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Generative Relationships

Curt Lindberg,
Complexity Management,
VHA Inc.

The basic idea:

When really innovative ideas are needed, when the future is very uncertain, traditional approaches to planning are of limited utility. An alternative approach involves the use of generative relationships. In this approach new ideas and strategies emerge from such relationships inside and outside the organization. The role of the leader is to foster generative relationships and learn from the results, letting direction emerge instead of being "set" in advance by a central authority.

Potential context for use:
  • When an organization needs new, creative strategies, a different direction, when times call for a firm to be more flexible and adaptive

  • When a group is searching for innovative new processes or products

  • When an organization is evaluating potential partners for participation in a new system or network




The developers of the concept of generative relationships, Lane & Maxfield, identify three types of future scenarios confronted by organizations: clear, complicated and complex foresight horizons.

Generative relationships may be the key to success and even survival in complex foresight horizons..."
-Lane & Maxfield

When the future is clear - simple, stable and predictable - they suggest traditional approaches to setting strategy are appropriate since an organization can identify, rationally evaluate and select alternative courses of action designed to achieve some desired end. On the other end of the spectrum, when the world is characterized by "cascades of rapid change, perpetual novelty and ambiguity," they suggest an alternative, an approach based they have termed generative relationships. In this process, strategy and direction (which cannot be foreseen) emerge through ongoing interactions inside and outside the firm.


The two key elements of their approach are:

  1. making sense of what is happening in the organization and within the larger system in which it resides; and

  2. fostering generative relationships and following the directions and ideas they produce.

Making sense, according to Lane & Maxfield, entails examining what is happening inside and outside the organization, interpreting this information from many viewpoints throughout the organization, not just in headquarters, and doing this all the time. This process must unearth and challenge basic assumptions about the organization and its environment. This work is best done through conversation. It is the contention of Lane & Maxfield that these practices will help an organization better understand itself, detect changes in the structure of its environment, make sense of these shifts and, therefore, open up space for possible future actions.

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"When the structure of an agent's world is changing rapidly, unexamined assumptions are likely to be out of date, and the actions based on them ineffective."
-Lane & Maxfield

With this understanding generative relationships enter the picture. Lane & Maxfield define a relationship as generative if it produces "new sources of value that cannot be foreseen in advance." But if you can't know in advance what a relationship will create for the organization, how can you decide which relationships to build, to continue. Complexity theory suggests some essential preconditions, some characteristics to look for or build into relationships.

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Preconditions for building Generative Relationships:

  • "aligned directedness" - agreement about a general direction, interest area

  • heterogeneity - differences, diversity of ideas and competencies among agents

  • mutual directedness - interest in and ability to engage in recurring interaction

  • permissions - implicit or explicit permission for parties to engage in explorations

  • action opportunities - ability, willingness of the agents to engage in joint action, to do more than talk


Look back in time in your organization and think about how new direction actually emerged, where new program ideas came from. Were they all anticipated, "set" in advance in the strategic plan or were generative relationship at work?

Notice the increasing number of "strategic alliances" happening in the business world. Consider whether the conditions for generativeness were in place.


The ROLM Story

A great example of the power of generative relationships is the story of the ROLM company as told in the generative relationships article by David Lane, an economics professor at the University of Modena and an faculty member at the Santa Fe Institute, and Robert Maxfield, one of the founders of ROLM. In the 1970s, a little computer company, filled with a few young electrical engineers focused on making minicomputers for the military decided it needed to diversify to grow. These engineers came up with the concept of marrying the computer with the telephone switch. With a basic system in hand ROLM sought out to build relationships with the executives responsible for telephone services in medium sized firms. Many were afraid to try out this "risky" new technology. But some made the switch and as a result of the significant savings and better, more flexible service they were rewarded with promotions, increased responsibility and encouragement to continue their efforts to bring down phone costs. These executives, with their understanding of the computer controlled PBX concept and their relationships with the ROLM account managers, began to search for new opportunities for savings and productivity gains. The resulting conversations between these company executives and ROLM representatives led to many product enhancements which led to an entirely new conception of the PBX - an "intelligent interface between a company and outsiders" instead of just an old fashioned phone system.

Notice that this innovation did not come from the computer or phone company giants of the time, IBM and AT&T, but a small company that happened upon the strategy of generative relationships. ROLM was acquired by AT&T for a billion dollars.

The VHA Example

The staff person responsible for VHA's leadership initiative, Curt Lindberg, had the good fortune of meeting David Lane and Bob Maxfield at a session on complexity and strategy at the Santa Fe Institute. With an up close and personal acquaintance with the concept of generative relationships he decided to tap this approach in the "plan," to bring complexity thinking to VHA member leaders. As such, he sought out relationships with a wide range of complexity faculty (from biologists, to computer scientists, to organizational theorists and consultants) and VHA member leaders (physicians, CEOs, nursing execs, females and males) who were searching for new management constructs and could be categorized as "early adopters." This mix of people satisfied a number of the preconditions for generativeness - heterogeneity, aligned directedness, an interest in recurring interaction (because the researchers were looking for organizational types who would try their "complexity ideas" and the practitioners were looking for partners to help them understand and use "complexity inspired" management approaches). After getting acquainted in a series of educational sessions and workshops, quite a number of relationships developed - between the hospital leaders and complexity faculty, among the hospital executives themselves, and among the faculty - which have made a difference -produced new sources of value, surprises, new connections, and real progress on the use of complexity thinking in management and in health care organizations. For instance:

  • The number of VHA hospital leaders involved in this initiative grew, mostly by word of mouth, by over a factor of three during its first year

  • Hospital leaders began to use complexity concepts to create fresh approaches to challenging issues like how to plan when the future is unknowable, building health care systems, learning how to collaborate with long-standing competitors, creating organizational climates which allow creativity to flourish

  • One of the world's leading science writers heard about this initiative and is interviewing some of the hospital leaders for material for his book on complexity and business organizations. He is now being tapped by VHA to write up some of the stories of efforts by VHA members to use complexity thinking in their work so others can learn from their examples.

Some relationships did not become generative; they were simply dropped.

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Shadow System

Facilitator's Tips:
  • When facing a new project or needing to kick off a planning process ask whether the relevant foresight horizon is clear, complicated or complex. If it is clear or complicated, traditional management and planning processes will probably work fine. If you are in the realm of the complex, consider using the approaches suggested by complexity, including generative relationships.

  • Map the existing or potential relationships germane to the issue or project at hand. Examine them in light of the preconditions for generative relationships. Ask whether you can do anything about missing preconditions. For instance, can you supply the room, the permission to experiment. If you uncover relationships which lack many of the preconditions and you can't supply them, consider dropping them and spending the energy elsewhere.

  • Ask whether you have a sufficient number of relationships in play. The more important the issue or challenge and the more uncertainty you face, the more relationships you should consider fostering. The will increase the probability of producing innovations, creative new ideas.

  • Regularly reflect on the status of the relationships. Give the ones that seem to be producing something of value room to develop further. Watch them for surprises, unexpected consequences; you may be looking at a potentially big opportunity. When such opportunities emerge remain ready to put aside previous plans and follow where the relationships lead.

  • Find out what is happening in the shadow system. Generative relationships are forming here all the time.

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Copyright 2001, Curt Lindberg, Complexity Management, VHA Inc.
Permission to copy for educational purposes only. All other rights reserved.