Blog: Simply Organizing

Transformation from the top? How about engagement on the ground?

15 September 2017

The company has a new chief, with 100 days to show the stock market some quick wins. Not the usual wins: transformation is the game. Hurry up and reinvent the whole company.

But where to begin? That’s easy: at the “top”. Where else when there’s such pressure. Besides, any chief who has been to a business school or reads the business press knows that it’s all about leadership: the boss who does the thinking that drives everyone else. Louis XIV said “L'état, c'est moi!” Today’s corporate CEO says “The enterprise, that’s me!”

John Kotter has written the widespread word on transformation, at the Harvard Business School, where so many of the cases are about the chief.  Here is the Kotter model, in eight steps.

The company has a new chief, with 100 days to show the stock market some quick wins. Not the usual wins: transformation is the game. Hurry up and reinvent the whole company.

But where to begin? That’s easy: at the “top”. Where else when there’s such pressure. Besides, any chief who has been to a business school or reads the business press knows that it’s all about leadership: the boss who does the thinking that drives everyone else. Louis XIV said “L'état, c'est moi!” Today’s corporate CEO says “The enterprise, that’s me!”

John Kotter has written the widespread word on transformation, at the Harvard Business School, where so many of the cases are about the chief.  Here is the Kotter model, in eight steps.

1. Establish a sense of urgency.
2. Form a powerful guiding coalition.
3. Create a vision.
4. Communicate the vision.
5. Empower others to act on the vision.
6. Plan for and create short-term wins.
7. Consolidate improvements and produce still more change.
8. Institutionalize new approaches.

Please read this again, asking yourself, every step of the way, who does each? The chief. Beyond an inner circle, everyone else is there to pursue the vision, obediently. Indeed, the article states that “powerful individuals who resist the change effort” must be removed. What if they have good reason to resist? Can there be no debate, no discussion? Is the contemporary corporation the court of Louis XIV?

“Establish a sense of urgency”, to barrel ahead: the wolves of Wall Street are braying at the door. “A guiding coalition”—with “senior managers [always at] the core”—will “create a vision”: out of the thin air of the top? Is this any place to understand what’s happening on the ground? No wonder so many big companies can’t get past me-too strategies they call “visions”. Then “Communicate the vision” to that obedient staff on the ground—to continue with the clichés, by “empowering [them] to act on the vision”, as if people hired to do a job need permission to do it.

And keep those “short-term wins” coming with “still more change”—more and more and more change. Where is continuity in all this, given that change without continuity is anarchy? (Be careful of words like “transformation”, because change has to be about sustaining what’s good no less than changing what isn’t.) Finally, don’t forget to “institutionalize” the whole thing: after all, this is the holy writ. And whatever you do, and wherever you are, top or bottom, don’t learn, at least about the vision—that was finalized in Step 3.

If change is so good, how come such models of change hardly change? Kotter has been promoting essentially this one since 1995.  How about a change of perspective for a change: recognizing the top as a misguided metaphor that can distort behavior. Are the best strategies really formulated from on high, by looking down? Or do they form amidst the clutter of the real life of the organization: making products, providing services, attending to customers? Everyone deeply involved can think constructively, CEOs too, although sometimes the best thinking comes from unexpected sources, such as a worker who sews the seeds of a great new vision. Imagine that!

Actually, you don’t need to imagine that. Instead, consider this story from IKEA, about selling much of its furniture unassembled, so that customers can take it home in their cars, saving money for them and the company.  This powerful guiding vision transformed the IKEA business model as well as much of the furniture business. So where did it begin? With a worker. “Exploration of flat packaging begins when one of the first IKEA co-workers removes the legs of the LÖVET table so that it will fit into a car and avoid damage during transit” (from IKEA.com).

But someone had to come up with the key insight that “If we have to take the legs off, maybe our customers have to do so as well.” That needed to be someone on site, maybe that worker, or a foreman, perhaps even the CEO, since the best entrepreneurs spend much of their time on site. But if it was someone else, then this insight had to be conveyed to the chief so that he could sprinkle holy water on it. And this suggests an organization of open communication, throughout, not one fixated on tops and bottoms, where so many ideas like this get lost. In such an open organization, sustaining culture matters a lot more than transforming everything.

John Kotter acknowledges that major change can take years.  I asked someone in IKEA how long it took to develop this new business model fully. He said 15 years! Wait a minute: according to the stock market, you’re not supposed to do that. Why couldn’t they just get it done in 100 days? Please list all the furniture companies that succeeded by doing that.

So instead of a model of top-down transformation, how about a process of grounded engagement? I call it communityship: don’t look for the word in the dictionary, let alone at the top of any organization.  Here are a few basics of it—not steps, no order, non-linear, just a composite, like change itself.

Effective organizations are communities of engaged human beings, not collections of passive human resources. (I have used this sentence many times before, and will keep using it until it is taken seriously.) These organizations have no tops or bottoms, no “leader” who has to think for everyone else. Everyone is engaged; communityship is fundamentally indigenous.

