Informal Systems Thinking About Innovation

INFORMAL SYSTEMS THINKING ABOUT INNOVATION

- THE CASE OF SLOVENIA

Zdenka Zenko, Matjaz Mulej, Vojko Potocan , Marjan Pivka, Dusko Ursic

All five: University of Maribor, Faculty of Economics and Business, SI-2000 MARIBOR, SLOVENIA, P.O.Box 142. E-mail: ; ; , ,

Abstract

Slovenia belongs to the 80% of mankind, which have had a poor chance to develop their natural creativity to innovativeness with beneficial economic and social consequences. In 1991 Yugoslavia dissolved, and Slovenia came to have a new chance to choose a new, more innovative way of her socio-economic development and growth, about a century later than the most advanced North-West of the planet Earth. Partial models do not work, holistic models are hard to implement, if people do not realize why are they supposed to change their established habits of life. Several opinion investigations demonstrated this problem exist in Slovenia, too, and is a serious obstacle to catching-up underway. One need is to promote more holistic thinking by promotion of systems theory. Unfortunately, what came out of the General Systems Theory, is far away from holism (on the level of a total system), which is what Ludwig von Bertalanffy spoke for. Humans, including systems theorists, do not find his idea feasible. But a look at his ideas, e.g. in the light of Mulej’s Dialectical Systems Theory and some others, and of some organizational innovations / methods such as Total Quality Management using ISO 9000/2000 and EQA 2000, lets us see that there is chance to promote informal / implicit systems thinking. Research on the companies very successful on a long-term basis can be understood as an insight that implicit systems thinking can work very well.

Nastja Mulej

New Moment, d.o.o.,

Bezigrad 10, SI-1000 LJUBLJANA, SLOVENIA.

E-mail:

0. The selected problem and viewpoint of this contribution[1]

Slovenia used to be a part of Austria-Hungary for centuries, and of Yugoslavia in 1918-1991, which was established after dissolutions of Austria-Hungary and Turkey. Yugoslavia was a latecomer to industrialization and tried to catch up with the advanced Northwestern part of the world in two quite different ways under King (1918-1941) and under Tito and his successors (1945-1980-1991). Slovenia has been and is trying to do it in a third way, after dissolution of Yugoslavia in 1991, in order to become an innovative society able to enter European Union on a rather equal footing[2]. Creation of an innovative society is a complex process requiring systemic, i.e. holistic thinking based on interdisciplinary creative cooperation, to succeed. According to the theory of diffusion of innovation, such a process needs support from all/many tackled ones [Rogers, 1995[3]]. In CEEC, including Slovenia, making an innovative society is a must and a novelty, which is being imposed over the inhered culture[4].

1. The need for an definition of an innovative society

It was already in the Foreword by prof. S. Pretnar (in: [Devetak, 1980]) that Slovenia was warned of the fact that the world wide span of extremes in National Incomes per capita had grown from 3:1 to over 150:1 from mid 19th century until 1970. In the following only 25 years the same span grew to +400: (see: [Dyck, Mulej and coauthors, 1998, 1999]). [5] From other work [ Rosenberg, Birdzell, 1986 ] we can learn that such figures reflect the fact that (only!) the richest countries of today have implemented a social management innovation in mid 19th century: they freed entrepreneurship and abolished the previous centralized/hierarchical-command culture both in terms of ideology and in terms of economics (see: [Grassby, 1999]), every citizen was granted the right to experiment at his or her or their own account in lab, production and trading. This means that the essence of the innovation was the political and economic democracy, enabling other innovation/s. One of the consequences is that the 15-20% of world population, who live in the innovative societies, control about 95% of knowledge and investment in knowledge and keep permanently increasing their advantage before others. The first countries to do so were joined by a few other countries, which deliberately have implemented their social management innovation on an accelerated basis and skillfully and hence are catching up the first ones quite well, although they took off with a delay.

From the experience of these countries, one can learn that latecomers have a chance to become parts of the innovative society[6]. This need is publicly and officially accepted in Slovenia [SGRS, 2001].

