Intelligence Advantage Summary Table of Content Excerpts Preface Introduction Bibliography Background Conceptual background Praises Review

Introduction to The Intelligence Advantage The Emergence Of A New Era Convergence Of Thinking Into Complexity Theory The Pathway To Marketplace Advantage The Critical Role Of Structure A New Era Emerges Into A Tradition Every few hundred years throughout Western history, a sharp transformation has occurred. In a matter of decades, society altogether rearranges itself, its world views, its basic values, its social and political structure, its arts, its key institutions. Fifty years later a new world exists. And the people born into that world cannot even imagine the world in which their grandparents lived and into which their own parents were born. -Peter Drucker The next time you are sitting in an executive or management meeting, or anywhere that people accountable for the performance of a corporation are engaged in a discussion, listen very carefully to what is said. Listen to the ideas, and notice if they resonate with a new way of thinking -- a way of thinking that is capable of achieving a marketplace advantage in today's rapidly changing environment. As you listen, set aside the current buzzwords and notice what remains. Do you hear theory that is different from what you might have heard decades ago? More importantly, listen for signs of a kind of speaking that has the power to generate the pursuit of new action, the intelligence to revitalize our ailing corporations, and an openness towards learning that is sufficient to make effective use of ever-improving technologies. For most of us, our ideas about the world, our models and our structures of interpretation arise from a few fundamental assumptions. We use these assumptions to design and operate our corporations and relate to the people in those corporations. The thinking, logic and language that surround these assumptions are based on a view that the world works like a machine and that it is predictable and understandable in considerable detail. This way of thinking was a perfect match for the Industrial Era and it allowed us to function with ease and effectiveness throughout that era. In fact, this way of thinking "created" the Industrial Era. Only under rare circumstances do we approach anything in a way that is not linear, mechanistic, reductionist or analytic. For most of us, this is the only way we know of approaching action, organization and events. Our "Industrial Era" thinking is the only acceptable way of approaching organizational issues. The Industrial Era and its approaches are rapidly being displaced and a new way of thinking about the world is emerging -- one that is far too different from that of the past for mere adaptation. This new way of thinking, and the theories and approaches that accompany it, are emerging out of our awakening to new levels of understanding in the areas of complex systems, intelligence, information and language. Our new understanding of these areas is spawning new technologies that are now sweeping the commercial world. These new technologies are demanding changes in every aspect of our organizational structures and management practices. Innovative ways of working together, utilizing information and spreading knowledge are being employed by our associates and competitors in ways that are taking market territory. TO THE OUTLINE The Emergence Of A New Era To be worthy of the label "new era," the changes that take place must be so pervasive that the very structures of society are affected. When an era changes, everything that we used to count on becomes shaky. Old "truths" are no longer reliable. The world that we are familiar with and competent in seems to be more and more mysterious. Yet an era change is not really very mysterious. In fact, it is filled with countless opportunities for those who take the trouble to learn the new ways of thinking from which the era change arises. A glance through history reveals countless examples of one era being transformed into another and the ramifications of not making the necessary shifts in the thinking and approaches that accompany that era change. To name only a few examples: a dramatic shift in thinking occurred everywhere when human beings began to redefine their relationship to one another, thus abolishing slavery. Countless landowners, dependent on slave labor, failed to alter their way of thinking -- and therefore their estates -- to the new way of thinking that was abolishing slavery. These landowners sent their estates into terminal decline. Owners of lucrative cottage industries, who failed to learn new ways of organizing around large central systems of energy and machinery, were unable to compete with businesses that reorganized. The emergence of literacy created a fear in those who were illiterate or those who used literacy as an advantage. People failing to adjust to the reorganization that occurred as the literacy rate began to rise found themselves in the midst of enormous struggles. Today, we are watching similar setbacks involving people and companies that are failing to learn the ways of thinking and organizing that accompany computers. The beginning of a new era always has its roots in new theories and new ways of seeing the world. When these new theories and new ways of thinking are applied in diverse ways, a compelling and all-inclusive change begins to ignite. Take for example the idea of freedom. The idea has been in the world for centuries. It was not until it was applied by people fleeing non-democratic systems, and used to establish a place in which the ideas of freedom could be put into practice, that freedom was expressed as never before. America's founding ideas and their subsequent applications have fueled changes in every part of the globe. In a similar way, the ideas that made possible the design and production of machinery were around for centuries before they were specifically applied. The ancient Greeks had a working steam engine, but it was not until steam power was introduced in England that the methods of organizing work changed dramatically. The changes caused by steam power made the production line, as we know it, virtually inevitable. In a similar way