Questioning sovereignty
It is tempting to think of a corporation or even an industry as an ecosystem, within which “leadership becomes less about control and more about navigating through complex and diverse business eco-systems.”(Western, 2013) What distinguishes such ecosystems is the filiation of their constituent or member organizations to a parent organization or lobbying industry association. The latter are defined by Trist as ‘referent’ or ‘regulative’ organizations (Trist, 1983), to distinguish them from ‘operative’ organizations engaged in some form of exchange process across their boundaries. This definition of an ecosystem focuses primarily on the vertical relationships of the ecosystem’s constituent parts to itself as a sovereign whole and makes it easy to think of the modern corporation as an ecosystem. It also lends itself to a cybernetic understanding of sovereignty.
An alternative horizontal approach defines the ecosystem structurally as an emergent effect of how it interacts with its environment, as “the alignment structure of the multilateral set of partners that need to interact in order for a focal value proposition to materialize.” (Adner, 2017) Here the focus is on the effects engendered by the ecosystem-of-interest in its environment (Ryan, 2006). Its focus is on the relationship to the customer, in relation to whom the constituent parts of the relevant ecosystem become complementors responding to a demand that is multi-sided (Evans & Schmalensee, 2017). The challenge to the systems psychodynamic perspective by a structurally-defined ecosystem is how sovereignty is to be understood – by what authority are individuals to act in the name of the ecosystem and what holds the individual members of the ecosystem in relation to each other? To make sense of such an understanding requires us to let go of the cybernetic approach and to understand structural ecosystems as alive.
An insight into the libidinal consequences for individuals of these structural ecosystems comes from examining what gives the exercise of power ‘force’. The agent of ‘sovereignty’ with respect to a community describes the site of unquestionable legislation or jurisdiction located in a person or an assembly. The community inside of which the exercise of that sovereignty has ‘force’ then defines those who are subject to sovereignty (Tuck, 2016: p84). In this circular definition, the ‘force’ of legislation or the exercise of jurisdiction is thus the ability to command obedience to that sovereignty[1]. In an ecosystem defined by filiation, this sovereignty comes from ‘above’ as a shared way of defining that membership a priori. In contrast, structural ecosystems are faced with a membership for whom sovereignty comes horizontally from what it is doing at its ‘edges’, its membership necessarily changing with changes in its value propositions. Sovereignty is questioned, therefore, when those previously considered to be members of a community no longer feel themselves to be members (Lamb & Primera, 2019; Pan, 2024).[2]
Going beyond markets to reduce market failures
A market is a general definition of the particular products or services that will be supplied, aggregating demand across customers’ contexts-of-use. While focusing on a market involves ignoring the singular nature of a customer as a context-of-use, the failure to address the needs of the singular nature of a context-of-use is experienced as a market failure. Since the 1970s, digitalization has enabled businesses to pursue economies of scale and scope by automating and mechanizing more and more of the socio-technical systems used by them in supplying more and more markets. The effects of this have been apparent in the increasing diminishment of the role of labor in capturing value from those markets (McAfee, 2012).
Digitalization in the 21st century has also enabled the servitization of products and services through adding software to a product and/or service (Kohtamaki, Parida, Oghazi, Gebauer, & Baines, 2019). As a consequence, while value can still be captured through economies of scale and scope in supplying products and services, new opportunities for value capture emerge based on creating value through economies of alignment in the dynamics of how servitized product-services are used by customers (Martin, Schroeder, & Bigdeli, 2019).
During the course of this century, digitalization has thus also become a key enabler in the emergence of platform architectures supporting structural ecosystems (Blaschke, Haki, Aier, & Winter, 2019; Ceccagnoli, Forman, Huang, & Wu, 2012; Nerbel & Kreutzer, 2023). These digital platforms leverage the servitization of complementors’ offerings by making continuous innovation possible in how the singular nature of each customer’s multi-sided demands can be met (Isckia, de Reuver, & Lescop, 2018). The danger is in a ‘vanishing hand’ of capitalism (Langlois, 2003), as the protocols that these platforms use become invisible behind the way they interact with their customers. At the same time, an opportunity to further reduce market failures arises insofar as these protocols can be made dynamically responsive to the singular nature of each customer’s situation.
