ORGANIZATIONAL CHANGE: THE SUBSTRATE-INDEPENDENCE THEORY

ORGANIZATIONAL CHANGE: THE SUBSTRATE-INDEPENDENCE THEORY

Organizational change is a multidimensional initiative that occurs as both a top-down, planned initiative and as a bottom-up, emergent initiative. At times, there is resistance between the two which dampens any attempt at successfully achieving a necessary and desired change. This resistance takes the form of stabilizing or destabilizing processes. Stabilizing and destabilizing processes maintain the identity of the organization in relation to the change initiative, providing either a stable identity that supports the change or a destabilized identity that resists the change (DeLanda, 2006). Organizational change initiatives must be viewed as being multidimensional before it can be successful, thus reducing any resistance to change. To achieve such a successful change initiative, this article presents the substrate-independence theory (Turner et al., 2022) as a method for achieving organizational change.

THE SUBSTRATE-INDEPENDENCE THEORY

The substrate-independence theory focuses on social systems capable of learning, self-organizing, and adapting to their environment as complex adaptive systems. As a sense-making theory, it aids leaders and practitioners in building and understanding their landscape through the development of counterfactuals to help identify adjacent pathways. Adjacent pathways start with understanding where you are (e.g., situation, problem, environment), followed by identifying coherent pathways from where you are (counterfactuals), experimenting with these alternative pathways (e.g., probing, parallel experimentations), and being open to alternative pathways that are different from the current path (e.g., potential future states). Alternative pathways are continuously being evaluated as more information is learned about one's environment and customer; this is an iterative process of constant evaluation rather than sticking to a plan.

From our experience, we have worked with many companies that have multiple projects occurring at the same time involving multiple organizational divisions. After looking closer at these projects (understanding where you are), it is often discovered that many of the projects either (a) do not provide value to the customer (non-value-added), (b) are older projects that will be outdated when completed (pet projects), or (c) involve projects that are no longer aligned with organizational goals or strategy. At this point, leaders are forced to look at what is and what is not possible (counterfactuals). Acknowledging that many of these projects need to be abandoned so that energy, resources, and finances can be directed to value-added projects that align with organizational goals (potential future states) requires leaders to redesign their pathways so that energy within the organization is better utilized. The new pathway is different from the original pathway as shown in Figure 1. The new pathway is continuously managed and cannot be predefined or planned in advance. We are working in a complex adaptive system, globally interconnected organizations.

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Strategy and change need to be dynamic and flexible so that new pathways not only become visible, but they are actionable and maximize value to the customer. These pathways become information in real-time that is distributed using the least amount of energy necessary. This theory provides praxis for sense-making in organizations.

Using the least amount of energy, distributing information through a project or organization can be monitored through the concept of logical depth (see Figure 2). The energy required to access the original information transmitted relates to logical depth. If someone needs to search through several journal articles, books, and wiki pages to identify the validity of the information delivered, there would be a high level of logical depth. In contrast, if the information provided included sources showing the originality of the information, less time is required to validate the information. This is an example of having a low level of logical depth. In organizations, the less time needed to understand information (validating and identifying originality), the less energy is required. One question to ask to identify logical depth: Is the cost of acquiring information greater than (high logical depth), or less than (low logical depth), the cost of generating it independently of the source?

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ORGANIZATIONAL FITNESS

The substrate-independence theory represents information flow and the conservation of energy to maintain an organization's fitness. Fitness is required before an organization can repurpose itself into an emergent and new coherent structure to meet external demands. Emergence is necessary for any change to take hold and become part of the new organizational landscape. Coherence is required for any change initiative before achieving “maximal satisfaction of multiple constraints” (Thagard, 2002, p. 17). During emergence, or as the change is taking place, coherence must be supported through clear and frequent explanations, deducing the benefits or need for the change, leadership facilitating and supporting the initiative, whereas incoherence should be avoided (e,g., inconsistency in messaging, incompatibility in processes) (Thagard, 2002).

Most readers have experienced coherent and incoherent behaviors in the workplace. One simple example could relate to providing a ‘definition of done.' Many initiatives utilize iterative practices to work on sub-problems or tasks that contribute to a larger problem/initiative. When iterative activities are worked on by team members with no clear end goal or ‘definition of done,' the team may never find an end to their work. Some initiative owners could continue adding new requirements to the scope until the initiative becomes something completely different from what was envisaged by management. This lack of clarity provides a simple example of incoherent behaviors. Coherence must be included to assure that all activities, goals, and strategies are clearly understood by all those involved and not just by upper management. This includes a level of transparency at all levels within an organization.

