Articles on Organizational Development
R. Michael Bokeno, Introduction: appraisals of organizational learning as emancipatory change, Journal of Organizational Change Management Volume 16/6, pp 603-618 (2003)
Issue 6 of volume 16 of the Journal of Organizational Change Management is devoted to an exploration of Organisational learning. In this introductory essay Bokeno “attempts to illustrate the emancipatory intent of organizational learning (OL) by connecting its aims and aspirations to prominent themes of critical organization study, including the emancipatory understanding of “learning” by OL, how OL engages the “dialectic of enlightenment,” and its prioritizing of “communicative action” as the means for reflection and transformation.â€
“Conversations lie at the heart of managerial work. Managers talk. It is through talk that they teach and inspire, motivate and provide feedback, plan and take decisions… develop new ideas, share knowledge and experience, and enhance individual and collective learningâ€¦ Yet, in most companies, very little attention is paid to the quality of conversations.”
Lynda Gratton and Sumantra Ghoshal 2002
Bokeno commences, “Two of the more vital and energetic challenges to mainstream organization and management theory in the past two decades have been critical organization studies (COS) and organizational learning (OL). While they have been heretofore distinct enterprises for social and organizational transformation, in this paper I venture a comparison of the projects in terms of what might be similarities between them. I do aim to endorse OL as emancipatory change, but my larger purpose is rather to provide some basis from which theorists and practitioners from both COS and OL can draw from the insights of the other. Given the monumental socio-organizational transformational tasks both have laid out for themselves, any effort that points to areas of combined strength should be welcome.â€
Cottage near the Grampians, western Victoria (More)
“Broadly and by way of background, both COS and OL understand a range of societal dysfunctions as the direct result of modern corporate domination and organizational practices based solely on technical-instrumental rationality. Both endeavors see the modern corporation as the site where social transformation may be productively addressed. Consequently, also fundamental to both is the envisioned resurrection of a more freely chosen and constituted organizational structure, one that emerges from the comparatively liberated thinking and acting of individual and collective agency.
“Despite similar inspiration, OL and COS remain largely independent projects. In many ways the separation is acutely disappointing. Increasing critical assertions by COS and other theorists of power and politics aimed at the OL endeavor and its “humanistic management” heritage smacks of battle lines for an academic turf war that is at best unwarranted and at worst arrogantly unresponsive to the practical demands of the organizational and social transformation that both evidently seek.
“The tone of the debate can be guaged from this comment by a H. Armstrong in 2000 (“The learning organization: changed means to an unchanged end” in the journal Organization 7/2, p355-61) that “the `learning organization’ is naught but a Hawthorne light bulb with a dimmer switch … It is a Machiavellian subterfuge. It is a pimp, and the employees, the hapless prostitutes.â€
â€œIn business, as in art, what distinguishes leaders from laggards, and greatness from mediocrity, is the ability to uniquely imagine what could be. To get to the future first, top management must either see opportunities not seen by others or must be able to exploit opportunities that others can’t… As much as anything, foresight comes from really wanting to make a difference to people’s lives.â€
Gary Hamel & CK Prahalad 1994
R. Michael Bokeno, The work of Chris Argyris as critical organization practice, Journal of Organizational Change Management Volume 16/6, pp. 633-649 (2003)
An illuminating elaboration of the debate is given in this essay which examines the broad thesis of organizational learning theorist Chris Argyris in terms of communicative action, and finds his critical understanding of Model I and the emancipatory potential embedded in double-loop learning consistent with prominent themes in critical organization study.
Bokeno explains some of the views as follows: Argyris’ is well known for his contrast between “espoused theoriesâ€ and “theories in useâ€. Theories-in-use consitute “a set of socialized assumptions or “master design” that govern our behavior and interaction with others. Importantly, Argyris has found that a very specific set of governing assumptions exists well-nigh universally – across, age, wealth, position, race, education and geography. This set of assumptions and their accompanying behaviors, called Model I, is characterized by:
- maintenance of unilateral control;
- win-lose conflict orientation, where the goal is to maximize one’s chance of winning and/or minimize the chances of losing;
- rationality and the objective distance afforded by it, so that one can credibly “account for” or justify one’s behaviors and decisions and “discount” those of others; and
- preservation of “face” for both self and others, requiring that one not express negative feelings.
“Model I is assumed to be a universal theory-in-use, a master design maintained by individuals in organizations. Thus, Argyris here not only links the incapacity of organizations for change to deficiencies and distortions in interpersonal interaction among organizational members, but also to the maintenance of power in organizational interaction as the source of the incapacity. Consequently, the organization that develops the means for “effective” (double-loop) learning and change, is also the organization that develops the conditions for emancipatory – i.e. free, empowered, democratic, participatory – reform.
“There also exists a set of assumptions called Model II, consisting of:
- continuous and open access between individuals and groups;
- free, reliable communication;
- interdependence as the grounds for cohesiveness;
- trust, risk-taking and helpfulness; and
- integrative (rather than win-lose, zero-sum or distributive) conflict.
“Model II for Argyris is largely hypothetical. He has found them to exist only in the form of espoused theories – what people say or believe about how they interact, not how they actually do interact. The project for Argyris, then, is to transform Model II from an espoused theory into a theory-in-use.â€
Model I can be described as managerialism and “discursive closureâ€â€¦ managerial practice is an emphasis upon short-term, quick-fix problem solving, routines which provide the illusion of being rational, in control and making the world predictable.
Bokeno says, “if we understand (double-loop) learning as a process accomplished via critical reflection upon Model I norms, and Model I norms as those that stipulate power asymmetry, then double-loop learning becomes the practical communication process by which transformation/emancipation happens.â€
Bokeno’s and the other papers constitute a very important review of this important area.
