Complexity theory in action – The Humberside TEC

Michael Jackson provides a case study of the Humberside Training and Enterprise Council (TEC) that was established by the UK government by privatising the civil service to promote local economic development. This case study is provided as an example of complexity theory in action within a region67_{. The TEC comprised seventy private companies. The role of the}

TEC was to ensure appropriate education, training and development, advice counselling, provide help in finding training solutions to business problems, and increase competitiveness and growth in Humberside`s economy. According to Jackson, the MD, Peter Fryer, pushed the TEC to the edge of chaos and described his role as: “explore the environment, share feedback, clear pathways, give oceans of support and bugger things up!” Three principles of organisation that the TEC adopted were: ‘make connections’, ‘learn continuously’, and ‘make processes ongoing’. Regular learning and networking conferences were held for all staff. Informality and accessibility to all levels became the norm. Many learning approaches and activities were adopted and staff completed a monthly activity sheet indicating what they had learned. The concept of making process on-going was to emphasise the need to self-organise within changing environments. TEC policies were changed to be outcomes-based rather than the specification of rigid processes and procedures.

Peter Fryer describes how he used the principles of complexity theory to transform the TEC into an efficient and adaptable organisation68_{. Complexity theory encourages a shift from a}

command and control style of management. It challenges the idea that an organisation should strive for equilibrium and recommends that they should operate at the edge of chaos. The

67 _{MICHAEL JACKSON 2003. Systems Thinking. Creative Holism for Managers.(Page 125-128)}

68 _{GEOFFREY HIGGS 2003. Seminar notes on ‘Intra Organisational Network Development, The Humberside}

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TEC was formed by privatising part of the civil service that dealt with training and business support and comprised of seventy private companies that employed about two hundred staff and had an annual turnover of about 35 million pounds. He states that the TEC associated itself with the London School of Economics and this association laid down the theoretical principles of complexity that explained why some of the principles that they had already started doing practically were working. Fryer describes the TEC as a “complex evolving system” which he says raises the questions and answers thereto and consequently what opportunities arise that may be exploited. Learning environments are continually engaged in feedback loops that can deal with the challenges of a turbulent world. According to Morgan69_,

most organisations are proficient at single-loop learning, developing an ability to scan the environment, set objectives and then monitoring the system according to these objectives. Double-loop learning involves an additional step of questioning the relevance of the operating norms and this was what Fryer tried to inculcate in the TEC. The TEC adopted a network systems model originally produced by Chris Langton and Fryer describes the basis of the model as follows:

“It’s a very simple model that assumes there are a number of agents that are connected. We cannot predict or dictate what is going to happen, but from those connections, regularities and patterns form which then feed back into the system. And that simple model enabled us to ask a whole host of new questions. What were the boundaries of our system? Who were the agents and how were they connected? What were the patterns forming? What were the mechanisms of feedback that we had. Those questions by themselves brought about change because we would never have dreamed of asking them before”

This description is clearly aligned to the “Organisations as brains” metaphor as described by Morgan70_{. Morgan uses this metaphor to examine the possibility of distributing holographic}

capacities for intelligence and control throughout the organisation so that the system can self- organise as emerging opportunities and challenges present themselves. Fryer saw the organisation as a learning organisation and a cybernetic approach is evident in his portrayal of the TEC. According to Morgan, cybernetics suggests that learning organisations must allow them to do the following:

 Scan and anticipate change in the wider environment to detect significant changes.

69 _{GARETH MORGAN 2006. Images of Organisation. Chapter 4. Pages 84-87.} 70 _{GARETH MORGAN 2006. Images of Organisation. Chapter 4.}

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 Develop an ability to question, challenge and change the operating norms and assumptions.

 Allow appropriate strategic direction and pattern to emerge. Also, in achieving these aims, they must

 Evolve designs that allow them to become skilled in double-loop learning, to avoid getting trapped in single-loop processes, especially those created by traditional management control systems and the defensive routines of organisational members.

Fryer points out that the organisational interaction in the TEC was made up of three things, viz.

 Objects such as computers and hardware devices.

 Closed systems such as electricity supply and health and safety checks.

 Open systems such as those involving relationships and conversations with people and networks within and without the organisation, creativity activities being carried out, etc.

Fryer states that in most organisations, people treat open systems as closed systems and that the government, in particular never fully understood the concept of open systems. One of the main tasks of the TEC was to identify which systems should be treated as closed and which should be treated as open. This, he says, had a tremendous impact on the functioning of the organisation.

