The Art of Chaos-Informed Transformation
Frans M. van Eijnatten
Maarten C. van Galen
Laurie A. Fitzgerald
 New vocabulary for the new science
It seems only logical that a new way of seeing the world tends to emerge in synch with an equally new lexicon. Since the worldview known as Chaos is no exception, we'll begin our tale of the transformation of a little-known Dutch capital-equipment manufacturer by clarifying in advance, the meaning of a number of terms and phrases scheduled to appear throughout this article. In addition to enigmatic term Chaos, we'll make mention of the noun chaord 1 and its corollary adjective chaordic 1 as well as the practice we'll refer to as Chaordic Systems Thinking also known by its initials CST. The reader will also come across holons , the holarchies they comprise, a measure of their 'depth' we refer to as holonic capacity , as well as the interiors and exteriors of these curious entities . Finally and in keeping with our title, we plan to extol the many virtues of dialogue even though it is not as familiar to the scientific establishment as the other terms may be.
Our vocabulary lesson necessarily begins by clarifying the meaning of Chaos, a term we have adopted the convention of capitalizing so to distinguish it from its common connotation as "mess, anarchy, a state of utter confusion . and the complete absence of order" (Merriam-Webster, 2001). Rather, Chaos is shorthand for the emerging cosmology or metaphysic catalyzed by a trio of 20 th century scientific discoveries: Einstein's Relativity, Quantum Mechanics, and its namesake, the Chaos Theory. Although space and time are insufficient to permit a detailed definition of the so-called 'new science' in this context, suffice to say that Chaos provides us with a 'lens' . and a very powerful one at that, through which to see the world in which we live, and more importantly, the organizations we seek to manage.
Those who gaze through these 'specs' are able to see an organization as the complex, dynamical, non-linear, co-creative, far-from-equilibrium system it is - an intelligent entity in which chaos and order always and forever co-exist. The interrelationship of these seemingly opposites has been concisely expressed in the term 'chaord' coined by the founder and former CEO of Visa International, the credit card company. Dee Hock (1996) defines a chaord as " any self-organizing, adaptive, non-linear, complex organism, organization or community, whether physical, biological or social, the behavior of which harmoniously blends characteristics of both order and chaos ..." A chaordic system can then be understood as a " complex and dynamical arrangement of connections between elements forming a unified whole the behavior of which is both unpredictable (chaotic) and patterned (orderly) . simultaneously" (Fitzgerald, 1997: p.1). Accordingly, while virtually any complex system can be regarded as chaordic, our interest is of course, in the business enterprise, specifically those like the star of our tale that have been intentionally designed to take full advantage of its chaordic nature.
You will soon see how those who dare to don the Chaos lens and simultaneously relinquish the assumptive commitments underlying conventional wisdom soon grow increasingly skillful in the practice of what we have named Chaordic Systems Thinking. CST is a powerful way of conceptualizing the enterprise not as the fixed mechanical structure we've been led to think it is, but as 'flow', dynamic and vital in its progress. Organizational leaders who become adept in its practice find the attainment of optimal sustainability - the holy grail of management - at last within their grasp.
Next up in our annotated glossary of new science language is the admittedly strange term " holon" along with its variations " holonic capacity" not to mention " holarchy" all of which are now commonplace in the lexicon of the firm you will meet shortly. By the definition of its creator, the late historian and philosopher Arthur Koestler, a holon is any entity that is both a whole in its own right as well as an integral part of some greater whole. Think about it for a moment and you will soon realize that there is nothing that is not such a wholepart. Nonetheless, it is also true that no two holons are exactly alike. Each can be distinguished from any other by virtue of its holonic capacity or put more simply, its relative degree of wholeness.
If it occurs to you that this notion of holonic capacity may imply the presumption of the hierarchical nature of reality, you would be correct. However, it is important to note that due to the increasingly disagreeable connotation of hierarchy, a by-product of the very human tendency to construct systems in which power over others rather than wholeness rules as the major criterion for the determination of rank and status, you'll be happy to know that an alternative term has been adopted in its place. In the language of the new science, the lesser holons forming a greater whole are understood to comprise a "holarchy" - a hierarchy of increasing wholeness .
