James K. Hazy

A Complexity Science Model of Social Innovation in Social Enterprise

Abstract A complexity science-based model for social innovation in social enterprises is presented. The three components of the model include: (1) representing the evolution of social innovation using nonlinear dynamical systems with accompanying parameters and attractors; (2) a cusp catastrophe model of bifurcation or the emergence of a new attractor; (3) the role of emergence in complex systems utilizing recombinatory operations. The model represents the emergence of social innovation as an evolving dynamical system governed by the interaction of two parameters. The first parameter is opportunity tension or the degree of coordination and organization on a collective level required to resolve social problems or take advantage of social opportunities. The second is informational differences having to do with the accessibility of information via social networks connecting key players in the social system under consideration. The informational differences parameter also refers to experiments in social novelty acting as seeds of the emergent social innovations. Since social innovation is understood as the emergence of a new attractor reflecting the social innovations, the new attractor is shown to replace an originary attractor representing inadequate ‘business as usual’ practices and social networks that have not been able to resolve the social problem or take advantage of the opportunity. At a critical threshold, the social system undergoes bifurcation as extant social components are recombined leading to the generation of novel social forms that can more sufficiently resolve the social problem or take advantage of the opportunity.

Towards operationalizing complexity leadership : How generative, administrative and community-building leadership practices enact organizational outcomes

Over five years ago, The Leadership Quarterly published a special issue on complexity to advance a new way of thinking about leadership. In shifting attention away from the individual to the organizing process itself, complexity added an important focus on process and context to leadership and management research. Yet, the complexity approach creates challenges for researchers who must combine or replace individual level constructs—like those built through surveys or factor analysis—with richer theories that investigate networked meso dynamics, multilevel phenomena, emergent processes, and organizational outcomes. To address this challenge, the present analysis draws on theoretical and empirical work over the last several years to identify five specific areas where complexity inspired research has led to new insights about the mechanisms that enable the organization to perform and adapt. It suggests propositions that describe how leadership and management, defined holistically, might activate complexity mechanisms to perform five essential organizing functions.

Parsing the 'influential increment' in the language of complexity: uncovering the systemic mechanisms of leadership influence

This article develops theory relating the process of leadership to the social processes that sustain an organisation as a complex adaptive system. It interprets current theory in a new light and describes dynamical interactions that relate mechanisms of leadership to the organisational capabilities that have succeeded in the environment. It examines how three distinct but complementary mechanisms interact to form a leadership metacapability that evolves in organisations to positively impact both performance and adaptation.

Mechanisms of social value creation: extending financial modelling to social entrepreneurship and social innovation

We focus on the identification and selection of innovation initiatives that are intended to create cumulative social value. We suggest that a process like discounted cash flow (DCF) is needed, but developing such a process is complicated in the social value context due to a lack of metrics and consistent social value constructs. Taking a dynamical systems perspective and using economic modelling as a guide, we argue that access to resources and information about their future use represent measurable social value. Further, we describe innovation as the recognition and exploitation of patterns in the environment that create social value.

The unifying function of leadership: shaping identity, ethics and the local rules of interaction

This article develops systems theory that relates the functions of leadership to shared identity and ethics. Using complex system leadership theory wherein leadership is defined as changing the rules governing local interactions, the theory links shared identity and ethics to those local rules. Collective identity is defined as a mechanism to actualise a shared set of local rules, and an ethical system is defined to be one which enables individuals to experience autonomy in the context of those rules while exhibiting transparency with regards the benefits and risks of participation. Because leadership impacts collective identity and thus the rules of interaction, and sometimes does so opaquely, creating and maintaining such a system is an ethical challenge for leadership. Unifying leadership is defined as the organisation level function that unites the system by shaping identity while defining and enforcing the ethical framework wherein individuals make informed autonomous choices.

Leading large: emergent learning and adaptation in complex social networks

The mechanism by which adaptation in large organisations emerges from localised bottom-up processes remains largely unexplored. This paper describes the emergence of a learning algorithm in organisations which crosses levels of analysis. It posits that what is essentially a neural network arises naturally in organisations with individuals as nodes, interactions as edges, and influence relationships among them performing a function that is analogous to synaptic weights. This network structure enables organisations to adapt through a process of influence process structural learning that is analogous to back propagation learning in traditional neural networks. The model describes leadership within top management as expressing the organisations response to environmental stimuli about which top managers have little direct knowledge. Leadership acts to change influence relationships among managers by altering their relative status and reputations. The theory implies that influence relationships exhibit a power-law distribution, a potential marker of emergent collective agency.

Technology leverage and a sustainable society: a call for technology forecasting that anticipates innovation

We argue that economic value to society is created by converting input resources into valued outputs though the application of technology. To support this argument, the concept of technology leverage is introduced, and it is noted that the same input resource can be converted into different output values depending upon the technology employed in the conversion process and the state of technical innovation at the time the conversion occurs. This implies that through as yet unrealised innovations, future generations may create greater value for the same amount of resource than is currently possible. This difference has significant ramifications for current day resource allocation decisions. In addition to more conventional conservation arguments, technology leverage also recognises that the future value of retaining resources, especially non-renewable ones, may be evaluated using real option valuation techniques. These concepts are helpful in determining more comprehensive policies relating to resource allocation decisions.

RECONCEPTUALIZING VALUE CREATION WITH LIMITED RESOURCES

In traditional economics and finance the notion of value creation is virtually synonymous with the net present value of cash flows. Such a characterization implies that all of the uses of resource inputs, such as raw material and energy, are known and that their value is priced into commodities markets. It also fails to allow for the opportunity cost associated with the depletion of resources which, with advancing technology, might reasonably have future uses far greater in value than can be achieved at present with current technology. Stated differently, in traditional valuation analysis the option value associated with scarce resources –when new technology or knowledge can be applied to them– is not addressed. In the present work, we define technology leverage as representative of this effect. We then address the problem of sustainability of organizations by stating four propositions and examining their implications for government policy and for firm governance.

Emotional contagion and proto-organizing in human interaction dynamics.

This paper combines the complexity notions of phase transitions and tipping points with recent advances in cognitive neuroscience to propose a general theory of human proto-organizing. It takes as a premise that a necessary prerequisite for organizing, or “proto-organizing,” occurs through emotional contagion in subpopulations of human interaction dynamics in complex ecosystems. Emotional contagion is posited to engender emotional understanding and identification with others, a social process that acts as a mechanism that enables (or precludes) cooperative responses to opportunities and risks. Propositions are offered and further research is suggested.

An econometric analysis of ecological footprint determinants: implications for sustainability

Most research on the impact of income and other socioeconomic variables on the environment focuses on specific local environmental effects and not on the broader sustainability picture. We seek to fill the apparent gap in the literature, exploring whether and the extent to which income, economic openness, income inequality and the distribution of power influence sustainability. We employ ecological footprint data and from it derive a sustainability indicator, the ecological deficit. Using econometric analysis, we test the effects of our explanatory variables on the ecological deficit. While we find that economic openness appears to run counter to the goal of sustainability, the results for the other variables are more ambiguous and inconclusive.