Capturing value from creating economies of alignment through the use of digital platform architectures requires not only that ecosystems add a focus on how products and services are used but also that they develop the relational agility necessary to supporting the dynamics of those uses. Such relational agility requires continuous innovation in how to support different customers’ contexts-of-use and in how the dynamic characteristics of those contexts-of-use may be supported (Isckia & Lescop, 2015).
The challenge to sovereignty
The challenge to sovereignty presented by this edge-driven continuous innovation is not just in the dynamic relationships between platform design, value creation and knowledge (Isckia et al., 2018) but also in the dynamics of knowledge creation itself (Teece, 2022). Following WWII, the systems psychodynamic perspective emerged as a way of addressing the relation between individuals and the business as a sociotechnical system:
“The distinction between interpersonal and group or system dynamics is critical. Interpersonal dynamics involve direct person to person communication – perhaps amongst several people. System dynamics mediate that direct relationship through a third position; that of the system, its purposes and tasks. So systemically, persons are related to one another by means of their positions in the system (ie their roles related to tasks – not by means of a direct relationship.”[i]
A systems psychodynamic perspective, thus focused “on the interplay between the management of emotions and tasks,”[ii] was seeking to bring clinical understandings to bear on the way individuals took up their roles within businesses.[iii]
What the systems psychodynamic perspective did not do, however, was address the effects of relational agility. This doubled the traditional double task of person x role in order to address the dynamics of the organization’s relationships with the contexts-of-use of those for whom it was creating value (Boxer, 2024). Doubling the double task meant addressing the dynamics in how the creation and capture of value could be organized socio-technically. It also meant addressing the libidinal consequences of continuous innovation for the way the identifications of those working within ecosystems were being supported. While the systems psychodynamic perspective had provided a shared vision of how to understand an individual’s relation to a socio-technical system, digitalization was introducing a new competitive dynamic into how we understood the double task facing organizations themselves.
Understanding an ecosystem as being a filiation to a sovereign power involved holding a relation to two asymmetries: (i) how each organization’s economy worked in terms of how its primary tasks balanced creating value with capturing value; and (ii) how a vertical sovereignty governed the relations amongst an ecosystem’s members through the way it defined the domain of relevance for their operations. Developing relational agility, however, added the need for an ecosystem to be alive to its environment.[3] Being edge-driven meant changing the power balance between vertically-defined normative roles and horizontally-defined edge roles. The addition of horizontal forms of sovereignty involved adding a third asymmetry managing the primary risk of failing to find new ways of making ‘common cause’ in relation to the changing nature of customers’ situations (Boxer, 2023). The cybernetic understanding could only take us so far in addressing the demands of this third asymmetry to the extent that it required some degree of surrender of sovereignty in engaging with the dynamics and heterogeneity of demands. [4]
Understanding libidinal economies as immune systems
The need to change this power balance involves accepting some degree of surrender of vertical sovereignty to customers in order to make room for edge-driven definitions of membership in pursuit of relational dynamics. The defining challenge of structural ecosystems focused on continuous innovation becomes the challenge of maintaining a shared sense of ‘force’ (Adner, 2017). For individuals, rather than following the desire of a leader appointed to represent a vertical sovereign authority, they must surrender some degree of this sovereignty to being edge-driven in order to follow the leadership of the customer’s desire.[5]
There are therefore two kinds of challenge needing to be met in the 21st century that go beyond the systems psychodynamic perspective: first, that demand must always be understood as organized in a way that will be asymmetric to the way supply is currently organized. This involves an approach to the economics of an ecosystem rooted in demand that is always multi-sided and driven dynamically by the singular nature of customers’ contexts-of-use. The resultant doubling of the double task leads to the second challenge: an organization has to be able to be alive to the customers at its edges by managing how its libidinal economy supports individuals’ identifications . Leadership involves understanding this libidinal economy to be organized systemically like an immune system, one that will resist the dynamics of relational agility in conserving the current relations between individuals’ identifications. The psychodynamics of these libidinal economies have to be understood not just as providing defenses against anxiety, but as providing the means of enabling innovation.
Footnotes
[1] The possibilities here for commanding obedience are (i) physical force (by the police and army), (ii) legal force (through fines and imprisonment), (iii) market forces (through contractual enforcement) and (iv) community inclusion (through not withdrawing social ties). ( Vibert, F. 2014. The New Regulatory Space: Reframing Democratic Governance. Elgaronline: Edward Elgar.)
