Peter Kruse: Transforming Organizations into Social Brains

Though it is useful to benchmark and so strive to match best practices in organizational strategies, learning from others through imitation can also restrict us to the limits inherent in the strategies we copy.  What often prevents students from becoming masters in their own right is the nagging feeling that there is always someone else who will be better at dealing with the unknown beyond the limits of our experience than ourselves.  In business innovation processes, this is expressed in risk avoidance behaviors which take genuinely new insights and impulses to radical innovation and reduce them to safer line extensions to existing products or business models within the boundaries of the existing organization.  For businesses, which depend increasingly on pattern-breaking innovation to succeed, these innovation dynamics can become dangerous.  If we imitate what others do, we get only what others get, and if everyone benchmarks each other, we get a homogenous world, poor in innovation and fighting over market share in a zero-sum game of diminishing returns.


Peter Kruse (part 1 of 7 video), one of Germany’s leading figures in trend analysis and organizational development, has coined the term “Next Practice” to describe a way out of the best practice trap.  Originally a researcher and professor of neurophysiology and experimental psychology, Kruse inherited the family business, and started to think about ways he could apply his insights from his scientific research into the brain to the challenges of restructuring a business and making it competitive in the context of the ever increasing complexity of the knowledge economy.


As a researcher, Kruse had come to understand the brain as nature’s most successful solution for mastering complexity.  His own solution to the challenges his company presented him with was to view his company as a social brain and to see if he could translate the functional characteristics of the brain into operational principles for organizations, to copy not a particular solution of a brain to a particular problem, but rather to imitate the meta-competence of the brain to innovate when faced with something new.


What makes the brain so successful in dealing with novelty and complexity lies in abilities emerging from its three key functional characteristics: connectivity, arousal and valuation (through pattern formation, or intuition).  Through its neural network (video part 2), the brain communicates with itself in potentially infinitely complex patterns, matching and mirroring the complexity of the world it experiences as it interacts with it through perceptual input and attempts to cope with the stimuli it receives.  Arousal—through e.g. need, interest and emotion—creates activity in the network, causing it to form and reform network connections in response.  Valuation lies in the ability of the brain to recognize patterns in its own neural activity that lie beyond its (very limited) capacity for rational analysis, and that are in some way useful for survival or success.


Transposed to the modern external world, we have connectivity through the Web on a hardware level of cables, EM-waves and processors, and through social media on the relationship level.  Arousal, from sex to cars to politics, to terrorism, animates the network to become active, use existing connections that are beneficial, and create new connections it might need.  Two of the brain’s three functional characteristics are present in our collective external reality, and are already strongly developed enough to have begun to function autonomously to create effects which are greater than the sum of their parts.


The challenge in developing an externalized neural strategy lies in the brain’s third functional characteristic of “valuation.”  Where the brain learns pattern recognition from the beginning of life, and is masterful in having the preconscious intuitions that are useful for survival (as Malcolm Gladwell shows us in Blink), collective intuition is still in its infancy.  Valuation, however, is where the big added value of a neural strategy lies, something Google was quick to discover and operationalize through search algorithms based on usage popularity and interconnectedness, and which social networks have taken to the next level with social evaluation (here Kruse–part 3, in which he sees absolute limits to the possibility of achieving collective valuation through the social net).


As a scientist, Kruse set himself the goal of making collective intuition measurable, and developed his “Nextpertiser” as a tool of the consultancy that emerged from his initial family business to help clients gain access to collective valuation data.  The results of the analysis of the complex and freehand input that respondents enter into the tool is a three-dimensional values matrix, through which the attitudes and behavioral strategies of potentially very large groups of people are visualized and clustered to generate significant patterns.  Interpretation of the patterns makes them available for policy, strategy and action on a collective level in a way analogous to how the brain uses pattern recognition to steer individual action.  The demonstration in the (German) Web2.0 presentation, e.g. focuses on the collective response to social media, and shows a deep societal division between “digital visitors” and “digital natives,” which cuts across all age demographics, showing that even the group of digital natives up to the age of 30 are split down the middle by these values clusters.  Action on marketing, education, research and development, government policy and any other area on which the transition to  Web2.0 and the creative economy (everything!) impinges, can draw great benefit from seeing this pattern and taking this values split into account when developing actions to take.


Some general implications?


Organizations that do not develop connectivity, arousal (or engagement) and collective valuation facility will have a poor chance of survival in the competition with organizations that do.  That includes the organizational approach to strategy, leadership and communication, whose main task will be to enable neural facility (or at the very least not stand in its way!)


Success in the neural world will depend strongly on social empathy and an ability to work with social resonance phenomena, that steer and focus attention and energy through the net (Kruse—part 4).


Effective leadership will operate at the level of “values” (not religious or moral, but as the behavioral strategies people, groups and systems use to master complexity).  One might say that this is another piece of the puzzle showing us that politics in the form of representative democracy will need to be redefined to reflect the ability and demand of citizens to participate more directly in the policy and decision making process (Kruse—part 5).  Another implication is that shareholder capitalism, operating as it does in a vacuum of purpose and values, will have little to stand on in the emerging neural society, and that alternatives to current economic beliefs are needed to keep pace with the infrastructure, dynamics and real-life consequences of a world connected in realtime (here I find myself returning again to Umair Haque and the Capitalist Manifesto for a vision of what it might be).


To round things off, here is the rest of the Kruse interview—part 6, and part 7 (on Obama and the failed great man theory of leadership, net neutrality, and communications quality control on twitter and strengthening the limbic system of the net!).


For German speakers there are links to his presentation on Web2.0 at the Re:publica 2010 conference, a short interview excerpt on how people respond to complexity (a plea for intuition in business!), an explanation of how his “Nextpertizer” tool for measuring “collective intuition” works, and a wonderfully pithy snippet of his testimony before the German Enquete Commission on the implications of Web2.0 and social media for systems of power for the development of Net Policy.

2 thoughts on “Peter Kruse: Transforming Organizations into Social Brains

  1. Pingback: Best of Friday’s Finds 2013 | Harold Jarche

  2. The most effective leaders operate on the level of truly embodied “values” (not religious or moral” these are the socio-anthropological values that do not necessarily match the marketed “ethics and values” of a company, which are often cited in Annual Reports.

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