"adhocery . . . is a practice that need not be urged because it is the only one available to us"

Introduction

In the paper published above, Gérard Bélanger (2002) uses the occasion of the current debates on the dilemmas posed by various proposed reforms for the governance of health care. Many of these suggest some form of demonopolization, deconcentration and decentralization, but Bélanger argues that it is futile to try to decentralize a centralized system - it is like trying to get a cat to bark.

Bélanger adopts Jane Jacobs's point of view (Jacobs 1992) that there is no meaningful middle ground between centralization and decentralization. They represent two different and self-contained syndromes of moral principles; they embody dominant logics that are impermeable. In Jacobs' words, any attempt at commingling can only lead to "monstrous hybrids".

Bélanger's position - if accepted holus bolus - entails that any reasonable person or group is always forced in all circumstances to make a Manichean choice and to bet either on a decentralized or on a centralized system.

Bélanger is aware of the starkness of the choice he proposes, and he suggests that some may well try to find ways to correct some of the most unfortunate consequences of such choices by adjustments in the management and governance structures of the system. But such flats and sharps, he contends, cannot modify the dominant logic: It would simply attenuate ever so slightly some of the malefits .

This approach, based on pure dominant logics, is both overstated and counterproductive because it fails to explain real-life situations and to provide for real-time choices that we know exist. Bélanger dramatically underestimates the possibility that systems truly embodying multiple logics could emerge or be designed. He also fails to fully appreciate the possibility of taking advantage of the benefits of both centralization and decentralization.

In the next section, we provide a general critique of Bélanger's argument based on our daily observation of effective mixed organizational forms both in nature and in society. In the following section, we show that "ecologies of governance" combine top-down and bottom-up logics very effectively. We use the example of VISA in the private sector and of regime-based federalism in the public sector as illustrations of effective ecologies of governance. Finally, we identify some principles of design that might help interested parties engineer an effective third option, avoiding the malefits of both hyper-centralization and hyper-decentralization.

The dominant logic syndrome as ideology

At the centre of Bélanger's argument is the idea that one cannot tinker with an institutional order that is fundamentally centralized with any hope of success because the "dominant logic" that inhabits any socio-technical system is overpowering. Any attempt to change the style of the socio-technical system is futile: the dominant logic will ensure that these add-ons are absorbed, integrated and transmogrified in the dominant direction.

This sort of either-or dynamics has some attraction. It emphasizes the integrity of socio-technical systems and underlines the importance of acknowledging the power of this logic. Lachmann has indeed shown that the institutional order has some capacity to thwart efforts at modifying it, and there is a Darwinian selection mechanism at work that often leads the system to reject alien accretions or transplants (Lachmann 1971).

However, this rigid perspective uses an "either-or" framework in dealing with "more-or-less" situations. In fact, real-time systems are much less rigid and much less "intégristes" than is implied by Bélanger. They are constantly evolving and have to adapt and adjust to ever-changing circumstances. As a result, institutional métissage is a fact of life.

Such a métissage may take many forms.

For instance, Vertinski has shown that natural systems like colonies of slugs reveal a capacity for cohabitation of both centralized and decentralized modes of operation. They switch from one mode to the other depending on circumstances. In placid times, a leisurely decentralized system prevails where every individual slug pursues its own activities. But this system is "instantaneously" transformed in an army-like centralized system when the colony is under attack. As soon as the threat has gone, the system reverts back to its decentralized state. Vertinski has shown that there are similarities between this sort of switching strategy and certain Japanese management strategies (Vertinski 1987).

Institutional and organizational métissage may also lead to a true coupling of top-down and bottom-up dynamics. This may be said to exist in systems like common law in which there is a learning loop - decentralized bottom-up experiments and decisions in the local environments cumulatively putting pressure on the institutional order and leading to changes in it. Such changes in turn, modify the institutional order and, top-down so to speak, lead to certain types of experiments being "adopted", i.e., gaining a higher probability of success.

As long as the bottom-up experiments do not push the system outside of a certain corridor of acceptable performance, the system remains self-regulating. However, if and when the system drifts out of the corridor and enters a danger zone for its stability, some form of top-down regulatory power kicks in. This is the moment when Delta organizations ŕ la Dror, (i.e., standing in an authority position above the fray, like the Supreme Court) get into the act (Dror 1997).

In yet other instances, truly different dominant logics prevail routinely in an intermingled way and do so quite effectively. An example is the After Action Program of the US Armed Forces. This program entails planned temporary hiatuses in the hierarchical operations of the forces when horizontal and rank-free discussions are allowed to prevail among the troops and their officers on what went right or wrong in certain recent operations. The old hierarchical order is re-instated as soon as this after-action planned non-permanent debate has concluded (Pascale et al 1997).

