Knowledge and human capital have made a dramatic debut in the millennium
economy. Together they signal a critical shift in organizational life to something
new and different, especially when it comes to dealing with people. The best of
any company’s knowledge and human capital walks out the door, everyday, at
5:00PM. These two forms of capital are intangible; they have not been a part of
the traditional balance sheet. Capturing and increasing the value of these capital
assets requires a new set of skills. As many have noted, in the information age
“knowledge workers” have the leverage. And they carry their means of
production with them wherever they go.

The result is that management as a professional discipline is on the verge on a
major transformation. While management’s famous guru Peter Drucker insisted
that management is the organization’s single most important “organ,” he also
declared it is not possible to manage people. Rather, he stated, “the task is to
lead.” Lloyd Provost and his contemporaries at API teach us that it is only
processes that can be managed, and only then through the purposeful application
of continual testing and learning. Esther Dyson drew from the new science of
complexity, especially in the area of complex adaptive systems, (“CAS”) to
characterize this impending transformation through a different lens. The new
management acts in a distributed way, as an “immunity,” a capacity that
everyone can (and should) participate in and practice.

Superperforming management and leadership co-joins improvement and
complexity science to create a new approach that leverages both process and
culture together. This incredible new paradigm signals a fundamental shift away
from a mechanistic view and towards a view of organizations as living
organisms.

Dave Guerra’s post in response to Chinese Scholar Sheng Zhao query on the Leadership Scholars Network, from the Academy of Management Listserve.

Sheng Zhao: “I am curious about emergence of leadership studies in the US. Looking back on the history, managers and management are the focal topics, but about two decades ago (as far as I know), leaders and leadership began to come into the front stage. What is the reason for the trend? Is it that management studies reach its end of the rope?  Or the social, technological and economical changes bewilder us and we need more direction (which way to go) than management?”

Dave Guerra: “In my opinion it all has to do with the growing revelation that what we losing our mechanistic tethering and moving toward an organic one. Organizations are alive, and as I shared with a young Chinese doctoral student, all of management and even mechanistically-based leadership theory are headed back to the future – to Bohr’s complementarity principle – to Yin and Yang. Our newtonian models have failed us – on the whole management science, much less practice, has been slow to adopt the major scientific discoveries of the last century, especially the last forty or so years. If quantum mechanics and nonequilibrium thermodynamics are true, then we should be able to appreciate them in a most ordinary and self-evident way.

After a life’s work of practical inquiry in the field, it has been my shocking discovery that there is indeed a pattern of harnessing opposites, tangible and intangible, that is the sweet spot of optimization. This is why servant leadership is the only leadership that works – because of the emergence of intrinsic motivation that it provokes – but it is also true that the control of outcomes – through statistical predictability, to quote Deming, is the only management that works – process management, that is. To my mind, if this is true, then there must be some underlying first order principle, some natural law, that is at work here. There is. It is the principle of complementarity, and it tells me we need a life science not a machine science to guide the next generation of organizational theory and practice.

Hence the current rage in leadership studies makes perfect sense, given the actual coming of age of Drucker’s knowledge economy, but my prediction is that ultimately we will find the truth is in the middle. Management and leadership must be treated as equivalent and complementary hemispheres, not separate and distinct provinces. They need eachother for completion. As Deming put it, “To manage, one must lead.”

So hence my message to my young Chinese inquisitor about “management and leadership” in the west, look backwards, from whence you came, to the harmony of yin and yang, because that is where we are headed. That’s my opinion and why ‘complexity leadership’ and ‘biology management’ are the best lens to inform us.

This is very exciting and in my experience at the front, very new.”

Dave Guerra

Sheng Zhao: “I admire greatly that a westerner can understand Yin Yan, and connect it with complexity. In fact many Chinese do not understand the deep meaning of Yin Yan. I find complexity, Yin Yan, and Budhism devle into a  similar worldview in the deep. I raised the question why the leadership studies rise in the US is out of my curiosity that the management studies in China are moving from leadership focus to manager focus, countering US’ trend.  I want to find out why they evolve differently.

Thank you for your insightful comments, and others for their contribution. All the questions, ideas, and opinions on the list help a little brain on the other side of the earth to vibrate more reasonably.”

Sheng Zhao

Bohr’s particle-wave duality. Faraday’s electromagnetism. Watson & Crick’s DNA molecule. Jung’s thinking-feeling opposites. Prigogine’s dissipative structures. Our own brains, with their left and right hemispheres – all point to the same glaring and pervasive pattern throughout all of nature — and in organizations too. Because of our mechanistic paradigm of organizations, it has been hidden before now. The Cartesian worldview is over 400 years old, and is reinforced through the almost century-old Taylor model, scientific management.

When organizations are reframed as living, complex adaptive systems (organisms), the simple heuristic of ‘manage process, lead people’ appears as the obvious and direct path to optimization. The evidence is that long-term market out-performers, i.e. Superperformers, all exhibit this pattern. The control that is called for is control of process, and the liberation that is called for is the liberation of spirit. The biophysics that guides this new paradigm weds the biology of improvement science to the physics of complexity science. Like Bertalanffy’s general systems theory, this new discovery transcends every business discipline, every domain. Performance Management, Talent Management, Project Management, Diversity Management, Knowledge Management, Change Management etc. . . . all give way, shifting in orientation from management to optimization, which joins management and leadership together as necessary and complementary hemispheres.

It is Performance Optimization, Talent Optimization, Project Optimization, Knowledge Optimization, and so on, that supplants management as the superior objective. Superperformers already know this and operate intuitively from this paradigm. Furthermore, this new knowledge recasts management and leadership: from a view of them as hierarchical locations to a view of them as distributed enterprise-wide properties, akin to your own immunity, consciousness, or nervous system.

Organizations of every type can access this new knowledge to reconstitute business strategy and transform performance.