A dialectical system of operational attributes of an innovative society includes ([Mulej et al., 2000], and earlier): a modern, creative, democracy in society and organizations; a modern market; a modern understanding of ownership; a modern understanding of innovation; a modern, innovative, business of most organizations; a modern, innovative, entrepreneurship. (See [Zenko, 1999])

2. Empirical picture of attitudes about innovation in Slovenia

For centuries, until independence in 1991, inhabitants of Slovenia used to be more under impact of guilds[7] than the modern (buyers') market. The guilds economy needs no innovation, but the buyers' market economy lives on it. On the general legal and political level this came to be understood and passively supported, in Slovenia, but what about implementation by people, what about their subjective starting points (values, knowledge, (use of) talents, emotions) with which they perceive and understand and support, or refuse, the objective needs and possibilities in their environment?

Our investigations [Mulej, ed., 1997; Pivka and Ursic, 1998, 1999] let us see that in the decade since Slovenia has independently employed and developed its own innovativeness, entrepreneurship and democracy (as three interdependents subsystems of the same whole), capacity and readiness to interlink innovating, quality and creditworthiness of enterprises, or to interlink innovating, business quality and human resources development into an innovative business, an up-to-date attitude about innovating has been emerging very slowly only. In 1999 and 2000 we did a comparative empirical investigation putting similar questions in a different way. We took in account the international finding that in the most entrepreneurial environments innovating tends to show up as a very natural component of culture and business, basis of quality and hence of competitiveness, thus also a basis for good salaries (and purchasing capacity) and investment, hence the capacity to survive in business and evolve in a modern society and economy. In the case of Slovenia, as we already have mentioned, it matters also that EU requires Slovenia to be innovative in order to let her enter EU. This requirements of the market and of the EU do not allow for a slow modernisation of Slovenians' attitude about innovation.

On the other hand, an opinion research [Tos, 1999] demonstrated that 80% of Slovenian population prefere a slow evolution[8]. In other words, they hardly support innovation. In spring 1999 another investigation showed that Slovenian people do not value entrepreneurs [Mocnik, 1999]. We tested these findings with our own investigation on a smaller sample. They were demonstrated true, unfortunately.

Our opinion research covered in 1999 a sample of employed freshmen parttime students of the Faculty of Economics and Business, University of Maribor, coming from all areas of Slovenia[9]. In a repeated investigation, in 2000, students from two most advanced and most exporting areas were involved, questionnaire being the same. Our intention was to judge comparatively to what degree can a regional (and general) development of an innovative orientation be implemented, if one considers entrepreneurship, modern market, and creation of inventions, potential innovations and innovations to belong to central components of the system of values, ethics, norms, and culture of the up-to-date way of economy and life. These attributes are the least developed in the least modernized regions, world-wide [Rogers, 1995].

We [Mulej M., Mulej, N., 2000] found the following (by questions put in the questionaire):

1. The notion that market is a socioeconomic order providing the best life to innovators – is rare (5% in general, 16% in the two most internationalised regions of Slovenia = MIR).

2. The most visible sign that Slovenia is in her transition in a market economy – is rarely seen in an essential growth of the role and influence of inventors and innovators (13% in general, 16% in MIR).

3. Rare is also the opinion that it is a sign of Slovenia's transition in a market economy that in Yugoslavia, Slovenia used to have quite a few inventors and innovators, but now the government supports the efforts aimed at living on innovation more and more persistently and effectively with its measures concerning education and economy (15% both in general and in MIR).

4. The biggest impact over the opinion of the respondents concerning the importance of innovation in a market economy is ascribed to TV, newspapers, radio (38% in general, 34% in MIR), less to coworkers and bosses (24% : 21%), the least to state bodies (7% : 24% - the biggest difference between regions!). But only a few hear no encouragement from anyone (20% : 18%).

5. The modern attitude that private ownership means owners' responsibility for a high quality of business etc., prevails[10] (53% in general, 70% in MIR).

6. What also prevails is a modern attitude that entrepreneurship means capacity, will and action of people to combine, discover and employ opportunities to create something new and a new benefit[11] (72% in general, 73% in MIR).