Fitness relates to an organization's capability of sustaining its existence (resilience) while adapting to environmental threats (robustness) with purposive changes designed over time (anti-fragile).

• Resilience: Survive over time, only change when needed. Resist shocks while remaining the same.

• Robustness: Ability to withstand perturbations (disorder, disruption).

• Anti-fragile: Ability to change over time and improve itself.

Organizations must have each of these three characteristics before they are fit enough to address any real change initiative. Poor organizational fitness will fail when faced with a change initiative as the energy and resistance required are too high.

INFORMATION FLOW

The flow of information is enhanced through four propositions as highlighted in the substrate-independence theory:

• Energy follows information; as more information is needed, more energy is expended.

• Constructions enable the flow of pertinent information.

• Value is achieved when actionable information is delivered to the customer (agent needing the information).

• The correct information must be made available to the customer when called upon (Turner et al., 2022).

Organizations consume energy and resources around information. This is both an organizational and a change initiative concern. Because energy follows information and resources, attention needs to be focused on assuring that an organization's energy is concentrated on delivering value to the customer (end-user). These four propositions, shown in Figure 3, identify how energy can be better utilized around pertinent information in organizations.

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These propositions include the mechanisms of delivering the correct information at the right time to the right customer or end-user using the least amount of energy, also represented as logical depth. Logical depth assures that the information transmitted is coherent, otherwise, it would not be considered relevant. As more information is presented to agents in an organization around a change initiative, more energy will be expended toward the stated change initiative. This energy needs to be directed toward the right activities to achieve the desired change. Energy directed elsewhere will result in resistance and wasted resources. The goal is to have the energy directed toward the change and not resistant to the change. Coherence helps to achieve this flow of energy.

In contrast, as information is generated by agents within an organization, energy is expended toward that information. This practice is found in the informal networks that form within organizations on a regular basis. This is a point where change is driven from the bottom-up. It is necessary to acknowledge this information, support the activities generated from this energy, and provide much-needed resources for these activities. Anything less will result in resistance toward the self-generated change (change from informal and bottom-up networks). As organic change initiatives represent issues that have not been recognized by management (by ignoring bottom-up change initiatives), these initiatives are required to sustain an organization's fitness (resilience, robustness, antifragility). This point identifies the multidimensional aspect of organizational change; it must be supported from both dimensions (top-down, bottom-up). Otherwise, resistance to change will be pursued.

CONSTRUCTOR THEORY

The substrate-independence theory extends constructor theory from the field of physics (Deutsch, 2013) by applying it to social systems. Constructor theory utilizes constructors, constructions, and substrates while also using counterfactuals. A constructor is anything that can cause a transformation (e.g., assembly line, management) without changing itself. Constructions represent the transformation. The substrate's attributes undergo a permanent change from the construction; this change is considered irreversible (Figure 4).

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CONSTRUCTOR

The constructor refers to the agent that initiates the change. This can come from leadership or it can be generated from artificial forces, such as when work-life balance is driven by external forces or when cultural changes are driven by internal informal networks. The constructor sparks a need for change or acknowledges a change initiative that is taking hold due to artificial forces. The constructor reverts back to standard operating practices after setting the change in place. This is identified as the constructor not changing itself; it calls for change but doesn't necessarily take part in the change process (management, leadership).

CONSTRUCTION

The Construction represents the transformation or change that is to take place or that is already taking hold. The construction is divided into potential input and output pairings; what are the legitimate input and output pairings to achieve the change? This changes the focus on traditional practices that only look at the desired outcome. The substrate-independence theory focuses on these pairings, also known as construction tasks. Construction tasks provide multiple opportunities that could be realized, making use of counterfactuals. Counterfactuals provide “statements of possible alternatives based on our observations and interventions” (Turner et al., 2022, p. 8). Construction tasks, consisting of multiple input and output pairings, applies the concept of counterfactuals to the process.

Counterfactuals are used as a method of self-reflection for leadership development in which leaders continuously consider alternative solutions, considering ‘what if.' One exercise focused on counterfactuals involves all participants to offer their own set of counterfactuals (e.g., three counterfactuals each) that concentrate on potential input and output pairings around a transformation. These counterfactuals, once presented to the group, provide a list of potential causal models that could guide participants closer to their next best step. This incorporates diversity of thought and a variety of ideas that is necessary when dealing with complexity in real-time situations. This is important because change in complexity cannot be planned for and expected outcomes are rarely obtained. Complexity involves entanglement among several agents and conditions, making any predictions right only some of the time.