when electric motors were invented, other major changes in the organization of work were inevitable. The anticipated economic benefits of using electric motors went unrealized for decades. It was not until the organization of machinery, work flow and productive activity were radically changed that the benefits became available. Economic benefits were not made available by merely changing the source of power, because it was a long time before line management saw the need for change. Once ideas are applied to create technology, a society changes forever. The transformation of ideas -- in physics, communication and information theory, systems thinking and methodologies of inquiry -- that fueled the recent explosion of information has been occurring for over 100 years. But the countless applications of these ideas -- television, computers, integrated circuit chips, lasers, and distributed accountabilities -- have been developing for about half that time. Our way of organizing work has altered very little during that time and yet the speed of change in our thinking and our technologies is accelerating. We are not going to have the time to adjust that was available in previous era changes. The shift we are making is made possible by computers and includes increasingly extensive (and effective) use of information technology, but the shift is not really about computers. It is about information itself and includes communication technology, display and public access, graphics, algorithms, organizing our work practices, organizing information, accessing information and generating information. The Age of Information might better be called the Age of Knowledge. But irrespective of what we call it, it is unfolding rapidly and we are a part of it, whether we want to be or not. Unfortunately, most of us are not aware of how fundamental the shift is. Most of us do not know how to generate the kind of organization and action that is a match for the new era. Instead, we think in a way that is suitable for an Industrial Era. To make the shift in thinking, we need the willingness to unlearn the old and the courage to grapple with the new and unfamiliar. The times ahead will demand new theories, new thinking capabilities, new capacities for transforming chaotic data into useful information, and new levels of innovation capable of designing practical applications for that information. We must be ready to innovate, adapt and invent as never before. To meet the onslaught of new and unfamiliar circumstances in the future, we must learn new cooperative behaviors at every level. It will become increasingly common to join hands with former competitors, former "adversaries" or customers who were previously considered to have different interests. Efforts accomplished in dialogue between individuals, teams and organizations will far surpass efforts made by individuals. The coordination of information and action occurring across boundaries will be the order of the day for those who are to succeed in an information-based economy. TO THE OUTLINE Convergence Of Thinking Into Complexity Theory As we break the grip that the Newtonian-Cartesian paradigm has had on Western minds for centuries, we become able to create a new relationship with what occurs within and around us. We are beginning to reinterpret every aspect of ourselves, our ways of being and the universe in which we live. Every science and discipline is going through a process of breaking free of its old interpretations. The transformations that have taken place in Western physics and philosophy have converged until each sounds like the other, only expressed in different terms. Furthermore, the thinking of Western physics and Eastern meditative disciplines is beginning to converge. Fritjof Capra was ahead of his time when he saw this underlying unity in the 60s. David Bohm explored the East/West convergence and went on to create useful developmental material that can be used to facilitate dialogue and group processes. The explosion of new approaches and new theories is a blend of a multiplicity of fields, including language, philosophy, physics and even computer sciences. Science's reinterpretations of reality are producing profound insights in the areas of learning, development and corporations. One resulting expression in the world of biology speaks of the alphabet and grammar of DNA which interact to produce understandable evolution, immense creativity and rich variety. Grammar and syntax can be seen in the organization of cells, immune systems, languages, companies, economies and ecologies. Our new perspectives on learning, adaptation and survival are contributing to our understanding and design of corporations. Scientists are discovering that they can integrate the insights of physics and philosophy (especially linguistic theories) and open doors to new levels of understanding by exploring biological entities as creators of information and influencers of the ecology in which they live. As computer technologies are applied to these approaches, we are recognizing new aspects of learning, adaptation and production-line scheduling that do not fit our old pictures of how things should occur. These applications are resolving problems in the areas of production, scheduling and computer programming in ways far superior to those using the best engineering methods available. For example, drugs are being invented by computer models that use evolution to create potential structural matches for the offending virus. These new approaches produce a variety of possible solutions that are unimaginable using analytic techniques. Genetic algorithms are solving scheduling challenges that are beyond the capabilities of some of the most advanced mathematics. Ideas using genetic algorithms are being developed for diverse companies and uses: Citicorp for risk management, Canadian Pacific for railway scheduling and John Deere for productivity challenges. Some of the most interesting work in the area of interdisciplinary science is being conducted by a colorful group of Nobel Laureates, scientists, economists and computer wizards at the Santa Fe Institute in Santa Fe, New Mexico. The Institute's work is referred to as the "science of complexity." Their approach to