Generative Relationships for Innovation and Competitiveness
Generative relationships (Lane and Maxfield, 1999 ) was defined nearly two decades ago. However, few organisations have grasped the enormous latent potential that they offer. Generative relationships are a special kind of relationship that are the seedbeds of innovation and competitiveness. They are based on the application of complexity science to human and organisational relationships.
They offer a way of injecting new knowledge and creative possibilities into a business. Most relationships are transactional in nature. Each party gives something for something else in return. It could be money in exchange for a product, service, information, skill or time. It is based on a simple exchange and transaction. While a generative relationship usually also has a transactional component, it is much more. It is fundamentally about growth and development of both parties.
The following are the requirements for a generative relationship. Without all of these, it will not be generative:
- Heterogeneity. Each party must bring something different to the relationship: specialised skills or knowledge, patterns of thinking, assets, or relationship networks.
- Matched permissions. When parties belong to different organisations, they need their principals to offer permission for them to engage with relative freedom. They should not need to keep referring back to their management, creating bottlenecks going up and down in a communication hierarchy.
- Aligned directness. Both parties, although having different purposes and objectives still need some level of overlap and alignment towards a bigger whole.
- Recurrent interactions. There needs to be constant and recurrent interactions between the parties for joint exploration, problem solving, planning and design. It is only through such engagement that parties learn about each other, share knowledge and understanding, build trust, develop social capital, and create possibilities for action.
- Action opportunities. It is important for both parties to meet, plan and problem solve together, the relationship will not be generative unless there are opportunities for joint action. They do something to create something new in the world.
Generative relationships work by creating new possibility space, and unleashing value that would not exist without them. Both parties are continuously growing in personal development and mastery, new ideas, innovative ways of doing things, finding new efficiencies, growing their networks and business possibilities and in other innumerable improvements.
The shift from transactional to generative relationships puts an organisation on a new trajectory to grow sales, increase market share, reduce costs, increase revenues, enhance customer service, ignite employee engagement, overcome debilitating relationships with local communities or organized labour, stimulate new research and development, find practical ways to apply innovation, or simply to break down silos in an organisation. Systems thinking offers practical ways and a toolbox to help develop and nurture generative relationships.
D. Lane and R. Maxfield (1996). Strategy Under Complexity: Fostering Generative Relationships, Long Range Planning, Vol. 29, April, 1996, pp.215-231.