Balancing through stored energy from absorptive capacity

Axelrod and Cohen refer to the three elements of emergence as: Variation, Interaction and Selection. These map nicely with those identified by Adam Smith, which were specialization (variation), trade (interaction) and free choice (selection). This also is consistent with my previous descriptions of heterogeneity (variation or specialization), interdependence (interaction or trade) and choice (selection or free choice).

However, as I focus on tensions, what I have come to believe is that Axelrod and Cohen's labels are useful at a meta level, while my are more useful as descriptors of the tensions between stability and variability. For example:

Variation represents the tensions between homogeneity and heterogeneity
Interaction represents the tension between independence and interdependence
Selection represents the tension between compulsion and choice

A swing in the balance to those on the left pushes an complex adaptive system (CAS) to stability, while swing in the balance to those on the right pushes a CAS to variability. Too much stability and an CAS implodes due to its own weight, too much variability and its explodes as there is too little holding together.

The cues that emerge and that are perceived as possessing significance and challenge the status quo create uncertainty. In this manner, cues represent a catalyst for the creation of energy by the CAS for change. It is not necessarily true that the energy for change comes from the cue or the environment, but the cue is much like a defibrillator that provides the spark to jump start the system that then provides its own energy to balance the system.

Once the cue sparks the system to perceive some level of uncertainty, this creates the perception of disequilibrium due to an imbalance in the three elements of emergence. The CAS then begins a process through leadership and structuration to put the system back into balance. This imbalance represents the adaptive tensions that are triggered by cues and created through uncertainty.

To dissipate these adaptive tensions the system begins to search for existing schemas to rapidly return to balance, to combine existing schemas in innovative ways to return to balance or to create new innovative alternative schemas to do the same. More often than not, an innovative solution is created to adapt to these tensions since in a CAS the same thing never happens twice. For by definition, a CAS is highly dependent upon initial conditions, is path dependent and is non-linear in nature, which means that you will never be in the exact same position twice. Which means that all balancing is done by innovatively using existing schemas in new ways by linking cues to existing schemas in new ways or by creating new schemas through combination or through new learning.

The search and development of the appropriate schema requires foresight or foreseeing in order to develop a plausible probability that you are going to be taking a prudent risk to move the system back into balance. The foreseeing activity is foreseeing how leadership processes interact to adjust the tensions present in variation, interaction and selection to create new structural outcomes through a structuration process. This foreseeing must not only see how these two processes, leadership and structuration, bring the CAS into balance, but also must foresee how the emergent new possible (for there needs to be foreseeing of multiple possible and plausible structures) will ensure a structural tension so as to enable the emergence of new adaptive tensions in the future. Structures that minimize rather than optimize adaptive tensions will end up causing an system to fail to survive.

Once foreseeing provides some level of confidence that prudent risks can be taken to balance the tensions, then risk is taken. This risk taking is the force that brings the system back into the balance as this is the action that enables the adaptation necessary for survival.

From an energy management perspective you can think of it this way. Cues provide a spark that initiates the adaptation process. Three leadership processes work in tandem to assign significance and to perceive the importance of the cue and interpret the level of uncertainty that this cue represents, the imbalancing in the elements of emergence that this will lead. In this way, the system creates its own energy catalyzed by a small spark from the cue. This energy results in a force we call adaptive tension that then provides the energy necessary to search for innovation alternatives, foresee possible plausible outcomes and then take risk to achieve them. To do all this, the CAS must have a store of energy reserves that it can tap. There must therefore be slack in the system, which Cohen and Levinthal have characterized as absorbtive capacity. This capacity is a spare energy source that can be tapped to rebalance the system to go through the adaptive process to return to balance through risk taking.

Enablement theory of leadership

Enablement theory of leadership explains how three leadership processes enable emergent order within complex adaptive systems by balancing tensions.

Three leadership sub-processes, emergent, formal and shared, work in tandem to enable structuration, through significance, legitimacy, and dominance, to balance the tensions that arise among the three dimensions of emergence (heterogeneity vs homogeneity, interdependence vs independence, and choice vs compulsion).

