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Organizational Productivity:
Modeling the Interrelationship of Organizational Culture, Intellectual
Capital and Innovation
Russell S. GonneringDavid Logan
SwarmFest 2014
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“All models are wrong...but some are useful”
George Box Science and Statistics. J. Am. Stat. Assoc. 71, 791-799 1976).
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Why do some organizations just seem to perform better than most?
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It’s a group effort!
Mihaly CsikszentmihaliKeith Sawyer
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We Call That Group Effort “Organizational Culture”
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• Pattern of adaptation based on shared purpose, values, history, identity and future.
• Language, particularly generative, future-based language, is a primary means of establishing this shared experience
• A “Cultural Meme”, Increasing Returns, Positive Feedback
Organizational Culture
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Empiric Study• 10 years
• 24,000 people
• 2 dozen organizations
• Organizational Development Surveys
• Burke’s Cluster Analysis of Interviews
• Sociograms
• Confidential Self-ratings
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Logan, et al
• 5 Stages
• Dynamic, Internal and External Influences
• “Linear” Progression of Culture, but Path-Dependency!
• Nonlinear Progression of Performance
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Can’t Skip a Cultural Stage!
Nonlinear Jumps in Performance
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CSSSA 2012
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Probability of Stage 4
0"
0.1"
0.2"
0.3"
0.4"
0.5"
0.6"
0.7"
0.8"
0.9"
Configura5on"
1M"
1W"
1E"
2E"
1M1W"
1E1M1W"
2W"
3W"
2M"
1M2W"
4W"
1E2M2W"
5W"
2E4M4W"
3M"
4M"
6W"
4M4W"
7W"
8W"
2E4M4W"
2E4M8W"
E: Executive; M: Manager; W: Worker
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Science 1997;276:122-126
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PLOS One, March 27, 2013
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Model Evolution
• Productivity
• Close structural holes-”Triading”
• Values
• Purpose
• “Perspective”-Innovation
• Dunbar’s Number
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Starting Point
• Agents: number and role; culture, values, purpose, depth and breadth of knowledge, perspective (stochastic assignation)
• “Inverse Flocking Probability”
• Closure of Structural Holes-”Triading”
• Economy, General Tuner, modifiers of cultural exchange
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Starting Point
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Model
• 200 time ticks
• Agents meet in time and space
• Exchange culture and knowledge according to formula
• Additional stochastic “education” and “disillusionment”
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Exchange
!
Peer/Peer (Same Cultural Stage)
RM: role modifiers
Nonpeer: Magnitude Change
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Model - Culture Transition
• Stage 1 = < 20
• Stage 2 = 20 - 39
• Stage 3 = 40 - 59
• Stage 4 = 60 - 79
• Stage 5 = 80 and above
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Model
• Agents can advance in culture or “die” (culture < 20)
• New agents added at Organizational Culture thresholds (expansion/merger)
• Limited to 100 (Dunbar Number)
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Productivityy = k xα
y = Organizational Productivity k = Complex constant made up of Organizational Culture, variance of Values and Purpose, Innovation (variance of Perspective) x = Intellectual Capital (Organizational Knowledge x variance α = .75
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Productivityy = k xα
• Intellectual Capital is analog of mass in allometric scaling model
• Only indirectly dependent upon population
• k is not species-specific but related to Organizational Culture and ability to operationalize that Organizational Culture
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“Triading”
• Closure of structural holes
• Initiated at Organizational Culture thresholds
• All agents of “Triad” share in cultural/knowledge exchange
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Baseline: Stable though 1,200 ticks
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Inverse Flocking Probability
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Baseline, 200 ticks, no Triading
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Probability of Reaching Stage 4 Culture
All 2 Executives + all 4 Managers = 0% 2 Executives + 4 Managers + 4 Workers = 20%2 Executives + 4 Managers + 8 Workers = 55%
0"5000"10000"15000"20000"25000"30000"35000"
0" 20" 40" 60" 80"
Organiza(onal+Produc(vity+
Organiza(onal+Culture+
Organiza(onal5Produc(vity+Final+Culture:+56.46+
Organiza1onal4Produc1vity"
0"5000"
10000"15000"20000"25000"30000"35000"
0" 20" 40" 60" 80"
Organiza(onal+Produc(vity+
Organiza(onal+Culture+
Organiza(onal5Produc(vity+Final+Culture+:+63.08+
Organiza1onal4Produc1vity"
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Triading
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Probability of Reaching Stage 4 Culture
Baseline with Triading = 95%
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Baseline “Attractor”
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Triad “Attractor”
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Climbing the Mountain
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• Dynamic external influences
• Effect of new leadership
• Disruptive innovation
• Interrelationships?
Future Directions
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References
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