We would certainly be remiss if we did not mention the familiar terms "interior" and "exterior" before launching into our tale of "holonic" transformation. Even though both are commonly spoken, their significance to the hero of our story is somewhat different than one might expect. Perhaps the most efficient way to define them is to refer to the work of philosopher Ken Wilber (1996) who has pointed out the fact th at every holon possesses both a perceptible and often tangible surface (its exterior) as well as a ethereal within (its interior). Largely due to the legacy of materialistic science, this essential composition of reality has been overlooked, dismissed and abandoned until the new science came along to resurrect them all to the significant advantage of those who don the Chaos lens.
In any event, the exterior can be understood at that aspect of a holon one can know empirically via the senses or their instrumental extensions. Unfortunately, because the majority of modern managers and practitioners have become so over-reliant on their senses and the information received through them, they continue to give short shrift to the unsubstantial within of the systems they hope to manage. Not so for the protagonist of the story we're about to tell: To their chaordic systems way of thinking, the interior is not only more crucial to their success than is their manifest surface, it is essentially determinative of both. In other words, in an updated version of the old saw "form follows function," Chaos asserts that a holon 's exterior follows from the dynamical action taking place in its interior.
If this is indeed the case, then managers and practitioners who strive to reengineer their systems into new and improved forms capable of producing new and improved results would be wise to attend to the interior. Those who take the trouble to familiarize themselves with the "soft" but non-substantial "stuff' comprising the mysterious within - thoughts, concepts, beliefs, values, emotions, assumptions, and meanings to name but a few - will quickly discover just how much easier is the task of achieving the goals they have set for their increasingly complex systems.
Chaos assures us that the crucial distinction between a system's interior and exterior 'halves' has profound implications for how one goes about 'knowing' them. Wilber (1996) has pointed out that since the latter can be readily apprehended by the senses, the relationship of the observer, a manager or practitioner, to a system's surface is necessarily monological: one "relates to" the system via a unilateral, subject-to-object, sensory-dependent process. In sharp contrast, given that the holon 's interiority is hidden from he calls the eye of flesh" - the ethereal within of an organization or its orgmind so to speak, can only be accessed dialogically .
And so we arrive at the conclusion of our mini-glossary of new science terminology with the name of the process that played such an instrumental role in the transformation of the chaordic system whose story we're just about to relate. Dialogue consists of the prefix dia and word's root, a derivative of logos from the Greek which together connote the notion of "through" (not "between" as is commonly held) and "meaning." According to the late David Bohm (1996), the distinguished theoretical physicist who virtually single-handedly brought this powerful process to the attention of the lay public, dialogue is quite literally "meaning flowing through" - a stream of meaning flowing through a unified whole, whether that be an individual or a collective (Gerard & Ellinor, 1999).
In order to truly know a particular unified whole (a holon? a chaordic system? an organization?), it follows that mere sensory observation of its manifest exterior . an unfortunate practice common to managers and practitioners who have not yet donned the Chaos lens . will simply not suffice. One must enter into the river of meaning flowing continuously within the organization's collective interior . its orgmind so to speak. As the heroes of our tale can guarantee, one can gain entry to the mysterious within only by engaging in the process of dialogue . In fact, they would probably insist that the adoption of dialogue as the primary mode of interaction in the firm is the key to their extraordinary success. But then we might just as well proceed with the narration of their story.
Introducing DMT
Meet the Dutch capital equipment manufacturer DMT: A small but eminently successful business serving the global marketplace with highly complex processing systems they design, build and install in food processing operations around the world. In the quarter of a century it has been in business, the firm has managed to attain and sustain an enviable share of its market consistently exceeding 50%. Today DMT employs nearly 600 people in its primary facility located in the south of The Netherlands with another 200 or so engineers and salespeople positioned around the world. While virtually its entire product is designed and built in the Netherlands facility, 95% is installed and operated on location. It would not be an exaggeration to say that DMT's products can be found in almost every nation in the world.
