Part 2: Leadership, organizational learning and complexity theory (from history to future)

2 THE FUTURE OF KNOWLEDGE MANAGEMENT
2.1 COMPLEXITY OF CONTEMPORARY ORGANISATIONS
Organisations in developing countries find themselves increasingly engaging in manufacturing activities, while organisations in developed countries focus more on information and services (Drucker, 1999). Among other things, this is a result of competition and it requires speed, flexibility, and adaptability to keep track and innovate in the changing environment. As a result, organisations face extraordinary challenges. For instance, the traditional organisations of the last century have evolved “from a bureaucracy with clear boundaries and internal areas of authority to a new form, which has fluid and flexible external and internal boundaries” (Schneider and Somers, 2006; p. 351). In organisational studies this development also occurs; moving from a theory in which organisational features are being traced back in a linear way to historical or cultural factors (Tsoukas and Hatch., 2001; p. 980), to a theory in which organisational features are influenced by so many variables that the over-all behaviour of organisations can only be understood as an emergent consequence of the holistic sum of behaviours embedded within (Levy, 2001). Thus, behaviour is nonlinear and there is an understanding that small changes and shifts in such behaviour can have significantly large implications. Since recent years, organisational studies increasingly embrace this development that is covered by complexity theory. Complexity theory attempts to understand how organisations and environments adapt to changing circumstances over time.

To put complexity theory in an organisational context, Brown and Duguid (2000; p. 77) give the
following example:

THE “GEEK” WHO UNDERSTANDS THE NETWORK, THE SECRETARY WHO KNOWS THE SECRETS OF WORD, THE ONE COLLEAGUE PROFICIENT WITH DATABASES, THE OTHER WHO HAS LEARNED JAVA IN HER SPARE TIME, AND THE ONE WHO KNOWS HOW TO NURSE THE SERVER ALL CONTRIBUTE.

If all staff members in an organisation, also referred to as agents in complexity theory, engage in intelligent acts with each other, a CAS evolves in which agents present a diversity of options to the whole (Miller, 2007) and eventually the leader should grasp an unanimous decision based on effective mechanisms for narrowing choices.

2.2 LEADERSHIP IN CONTEMPORARY ORGANISATIONS
Leadership is a core factor in contemporary organisations. However, as noted by Davenport (2001), it has become clear that traditional leadership was formed to deal with a very different set of circumstances and is therefore of questionable relevance to the contemporary work environment. Of the same mind is Drucker (1999), who argues that many organisations are taking a far too simplistic view of their structure and culture. They underestimate the size and scale of the “challenge of change” (Drucker, 1999; p. 193) of especially the culture. He stresses that leadership is a key element in such a successful change. Additionally, Umemoto (2002) stresses the knowledge-creating processes cannot be managed in a traditional sense of management that centres on controlling the flow of information.

This traditional leadership is making way for a new type of leadership in which the leader “is getting people to share their knowledge by not only new processes but also a new covenant between employer and employees” (Hibbard and Carillo, 1998; p. 52).

According to Snowden and Boone (2007) this new type of leadership is based on the “advances in complexity science, combined with knowledge from the cognitive sciences”. What they all have in common, is that “under the influence of good leadership, organizational missions are established, goals are reached, problems are addressed through innovative and creative means, and the growth and development of individuals within the organization is nurtured” (Marcketti and Kozar, 2007).

With this new type of leadership surprising and innovative behaviour emerges without the necessity of
centralised control. Boal and Schulz (2007; p. 412) argue that “influencing complex adaptive organizations can be accomplished through intervention in the maintenance and modification of the structure of agent interactions and of the context in which their behaviors occur”. A particular agent’s behaviour, for example, is always guided by the agents in their immediate proximity, and the benefits that arise in the various ways of interacting with them. Therefore, leaders should be more involved in the creation of the context and structure of coordination. Boal and Schulz (2007; p. 415) stress that one way to influence the context and structure of agent activity is through tagging process. Tagging is a process identified by Holland (1995) and serves to co-ordinate the activities of different agents by creating identities around different agent groupings. Hereupon, tags basically signal differences between agents’ types and act as mediators between differentiated agents. In short, tags shape agents into organisational structures like departments, functions and teams. According to Boal and Schulz (2007; p. 415) leadership should use the tagging process “to manage the adjustment of interactions between a system’s agents and to promote movement to new modes of activity in response to the environment”. This does not mean that agent behaviour should be defined along the lines of familiar organisational patterns by representing core competencies through “the history of the organizations’ attempt to survive and grow. In the present tense, core competencies are the platform by which organisations engage the competition. In the future tense, core competencies are the well-spring for growth and evolution” (Boal and Schulz, 2007; p. 416).

According to Malloch and Porter-O’Grady (2005; p. 129) leadership in contemporary organisations should include the ability to anticipate, identify, and respond to unpredictable occasions. They refer to it as “the ability to read signals and to anticipate challenge ... in a way that crisis influence and impact can be quickly assessed and responded to”. As a result, Schneider and Somers (2006; p. 351) argue that “new models of leadership continue to develop, including a model of leadership for the new form of organization, in which leadership relies less upon managerial authority, and a new set of ideas that transcends the physical, biological, and social sciences”. Thus, the leadership’s legitimacy must be based on more rational norms. The trust that leaders build must be an inclusive, open, democratic kind, or knowledge creation and sharing will falter (Bennis and Nanus, 1997; Adler, 2002).

