Business Case Studies, Executive Interviews, Mark Buchanan on 21st Century Organization

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Executive Interviews: Interview with Mark Buchanan on 21st Century Organization
December 2007 - By Dr. Nagendra V Chowdary

Mark Buchanan
American Physicist and Author

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  • First, a word about your book, The Social Atom:Why The Rich Get Richer, Cheater Get Caught, and Your Neighbor Usually Looks Like You. A fairly long title! Whats the short story of this book?
    The short story is that we can understand the human world and all its surprises better if we learn to think of patterns, not people. We have been brainwashed to think that its individual human complexity that makes the social world complicated. But it's not. From persisting segregation to strange movements of markets or waves of hysteria, people act in fairly simple ways, and its the patterns thatwell up among themthat make the socialworld rich and hard to fathom.

    The situation is very much akin to physics, where the atoms are relatively simple, and its the patterns among them that scientists work hardest to understand. But the real message is that scientists are now really beginning to think "patterns, not people," and social science is becoming a lot more scientific and powerful as a result. The book offers a snapshot of what's going on.

  • How come a journey from Ph. D in physics to a world of business? What triggered this shift? How has been the journey?
    Physics is away of thinking clearly, of trying very hard to understand the cause and effect, and making sure the data really backs you up. This can apply to almost anything.

  • What according to you are the three most important changes that have altered theway business is carried out across the globe in the last decade? How do you think companies have responded to these changes?Are there any good examples of companies that have adapted effectively to these changes?
    The changes I think are fairly obvious: globalization and technology. The world has really become smaller, and business spans the globe like never before, so both opportunities and problemin one part of the world have immediate effects far away. The second thing is technology (which has of course played a large role in driving globalization). Many businesses, from automakers to microchip manufacturers, have taken advantage of technology to streamline their production processes beyond anything imaginable 30 years ago.

  • If you have to point out similar changes in the "organizational" front, whatwould those be?What have been the triggers for such changes?
    On the organizational front, I think we are lagging behind. Companies still act on the basis of fine sounding theories based on little evidence, and most mergers and acquisitions still underperform. One thing we've become better at, clearly, is having more responsive and decentralized businesses, which use the skills of many employees more effectively.

  • Since Peter Drucker wrote his seminal work, The Concept of Corporation in 1946 after his study at General Motors, organizations have undergone a metamorphosis in terms of the structure, the defining responsibilities of organizations, expectations from organizations, etc. What does the 21st Century Organization signify to you? What is your ideal organization in the coming decades?
    I am not sure I have an ideal organization. But perhaps one thing I see as important is an organization that looks beyond the narrow economics based view of profits or return to investors as the only reason for its existence. Few of us live that way in our individual lives, so its strange that we've thought this was the way organizations should be. That's been the dire influence of traditional economic thinking, which now looks like a rather great embarrassment. Effective organizations will make money, surely, but they also must persist by maintaining cooperative relations among their employees and provide a place where those employees can collectively pursue far reaching aims, beyond merely getting a paycheck.

  • How do you define organizational effectiveness? Has its connotation undergone any change over the years, across the industries? How should this be measured? What are the yardsticks for measuring organizational effectiveness?
    See answer to previous question. Its not just the bottom line.

  • Suddenly there seems to be an unusual focus on social networks and patterns of social networks.Why have the social networks become so important in an organizational context?
    Social networks have always been important. Almost everything humans have done well through history has come frompeopleworking together, rarely through individual genius. But technology hasmade it far easier to connect to others, and also to see those connections and think about them. Now that our networks span large distances and nations its more obvious how important they are, and that these networks bring crucial skills or information into our reach.

  • In The Science of Subtle Signals, you observe that, "anyone in business knows through painful experience the pervasive problems that exist because our knowledge of organizations is imperfect." What are these pervasive problems and why do you think the knowledge of organizations is imperfect?
    These problems include the things that people who ve worked in business know all too well. Divisions of a company don't communicate, or fight with one another, or duplicate efforts. Power rivalries between individuals alone undermine the smooth working of an organization. Creative teams that become bogged down because it becomes too risky to their own internal standing in an organization; to continue taking the risks need to be really creative. I think our knowledge of these things is imperfect, indeed almost nonexistent, because most of this stuff happens in ways that we cannot measure.

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