Businesses Grow Like Gardens, Not Machines

Emergence principle in practice

When complexity researcher Neil Theise observed that emergence is "everywhere once you start looking for it," he illuminated a fundamental truth about how complex systems, including businesses, actually develop and thrive. This insight challenges our mechanistic assumptions about building organizations and reveals why some enterprises endure for centuries while others, despite meticulous planning, vanish within decades.

Emergence occurs when interactions between simple components create properties that cannot be predicted from the parts alone. Water's liquidity cannot be found in hydrogen or oxygen atoms; consciousness cannot be located in individual neurons; and a thriving business culture cannot be traced to any single policy or person. These properties emerge from the relationships and interactions within the system.

In business, we witness emergence constantly yet rarely recognize it. A company's reputation emerges from thousands of customer interactions. Innovation capacity emerges from how people connect across disciplines. Competitive advantages emerge from accumulated capabilities interacting in unique ways. Understanding emergence transforms how we think about building lasting enterprises.

The Domains of Business Emergence

Organizational cultures exhibit the same emergent properties as ant colonies. Individual ants follow simple rules, yet collectively create sophisticated structures and behaviors no single ant comprehends. Similarly, organizational cultures emerge from countless interactions guided by simple principles.

Consider how Berkshire Hathaway's culture emerged. Warren Buffett didn't design it through mission statements or values workshops. Instead, he consistently demonstrated principles: think like owners, embrace rationality, focus on long-term value. These principles, enacted across thousands of decisions and interactions, generated an emergent culture of patient capital allocation that persists even as the organization scales.

The Japanese concept of kata recognizes this principle. Toyota's culture didn't emerge from documentation but from millions of instances of stopping the line when problems arose, conducting root cause analysis, and implementing improvements. Each instance reinforced the principles until a culture of continuous improvement emerged organically.

Traditional strategy assumes linear planning. Analyze, design, execute. But studying enduring enterprises reveals strategy as an emergent phenomenon arising from what Buddhists call "dependent co-arising," where phenomena emerge through interconnected relationships rather than isolated causes.

Amazon's dominance emerged not from a master plan but from interconnected capabilities reinforcing each other. Customer obsession led to expanded selection. Expanded selection attracted more customers. More customers justified infrastructure investments. Infrastructure enabled faster delivery. Each element arose dependently with others, creating emergent competitive advantages no competitor can simply copy.

This mirrors natural systems. A forest's resilience doesn't come from individual trees but from mycorrhizal networks, nutrient cycles, and symbiotic relationships that emerge over time. Similarly, durable competitive advantages emerge from webs of interconnected capabilities, relationships, and practices that develop organically.

Biologist Stuart Kauffman's concept of the "adjacent possible" explains how innovation emerges. Each innovation creates new adjacent possibilities, enabling further innovations in an expanding cascade.

3M exemplifies this principle. Their culture of allowing researchers to pursue curiosity created conditions for emergence. The "failed" adhesive that became Post-it Notes wasn't planned but emerged from the intersection of available materials, unmet needs, and a culture that didn't punish productive failures. Each innovation expanded their adjacent possible, creating conditions for further emergence.

This explains why innovation clusters geographically. Silicon Valley's innovation doesn't emerge from any single factor but from dense networks of talent, capital, and ideas creating rich interaction fields. Each successful innovation expands the adjacent possible for the entire ecosystem.

Enabling Win Win Emergence

Understanding how emergence works reveals principles for creating conditions where it flourishes. Emergence requires interaction. Physical architecture matters: Pixar's central atrium, designed to maximize unplanned encounters, enables creative emergence. But interaction fields extend beyond physical space. Regular rituals, cross-functional projects, and informal networks create spaces where emergence occurs.

Century-old family businesses often maintain seemingly inefficient traditions like regular family gatherings, shared meals, and storytelling sessions. These create interaction fields where values, knowledge, and relationships emerge across generations. What appears inefficient through a mechanistic lens proves essential for emergence.

Paradoxically, constraints often accelerate emergence. Jazz musicians playing within musical structures create emergent improvisations impossible without those constraints. Similarly, business constraints can enable emergence. Southwest Airlines' constraint of using only Boeing 737s seemed limiting but enabled emergent advantages: simplified maintenance, flexible crew assignments, and faster turnarounds. The constraint created conditions for innovations that full-service carriers, with their complex fleets, couldn't achieve.

Complex systems exhibit what scientists call "radical unpredictability," where small changes can cascade into large effects while large interventions might produce minimal change. This means designing for adaptation rather than optimization. Trader Joe's exemplifies this principle. Rather than optimizing through big data and complex systems, they maintain simple principles: curated selection, employee autonomy, and customer trust. This simplicity enables rapid adaptation. Employees can respond to local preferences, discontinued items get replaced quickly, and new trends get tested without corporate bureaucracy.

The Law of Requisite Variety states that a system must match its environment's complexity to thrive. In business, this means maintaining diverse capabilities, perspectives, and approaches, even those without immediate application. Google's "20% time" policy recognized this principle. By allowing employees to pursue diverse projects, they maintained requisite variety that enabled emergence. Gmail, Google News, and AdSense all emerged from this policy. None were planned, but the conditions enabled their emergence.

Emergence operates on its own timescales, often incommensurate with quarterly earnings cycles. A redwood forest's majesty emerges over centuries; attempts to accelerate this process destroy the conditions enabling emergence.

This temporal mismatch explains why private and family-owned enterprises often outperform public companies over long periods. Hermès, still family-controlled after six generations, allows craftsmanship to develop over decades. Their competitive advantage emerged from patient cultivation of capabilities, not strategic planning.

The German Mittelstand companies, many centuries old, embody this patience. They focus on gradual capability development, allowing expertise to compound across generations. Their dominance in specialized global niches emerged from patient cultivation rather than aggressive expansion.

The Practice of Emergence

Understanding emergence fundamentally shifts how we approach building and evaluating businesses. For leaders, this means focusing less on designing outcomes and more on creating conditions. Establish clear principles rather than detailed rules. Build slack into systems rather than optimizing for efficiency. Create rich interaction fields. Most importantly, develop patience for emergence timescales.

For investors, it means evaluating businesses based on their emergent properties rather than just current metrics. Culture resilience, innovation capacity, and adaptive capability matter more than quarterly numbers. Seek companies with structures enabling beneficial emergence: aligned ownership, patient capital, principled leadership. Recognize that the most valuable properties are often emergent and thus not immediately visible in financial statements.

Peter Senge wrote about "the living company," organizations that adapt and endure like living systems. This isn't mere metaphor but recognition that enduring businesses operate more like gardens than machines. They exhibit emergent properties arising from countless interactions over time.

As we face accelerating change and radical uncertainty, understanding emergence becomes crucial. The companies that endure won't be those with the best strategic plans but those that best cultivate conditions for beneficial emergence. They recognize that sustainable advantages emerge from patient cultivation rather than strategic design.

In our obsession with disruption and control, we've forgotten ancient wisdom: the most beautiful and resilient systems emerge rather than being engineered. The challenge isn't designing perfect organizations but creating conditions where human creativity, relationships, and capabilities can emerge into something greater than we could have imagined. This is the work of building businesses that don't just survive but evolve and improve across generations, growing ever more valuable, like forests that enrich with age.

Onwards….