Emergent properties is the theoretical position that often times complex phenomena have features that canâ€™t be explained by the individual components or simple interactions. The sum is more than that of the parts. I love this theory, because it reminds me of organizations that literally take an idea in someoneâ€™s head and do what no one around them seems to be able to do in the market, sometimes with fewer resources. Sometimes out of nowhere they come along and change the world, and nowhere is this more recently evident than in the field of technology.
Back to the theory, take for example the human brain, and the concept of consciousness. Does a complete understanding of neural functionality explain the concept and resulting outputs of consciousness? It certainly seems like there is something going on at a different level. My belief is that you canâ€™t explain everything based on just what is tangibly evident. In some ways this is like explaining the success Apple computers has with a 70%+ Net Promoter Score and disciples the world over with just financial statements and operational reports. The statements you make may well be true, but donâ€™t speak to the whole picture. And now to the first point Iâ€™d like to make: Intangible assets have as much of an effect on causality as the tangible, usually more.
Opposing the theory of emergent properties are those who ascribe to reductionism. Reductionism asserts that understanding of all complex systems can be completely understood in terms of the individual components. The world needs these people too, because what is learned through this type of research is often invaluable. Itâ€™s like a debate between scientific and a religious perspectiveâ€¦ I think we need both. I believe that intangible assets demand the same level of attention as do the tangible, and yet most often the dimensions of a business that canâ€™t easily be measured doesnâ€™t receive a fraction of the attention that the financials do.
Another phenomenon that most reminds me of the emergent property theory is the groundswell of energy and motivation that occurs in employees and customers in companies with great strategy, vision, communication and resolve. Everyone works the same number of hours per day and yet you can feel the environment shifting and the energy building. Conversations naturally change, and the anticipation of success builds.
Leading indicators like customer perspectives on the importance and performance of various aspects of your brand may require more work to gain, but the decision making power that results is no less important than your projected income statement.