It is now obvious why OL is so important in the contemporary organisation. These contemporary organisations have to learn in order to adapt to a changing environment. Thereupon, Malloch and Porter-O’Grady (2005; p. 127) argue that previously, OL was based on the application of a more mechanistic notion of organisational life and that the contemporary OL approaches have shifted towards a belief that organisations are not so much machines but, instead, organisms. In order to adapt to a fast changing environment, organisations must also make it possible – even desirable – for staff members at all levels of the organisation to own the obligation of identifying and responding to the shifting realities affecting their ability to address the purposes of the organisation and undertake their own work. In the literature this is referred to as self-organising (Knowles, 2001). Consequently, often leadership is seen as crucial to the process of self-organising and is, therefore, the link with OL by acting as context setters and designers of learning experiences (Brown and Eisenhardt, 1997). Schneider and Somers (2006; p. 356) are even arguing that leadership in contemporary organisations should be performed by people in rotation or in tandem. “Leaders serve as tags and influence other persons and processes. They [then] frequently lead without authority and often do so in temporary capacity. Leaders might consciously initiate their leadership role, or might accept the role that has been given to them ... but nonetheless leaders might occur”. A danger of allowing staff members to evolve too independently is that they become too loosely coupled to the organisation. By loosening staff members enough to allow them to develop their own new knowledge and tightening staff members to be able to push knowledge along the lines of process is one of the challenges of contemporary leadership (Brown and Duguid, 2000).

2.3 LEADERSHIP FRAMEWORKS IN CONTEMPORARY ORGANISATIONS
The literature is proposing several new leadership frameworks to enhance OL in contemporary organisations. This chapter summarises two frequently-cited leadership frameworks together with the specific leadership’s characteristics that would be required:

1. Complexity Leadership Theory (Uhl-Bien et al., 2007)
Leadership is composed of three separate but entangled roles. Firstly, the administrative leadership for traditional top-down leadership. Secondly, the adaptive leadership which refers to leadership that occurs within interdependent interactions of emergent collective action (Schreiber and Carley, 2008; p. 294). In other words, it raises awareness among leaders of the differences among people and situations. Thirdly, enabling leadership which serves the creation of conditions that stimulate emergent collective action and adaptive leadership Schreiber and Carley (2008; p. 294) argue that “one way it does this is by limiting the topdown controls of traditional leadership that inhibit collective action” and the other way “it channels productive responses originating in the emergent collective action back up to administrative leadership for strategic planning and exploitation”. As a result, the personal approach and structural approach of leadership, also known as “leadership through interaction” and “leadership through systems” (Reichwald and Siebert, 2004; p. 185) are integrated as one.

2. Network Leadership Framework (Schreiber and Carley, 2008)
This framework is an extension of the Complexity Leadership Theory with the addition that it focuses on OL and adaptability. Schreiber and Carley (2008) argue that interaction induces knowledge and interdependence pressures people to act on knowledge. According to them there are four ways to enhance learning. Firstly, through relational coupling that illustrates the degree of interdependent relations within a system. For instance, “low coupling does not generate enough interactive activity and high coupling can lead to information overload” (Schreiber and Carley, 2008; p. 297). Secondly, through requisite variety that illustrates the degree of diverse knowledge because diversity enhances the capacity “to search for solutions to challenge and to innovate because it releases the capacity of a neural network of agents in pursuit of such optimization” (Uhl-Bien et al., 2008; p. 190). Thirdly, through a network form that illustrates the degree of status differentiations, which can have an effect on the ability to produce OL processes. Fourthly, and finally, through the degree of stress that induces
interactions and pressures agents to act. However, stress requires good leadership whereas overstressing can be counterproductive to OL processes (Schreiber and Carley, 2008).

The leadership’s characteristics that are required in this leadership framework have a focus on how leaders shape communication structures. Through this practice, organisations establish a social network for every agent in which knowledge flows back-and-forth. For instance, the ones who are otherwise disparate working from an organisational ‘island’ are able to enact within the network and the ones who are the organisational minority with new or different knowledge can also diffuse and share their knowledge; this way of creating new knowledge is the basis of innovation. Consequently, leadership can be described as distributed and shared; moving away from control orientation.

2.4 HOW SUSTAINABLE ARE THE LEADERSHIP FRAMEWORKS?
The leadership’s characteristics outlined in the two leadership frameworks can be traced back to the attempt of Grant (2002; p. 138) “to create mechanisms that reconcile the efficiency in knowledge creation (which requires specialization) with efficiency in knowledge deployment (which requires integrating many types of knowledge)”. He proposed four mechanisms for knowledge integration of which three are applicable to the leadership frameworks. Firstly, rules and directives which are topdown approaches to co-ordinate plans, schedules, forecasts, rules, policies and procedures, and information and communication systems (Van de Ven et al., 1976). Thus, these are the rules in the form of etiquette, politeness, and social norms. Within the complexity leadership theory this is referred to as the administrative leadership.

Secondly, routines which are relatively complex patterns of behaviour triggered by a relatively small number of initiating signals or choices (Grant, 2002). The routines of the emergent collective should be adapted by the leaders, because “routines may be a simple sequence, their interesting feature is their ability to support complex patterns of interactions between individuals in the absence of rules and directives” (Grant, 2002; p. 139).

Thirdly, group problem solving and decision making which require, in contrast with the previous mechanisms, more personal and communication-intensive forms of integration. Grant (2002) argues that this mechanism relies on high-interaction, non-standardised coordination that increases task complexity and task uncertainty. This mechanism is closely linked with the role of enabling leadership in the complexity leadership theory. Based on these mechanisms, it becomes clear that leadership in contemporary organisations creates complexity, because such leadership pushes organisations to the edge of chaos. On one hand, leadership should promote unknown attraction in organisations by giving staff members the possibility to raise new ideas. On the other hand, however, leadership should also follow the more bureaucratic approach of the organisation’s management.