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

Review of The Intelligence Advantage Ideas that Might be Profitable Jim Buccini Current thinking Other "counter-intuitive" ideas Measures of Intelligence (Discovery?) Design Principles for Intelligence Structures for Flexibility Disturbances must be designed into the regular organizational processes Phases of the process of transformation New dimensions in behavior to create coordination in our complex system Current thinking: As we get larger, the coordination becomes exponentially more difficult. It is harder to make any real changes in larger, more established businesses. Complexity Theory thinking: Wrong! In fact, it is exactly the opposite. The reason large organizations are easier to transform lies in the theory of complex adaptive systems. Complexity theory explains how a small change affects all parts of the system. Significant changes can be accomplished with minimal effort and small disturbances to the system. Of course, this holds for profitable and unprofitable changes. It will probably take more time to transform an organization with 1,000 people than one with 10 people, but the difference cannot be scaled linearly in a direct proportion. There is no concept like "fixed amount of transformation per person" you need to accomplish. If this were true, it would imply that large organizations were considerably less intelligent than small ones, and it is unlikely they could survive and adapt. This does not match with the reality of their persistence. If we look at nature, the cerebral cortex is the deeply convoluted surface region of the brain that is most strongly linked to intelligence. A human's cerebral cortex, if flattened, would cover four sheets of regular typing paper. By contrast, a chimpanzee's would cover only one sheet of paper, a monkey's would cover a postcard, and a rat's would cover a postage stamp. Intelligence does not seem to scale linearly with the number of neuron cells, or thinking "workspace" available. In fact, it appears to increase at a much faster rate. The problem with this analogy and people is, "As human beings we are designed to be infinitely adaptable, but we have brilliantly mastered restricting that." TO THE OUTLINE Other "counter-intuitive" ideas: Management has less to say about the organization than it likes to think. Theories guide the activities of our life long before we understand the nature of theories. The phrase "what we don't know that we don't know" (complex phenomena) expresses the phenomenon in which something is in the background and completely unavailable for examination and effective use. The "background" region contains a vast realm of useful knowledge we do not consider. Listening and dialogue are powerful ways to help people begin to explore this area of possibility. Perhaps the most important role of a leader is to provide a "pattern language" to ensure the organization maintains a design consistent with its self organizing nature and produces a language of interpretation for those who are part of the organization. To transform anything with a past requires understanding of the historical nature of things (past theory) and a new theory to generate actions. (We often avoid the effort to develop understanding of past design theory because we do not understand its value in catalyzing transformation.) Change is not something to pursue it happens. Increasing intelligence is something worth pursuing it doesn't just happen. One theory we can profitably get rid of is the idea that leadership must come from the top and that the whole top team must be aligned. Another theory to discard is that everyone must be on board. If an executive considers that he or she is the leader rather than an executive and a leader, that person is thinking of himself or herself as separate from the organization. As we shift from the "production era" to the "information era" the rules of the game change. Intelligence will assume greater value because it will become the key to success. (Less ability to profit from information asymmetry, must look to profit from knowledge asymmetry.) The single most powerful changes usually result when teams are taught to dialogue effectively. (This is a source of leverage.) The nature of accounting is focused on the physical parts of an operation. It is not designed to support the accumulation of knowledge. Accounting systems must be changed. They are as responsible as hierarchy for inhibiting innovation and learning. The most powerful approach will continually balance possibility, theory, relationship and structure. The dynamic balance between these four factors keeps an organization vibrant and alive. TO THE OUTLINE Measures of Intelligence (Discovery?) variety of responses possible to externally generated input variety of models that can be created amount of input (information) and the number of sources of input that can be integrated degree to which past interpretations are open to question and interpretations can be changed and/or generated (flexibility) ability to receive feedback and adjust accordingly number of relationships that can be maintained at any one time relative successes in altered circumstances percentage of products and processes that are new or that others do not have various measures of relative survival success (i.e., relative market share) TO THE OUTLINE Design Principles for Intelligence: Total number of internal connections of the system. Number and variety of connections to the external environment. A variety of loose and tight coupling with elements of the environment and the internal system, and the ability to alter the degree of that coupling. The number of internal and external connections of each element along with the combinations required for a complete piece of information to be stored, formed and accessed. A complex system composed of a limited number of principles which are strong, with many and varied possible inputs and a grammar which strongly influence the relationship an of events, which has impact on possible combinations. Communication operating freely within a structure, but requiring accumulation of other free communications to achieve meaning or relevance in action. Guidance by patterns rather than detail the guidance is directional rather than absolute. A balance of reliability and randomness (mistake, experiment, trial, etc.) which maintains system integrity (identity) while allowing maximum flexibility. Attention at the boundaries and at the center with little concern for the "middle", i.e. a design that handles routine and limit checks while keeping values strong and information at a maximum. The amount of redundancy in a system that is a match for the ambiguity required for the existence of possibility beyond extensions of the past. In nature, these elements are "wired in" to living intelligent systems. TO THE OUTLINE Structures for Flexibility: Boundaries intentionally created that are meant to be temporary and changed regularly. Accountabilities for structures that are outside those structures and therefore only have a pragmatic interest in their continuation. Communication structures to cross boundaries that come into existence with every creation of a boundary, as well as the ability to demand such communication outside the structure. Measures of speed of change in relationship to registered or perceived changes in circumstances. Practices of variations and practices of changes to those variations. Continual simplification (measured) of processes in conjunction with an increasing variety of circumstances that they can handle and results that they can produce (the rule of complexity, which says that rich variety can be produced from a few simple factors) Mechanisms of feedback that are increasingly rapid and designed to discover changes in the environment TO THE OUTLINE Disturbances must be designed into the regular organizational processes: challenges that cross boundaries overlapping accountabilities planned redundancy with random factors injected artificial boundaries designed into normal activities blending of ideas and people dialogue managed in ways that create diversity visual displays that invite different thinking or new participation exploration of apparently unrelated companies academic input from seemingly unrelated fields For maximum effectiveness the investment must be allocated without requirement of justification of individual acts results. TO THE OUTLINE Phases of the process of transformation: Awakening - awaken intention to pursue what is possible Formulation - through iterative dialogue process Experimentation - pilot projects and isolated experiments Integration - transfer successful pilot projects into mainstream Development - build challenge structures Mastery - learning by individual others TO THE OUTLINE New dimensions in behavior to create coordination in our complex system: closed to ... open secretive accessible (regarding information) exclusion inclusion impersonal expressive authority-based self-responsible bureaucratic accountable direct contro trust in processes hierarchical interconnected rule-bound value-based tightly controlled loosely coupled produced learned directive listen argument dialogue Best to interpret these behaviors as a whole rather than just pairs. TO THE OUTLINE