Anyone can come up with a great idea for change.  Have you ever told a joke? Good, because you can change the world. Most jokes, and creative ideas, are just little switches. (See my blog on “The Extraordinary Power of Ordinary Creativity.”) Here’s an example: “I want to die like my grandfather died, quietly, in his sleep. Not like those other people in the car who died yelling and screaming.” The little switch: grandpa was not in bed after all. At IKEA, the little switch, the critical insight, was: “If we have to take the legs off…” Such little switches are no big deal, even if they can launch very big deals. I’ll bet that people who take that top seriously tell fewer jokes, or worse ones, than people whose feet are firmly planted on the ground. 

Communication is open, so that ideas get shared easily. With no top and bottom in communityship, people just connect, for the sake of progress. A fixed hierarchy gives way to flexible networks. That insight at IKEA must have made its way to a management that was listening all around, not looking down.

Strategies, whether as overall visions or market positions, emerge gradually from grounded learning; they are not immaculately conceived. Many of the greatest strategies really do form, rather than being formulated, in a process nurtured by an engaged management that cares, not a heroic leadership that cures. And this process is not primarily about doing competitive analyses, although these can sometimes help. It is about committed people prepared to learn their collective way to unexpected strategies, one switch at a time. (In the last paragraph of his article, Kotter notes that “In reality, even successful change efforts are messy and full of surprises.” This sentence belonged in the first paragraph, where it could have changed many of the other paragraphs.) Of course, there is the need to pull diverse insights together, which is usually overseen by a management that’s on top of what’s going on, not on top of a hierarchy.

One final point: Often companies turn to the fix of transformation after a spell of disconnection. Those companies that stay connected, through communityship, don’t need step-by-step fixes. So please, all you serious managers, professors, and pundits, come down to earth, symbolically and literally. Get a bit playful with your strategies and your jokes: you just might find that effective change balanced with continuity follows, naturally: No need for transformation!

© Henry Mintzberg 2017. Our International Masters Program for Managers (impm.org) focuses on communityship more than leadership and learning strategies more than planning strategy, by encouraging managers to engage, not pronounce.

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¹Cases at the Harvard Business School “exaggerate the role of individual leaders. 62 per cent of cases feature heroic managers acting alone”, according to an internal HBS study. (Andrew Hill in his column in the Financial Times, “Harvard and its business school acolytes are due for a rethink”, 7 May 2017.)  

 ²Leading Change: Why Transformation Efforts Fail” Harvard Business Review (March-April 1995; reprinted January 2007; table below and quote following from the later version.

Dave Ulrich with colleagues, while involved with the GE WorkOut program around 1990, developed a similar model in steps, called the Change Acceleration Process (date reported to me in personal correspondence). In fact, the similarities are striking: Ulrich et al. listed “Seven Universal Principles for making change happen:1. Ensure leadership commitment, 2. Create a shared need, 3. Articulate a desired direction or vision, 4. Mobilize commitment, 5. Turn the long-term change into short-term decisions, 6. Institutionalize change. 7. Monitor progress and learn along the way.” (See Dave Ulrich, Mary Ann Von Glinow, Todd Jick, Arthur Yeung, and Steve Nason.  1993.  Learning Organization, Culture Change, and Competitiveness:  How Managers Can Build Learning Capability.  Monograph prepared for the International Consortium of Executive Development and Research. For the latest rendition: Dave Ulrich and Norm Smallwood.  2013.  Leadership Sustainability:  Seven disciplines to achieve the changes great leaders know they must make.  New York:  McGraw Hill.)

 ³Some words have changed, but not the steps or the tone. For example, Kotter International now writes of “Building” rather than “Forming a guiding coalition”. #5 has become “Remove obstacles”, albeit still to empower people to execute the vision, and #8 says “Anchor the changes in corporate culture”

 ⁴I first used the term in a Financial Times article titled “Community-ship is the answer” (23 October 2006).

Organizations around Public, Private, Plural

3 June 2016

In a recent TWOG where I described four basic forms of organizations (machine, entrepreneurial, professional, and project), I characterized our general understanding of organizations as primitive. We need much greater appreciation of the institutions that are so prominent in our lives, from our birth in hospitals through those where we learn, work, and play.

I have written frequently in these TWOGs about the three main sectors of society and the need for balance across them. Here I plot various types of organizations around a circle according to whether they function in the public sector (owned by government, for example agencies and ministries), the private sector (owned by founders or investors, as in widely-held corporations), or the plural sector (owned by members, as in cooperatives, or by no-one, as in NGOs). 

In a recent TWOG where I described four basic forms of organizations (machine, entrepreneurial, professional, and project), I characterized our general understanding of organizations as primitive. We need much greater appreciation of the institutions that are so prominent in our lives, from our birth in hospitals through those where we learn, work, and play.

I have written frequently in these TWOGs about the three main sectors of society and the need for balance across them. Here I plot various types of organizations around a circle according to whether they function in the public sector (owned by government, for example agencies and ministries), the private sector (owned by founders or investors, as in widely-held corporations), or the plural sector (owned by members, as in cooperatives, or by no-one, as in NGOs). 