Fryer makes a pertinent point that we often view a network as a clinical entity that can be cleanly picked out. All our networks, he says, is interspersed with other networks and they all affect each other. Fryer portrays the TEC as a network of networks and part of a community which itself is a network of networks. The TEC is part of all the training and support network provider networks, part of the learning infrastructure network and the national TEC’s network and so on. Fryer identifies five critical aspects of building effective organisation within network complexity that were practiced by the TEC. These are autonomy, connectivity, feedback, community and leadership and Fryer’s suggestions are briefly summarised below.

1. Autonomy.

The principle is that people know what to do and thus there is no need for policing and reminding them about their responsibility. People should be treated as responsible adults and be trusted. This, Fryer says, places moral responsibility on them. When

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mistakes happen as they invariably do, it places one in an unexpected position. Learning takes place when mistakes happen. Fryer states the TEC sought to remove ‘stabilisers’ that actually obstruct the learning and development process. He uses the analogy of teaching a child to ride a bike. Initially, two extra wheels are placed alongside the back wheel that acts as stabilisers. Once the child has mastered how to ride the bike, the stabilisers are removed. Some business stabilisers that Fryer identifies are signing in and out, filling in of timesheets, rules, procedures, processes and systems that tend to force people into line rather than allowing a culture of taking responsibility. Fryer also sought to remove formal hierarchy, formal job descriptions, budgets that tended to wrongly focus on the money rather than the activity. The most expensive activities is ‘managing’ and ‘checking’. Fryer says that they told each person that they are their own manager and they saved a fortune.

2. Connectivity.

Fryer notes that connectivity is a critical aspect of networking and that the nature of the dialog and communication amongst connections are fundamental. The TEC placed emphasis on ideas and knowledge sharing. They brought communication experts in to assist with converting the initial argumentative winner-takes-all conversation to a more collaborative, sharing and development of ideas. Persons who went to meetings to represent a team were given the power to commit on behalf of their team. This ensured that reliable persons who could be trusted to were selected and this improved connectivity and got the job done. There was recognition that the real business of the organisation took place at the interface between the staff member and the client or stakeholder. The more staff were capacitated to inter-connect with clients and empowered to take decisions on behalf of the TEC, the better the standards and efficiencies of service that could be provided. This approach also encouraged people to be more creative, to feel a valued part of the organisation and consequently to work smarter. According to Fryer, there was a time that they ran out of meeting rooms. In order to improve communication, they established a coffee shop in a busy area of the building. Free coffee and tea were provided and the open plan had the advantage that people who were passing by often joined in on the conversation. He states that meetings lasted only as long as they needed, whereas meetings in meeting rooms lasted as long as the time the room was booked.

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Like complexity, Fryer says that feedback is happening around us all the time. He expresses the importance of both external and internal feedback and the TEC provided training to their staff to pick up and give feedback verbally. Learning and emergent forms of organisation place considerable emphasis on double loop learning to transcend the constraints of single-loop processes and defensive routines that that tie an organisation to the past71_{. The TEC philosophy resembles Morgan’s learning}

organisation and a culture of learning to learn was a key priority for the TEC.

4. Community.

The TEC functioned like a community where people felt a sense of belonging. This, Fryer says is an aspect of networking. He says that people would be engaged long beyond the call of duty. The only rule was that people must act in the best interests of the organisation.

5. Leadership.

Fryer says that it was important to have lots of skills and talent to be adaptable and to spot patterns as they emerged or even before. It meant that people needed to be given the space to try things out, to “hold” leadership and to create the space of possibilities. This style of dispersing leadership throughout the organisation allowed Fryer as the CEO to

1. Explore the environment by being very well connected both internally and externally.

2. Exploit networks constantly as patterns emerged and then to encourage the formation of communities of practice to maximise the knowledge and information that the organisation had.

3. Clear pathways by finding the “stabilisers” that seemed to be good ideas but was stifling the culture of self-responsibility and accountability and thereby impeding efficiency.

4. Feed information to others more directly, provide support and help them grow their connectivity.

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Michael Jackson states that if organisations are pushed away from equilibrium towards the edge of chaos, self-organisation occurs naturally and organisations become capable of infinite variety and more responsive to more flexibly to changing, turbulent environments. He contends that this is essential because, as with fitness landscapes in biology, only flexible organisations are able to take “adaptive” walks to “higher fitness points”72_.