complexity deals with the emergent phenomena of life and living systems in ways appropriate to those types of phenomena, rather than those suited to the strictly physical and material universe. Much of what we are interested in cannot be mechanically generated or understood in a linear fashion and complexity addresses these areas. These areas include evolution, adaptation in living systems, learning and the development of languages, societies and communities. Phenomena such as life, learning, relationship, team and organization emerge from a complex interplay of forces and elements. These phenomena unfold, influenced by a network of a few simple principles that allow rich and varied patterns to develop. These are unpredictable, unspecifiable and unrepeatable in detail. Although the network of principles shapes what emerges, it does not control in detail what is unfolding. The network of principles does, however, ensure that a pattern is maintained while keeping creativity at a maximum. Some level of prediction and control can be exercised regarding the shape of the patterns, but we cannot control the rich detail from which the patterns emerge. The exercise of specific control at a detailed level kills the patterns that would otherwise emerge. Breakthroughs in the various sciences are opening doors in the areas of communication and computational ability. These breakthroughs are shedding light on the fact that there are some organizational structures that are more supportive of communication, computation and creativity than others. Our learning about an organism's capacity for communication, computation and flexibility in service of its growth and survival (i.e. its intelligence), can potentially be applied in many other areas, such as our companies and other productive organizations. Corporations are facing the same challenges that all living beings face in their attempt to survive in an ecosystem. When the theories and principles resulting from the new developments of the scientific world are pursued, these theories and principles may revitalize or totally transform many of business's recent trends (TQM, re-engineering, etc.) and bring them to new levels of power and effectiveness. W. Edwards Deming provided us with one very important clue: "What is missing is a theory of management." I'm going to go one step further and suggest that what is needed first is a theory of organization. Until this is created, whatever strategy we apply (whether TQM, re-engineering or the "learning organization") will continue to flounder because of the gap between our current thinking, language and approaches and what is actually needed. This gap must be bridged if we are to lead our corporations into the next century without unnecessary struggle and suffering. TO THE OUTLINE The Pathway To Marketplace Advantage Between 1970 and 2000 there will be approximately a 500 million-fold increase in our ability to access, move, create and process information. A great deal of technology has already been created. Yet, compared to the increase in our capacity to move, process and store information, our way of organizing and working together has not been transformed to meet that increase. The source of marketplace advantage may be seen as the organizational capacity to develop and apply knowledge in ways consistent with the power of available technology. Developing this capacity will enable the corporation to deliver on the promise of both the knowledge and the technology. The superficial activities that the various management fads provide will not accomplish the depth of transformation that is required. What is required is more profound and more at the heart of how we think than what is proposed by popular programs, such as TQM and re-engineering. What is required is a level of organizational intelligence and learning that goes far beyond that which any mechanistic or engineered approach can provide. This level will not be approached until we begin to think of a corporation as having an intelligent existence of its own. This new level of organizational intelligence and learning must totally transform the way in which we organize for work and organize work itself. Most companies have not even begun to grasp the implications of the Knowledge Era, much less take on relevant issues and think about them in powerful ways. Certainly, most of us are concerned with information technology, investment and the effectiveness of what we have or what is readily available. But how are we going to access what is not available to us through our normal pathways? To begin to master this way of thinking, we must understand the possibilities of the technology and the ideas behind it, and be willing and able to question our approaches to many things. Namely, we must question the way that we think about work, the way that we organize our cooperative productive activities and the relationships with those with whom we will work. Development and learning are natural processes for human beings, but pain and struggle are not inherent in these processes. Changing the past or changing habits and familiar structures do not have to be painful processes. In order to learn and develop, in a way that is not filled with difficulty, we will have to be willing to let go of some of the things we learned in the past, as well as some of the habits we have acquired, such as being right and knowing everything. Although our current way of thinking and designing our organizational structures may have had some very beneficial effects in the past, the world is changing dramatically and these structures are inhibiting the natural flow of learning and the natural emergence of intelligence. A recognition of this condition is the first leap forward in removing the sense of desperation from the process of development and learning and transforming the process into one of joy, excitement and great reward. Corporations exhibit many of the same characteristics as individuals. It is as though corporations have personalities and make decisions and take actions that are independent of the individuals in them. Corporations also appear to resist learning. A corporation is a phenomenon that emerges from the interaction of individuals within various social