For those of you using a wide screen, all of this can be seen on the one big circle above. If you are using a smaller screen, this big circle is broken down at the end into the three segments of public private, and plural for easier reading.

You will notice that the organization most typical of each sector is placed in the middle of it, while others are displayed to either side, depending on the extent that they tilt toward another sector. (For example, state-owned enterprises, such as power utilities, may be public, but because they function as businesses, are shown near the private sector. And because many family businesses exhibit a strong sense of community, as is typical in the plural sector, they are are shown near it.)

I make no claim that this circle includes all types of organizations. (I built it from all the notes I have been making for years about these different organizations.) Nor is the placement of these organizations tilting toward one sector or another indisputable, just suggestive. (There are, for example, family businesses that are rather mercenary, not community-oriented.) This framework may be rudimentary, but our understanding of organizations is far more rudimentary. We can use all the help we can get!

A couple of comments about all this: First, you see many more types under plural than under public or private. Of course that is why I call the sector plural! There are all kinds of businesses, but not so many distinct types. And while the range of activities in government is vast, the marching orders that come from being public limit their activities somewhat. The plural sector is the most varied of the three.

Second, the circle indicates that organizations fall into one sector or another. It shows only two hybrids. PPPs are one, namely public-private partnerships, although even these are shown as slanted toward the private sector, because that is where power tends to be these days. (The American “military-industrial complex” is probably the greatest PPP of all time.)  And communes (as well as kibbutzim) are shown as both public and plural, because they can be seen as municipal governments of a sort as well as distinct communities.1

The point, which I emphasize in my book Rebalancing Society, is that the three sectors are, and must remain, distinct as well as strong if our societies are to regain balance. Organizations belong in their place. B Corps may care about more than profit, but they are still businesses. And NGOs should no more be run like businesses than businesses should be run like NGOs. Likewise, the “New Public Management”, so reflective of old corporate values, has been doing a number on many governments for years (as I hope to discuss in next week’s TWOG).

© Henry Mintzberg 2016 Follow this TWOG on Twitter @mintzberg141, or receive the blogs directly in your inbox by subscribing hereTo help disseminate these blogs, we now also have a Facebook page and a LinkedIn.


1 Of course, a company like Volkswagen, owned by both governments and private shareholders, is technically a hybrid too, although the tendency here is to run such enterprises like regular businesses.

 

Ye gods: an efficient orchestra!

21 April 2016

Last week’s TWOG described four different species of organizations, and warned about mixing them up. This week’s TWOG provides a graphic example of doing just that: confusing a professional organization with a machine organization.

A young, enthusiastic MBA student was finally given the opportunity to apply his learning. He was asked to carry out a survey of an organization with which he was not normally familiar and submit recommendations as to how its efficiency could be increased. He selected as his target a symphony orchestra. Having read up on everything he had learned, he attended his first concert and submitted the following analysis:

Last week’s TWOG described four different species of organizations, and warned about mixing them up. This week’s TWOG provides a graphic example of doing just that: confusing a professional organization with a machine organization.

A young, enthusiastic MBA student was finally given the opportunity to apply his learning. He was asked to carry out a survey of an organization with which he was not normally familiar and submit recommendations as to how its efficiency could be increased. He selected as his target a symphony orchestra. Having read up on everything he had learned, he attended his first concert and submitted the following analysis:

a.  For considerable periods, the four oboe players had nothing to do. The number of oboes should therefore be reduced, and the work spread more evenly over the whole concert program, thus eliminating the peaks and valleys of activity.

b.  All twenty violins were playing identical notes. This would seem to be an unnecessary duplication, so the staff of this section should be cut drastically.

c.  Obsolescence of equipment is another matter warranting further investigation. The program noted that the leading violinist’s instrument was several hundred years old. Now, if normal depreciation schedules had been applied, the value of this instrument would have been reduced to zero and the purchase of more modern equipment recommended long ago.

d.  Much effort was absorbed in the playing of demisemiquavers, which seems to be an unnecessary refinement. It is recommended that all notes be rounded up to the nearest semiquaver. If this were done, it would be possible to use trainees and lower-grade operatives more extensively.

e.   Finally, there seemed to be too much repetition of some of the musical passages. Therefore, scores should be pruned to a considerable extent. No useful purpose is served by repeating on the horns something that has already been handled by the strings. It is estimated that, if all redundant passages were eliminated, the whole concert time of two hours could be reduced to twenty minutes and there would be no need for an intermission.

If this student had instead chosen a factory, nobody would be laughing, perhaps least of all the people in that factory. In other words, this kind of mixing up is no laughing matter. So what to do? First, get your species of organizations straight (i.e., read last week’s TWOG). Second, beware of efficiency, as well as proficiency, innovation, and leadershipout of their natural contexts (also in last week’s TWOG).

© of the story: unknown, but published more or less as above in the mid 1950s, in an American professor’s bulletin, a Canadian military journal, and Harper’s Magazine, based on an anonymous memorandum that circulated in London and was probably published originally in Her Majesty’s Treasury of the Courts. With minor editing, this was first published here on 3 October 2014. Next week: The mythical manager as orchestra conductor.

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