Complexity Leadership in Healthcare Organizations, Part II Dr. Mary Uhl-Bien Howard Hawks Chair in Business Ethics & Leadership University of Nebraska Presented to Plexus © 2013 Mary Uhl-Bien Conclusions Healthcare needs to respond to complexity with complexity: Loosen the administrative system Fuel the entrepreneurial system (and entrepreneurial leadership) Develop the adaptive system (adaptive leadership and adaptive dynamics) for emergence Conclusions: Not “Feel-Good” • This can feel very disruptive to organizational members. • Complexity leadership is not a “feel-good” model of leadership typically seen in leadership theorizing and practitioner-oriented books. • Because it goes against traditional understanding of what leaders do, many will not recognize it as effective leadership. Adaptive leaders often feel they are going against the tide, and it takes great tenacity to withstand the the tremendous pressures to pull back to equilibrium. THE COMPLEXITY LEADERSHIP MODEL In Organizations, Two Kinds of Systems: Administrative and Entrepreneurial An “administrative” (bureaucratic) system focused on coordination, efficiency, and rules of order. An “entrepreneurial” (emergent) system focused on generating innovation, novelty and emergence for the organization. Administrative System Entrepreneurial System Administrative Leadership and Entrepreneurial Leadership Administrative Leadership (top-down) occurs in the administrative systems and focuses on coordination, efficiency, and rules of order. Entrepreneurial Leadership occurs in the entrepreneurial systems and focuses on generating new ideas and innovations that can lead to novel outcomes (new products, services, processes) for the firm. Administrative Leadership in Administrative System Entrepreneurial Leadership in Entrepreneurial System The Key Challenge: Adaptability The key challenge is getting these two systems to work effectively together to produce sustainability for the firm. This can be seen as a problem of adaptability. It can also be seen as a problem of “requisite complexity.” Requisite Complexity • “It takes complexity to beat complexity.” • Despite this, many organizations respond to complexity with order. High 45° The Chaotic Regime Variety of Stimuli The Complex Regime The Ordered Regime Low Low Variety of Responses High Suppressing When they respond with order, informal leadership (and CAS dynamics) needed to make organizations adaptive are suppressed. This is the response that predominant leadership approaches are most often creating. Executive Level Agent Agent Agent CAS Middle Level Agent Agent Agent Agent Agent CAS Agent CAS Front-Line Adaptive System The adaptive system operates in the productive tension between administrative and entrepreneurial systems to foster emergence and adaptability for the firm. Administrative System Entrepreneurial System Adaptive System Adaptive Leadership • Adaptive leadership fosters conditions for emergence and institutionalizes emergent outcomes into the organization: Institutionalization Emergence Administrative System Entrepreneurial System Productive Tension Adaptive Leadership Loosening behaviors (i.e., “exploration”) involve enabling conditions for interaction, search, experimentation and information flows. Tightening behaviors (i.e., “exploitation”) involve reducing variance through choice, execution, standardization, and restricting information flows. Complexity Leadership Framework: Complex Adaptive System Administrative (top-down) leadership has loosened up the administrative system Adaptive leadership is enabling emergence for the organization Adaptive Leadership Administrative System Entrepreneurial System Emergence dynamics are enabled Informal (bottom-up) leadership is fueling the entrepreneurial system Complexity Leadership Framework: Complex Adaptive System Administrative (top-down) leadership has loosened up the administrative system Adaptive leadership is enabling emergence for the organization Adaptive Leadership Administrative System Entrepreneurial System Emergence is institutionalized into new order Informal (bottom-up) generative leadership is fueling the entrepreneurial system Adaptive Dynamics Adaptive dynamics are often present or trying to be present in organizations. They look like new ideas, innovations, workarounds, pushback, prosocial rule-breaking, voice. They are enabled by entrepreneurial leadership. Entrepreneurial leadership helps generate new ideas and champion them into the system. Entrepreneurial leadership contributes to “bottom-up” emergence in organizations Emergence (and Suppression) When engaged appropriately (e.g., “simple rules”), administrative constraints channel entrepreneurial leadership to perform in productive ways. Administrators get pressured to change from adaptors and innovators. If administrators regularly turn down these adaptive requests, the organization “learns” to be not adaptive (entrepreneurial and adaptive leadership is suppressed or stifled).