Utilizing counterfactuals provide agents (e.g., change agents, managers, leaders, supervisors; agents of change) with many of the potential conditions that could become reality, providing quicker responses to change when these conditions occur. This prevents scenarios where leaders ‘put their heads in the sand' and continue moving forward regardless of negative and unexpected outcomes. Counterfactuals and construction task pairings force agents to consider multiple perspectives (perspective-taking) that aid organizations in becoming more adaptive and resilient.

SUBSTRATE

The subsystem (part of a whole; e.g., individual, team, executive branch) that is being transformed refers to the substrate. Agents of change represent the constructor, the transformation is the construction, and what is being changed is the substrate. The change occurs to internal attributes that make up the substrate; the change is not applied to the whole substrate. Attributes are described as any property of a substrate (Turner et al., 2022). One example is with education. An individual learns new knowledge and develops this knowledge into new skills, thus improving their utility. Education is not designed to transform a person in one step overnight. This process involves scaffolding methods that deliver knowledge at times when the learner is ready, providing time for reflection and practice, ultimately resulting in new knowledge. Learning is designed to deliver new knowledge to a learner that is congruent with the learner's existing knowledge structures. While new knowledge is gained by the learner through these scaffolding methods over time, the learner doesn't change immediately. The learner changes over time after successfully applying their knowledge and gaining confidence and a new identity. In this example, the attributes represent the learner's knowledge structures, change takes place in the learner's improved utility, and job prospects over time. Change is directed toward the attributes of a substrate and not the other way around.

THEORY OF THE SUBSTRATE

In its totality, using counterfactuals to develop multiple construction tasks begins a theory building exercise that is focused on the substrate's attributes. Which construction tasks will achieve the change in the substrate's attribute? This theory building exercise will also help to identify specific boundaries and constraints present in the current environment that are entangled with the substrate in question. The primary function of a theory is to describe a phenomenon (explaining or predicting), to identify boundary conditions, and to provide utility for practice (Turner et al., 2018). A theory must also be testable, which is the foundation of the scientific process. This requirement of being testable provides opportunities to test and modify theories to make them more relevant for specific conditions and to identify when they are not supported (not contextually relevant). Constructor theory acknowledges the importance of theory building by requiring a theory of the substrate to be included in the overall process. This theory of the substrate includes the counterfactuals and construction tasks, identified constraints, the substrate and targeted attributes, environmental conditions, among many other factors. Once a theory of the substrate has been developed, the goal is to run continuous parallel experiments, testing several of the construction tasks, to see which results in a change in the substrate's attributes. Once a positive effect has been identified, a new set of counterfactuals are developed building on new knowledge, and a modified theory of the substrate is presented. At this stage, new parallel experiments are conducted to further learn more about one's environment and to identify which construction tasks result in the greatest positive change in the substrate's attributes. This process continues to gain more knowledge of one's environment and to achieve a level of satisficing (Simon, 2019) rather than one of optimizing. This theory building, theory testing, and theory modification process follows the scientific method.

As an example, in traditional problem solving activities, organizational leaders are familiar with identifying hypotheses to test. Unfortunately, many hypotheses are generated without any theory supporting the hypothetical statements. All hypotheses must be supported by theory. This process becomes complete in constructor theory through the development of the theory of the substrate. A theory is developed first, potential pathways second, followed by the development of hypotheses based on these potential pathways. The theory of the substrate completes the experimental process.

The substrate-independence theory aids in developing a theory that can be modified through experimentation. This process also synthesizes the sensemaking process in understanding one's environment and begins building a landscape of the environment and constraints. In complexity, building landscapes become essential because these landscapes become information that other agents can access to understand the environment and its changing conditions. The landscape becomes information and reflects the theory of the substrate and testing of this theory. It provides a historical roadmap of previous knowledge and highlights adjacent pathways for forward mobility.

SCAFFOLDING

To aid in testing the theory of the substrate, we utilize scaffolds. We contrast mechanistic techniques (e.g., barriers, constraints) with non-mechanistic methods (cognitive structures, scaffolds). Constraints give the perception of mechanisms primarily because they became popular during the industrial era. Mechanical processes work well in closed systems but have been found to be problematic when applied to open systems such as social systems (e.g., complex adaptive systems, organizations).

The substrate-independence theory focuses on scaffolds instead of constraints. Scaffolds are traditionally identified as temporary structures used to aid construction with the intention of removing these temporary structures once construction is complete. Ideally, the new construction will be able to stand on its own without the scaffolding. Scaffolds can also represent processes in the way that education scaffolds learning, learning is structured in an organized manner and specific processes are used to transfer learning. Scaffolds can provide structure and processes to any change initiative.