Like many firms, DMT climbed aboard the organizational improvement bandwagon that had risen to popularity in the late 1980s by adopting the theory and practices of socio-technical systems design (STSD). It began by introducing self-management into its parts-production operation. Due to their apparent success, self-managing team structures soon spread to other similarly low-tech operations-level departments. Ten years later, while still maintaining a healthy market share and excellent profitability, it became apparent that the momentum behind its STSD initiative had begun to falter. Propitiously, the senior manager who was next in line to assume the mantle of leadership upon the retirement of DMT's founder shortly after the millennium would "discover" three ideas that together would give the company the boost it needed to transcend the stalled incremental change process: Chaos, the orgmind, and the art of dialogue.
This prescient executive . we'll call him Ted, immediately recruited a consultant who had significant experience in the process of organizational design and whole-system transformation grounded in this trio of theory and practice to guide the process. In addition, he retained the services of an action research team from a Dutch University who would document the process of profound change on which DMT would soon embark. Together the consultant, the researchers and a small team of managers Ted hand-picked to lead the process, set out to learn how to transform DMT . dialogically.
Rising out of the chaos that ensued from this unusual and untried (by them) approach to whole-system transformation, were three major learning components: 1) The introduction of Chaos as the theoretical "lens" on reality; 2) The adoption of dialogical interaction as the primary mode of communication in the system; and 3) The practice of emergent leadership known metaphorically throughout DMT as the "dolphin" strategy (Lynch & Kordis, 1988). Each represented a radical shift away from the way things had always been done at DMT: Chaos replaced the conventional lens on reality; dialogue superseded discussion as the company's communication mode; and emergent leadership took over where the designated variety once predominated.
It is worth noting at this juncture that Ted's team spent uncountable hours immersed in an intensive dialogical learning process throughout the first 18 months of the intervention, facilitated by the consultant and carefully documented by the researchers. As a result they succeeded in building a close-knit team that had thoroughly internalized CST. Since all this happened before any other member of the company was aware of what they were doing, it wasn't long before the main subject of "water cooler" gossip around the company was "What's happened to them? Why are they acting so strange?" . referring of course to the Ted and his core change team. The answers were soon to come as the opportunity to experience the theory of Chaos, the practice of dialogue and the power of the orgmind began to spread in ever widening circles that would eventually encompass nearly two-thirds of DMT's workforce. Included among the series of intensive learning activities that were developed, field-tested, fine-tuned, translated into Dutch, and then implemented throughout the firm were the following:
A layman's introduction to the core principles of Chaos with an eye toward boosting the holonic capacity for learning and change of the entire organization by an order of magnitude...or better.
After being introduced to the basic skill-sets of conversation through which meaning is able to flow freely, small groups of individuals receive expert facilitation (at first provided by the external consultant, and then by carefully-trained insiders who have volunteered to serve on a facilitation cadre) as they practiced the fine art of dialogue.
After sufficient time had passed to allow those who had now been exposed to Chaos and dialogue to integrate the concepts and hone their new skills, workshops were held to introduce the concept of emergent leadership. The critical importance of each and every "DMT-er" stepping forward and assuming responsibility for the greater whole was the central theme.
Groups of DMT members representing a cross-section of the company spent entire days together engaged in a deep dialogue focused on the articulation of personal visions and the question "How must DMT be in order to realize the collective vision of all its members?"
More than two years into the change process, a call was issued for people who were willing to take responsibility for designing from a "blank slate", a whole-system architecture capable of realizing the visions of all its members and for thriving, not merely surviving, in the company's increasingly complex and turbulent marketplace. Note: Managers and supervisors were expressly excluded from participation in this process. Even so, more than 50 individuals stepped forward to self-organize into an active network intent on producing the "New DMT."