Finally, there are organizations where neither the vertical/hierarchical top down links nor horizontal/bazaar like links predominate. These are truly ambivalent organizations where transversal or cross-functional collaboration prevails, as it does in a well-working matrix-form or federal-type organization. In such cases, the organization coalesces in all sorts of ways, as needs require, vertically, horizontally, or in transversal task-force clusters involving various sub-sets of actors for planned and yet non-permanent periods (Tarondeau and Wright 1995).

Ecologies of governance

The prime challenge for managers is not to design a socio-technical system that has integrity but one that works. This practical imperative calls for a governance that will succeed in squaring the circle, i.e., in finding effective ways to have most of the advantages of a centralized system while also obtaining all the advantages of a decentralized system.

This entails avoiding two pitfalls. The first is the illusion of control (for one is rarely faced in the real world with a complex socio-technical system that has a fixed shape and predictable behavior, and therefore that one can fully control). The second pitfall is the delusion of Candide (for it is equally naďve to believe that the appropriate institutional and organizational arrangements will always emerge organically in the best way).

Avoiding these pitfalls is at the core of the work of governance experts. They try to nurture the sort of basic architecture that ensures effective social learning through interventions at both the strategic and operational levels. In doing so, many assume that strategic choices can shape the system top down as if it were an integrated whole. This is rather naďve. One is rarely faced with an integrated system that can be fully controlled or locked into a fixed trajectory. Most of the time, one faces a set of interdependent systems that cannot either be fully brought under the same logic or even handled in congruent ways. And yet laissez-faire is not an option either, for the costs of unsatisfactory governance or governance failures are too high.

The best one may hope for is a new fluid form of governance - something called "ecology of governance" by Walt Anderson. He describes it as "many different systems and different kinds of systems interacting with one another, like the multiple organisms in an ecosystem" (Anderson 2001:252). Such arrangements are not necessarily "neat, peaceful, stable or efficient . . . but in a continual process of learning and changing and responding to feedback". Their main objective is to ensure resilience - the capacity for the system to spring back on its feet undamaged.

An ecology of governance amounts to a group of loosely integrated "uncentralized networks" each focused on an issue-domain. Two examples might help flesh out what is meant by such an arrangement - one that yields most of the benefits of centralized and decentralized organizations: VISA and regime-based federalism.

VISA as chaord

Dee Hock has described in great detail the saga that led to the creation of VISA - the credit card empire (1995, 1999) . VISA is presented as the result of a process through which deliberation about purpose and principles led to the creation of new organizational structure that Hock calls chaord. Chaord is a combination of chaos and order. It is defined by Hock as "any self-organizing, adaptive, non-linear, complex system, whether physical, biological or social, the behavior of which exhibits characteristics of both order and chaos or, loosely translated to business terminology, cooperation and competition" (Hock 1995: 4).

Hock has shown that in attempting to govern something as complex as the financial empire of VISA, the design problem was so extraordinary that one had to create a new form of uncentralized organization. This was seen as the only way to ensure durability and resilience in such a complex organization. VISA is exposed to a vast array of turbulent contextual circumstances, and also has to face the immense coordination challenge involved in orchestrating the work of over 20,000 financial institutions in more than 200 countries trying to serve hundreds of millions of users.

In such circumstances, neither a fully centralized system nor a completely decentralized one would appear to be capable of providing the sort of arrangement likely to ensure the requisite resilience. Consequently, a new form of organization had to be designed that would serve both the "main purpose" and also provide the mix of norms and mechanisms likely to underpin its realization through bottom-up effervescence within the context of some loose framework of guiding principles agreed to by all.

Hock has given some examples of these principles defining the sort of organization used to cope with these challenges in the construction and design of organizations of this sort:

• it must be equitably owned by all participants; no member should have an intrinsic advantage; all advantages should result from ability and initiative;
• power and function must be distributive to the maximum; no function and no power should be vested with any part that might be reasonable exercised by any lesser part;
• governance must be distributive; no individual or group of individuals should be able to dominate deliberations or control decisions;
• to the maximum degree possible, everything should be voluntary;
• it must be infinitely malleable yet extremely durable; it should be capable of constant, self-generated modification without sacrificing its essential nature; and
• it must embrace diversity and change; it must attract people comfortable with such an environment and provide an environment in which they can thrive (Hock 1995, 1999: 137-139).

There is an "essential nature" in VISA as an organization, but there are also many dimensions and categories in the architecture and operations of this socio-technical system that do not fall necessarily into a centralization or decentralization box for they correspond to both.