[2] The parallels here are intentional to the challenges faced by societies within which it needs to be possible for there to be an increasing variety of ways of living together. See, for example, Cramer, K. J. 2016. The Politics of Resentment – Rural Consciousness in Wisconsin and the Rise of Scott Walker. Chicago: University of Chicago Press..
[3] A recent HBR article (Webb, A. 2025. Why “Living Intelligence” Is the Next Big Thing. Harvard Business Review(January).) described living intelligence as combining artificial intelligence, advanced sensors and biotechnology in order to be able to sense, learn, adapt and evolve. While ‘living’ is invoked because of the dynamic relations needed between all four of these, it is important to recognize the essentially cybernetic understanding of intelligence being put forward in this article. It is nevertheless good that the need for relational agility is being recognized as a new kind of problem even though we also need to recognize the inherent limitations of cybernetic understandings of human intelligence.
[4] The issues here are apparent in this book by Streeck in which too many citizens-as-customers feel that their needs are no longer being addressed by the State’s powers-that-be. (Streeck, W. 2024[2021]. Taking Back Control? States and State Systems after Globalism. Brooklyn, New York: Verso.)
[5] An early paper on this opened up the horizontal versus vertical dimensions in the exercise of power (Boxer, P. J. 1998. The Stratification of Cause: when does the desire of the leader become the leadership of desire? Psychanalytische Perspektieven, 32(33): 137-159.), but not the immune system issues surrounding how such changes were resisted…
EndNotes
[i] From ‘The Transforming Experience Framework and Unconscious Processes: A brief journey through the history of the concept of the unconscious as applied to person, system and context with an exploratory hypothesis of unconscious as source’ Long, S. 2016. The transforming experience framework and unconscious processes: a brief journey through the history of the concept of the unconscious as applied to person, system, and context with an exploratory hypothesis of unconscious as source. In S. Long (Ed.), Transforming Experience in Organisations: 31-106. London: Karnac.
Socioanalysis is a term coined to describe the study of groups, organisations and society from a psychoanalytic and systems theory perspective (Bain, 1999; Long and Sievers, 2013). Others have termed this “systems psychodynamics” (eg, Hirschhorn 1988; Gould and Stein 2006 ;Gould, Stapley and Stein 2004; Stapley 2006; Obholzer and Roberts 1994 to name but a few). The discipline grew out of work done by Bion, Rickman, Bridger, Main and others during and after WW II. As psychoanalysts and social scientists, these pioneers worked in officer selection with the British army and at Northfield hospital with soldiers psychologically damaged by the war. They regarded the problems they faced in these tasks as involving systemic dynamics rather than purely issues about individuals or about interpersonal relations (Trist and Murray 1990). The distinction between interpersonal and group or system dynamics is critical. Interpersonal dynamics involve direct person to person communication – perhaps amongst several people. System dynamics mediate that direct relationship through a third position; that of the system, its purposes and tasks. So systemically, persons are related to one another by means of their positions in the system (ie their roles related to tasks – see Long 1992) not by means of a direct relationship. Their differences of position and role and the relations between them are key to our understanding of group dynamics.
Bain, A. (1999). “On Socio-Analysis” Socio-Analysis 1(1) 1-15.
Gould, L. and Stein, M. (2006). The Systems Psychodynamics of Organisations: Integrating the Group Relations Approach, Psychoanalytic and Open Systems Perspectives. London: Karnac.
Gould, L.; Stapley, L. and Stein, M. (2004) (eds) Experiential Learning in Organizations: Applications of the Tavistock Group Relations Approach: Contributions in Honor of Eric J. Miller. London: Karnac.
Hirschhorn, L. (1988). The Workplace Within. MIT Press.
Long, S.D. (1992). A Structural Analysis of Small Groups. London: Routledge.
Long, S.D. and Sievers, B. (Eds.) (2013). Towards as Socioanalysis of Money, Finance and Capitalism: Beneath the Surface of the Financial Industry. Routledge International Series in Finance and Banking. London: Routledge.
Obholzer, A. and Roberts, V. (1994). The Unconscious at Work: Individual and Organisational Stress in the Human Services. London: Routledge.
Stapley, L. (2006). Individuals, Groups and Organisations Beneath the Surface. London: Karnac.
Trist, E. and Murray, H. (1990). (eds). The Social Engagement of Social Science. A Tavistock Anthology. Volume 1: The Socio-Psychological Perspective. Philadelphia: University of Philadelphia Press.