Of course, DMT's transformation involved a great deal more than just this slate of workshops and training sessions. People throughout the firm were intensely involved on a daily basis in a number of activities ranging from "hallway dialogues" about the meaning and/or applicability of a Chaos principle to organizing "retreats" to study the ramifications of the operant orgmind. Furthermore, Ted's original team of managers who had served as catalyst for the entire process continued to devote numerous hours to it even including the "DMT's transformation" on their strategic business agenda. What is most remarkable about DMT's change process is the fact that these essential activities were more likely to emerge from the interaction of its members than to be planned or organized for them. Indeed, although Ted and other people with power in the system had a vested interest in this process, the transformation of DMT was never "owned" by them exclusively but by every member of the firm . the essence of emergent leadership.
Transforming on the fly
Perhaps the most pertinent lesson in this "case study" in dialogical learning and transformation is the fact that other than the framework of principles and precepts forming the Chaos lens, no plan or strategy was ever devised to guide the course of the change initiative. Virtually every action taken over the last four years emerged from the flux of continuous interaction among the 600-plus members of DMT. Activities that 'worked' were repeated while efforts that faltered were simply abandoned . a practice now known by DMT-ers as the "dolphin strategy": Do what works and forget the rest.
It should be noted that until well into the second year of the project, every workshop, training event, conference, meeting, retreat, and dialogue session was designed, delivered, and/or facilitated by the external consultant. Even so, both she and Ted's team were well aware of the necessity of internalizing external knowledge and "expertise" in a number of areas most certainly including the theoretical foundation of the Chaos lens, the practice of dialogue, a strategic approach to transforming a complex system from the "inside out," i.e., changing the orgmind, and the process of whole-system design. Consequently, in September 2000, an initiative designed to educate and develop a cadre of internal facilitators as well as a team of "trainers" who would assume responsibility for spreading the theoretical principles of Chaos, the practice of dialogue, and the mantle of emergent leadership to those who have not yet been formally exposed to these essential components of DMT's transformational journey.
The New DMT: Start-up to D-Day
Chaos suggests that the " natural direction" of profound change in any complex holarchy, is from the subtleties its interior outward to its tangible surface. Accordingly, the primary focus of the change effort throughout the first two years was on comprehending DMT's orgmind and then boosting it to a higher order of consciousness - of knowing, thinking and seeing the world. Eventually however, the firm's surface had to betaken into account in order to ensure success in the drive to transform the "whole" whole-system.
A preliminary evaluation of DMT's exterior revealed all to clearly that the plethora of structures, procedures, processes, roles, positions, departments, business units and so on comprising it had grown increasingly fixed and "stubbornly" resistant to change as a result of a long history of exceptional success. As a consequence, managers who had been receptive to if not enthusiastic about the effort to bring about change in the orgmind, suddenly balked at the suggestion that the company's exterior could take any form other than what it had been for more than a quarter of a century. Some who had spent years of their lives "climbing the corporate ladder" . including several members of the management team that initiated the process . found it difficult to cope with the very idea that the "ladder" that had elevated them to positions of power, privilege and status in their system would inevitably be reduced, collapsed and otherwise eliminated.
Nevertheless, because Ted and his team were resolutely committed to seeing the world through the Chaos lens, the process continued: Whether they liked what they saw or not, they had to acknowledge the inarguable necessity of strategically, intentionally and creatively destroying their existing system so that a wholly new, optimally sustainable chaordic enterprise could emerge in its place. Furthermore, they realized not without considerable angst, that their "plates" of responsibility for conducting business as usual were way too full to permit their direct involvement in the systematic dissipation of the existing system and the concurrent design of the "New DMT."
Subsequently, in the late winter of 2002, the entire company was invited to attend a series of "information sessions" in which the management team presented a recap of the change process as it had played out so far and then surprised everybody . some were delighted while others were skeptical . by calling for volunteers to form a team responsible for creating the architecture for a wholly New DMT.
Notably, the only constraints placed on the newly formed design team were three: First, they were to engage in the design process from the basis of CST. Secondly, each participant in the network was act as a representative of and proxy for every one of their colleagues. And thirdly, the resulting architecture had to make it possible to realize the personal visions of every member of the firm. Other than that, the design team would be supported with time, financial resources and all the expertise they needed to complete the magnificent task that lay before them.