Regime-based federalism

The traditional concept of federalism is territorial. It partitions the responsibilities of the organization (private, public or civic) among different layers of the organization more or less firmly based on a certain geographical areas. This is the case for American federalism (Carter 1998) and also for some firms that have adopted a federal structure like Shell and Unilever. (Handy 1992).

As Handy put it, federalism is "a well-recognized way to deal with paradoxes of power and control: the need to make things big by keeping them small; to encourage autonomy but within bounds; to combine variety and shared purpose, individuality and partnership, local and global" (Handy 1992).

But it is unduly limiting to restrict federalism to territorial federalism.

Diversity has many faces and federalism is an extraordinarily effective way to deal with diversity in an entity or in a socio-technical system. One may easily see the possibilities of federalism as an agency of reconciliation of various sets of purposes: a social architecture allowing multiple logics to cohabit.

Subsidiarity is one of the principles underpinning federalism. It establishes that no higher order body should take unto itself responsibilities that can be despatched properly by a lower order body. In territorial terms, this means that only if the local or state levels cannot effectively shoulder some responsibilities, should they be taken over by the federal government. The same logic would lead the head office of a company to provide subsidiaries with as much autonomy as they can properly exercise.

But organizations and systems are not limited to territorial partitions. They are composed of a multitude of communities of meaning. For instance, a health care system integrates well (or not so well) a good number of communities of practice (doctors, nurses, etc.). IBM contains communities of researchers, production engineers and financial artists. A country has communities of environmentalists, religious groups or gender groups, etc.

More broadly, in the absence of a higher order authority (as in the case of the transnational scene because of the void at the level of world government), networks very often emerge that are focussed on issues like weather, environment and racism. Such networks correspond roughly to both issue-domains and "communities of meaning" while taking into account territorial and national dimensions. Such specific forums are created on the global scene to handle critical issues (management of oceans, for instance), and accords or agreements of all sorts (the Kyoto protocol, for instance) are arrived at in such agoras.

The arrangements that they embody are referred to as "regimes".

Stephen Krasner has defined regimes in the international context as "sets of implicit and explicit principles, norms, rules and decision-making procedures around which actors' expectations converge in a given area of international relations" (Krasner 1983: 2). This definition has been refined and expanded by Hasenclever et al. who have made more explicit the different conceptual elements of the definition: "Principles are beliefs of fact, causation and rectitude. Norms are standards of behavior defined in terms of rights and obligations. Rules are specific prescriptions or proscriptions for action. Decision-making procedures are prevailing practices for making and implementing collective choice" (Hasenclever et al. 1997: 9).

Federalism is a way of thinking. It is not simply a dividing up into geographical units. It is a way to embody the motto - as much decentralization as possible and as much centralization as necessary. And the optimal degree of centralization/decentralization changes through time depending on circumstances. Indeed, the advantage of federalism is that it can choose to move either way in response to the particular circumstances and challenges of the day. For most federal organizations and systems, this leads to the development of regimes of all sorts to deal with certain portions of the terrain, and to work constantly at articulating and reconciling somewhat those different regimes that are always only somewhat partially compatible.

One may argue that any private, public or civic entity adopting a federal structure is choosing that very flexibility as an important asset, for federalism matches the complexity of the environment with the complexity of the organizational form.

The same thing is true for complex socio-technical systems. One can show that in many sectors the only effective way to manage complex socio-technical systems - like hospital systems for instance - is indeed to adopt a federal structure allowing for the appropriate mix of centralization and decentralization (Paquet 2002: ch. 17).

It will not be surprising then that, very much like in the case of the VISA chaord, there are echoes of federalism as a way of thinking about governance in a variety of guiding maxims of effective organizations. Charles Handy has identified a few such maxims:

• authority must be earned from those over whom it is exercised;
• people have both the right and the duty to sign their work;
• autonomy means managing empty spaces;
• twin (status and task) hierarchies are necessary and useful; and
• what is good for me should be good for the corporation (Handy 1992).

No single template is likely to become a rigid recipe in the use of a mixed regime-based entity but both chaords and federal systems are interesting illustrations of plausible and credible experiments. Both forms are examples of institutional and organizational métissage, and have revealed through multiple instances of effective use that one need not fall into the either-or trap set by Bélanger.

It is only in the unidimensional world of Bélanger that the stark distinction he proposes makes sense. In a multidimensional world, there is always some scope for modification of the parameters, and for forging an organization that can be said to be both centralized and decentralized at the same time.

