organizations. Each company will have its own pattern.

We will investigate some of the drivers behind the observable indicators at later stages.

Traditional View Modern View
market eco-system
push pull
product platform
competition co-evolution
proprietary interfaces open interfaces / open source
protected IP co-innovation
OR (linear) purposeful systems (living systems)
central decentralized, networked
hierarchy flat
vertical authority meritocracy
external control internal purpose
man is selfish empathic man
The organizations with the “new perspective” are clearly more changeable and adaptable, they are closer to living organisms. Living systems change constantly — if they do not change any more, they are dead. Margaret Wheatley [Wheatley 2006] calls a key chapter “Change: The Capacity of Life” and is spot on with this. Those existing or future organizations which develop this capacity for life will flourish. In the moment those who derive from the software and internet seem to have the advantage, but they must continue to embrace diversity and change, as Gary Hamel points out so clearly in Leading the Revolution [Hamel 2002.]
How can an organization retain innovative capability over a long period of time? The organization is an organism and must evolve with its environment. That the business environment can best be described using systems biology — granted, the term is fairly new, but the concept not —  was already recognized by James Miller when he wrote The Death of Competition in 1996 [Miller 1996.] Please note the “new world” only began to appear on the horizon The study of the “history of companies” is what helped Adrian De Geus [De Geus 2002] answer the question of “How long do companies live and why?” We shall explore the relationship to systems biology in more detail in a future series of blogs, let it suffice here to indicate the answer to the “why” part of De Geus’ question: companies live longer if they are not treated as machines to be exploited, but as organisms with their own right to live.
While you are pondering that, let us point at some sociological research that comes to a very similar conclusion and gives an early understanding of what the rules of “organizational biophysics” may look like. Richard Florida [Florida 2003] examined why certain regions seemed to be more of an innovative breeding ground than others — independent of development funding levels. Granted, you need technologies to innovative in. The innovation is the result of the social interaction of those with the talent to innovate. What Richard Florida found is that a region can only retain this innovative potential if a third ingredient is available in the cultural environment of the region: tolerance. Tolerance allows diversity, diversity is the basis for creative tension, and this is a necessary ingredient for innovation. This is, in a nutshell, the “3 T” model. Florida emphasizes that the order of importance increases in the way we have presented it:

technology < talent < tolerance.

We maintain that the results of this work cannot only be applied to regions and cities, but to organizations. How would you describe your company in these terms?

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2 Responses to The War of the Worlds — 4. And the Winner is …

  1. Anita Bunk says:

    Stefan and Hans-Jürgen, I like your table with the traditional and modern views. As a marketing professional, this is key for what I do in the internet of things. Navigating in the traditional vocabulary and with traditional tools will not bring success to this new development. Your list is definitely worth a very old-fashioned print-out for my desk binder of references 🙂 Keep the good work!

  2. Sivakumar Narayanaswamy says:

    I am impressed by the two below:
    while competition is replaced with co-evolution and protected IP by co-innovation, I am sure everyone will agree that the recent coming together of Siemens and McAfee is in line with this, though they are not exactly competitors.

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