After a couple of weeks passed during which the entire company was abuzz with speculation, deliberation and a lot of soul-searching as people tried to decide whether they were up to the immense commitment called for, nearly 40 individuals representing virtually every department and function in the company, showed up at an inaugural meeting of the DN. Obvious to all was the impossibility of creating a whole-system architecture in a timely manner with such a large number of people involved. Consequently, they self-organized into a configuration they dubbed the Design Network. This DN revolved around a "hub" of nine people who would be responsible for creating an architectural model for the New DMT based on "intelligence" relayed to it by the remaining volunteers. These would comprise the "network" whose job it was to reach out into the system involving more and more people as time passed as well as conveying important information to and from the Hub.
Following an intensive training session in which the external consultant introduced the DN to the fundamentals of whole-system design, the DN launched its quest to create a worthy architecture for the New DMT. Although the DN was given extensive training and on-going support from the consultant in terms of the technicalities of organization design, they had no roadmap to follow since the journey they were embarking upon had never been taken anywhere, anywhen or by anybody ever.
It is supremely important that this fact be taken into account when the inevitable question of "How?" is asked as it will be by those who may hope to replicate DMT's formula for success in such an ambitious venture. In the proverbial spirit of changing, and now designing "on the fly," the DN proceeded without a roadmap to guide their way. Furthermore, they did not create a record of their deliberations over the next nine months for us to evaluate let alone to share with the readership. Instead, their work must be judged entirely upon their "product": The exquisitely designed architecture for a robust, vibrant, optimally sustainable chaordic system worthy of the name DMT.
And so the weeks passed . often not easily for the DN. Intensifying competition, a continuing slide in the global economy and several sudden surges followed by retreats in DMT's business added to the already strong pressure to create a design and to increase performance in the regular jobs of the members of the still growing network. At last, after nearly a year of arduous effort the DN announced its D(esign)-Day and invited the entire company, all 600-plus people, to join them for the "unveiling" of the architecture for the New DMT. Although the members of this remarkable chaordic enterprise have only just begun the process of translating the multiple dimensions of its design for the future into reality, suffice to say DMT's transformation is well on its way. We'll just have to save that story for another time.
Afterwords
Our intention in the telling of this story has been to demonstrate the transformative power of a Chaos-informed dialogical approach to change and learning in a complex, dynamical, chaordic system. Due to their unwavering commitment to the process, the leadership of DMT has managed to diffuse CST and integrate the practice of dialogue throughout the company while at the same time enhancing its performance in the marketplace. By focusing on changing their system from the inside (orgmind-as-target) out, they have discovered and tapped into DMT's previously unrecognized reservoir of holonic capacity. In addition, by proceeding "on the fly," their success in blazing a trail through the wilderness of profound organizational change may inspire others to relinquish control and its attendant dependence on an action plan for whole-system transformation.
Notes
1 "C haord" and "chaordic" are registered trademarks of the Chaordic Alliance: http://www.chaordic.com .
References
Bohm, D. (1996). On Dialogue: Routledge, London .
Fitzgerald, L.A. (1997). What is chaos?: from the WWW : h ttp://www.orgmind.com/chaos/whatis.html
Gerard, G., and Ellinor, L. (1999). Dialogue: Something Old, Something New: from the WWW : http://www.sonic.net/dialogroup/whatsdialogue.html .
Hock, D.W. (1996). The Chaordic Organization: Out of Control and into Order: from the WWW : http://www.cyberspace.com/~building/ofc_21clidhock.html .
Lynch, D., and Kordis, P. (1988). Strategy of the Dolphin: Scoring a Win in a Chaotic World: William Morrow, New York .
Merriam-Webster (2001).
Wilber, K. (1996). A Brief History of Everything: Newleaf, Dublin .
Originally published in Special Issue: The Implications of Complexity and Chaos Theories for Organizations That Learn. The Learning Organization - An International Journal, P. Smith (Ed.), Vol. 10 (5), December 2003.
This material is copyrighted and may not be reproduced in any form without permission from the publisher.
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