Some principles of design

The design of governance systems, very much like the design of a building, must remain closely linked with circumstances and with the priorities of ultimate users. Moreover, much in the real experience of governance systems emerges unplanned as unintended consequences or as a result of the sheer creativity of the users of the systems. Social architects are never fully in control. But it is simplistic to presume that they can only be sorcerer's apprentices and that their design efforts are condemned to generate "monstrous hybrids" when they attempt to create and propose organizational and institutional designs that blend centralization and decentralization, or the two moral syndromes of "trader" and "guardian", as Jane Jacobs suggests.

In fact, there are a few guideposts that would appear to be promising when one is intent on nurturing the emergence of (1) an effective sense of direction for the organization, together with (2) the required sorts of conduct by stakeholders in achieving the purpose and (3) the kind of congruence of behavior by all stakeholders and partners that will gradually build the requisite trust needed for the organization to thrive.

These guideposts do not provide recipes or models, but they draw attention to certain dimensions of effective governance regimes likely to increase system resilience. Decisions about these features of the governance regimes tend to help in arriving at some determination of the optimal degree of centralization and decentralization that would appear to be required hic et nunc.

Active involvement, transparency, deception, and fail-safe mechanisms

One of the saddest and most unhelpful assumptions that can made by organization designers is the assumption of the passive nature of human beings, the postulate that citizens, partners, employees, etc. are passive holders of rights. They are "forgetting that those rights are the flip side of others' duties": this passive culture of human rights suggests that one can sit back and wait for others to deliver what they are entitled to (O'Neill 2002:35-39).

Rather one must build on the assumption that human beings are active and want to participate in the construction of their organizations and institutions. This entails a design that engages citizens, partners, employees, etc., that builds and counts on trust to provide the social glue to generate the requisite collaboration.

Some have suggested that transparency might be some sort of panacea, since it has the great advantage of providing all participants with a clear view of both issues and outcomes. But one should not develop a fixation on transparency. Often, as O'Neill suggests, "increasing transparency can produce a flood of unsorted information that provides little but confusion" (O'Neill 2002: 73). Combined with the wrong sorts of accountability that impose targets and all sorts of phony performance indicators mainly chosen for ease of measurement, transparency entails manly quantophrenia and not much intelligent accountability (Paquet 1997).

Indeed, demands for "universal transparency" are "likely to encourage the evasions, hypocrisies, and half-truths that we usually refer to as 'political correctness' but which might more forthrightly be called 'self-censorship' or 'deception'" (73). And total transparency may not do much to reduce deception (Bennis 1976; Juillet and Paquet 2002).

Formal, accessible and useful technology-based information management systems that interconnect all the stakeholders are likely to be useful. But they must be designed to discourage deception, rather than eliminate secrecy, and they must be geared to intelligent accountabilities. But these internal mechanisms may not suffice. Real-time systems (which need to evolve, adapt and adjust to changing circumstances) cannot be assumed to always do so in a smooth way. Consequently, there must be provisions both for active trust and some kind of built-in "fail safe" system that kicks in if the system drifts out of the corridor of acceptable performance and enters a danger zone for its integrity and stability.

For the polity, such a fail-safe mechanism is made of both formal and informal checks and balances. Examples would be the existence of the Constitution and the Charter, together with a judiciary that is independent of the legislature and the executive, a healthy free press along with fundamental freedom of speech and of assembly.

In private organizations, much of this fail-safe system depends on external restraints as the criminal code, or the values in good currency in a society, that complement internal mechanisms built in the corporate culture. Some internal mechanisms include robust corporate governance standards, strong audit committees, and well-defined procedures and protocols to be put in place in extraordinary circumstances.

The co-existence of (1) much stakeholder activism with (2) "border controls"/a "sense of limits" would appear to be one of the most important underpinnings for a self-organizing and self-regulating system: a true liberal pluralist system cannot exist without both of these components.

Intelligent accountability

Active human beings need not only a sense of limits but also intelligent accountability arrangements or structures for the system with which they are concerned. But, as O'Neill wisely points out, intelligent accountability requires good governance, and good governance is possible only if institutions and organizations are allowed some margin of self-governance (O'Neill 2002:58).

One must therefore have in place a network of accountability links both to foster self-organized structures and to ensure their viability. Such accountabilities must provide the sort of interactions likely to generate both a modicum of coordination in the short term, and a sort of radar to guide social learning in the longer haul.

These coordination guideposts need to solve four important challenges to provide these kinds of accountability.

First, one must ensure maximum participation of all the stakeholders since knowledge, power and resources are widely distributed. Wide participation has the additional advantage that it embraces the kind of multi-skilling that is most likely to produce the most imaginative and creative solutions to problems.

