Senior and middle management in this company have reached consensus on one thing: they will never allow something like this to occur again. All of those internal and external consultants were good-willed, bright and highly capable professionals. They did everything they could to make a significant contribution. Company executives and personnel did everything they could to make all these interventions work. Why did this happen? What went wrong?
Unfortunately this kind of story is, too often, the rule and not the exception. Why? Why do some management ideas take root and remain viable and others wither and die?
This report offers four fundamental reasons, listed in their order of importance. These four reasons are:
All organizations are, fundamentally, living social organisms;
Organizational culture is more powerful than anything else;
System-focused interventions work; component-centered interventions usually do not;
Interventions clearly tied to business strategy work; interventions not clearly tied to business strategy do not.
Reason #1
All organizations are, fundamentally, living social organisms
Organizations are living social organisms, each with its own culture, character, nature, and identity. Every organization has its own history of success, which reinforces and strengthens the organization’s way of doing things. The older and more successful the organization, the stronger its culture, its nature, its identity becomes.
Organizations are “communities of people with a mission” (Putman, 1990), not machines. They have machine-like characteristics, but these must serve the needs of the community and not vice versa (see de Geus 1997). Organizations exist to fulfill their mission and to contribute to the larger world around them, including their marketplace. They do not exist just for shareholders. They exist for the communities they serve, the society within which they are embedded, their employees, their customers, and their shareholders. They exist for all of these stakeholders, all together, all the time. Profits are important because they allow the organization to survive, reinvest, and grow.
They are analogous to air and water. They are necessary for survival and growth, but they are not the purpose or the mission of the organization. “Good management means doing the decent thing by both workers and consumers, not just amassing profits for bosses. ‘An organization is a human, a social, indeed a moral phenomenon,’ [Peter] Drucker notes, in a phrase that today’s reengineers ought to be forced to learn. Drucker has argued that the best managers are driven by the desire to create value for customers, and that the best way to do this is to treat workers not just as costs of production, but as resources, capable of making a sustained and valued contribution” (Micklethwait & Wooldridge, 1996, p.78).
There is a natural hierarchy of living systems. The basic nature of a living social organism is naturally more fundamental, deeper in the hierarchy, and therefore much more powerful than business work processes, financial systems, business strategy, vision, supply chains, information technology, lean manufacturing, marketing plans, team behavior, corporate governance, Wall Street’s investor reports, and so on. All of these phenomena are important. But they are less fundamentally important than the basic nature of organizations as living social organisms. This critically important reality must be where any intervention starts.
When this occurs, the intervention has a chance of working. When this does not occur, the probability of failure is high. It may look like an intervention is working in the short term, but what is usually happening is the living system is yielding short-term financial cost savings which start creeping back over the intermediate and long term. This is most evident in the example of ‘surgical’ interventions, such as reengineering, de-layering, and downsizing. There are times when ‘surgery’ is necessary; but ‘surgery’ is not the solution all the time, with every organization, everywhere. Yet, quite a few recent management thinkers would lead one to believe that ‘surgery’ is the only treatment that will work for all organizations.
All living systems, including organizations, grow and develop from the inside out. They start from their core and grow and evolve over time from that core. They operate for a purpose. That purpose is always greater than the self-interests of the organism itself. People, organizations, communities, societies exist in relationship with one another. Each establishes its own unique pattern. Self-sufficiency is a myth. All living organisms operate in a non-linear manner, in a core and periphery manner. That core is central to any one living system’s nature. Organizations follow the same laws of natural living systems that all other kinds of living systems follow (e.g., sub-atomic cells; biological systems; ecological systems; societal systems; inter-planetary systems; etc.).
One central reason that management ideas work or doesn’t work have to do with whether or not they are based on non-linear, natural paradigms. The more an idea operates from the paradigm of organization as machine the greater the likelihood that management idea will not work. The more machine-like the idea, the more the living system will take the hit and, as soon as possible, start the process of reconstituting itself, just the way the human body operates when it has been damaged or injured. Indeed, all the evidence is that system-attack, machine-paradigm-based, interventions (i.e., reengineering, downsizing) do not last. Every time, the living system reconstitutes itself, heals itself. The organization’s “immune system” begins developing ways to neutralize its “attackers.”
