Leadership Workshop (7 of 12) – Stimulate the Creative Flow

Leading at Light Speed is an essential new leadership book by Eric Douglas synthesizing the best business practices into 10 Quantum Leaps that build trust, spark innovation, and create a high-performing organization.

In Chapter 6, Stimulate the Creative Flow, Eric talks about Emergent Intelligence.

By taking advantage of bottom-up decision making, leaders encourage a form of behavior called “emergent intelligence.” Emergent intelligence theory shows an expanding research field in the complexities of operations with organisms and in societies.

The organisms operating on the most basic principles, according to emergent intelligence theory, are those which has the best chance of evolutionary success. Ant colonies are cited as a prime example. Ant culture has a valuable procedure which designates the queen as the only non-multi-tasker within its society. A second rule is: “Do what the ant next to you is doing.” A third is for outgoing foragers to give way to incoming ants carrying food. These three simple rules enable the colony to communicate and adapt to change very rapidly. The garbage is moved to the curb; then you find yourself searching for edibles. Because they operate this way, ant colonies adapt quickly to change and thus survive.

Positive effects of continual restructuring and developing of organizations and companies are beyond imagination. It suggests that simple rules might be very powerful when applied to people. Applying the emergent intelligence theory to creation of Visa during the 1970s and was initiated by Dee Hock who informed a banker’s team of the valuable use of this tantamount principle~During the 1970s, Dee Hock, instructed a group of bankers to use the concept of emergent intelligence to invent the Visa~Applying the emergent intelligence theory to the creation of Visa during the 1970s, was initiated by Dee Hock who informed a banker’s team of the valuable use of this tantamount concept}. Up to that point, local banks had offered a variety of different credit cards – each with different rules. A credit card using assured clearances was planned to be initiated by the team and Dee for financial actions without restrictions and to start from here to eternity.

Well defined, clearly understood rules are the base for banks to independently operate and was a banking concept Dee held. So his team worked hard for more than a year to define those rules. The process of genius was this. They created the first rule which says …You keep what you earn.” Banks that became Visa members would keep all but a tiny fraction of whatever fees or interest they generated.

The second rule was: “No limits on membership.” Any bank was free to join the Visa alliance.

The third rule related to ownership. Since the banks needed the freedom to operate independently, no one should “own” Visa. Thus Visa was structured as a non-stock corporation with governance vested in the member banks. Not one shareholder gained a speck of interest control in Visa as stock had not grown or developed, yet.

The final rule related to management. A separate company would manage Visa’s operations. Nevertheless answering to systems of executive and regional boards would be the way to go. Of the fees collected by the banks, a small fraction would go to this management company to take care of marketing, back office operations, reconciliation, and so forth. But it would not be in a position to “control” Visa. The authority flowed the other way – from the member institutions. Visa was developed as a basic item, however, fine print was minimal. The hard work was in all the engagement and planning that preceded those operating rules. Thus a worldwide form of currency was born.

From this experience, Dee invented the term “chaordic” organization. It reflects his belief that successful organizations are “chaordic” in nature. By that he means they walk a fine line between chaos and order. Order is represented by top-down decision making. Chaos is represented by bottomup decision making. Chaordic organizations, in Dee’s eyes, balance the two by having clear values, a well-defined vision, and sound operating principles. They also have clear systems for monitoring performance. Within that framework, people are left to create strategies and devise solutions as they see fit. It is a model that aligns perfectly with inspiring flow and building a high-performing organization.

Organizations that set these kinds of simple but profound rules enable their people to play on the waves of emergent intelligence. By investing in both trust and spark, by balancing order and chaos, they become capable of operating at light speed.

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