Second, the designer must commit to a minimum of rules so as to make the system as flexible and adaptable as possible. Consequently, much has to be built on voluntary agreements and conventions

Third, there must be an agreement to delegate to the front line all the decision-making that can be done there. The principle of subsidiarity is built on a sense of responsibility at the most local level, but it must be nested in a nexus of integrative moral contracts providing broader values to serve as a guiding framework. Such moral contracts based on broadly based values underpinning more local principles ensure that local decision-making will be made in a manner taking into account broader values. Such a setting both enables the kind of proximity that generates ideas that meet local circumstances. At the same time it allows for things that need to be discussed and agreed at a broader level to take place (Paquet and Wilkins 2002).

Fourth, to ensure system-wide accountability, one must build in an element of competition as a safeguard against the tyranny of the monopoly or as a damper on the power of the state.

Multistability through segmentation and a capacity for collaboration when required

The mix of active human beings, a basis for self-governance of organizations, and intelligent accountability leads to another important design principle: the recognition that the illusion of control must be tempered in two ways. First, by a good dose of awareness that circumstances being rather diverse in dealing with complex systems, it is preferable, both for external and internal reasons, that the socio-technical system be partitioned in sub-systems allowed to operate somewhat separately. Second, by a capacity, when required, to manage change in the governance framework itself - the rules of the game within which the partitioning takes place - and to elicit the requisite amount of collaboration in turbulent environments. An example of this need for collaboration at the level of states (within the European Union, for instance), but also among different partitioned segments of a national socio-technical system, would be the mad cow disease incident in the United Kingdom. Yet it should be clear that such collaboration is not the same as centralization nor is it an excuse for promoting it (Metcalfe 2001).

There is no doubt that a socio-technical system is both more resilient and more likely to be innovative if (1) it is partitioned in such a way that it can avoid being totally destroyed or "crashed" by external shocks. In systems design parlance, a system is said to be multistable when it has the requisite degree of balkanization necessary for the system to react "par morceau", allowing the system to delegate to the best-prepared sub-system the job of reacting to and managing these external shocks, and of doing so in a manner that preserves the system from totally crashing (Ashby 1960). And if (2) it allows parallel lines of reasoning and logic to thrive, to interact and to generate the most creative synergies, both in quiet times, when these logics work in parallel, and in turbulent times, when they underpin effective collaboration (Sacconi 2000).

Such partitioning of large systems (of which both chaords and federal systems are examples) has also other benefits. The socio-technical system is allowed to adjust more easily to external shocks in turbulent times and to improve social learning by ensuring a modicum of diversity of points of view. Also, through balkanization and decentralization, the system is immunized from hijacking by central powers or sabotage by marginal groups in times of difficulties. Neither threat is unimportant: on the one hand, when the central powers - losing control and being accused of not being able to maintain a modicum of effectiveness and stability - are under attack, they are normally tempted to re-establish a form of centralized control be it only for reason of expediency. On the other hand, while chaords and federal systems are often difficult to govern (some would say it is like herding cats) they are not easily sabotaged or "flamed", especially in the era of new technologies of information and communication (Paquet 2001).

But it should be clear that in order to be able to "land on its feet" in the face of the sort of external shocks that can be experienced in a turbulent environment, the balkanization has to be accompanied by some capability for collaboration across segments when needed - not a form of centralized control but a forum for effective collaboration.

Conclusion

These principles do not ensure that the appropriate mix of centralization and decentralization will materialize. They simply provide help in preventing centralization from degenerating into rigidity, deception or even abuse of power, while ensuring that certain basic features of a mixed centralized/decentralized arrangement are built into the original organizational design.

These principles are most effective in preventing a cumulative causation process from generating a drift toward either pole - pure centralization or pure decentralization - for it helps to throw some light on the malefits of both extreme rigidity and limited learning on the one hand, and lack of focus and lack of resilience on the other.

The propensity to elect pure centralization or pure decentralization or to argue the inevitability of one or the other is much less a result of real constraints than the consequence of ill-founded ideological assumptions that often the decision-makers are not even aware they are making. Consequently, one should be equally suspicious of prophets claiming that the answer is totally in an act of faith in the "invisible hand" of decentralization or in the "visible hand" of centralization.

The primacy of pragmatism calls for no act of faith but rather for an act of hope that cleverly designed checks and balances will succeed in leaving as little space as possible for the "invisible foot" of ineffectiveness.

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Ruth Hubbard is a consultant in Ottawa. She was President of the Public Service Commission from 1994 to 1999. Gilles Paquet is a Senior Research Fellow at the Centre on Governance and Professor Emeritus at the University of Ottawa. He is also Editor-in-Chief of optimumonline.ca

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