environments, but the corporation itself is independent of the individuals involved in the corporation at any given time. Organizations have an intelligence of their own. Corporations have the ability to learn and they have the ability to embody knowledge that cannot be found in any one individual, a few individuals, or even everyone in the corporation at any given time. The reductionist ways of thinking that we have inherited and continue to cultivate are incapable of grasping the notion that our corporations have an intelligence of their own. But this seemingly strange notion of corporations having intelligence begins to appear possible if you look at the fact that you can't locate a mind by looking at what is in each of the cells of a brain or the nervous system. If this is so -- that corporations have intelligence -- then it might also be possible that our corporations are more intelligent than the combined intelligence of all of the individual members in that corporation. And if this is so, then we are open to the possibility that organizational learning can take place at a much greater rate than if many individuals were learning independently. TO THE OUTLINE The Critical Role Of Structure Until recently, management has been able to inherit gracefully and effortlessly the organizational structures that suited the contemporary landscape. These organizational structures consist of machinery, processes, legal agreements, habits, language patterns, accountabilities, and the like which proved successful in our past productive efforts. We have learned how to use them in our work almost unconsciously and we have only had to make occasional minor adjustments in the structures. But the organizational and economic landscape is changing dramatically and management's great legacy of structures is not going to work much longer. Executives and managers argue that they know a great deal about structure. But what they actually know is how to use the structures that exist. Few executives and managers are competent in design, in formulating new structures and bringing them into existence. Most of the failures related to TQM initiatives are attributed to a lack of commitment. This is inaccurate. The failed efforts are testimony to a lack of understanding and facility in the area of structure -- both physical and linguistic. I, for one, am reticent about accusing executives of a lack of commitment. If they lack commitment, how did they get into a position of responsibility? To begin something new, to keep it in existence, and to alter the course of what is occurring, we must be able to bring into being the physical structures, practices, and language patterns appropriate to the new theories upon which the alteration is based. If we don't succeed in bringing the essential elements into existence and interrelating them, the new structures will not remain in existence and the old structures will reassert themselves. Such is the power of structure. Without structure, we would be living in a chaotic world. We must design structures that allow energy and/or information to be converted into something intended and not into something else. These structures will guide us and allow us to do many things effectively without demanding that attention be placed on the influencing structure. We are then free to create, innovate and access what is otherwise not possible. This is one of the areas in which complexity theory offers us a wealth of information. Structures that are a match for our intentions and understanding allow us to expend our energy and attention where it will have the most effect. The difference, between a productive and a nonproductive culture, can be found in the culture's ability to use structure without having to place awareness on it and the ability to keep structure in existence without great energy. When we are ignoring structure, or it is inhibiting or continually disintegrating, then the situation is "remedial" rather than productive. Perhaps the most powerful area of organizational and managerial development in the future will be the creation of operational definitions with which we can redesign every aspect of our approach to work. "Operational definitions" is one of the areas in which W. Edwards Deming said that management needed to be educated. Operational definitions turn ideas and theories into the "linguistic tools" with which we can work and produce results; they have been effective working tools for scientists, mathematicians and engineers for a long time. It is time for management to access the power available through use of operational definitions. TO THE OUTLINE A New Era Emerges Into A Tradition The sweeping nature of the changes that are occurring in the world can be seen to extend far beyond the world of corporate concerns. Governments and social systems are being transformed or toppling -- sometimes both. The Soviet Union could endure being uncompetitive or economically unsuccessful, but it could not endure the bright light of information and communication as its citizens broke free of the grip of suppression. In country after country, governments and leaders are being turned out of office. For everyone everywhere, security is becoming elusive and old beliefs are coming under attack. Every level of every current social structure, whether it is corporate or government, is falling in the light of new thinking and new practices. Our new Era of Information, with all its speculation, creation and uncertainty, is actually the flowering of a tradition. Although the tradition is young, there are many who have gone before us and there are many who have expressed their ideas in theories and proven them in application. The journey of organizational transformation is being undertaken by many who have dared to lead and dared to create the space of possibility for the rest of us. Join the game early. Embrace the fact that profoundly new ideas are always possible. Thoroughly enjoy the satisfaction of every aspect of your own development and that of your organization. To do so provides a possibility for the entire world -- the possibility that the transformation of our organizations will provide the environment and conditions for a realization of a new level of human existence.