New Business Model:

Business Systems

Organizations as Complex Evolving Systems

Key Characteristics and Strategies

By: Vadim Kotelnikov

Founder, Ten3 Business e-Coach Inspiration and Innovation Unlimited!

"Successful organizations must balance bureaucratic processes at one extreme with the fluid chaos of relationships, interests and transactions, which enable it to be innovative and alive, at the other. " ~ Robin Wood


Business Environment Organization Business Ecosystem Performance Measurement Knowledge Management Effective Management Shared Values Managerial Leadership Organizational Change Business Design Balancing Your Life and Business Wheels Vision, Mission, Strategy

Three Major Stages of Organizational Evolution1

  1. Bureaucratic: strategy is not emphasized; hierarchical structures; linear focus; dehumanized

  2. Complex: quantitative strategy; laterally complex structures; bifurcated, conflicting focus; limitations of workforce performance

  3. Adaptive: visionary, human strategy, simpler in context structure; work/family integration systems; capability and efficacy of workforce

Common Characteristics of Complex Evolving Systems1

Five operational characteristics

  1. Self-organization enables different possible combinations of ideas and relationships to emerge from the "co-incidences" that happen during informal interactions.

  2. Creativity emerges from the interaction of the components of a network; at the human level, the collaboration of a group and cross-pollination of ideas produces outcomes that are not possible to predict by simply summing up the behavior of the individuals involved

  3. Non-linearity small causes produce large effects in human systems

  4. Memory distributed throughout the system; this history is critical to the behavior of the whole system

  5. Adaptability can reorganize their internal structure without the intervention of, or in response to the intervention of, an external agent; it is a result of unconscious learning (tacit knowledge) that may enable the system to have a higher probability of survival under changing conditions in its ecosystem and environment.

Four human relationships and organizations' characteristics

  1. Being the in which people, who have authentic presence and needs, experience themselves in an organization can enable or constrain the potential of what an organization can become.

  2. Identity is a function of interaction of persons' being and their relationships; is a strong driver of the organization's outcomes. Innovation, for example, is possible only in a collaborative environment that creates the conditions for creative thinking.

  3. Conscious learning whether knowledge is created and shared in an organization will depend on the quality, number and types of relationships within an organization, and between the organization and its ecosystem.

  4. Coherence requires an alignment of context, viewpoint, purpose and action that enables further action.2 The extent to which organization operates as a network of relationships enables individuals to make sense of their work and their world, and will strongly influence the coherence of the organization and its sense of purpose.

 Discover more!

Organizational Innovation

9 Signs of a Losing Organization

Organizational Transformation

Systemic Innovation

New Business Model

Establishing Institutional Excellence

Adaptive Organization

Innovation-friendly Organization

Flat Organizational Structure

Centreless Corporation

Balanced Organization: 5 Basic Elements

Wood (Corporate Capabilities):

The Growing Role of the Business Architect


In today's knowledge- and innovation-driven complex economy, business architects are in growing demand.  They are cross-functionally excellent people who can tie several silos of business development expertise together, lead business innovation, create synergies, design winning business models and a balanced business system and then lead people who will put their plans into action... More

Systems Thinking

Systems thinking is your ability to things as a whole (or holistically) including the many different types of relationships between the many elements in a complex system. "Systems thinking is a sensibility for the subtle interconnectedness that gives living systems their unique character."11... More

Cross-functional Management (CFM)

Cross-functional management (CFM) manages business processes across the traditional boundaries of the functional areas. CFM relates to coordinating and synergizing the activities of different units for realizing the superordinate cross-functional goals and policy deployment. It is concerned with building a better system for achieving such cross-functional goals as innovation, quality, cost, and delivery... More

Right Balance Between Structure and Chaos

Chaos is paradoxical; you need a certain amount of chaos to be creative but not to the point that you feel overwhelmed by its amount. Too much uncertainty discourages people from mobilizing their best effort. Direction and purpose and a certain amount of structure create freedom. People feel liberated by goals and guidelines.

Successful organizations must balance structure and bureaucratic processes at one extreme with the fluid creative chaos of relationships, interests and transactions, which enable it to be innovative and alive, at the other... More


7Ss a Managerial Tool for Analyzing and Improving Organizations

The Seven-Ss is a framework for analyzing organizations and looking at the various elements that make them successful, or not. The framework has seven aspects: strategy; structure; systems; style; skills; staff; and shared values.

The theory helped to change manager's thinking about how companies could be improved. It says that it is not just a matter of devising a new strategy and following it through. Nor is it a matter of setting up new systems and letting them generate improvements. To improve, companies have to pay attention to all seven of the Ss at the same time. All seven are interrelated, so a change in one has a ripple effect on all the others. Hence it is impossible to make progress on one without making progress on all... More






  1. Managing Complexity, Robin Wood

  2. The Next Common Sense, Lissack, M. and Ross, J.