These leadership processes extract cues that initiate the creation of tensions and require a balancing process in order for the system to take risk and rebalance the system. The balancing process is initiated by an extracted cue that leads to the perception of uncertainty that creates tensions that leads to an exploration of innovative alternatives that then leads to the taking of prudent risks to rebalance the system through new emergent order.

Structuration is the process used by these leadership processes to balance the three elements of emergence to create new order, where each leadership processes is aligned with a primary structuration domain, which is also aligned with a primary element of emergence. The three way pairing is as follows:

Shared leadership -> Significance -> tension between compulsion and choice
Formal leadership -> Domination -> tension between homogeneity and heterogeneity
Emergent leadership -> Legitimacy -> tension between independence and interdependence

Fast-paced, turbulent and chaotic environments create tensions that force organizations to adapt and coevolve in unpredictable ways in order to survive. Organizations, as complex adaptive systems (CAS), represent dissipative structures that must experience change in a rapid continuous or less frequent and more radical punctuated equilibrium manner to dissipate the tensions generated from the environment. Balancing of these tensions enables an organization to become poised at the edge of chaos, far from equilibrium, where optimal emergence takes place that enables a new order necessary for survival. Those organizations better able to balance these adaptive tensions can remain poised at the edge of chaos for longer periods of time and experience greater levels of innovation through emergence that leads to new order and long-term survival.

The teleology of all complex adaptive systems is survival and drives them towards adaptation and coevolution in the short-term and survival in the long. Therefore, organizations must better understand the role of adaptive tensions and the process whereby they can balance these tensions to ensure survival. To do so, we must first understand: What are adaptive tensions? Where do they come from? What causes these tensions to emerge? How do they operate? How are they balanced? What role does leadership play in creating and balancing these tensions? Are there good tensions and bad tensions? Should organizations be structured to create tensions? If so, then how and what type? And, does balancing them enable a complex adaptive system to remain poised at the edge of chaos and enjoy optimal emergence?

I define tensions as an energy force initiated by cues and caused by perceptions of uncertainty that compels a system to explore innovative alternatives and take prudent risks. To understand these tensions we must understand the different types of uncertainty that the system creates, as well as the role of absorptive capacity in exploring and developing innovation alternatives to address the uncertainty and how systems take risk to balance these tensions.

We believe that the origin of tension arises from uncertainty relating to the appropriate mix of stability and variability in various organizational processes that result in changes necessary for survival. The pulling and stretching been stability and variability can be found among nearly all organizational constructs, as outlined below:

Change: incremental vs radical

Learning: individual vs organizational

Leadership: great man vs distributed

Culture: integrated vs fragmented

Strategy: central planning vs peripheral strategizing

Structure: hierarchical vs loosely coupled

Sensemaking: retrospective vs prospective

Risk: minimize vs optimize

Sytems: closed vs open

Value: efficiency vs effectiveness

These tensions resulting from stretching between stability versus variability disrupts the equilibrium within a system and forces changes necessary to meet the demands of requisite variety for survival. This disequilibrium creates an imbalance among the three elements of emergence (heterogeneity, choice and interdependence) within a CAS and between a CAS and its environment. The tensions between these two elements are as follows: homogeneity vs heterogeneity, independence vs interdependence, compulsions vs choice. Structuration provides the process for rebalancing to achieve a structure to enable balancing of these emergent properties. Emergent, shared and formal leadership processes support structuration and enable emergence that balances these adaptive tensions.

The purpose of my dissertation is to provide a better understanding of the source, role, need and effect of adaptive tensions within a complex adaptive system. The intended context for the research is within an open innovation structure for creating and developing new technologies. My research questions are: How do tensions impact emergence that leads to innovation and adaptation within organization? How do organizations take prudent risks to balance these tensions and maintain an optimal level of tension so that they adapt and coevolve rather than collapse or explode?