7. What is also well represented, but less, is the opinion that the organization in which respondents are employed, works well, i.e. visibly and permanently takes care of modernization and up-dating of creativity, knowledge, values and chances to use them in a way that most coworkers can, may, want and nearly must innovate permanently (40% in general, 50% in MIR).

8. The question »Which attributes prevail in the practice of the organization you know?« was the first of two doublechecking questions. It includes 19 comparative descriptions of an entrepreneurial and an administrative practice. Responses show that the entrepreneurial practice prevails over the administrative one, but – not so concerning the organizational innovations, managerial support to novelties, inventive approach to problems, democratic spirit, and tolerance by managers etc. It is better in MIR than in general.

9. The question »Attributes of politics and strategies of the organization you know« including eight subquestions, is complementary to the foregoing one. From this viewpoint the difference between the general situation and MIR is significant: the valuation of the longterm policies and strategy is much higher, but not reaching beyond 67%. The lowest are the judgements about the human resources politics (coworkers are the main source of success, longterm HR development) and politics concerning dealing with the problems (everyone shall discover them, search for causes, rather than for the guilty ones).[12]

The interpretation of data collected includes:

· There are important differences between regions that have been open to the buyers market and other international impacts for the longest time and with most development, on one hand, and the other regions on the other hand. This is true inside Slovenia and in the entire Central and Eastern Europe (CEEC)[13],[14].

· In Slovenia – in the general population (rather than among the entrepreneurs and managers whom we have not covered by intention) the opinion does not prevail that one can speak of market and market economy when there are not only supply, demand, and price, but only when there is power of the innovative ones and serious difficulties of the non-innovative organizations, individuals, regions, countries, international areas. Thus, the support to innovation-tending opinion leaders may be too small for the change of culture to take place with a sufficient speed.

· Therefore, Slovenia may not be able to enter European Union and the global economy in general on an equal footing in time to avoid the danger of being (neo)colonized.[15]

· Government does not do enough to make people perceive that the top leadership of Slovenia seriously aims at making Slovenia an innovative society, not merely a member of EU and NATO. Not even the phases of awareness / knowledge and persuasion phases have been reached, and of course less so have been the phases of decision and implementation, from the innovation-decision process as discussed in the theory of diffusion of novelties[16].

· In many organizations they still think that ownership and entrepreneurship are one thing, and innovating is a totally separated story, so is excellent quality of business. They also consider innovating to be rather an engineering issues than a human resources one. This means, they still consider it a hobby of very specific individuals rather than an integrating and must process.

· The especially underestimated issue are the organizational and managerial innovations, with which the top powerholders would give up a part of their power (in order to carry less burden) by freeing and developing creativity of their subordinates and by directing it to creation of benefit for the organization.

· Making the modern values seeing innovating, modern perception of market, democracy and entrepreneurship as the basis of modern business, economy and life of a high quality level, is therefore a lot too slow.

Very similar findings were demonstrated again in a number of conferences [PODIM 2000; PODIM 2001; DEZAP 2001; ZRS 2001; Stanic 2001; etc ].

What does this mean in terms of (informal) systems (= holistic) thinking as a precondition for an invention to develop to an innovation?

3. The “general systems Theory”, another Systems Theory and/or informal Systems Thinking – What does use?

Since his first renown research, as a biologist and mathematical biologist, from 1928 on, Ludwig von Bertalanffy (LvB) has gradually become the founding father of the General Systems Theory (GST). This notion is called a theory, which might recall us of time-free findings about time-bound features, events, processes, and attributes. This is what science produces and presents under the name of a theory. In the case of LvB, as quoted by Elohim [Elohim, 1999; Elohim, 2000] after Davidson [Davidson, 1983] and other references and sources, GST is not called a theory rightly. What LvB required, was GST to become a teaching (»Lehre«) with the role of a new worldview, which would ask all of us:

· to feel and act as a citizen of the entire world, not single nations only;

· to consider the entire biosphere as one system / whole;

· to see the planet Earth as one organisation, which means a whole with attributes emerging from interdependencies, sometimes mutually reinforcing, sometimes mutually opposing, between its parts on the basis of their interactions.