Conversely, the more a management idea builds on the nature and strengths of a particular living social organism and honors the integrity of that organism, the greater the likelihood that the idea will be adopted and integrated into the fabric of that organism.
For any consulting organization to claim that they are in the “organizational transformation” business is unrealistic and bordering on grandiose. All any one, inside or outside the organization, can do is identify the nature, integrity, beauty, identity, and strengths of an organization and do their best to develop, refine, and work to make things more efficient and effective. Living systems are dynamic. Change is the constant. Like the human body, the solar system or sub-atomic cells, the organization is already in its own unique process of patterned change and development. Whether a particular management idea works or not is related to the extent to which that idea takes this constant process of patterned change into account.
Determining where an organization has been, where it is currently, and where it is primarily poised to go next is critically important before any attempt to “change” anything is attempted. Indeed, what organizational consultants can do is help their client organization discover its own unique patterns and processes and, then, work to influence it in a manner that helps the organization to help itself function more efficiently and effectively.
References
Barney, J.B. “Organizational culture: Can it be a source of sustained competitive advantage?” Academy of Management Review, 1986, 11: 656-665.
Capra, F., The Web of Life: A New Scientific Understanding of Living Systems. New York: Anchor Books. 1996
Collins, J.C. & Porras, J.I., Built To Last: Successful Habits of Visionary Companies. New York: HarperCollins Publishers, Inc. 1994
Conger, J.A. & Associates, Spirit at Work. San Francisco: Jossey-Bass Publishers, Inc. 1994
Covey, S.R., Principle-Centered Leadership. New York: Fireside. 1992
Covey, S.R., The Seven Habits of Highly Effective People. New York: Simon and Schuster, Inc. 1989
DePree, M., Leadership is an Art. New York: Dell Publishing. 1989
Grove, A.S., High Output Management. New York: Vintage Books. 1995
Kotter, J.P. & Heskett, J.L., Corporate Culture and Performance. New York: The Free Press, Inc. 1992
De Geus, A., The Living Company. Boston: Harvard Business School Press. 1997
Donnithorne, L.R., The West Point Way of Leadership. New York: Currency/Doubleday. 1993
Goll, I. & Sambharya, R.B. “Corporate Ideology, diversification and firm performance.” Organization Studies, Winter 1995, v. 16, n. 5, 823-847.
Lorsch, J.W. “Managing culture: The invisible barrier to strategic change.” California Management Review, 1986, 28/2: 95-109
Micklethwait, J. & Wooldridge, A., The Witch Doctors: Making Sense of the Management Gurus. New York: Times Books. 1996
Oakley, E. & Krug, D., Enlightened Leadership. Denver, CO: StoneTree Publishing. 1991
Peters, T.J. and Waterman, R.H., Jr.. In Search of Excellence: Lessons from America’s Best-Run Companies. New York: Harper & Row Publishers, Inc. 1982
Putman, A.O., “Organizations.” Advances in Descriptive Psychology, 1990, v.5, 11-46.
Schneider, W.E., The Reengineering Alternative: A Plan for Making Your Current Culture Work. Burr Ridge, IL: Irwin Professional Publishing, Inc. 1994
Schneider, W.E., “Aligning strategy, culture and leadership.” In Neumann, J.E.; Kellner, K.; & Dawson-Shepherd, A. (Eds.), Developing Organisational Consultancy. London: Routledge. 1997
Schwartz, H. & Davis, S. “Matching corporate culture and business strategy.” Organizational Dynamics, 1981, 9(Summer): 30-48
Shrivastava, P. “Integrating strategy formulation with organizational culture.” Journal of Business Strategy, 1985, 5/3: 103-111
Sibbet, D. and the Staff of HBR., 75 Years of Management Ideas and Practice 1922-1997: A Supplement to the Harvard Business Review. Harvard Business Review, September-October 1997
Treacy, M & Wiersema, F., The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market. Reading, MA: Addison-Wesley Publishing Company. 1995
Wheatley, M.J. & Dellner-Rogers, M., A Simpler Way. San Francisco: Berrett-Koehler Publishers, Inc. 1996