[ii] From ‘Agony and Ecstasy in the Gig Economy: Cultivating Holding Environments for Precarious and Personalized Work Identities’ Petriglieri, G., Ashford, S. J., & Wrzesniewski, A. 2019. Agony and Ecstasy in the Gig Economy: Cultivating Holding Environments for Precarious and Personalized Work Identities. Administrative Science Quarterly, 64(1): 124-170..
A systems psychodynamic perspective focuses on the interplay between the management of emotions and tasks (Hirschhorn, 1998; Pratt and Crosina, 2016), making it well-suited to interpret our research participants’ accounts. While ‘‘deeply probing people’s experiences and situations during the discrete moments that make up [people’s] work lives’’ (Kahn, 1990: 693), this perspective embraces Mills’ (1959) admonition to regard personal experiences as reflections of social issues. Because it proposes an embodied self that understands and realizes itself through relationships (Fitzsimons, 2012), it helps to theorize about processes that encompass intra- and interpersonal dynamics (Ashforth and Reingen, 2014; Petriglieri and Petriglieri, 2015).
We thus take systems psychodynamics research beyond the confines of organizational roles where its seminal insights were developed (Trist and Bamforth, 1951; Menzies, 1960; Miller and Rice, 1967), while remaining within the conceptual bounds of its concern with the interplay between work tasks and emotions (Neumann and Hirschhorn, 1999).
Ashforth, B. E., and P. H. Reingen 2014 ‘‘Functions of dysfunction: Managing the dynamics of an organizational duality in a natural food cooperative.’’ Administrative Science Quarterly, 59: 474–516.
Fitzsimons, D. J. 2012 ‘‘The contribution of psychodynamic theory to relational leadership.’’ In M. Ulh-Bien and S. M. Ospina (eds.), Advancing Relational Leadership Research: A Dialogue among Perspectives: 143–174. Charlotte, NC: Information Age.
Hirschhorn, L. 1998 Reworking Authority. Cambridge, MA: MIT Press.
Kahn, W. A. 1990 ‘‘Psychological conditions of personal engagement and disengagement at work.’’ Academy of Management Journal, 33: 692–724.
Menzies, I. 1960 A Case Study in the Functioning of Social Systems as a Defence against Anxiety. London: Tavistock.
Miller, E. J., and A. K. Rice 1967 Systems of Organisation: The Control of Task and Sentiment Boundaries. London: Tavistock.
Mills, C. W. 1959 The Sociological Imagination. Oxford: Oxford University Press.
Neumann, J. E., and L. Hirschhorn 1999 ‘‘The challenge of integrating psychodynamic and organizational theory.’’ Human Relations, 52: 683–695.
Petriglieri, G., and J. L. Petriglieri 2015 ‘‘Can business schools humanize leadership?’’ Academy of Management Learn- ing and Education, 14: 625–647.
Pratt, M. G., and E. Crosina 2016 ‘‘The nonconscious at work.’’ Annual Review of Organizational Psychology and Organizational Behavior, 3: 321–347.
Trist, E., and K. Bamforth 1951 ‘‘Some social and psychological consequences of the Longwall method.’’ Human Relations, 4: 3–38.
[iii] From ‘On psychoanalysing organizations: why we need a third epoch’ Boxer, P. J. 2017. On psychoanalysing organizations: why we need a third epoch. Organisational & Social Dynamics, 17(2): 259-266..
The first epoch refers to the approach in which clinical know-how is applied to ‘psychoanalysing organizations’, subject to the metaphor that an enterprise can be approached as being like an individual. Systems psychodynamics falls within this epoch (Fraher, A. L. 2004). This first epoch brings together “Bion’s explorations of group mentality, Eric Trist’s socio-technical breakthrough, Fred Emery’s introduction of open system theory, Ken Rice’s development of the concept of primary task, and Elliott Jaques’ and Isabel Menzies’ account of social systems as a defense against anxiety.“ (Armstrong, D. 2012). Socio-analysis, too, is largely rooted in this first epoch, although it begins to bridge to the second epoch through the importance it gives to language and inter-subjectivity.
Armstrong, D. 2012. Terms of Engagement: Looking Backwards and Forwards at the Tavistock Enterprise. Organisational & Social Dynamics, 12(1): 106-121.
Fraher, A. L. 2004. Systems Psychodynamics: The Formative Years of an Interdisciplinary Field at the Tavistock Institute. History of Psychology, 7(1): 65-84.
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