Scaffolds provide both temporal (lasting for a determined time) and temporary (lasting for a brief period) processes that span across culture, cognition, and evolution (Developing scaffolds in evolution, culture, and cognition, 2014). The substrate-independence theory utilizes scaffolds to support change in the substrate's attributes through the construction tasks. Scaffolds can be identified for each construction task (C-T, represents construction tasks associated with a scaffold). Scaffolds have been identified as being either robust (rigid, elastic, tether) or resilient (permeable, mutating, dark) (Snowden, August 27, 2017) (Turner etal., 2022). This scaffold classification provides an initial assessment of the types of scaffolds available but we understand that there are more types that are being developed along with layering scaffolds to meet the contextual setting. The type of problem or environment will determine the appropriate scaffold to use and each scaffold will be applied to the construction tasks (C-T).

THE SUBSTRATE-INDEPENDENCE THEORY OVERVIEW

Figure 5 provides an overview of the substrate-independence theory that includes the components that we discussed in the previous sections of this article. Constructor theory involves reversible processes initiated by the constructor. The transformation or intervention is represented by the construction and the change is taking place in the attributes of the substrate (top of Figure 5). The construction tasks (C-T) are listed around the attribute (right side of Figure 5) to identify the legitimate input and output states to achieve the change in the targeted attribute.

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Along the left-hand side of Figure 5, we provide different types of scaffolds. Robust scaffolds provide boundaries for team/group interactions and information. Resilient scaffolds facilitate interactions, the movement of information, and introduce diversity.

Landscape mapping can be accomplished a priori for the ordered domain (clear, complicated) but must be conducted post-hoc for the unordered domain (complexity, chaotic). When addressing complexity, experimentation, mapping, and visualization techniques are called for. This becomes part of the theory building and testing process. The map becomes part of the landscape and represents information about the environment. This information is tangible and interpretable by other agents and provides adjacent possible pathways for the next best step to take when managing complexity. The landscape, map, and the theory of the substrate all become part of the physical environment for others to access and observe (it becomes multidimensional incorporating top-down and bottom-up information). This provides the coherence to any change initiative that is interpretable by all agents involved.

CONCLUSION

The substrate-independence theory advances sense-making by enhancing the Cynefin framework to include scaffolds as constraints. Constraints typically represent mechanistic barriers, while scaffolds are related to cognitive and more abstract representations. Scaffolding is a way of structuring learning and can illustrate how information and knowledge are structured. Scaffolding aids sense-making and is represented as a cognitive technique for enhancing learning and transferring information. By focusing on social systems, the substrate-independence theory uses scaffolds over constraints. Scaffolds are characterized as being either robust, visible with clear boundaries, or resilient, surviving continuity of identity over time. Additional scaffolds are possible, such as multidimensional and multilevel scaffolds.

As a sense-making theory, the substrate-independence theory aids leaders and practitioners in building and understanding their landscape through the development of adjacent pathways. Adjacent pathways start with understanding where you are (e.g., situation, problem, environment), followed by identifying coherent pathways from where you are (counterfactuals), experimenting with these alternative pathways (e.g., probing, parallel experimentations), and being open to alternative pathways (e.g., potential future states). These landscapes and adjacent pathways become information in real-time that is required to be distributed using the least amount of energy and only the requisite information to provide meaning for all shareholders. This becomes essential when dealing with complexity which is represented in the substrate-independence theory.

The substrate-independence theory helps to extend the sense-making literature by offering techniques for delivering a deeper understanding and a broader class of understanding. The substrate-independence theory meets the calls from researchers by extending sense-making research by introducing a new theory and set of tools. This theory also presents a model that is inherent within organizations, providing praxis for sense-making in organizations.

KEY TAKEAWAYS

• Counterfactuals provide the only means of identifying potential outcomes that would not have been predicted using traditional methods when organizations undergo change.

• Having a sound organizational fitness provides a structure in which both formal and informal networks can work freely and interdependently to reduce the effects of perturbations.

• Real-time landscapes created through rapid experimentation, multidisciplinary, and distributed decision-making allow for controlled movement in complex environments.

• Sensemaking (understanding one's environment) begins as more knowledge is gained. This information can then be distributed to further develop one's landscape that reflects the real-time state.

As more information gets distributed, scaffolding can be implemented to change attributes in a substrate (sub-system). Scaffolds can provide structure and processes to any change initiative.