A quite different paper is from Paul E Bierly in the same journal three years previously.
Paul E. Bierly III, Eric H. Kessler & Edward W. Christensen, Organizational learning, knowledge and wisdom, Journal of Organizational Change Management, Vol. 13 No. 6 pp. 595-618 (2000).
This article (which unfortunately lay around on my desk unattended for three years), contains a wealth of quotable quotes, useful definitions and distinctions, very useful reviews of past and present approaches to organisations and learning and much wisdom.
“Learning is the process of linking, expanding, and improving data, information, knowledge and wisdom.â€
“To improve our understanding of the impact of organizational learning and knowledge on competitive advantage, we propose a framework that includes the constructs of data, information, knowledge, and wisdom. Each of these constructs is then associated with a different type of learning. We further argue that wisdom is an important, albeit missing, construct in the knowledge-based theory of the firm. A key to organizational wisdom is judgement and decision making, which requires an understanding of the complexity of a situation, but also requires the ability to make sense and simplify so that action can be taken. Three important drivers for the development of organizational wisdom are experience, a passion to learn, and spirituality. Processes for acquiring organizational wisdom such as transformational leadership, organizational culture and knowledge transfer are also discussed.
“Since the early 1990s the resource-based view of the firm has almost supplanted the traditional I/O approach to strategy. The central argument of this school is that a firm’s resources will be a source of competitive advantage if the resources are valuable, rare, inimitable and not substitutable. Research on the resource-based view of the firm illustrates that for most firms knowledge is the most important strategic resource and that the capability to create, integrate and apply knowledge is critical to the development of sustainable competitive advantages. Thus, the knowledge-based view of the firm has emerged, which identifies the primary rationale for the firm as the creation and application of knowledge.
“This approach has led to the general prescription that firms should become “learning organizationsâ€ to maximize their knowledge base logical this prescription, others have pointed out the difficulty of integrating different types of knowledge and the need for “absorptive capacity’â€ to understand and acquire external organizational knowledge. Subsequently, research on knowledge strategies (and organizational learning have been undertaken).
“Following the knowledge based view, strategic analysis focuses on the different ways firms can strengthen their overall knowledge base by determining which specific knowledge areas should be strengthened. The general argument of these researchers is that superior knowledge in critical areas will lead to a sustainable competitive advantage and organizational success.
“A major critique of the knowledge-based approach to strategy is that it is based on the underlying assumption that more information and knowledge lead to greater success. Clearly, this assumption is difficult to test, but empirical tests studying the links between R&D intensity and profit, and between patents and profit do not seem to support this assumption, at least for some industries ). Likewise, the link between information technology intensity and organization performance remains fuzzy. Despite propositions that the use of advanced information technologies should result in more effective intelligence and that this intelligence should produce higher quality decisions the evidence is equivocal and idiosyncratic at best.â€
Data are something given, granted, or admitted; a premise upon which something can be argued or inferred.
Information is a representation, an outline, sketch, or giving form.
Knowledge is a clear and certain perception of something; the act, fact, or state of understanding.
Wisdom is the faculty of making the best use of knowledge, experience, and understanding by exercising good judgement.
Passion: To be wise, one must also have the strength of belief to make it happen. Because wisdom includes action, one must be able to have the drive and the courage to overcome personal, social, and institutional barriers in the name of implementing the “right” strategy.
Here is an important quotation from one of the great minds of the 20th century, Albert Einstein: accumulating knowledge is insufficient to become wise. In a speech at Princeton University:
“Convictions which are necessary and determinant for our conduct and judgements cannot be found solely along this solid scientific way . . . The scientific method can teach us nothing else beyond how facts are related to, and conditioned by, each other . . . Knowledge of what is does not open the door directly to what should be. One can have the clearest and most complete knowledge of what is, and yet not be able to deduct from that what should be the goal of our human aspirations. Objective knowledge provides us with powerful instruments for the achievement of certain ends, but the ultimate goal itself and the longing to reach it must come from another source . . . The knowledge of truth as such is wonderful, but it is so little capable of acting as a guide that it cannot prove even the justification and the value of aspiration toward that very knowledge of truth. Here we face, therefore, the limits of the purely rational conception of our existence . . . Intelligence makes clear to us the interrelation of means and ends, but mere thinking cannot make clear these fundamental ends and valuations.â€
Castle of Fontainebleau, near Paris, France (More)
Harold J. Leavitt, “Why Hierarchies Thriveâ€, Harvard Business Review Vol. 81/3, p96, 7p (2003)One Friday afternoon, word came down that the president (Jimmy Carter) absolutely had to have a detailed report about a certain problem by Monday morning. What could be more important? The staff worked the entire weekend, assembling and reviewing data; rechecking numbers; organizing, debating, and rewriting conclusions. One staff member even canceled his 10-year-old’s birthday party. They had a deadline to meet-and they met it. Early Monday morning, the bound report was on the president’s desk. Nothing happened.
It turned out, of course, that President Carter hadn’t actually needed a report on the problem in question. All he had done was remark casually to a few top aides that he would like to see how work on the problem was progressing. That offhand remark had set the telephones ringing down the chain of command. His comment metamorphosed into a suggestion and then into an order, which exploded into a crisis that required everything else to be put on hold.
Henry Kaiser, the cofounder of Kaiser Permanente, was fond of fresh fruits and vegetables. Once, before leaving on an extended trip, he announced to his staff that he would like to have a vegetable garden waiting for him when he got back. A few days before his return, Kaiser’s staff remembered the comment. A huge team of gardeners quickly was summoned. For two days and nights they planted. When Kaiser returned, so the legend goes, he pulled up a perfect, full grown carrot–quite unaware that it had been planted there just the night before.
Leavitt concludes, “It seems more sensible to accept the reality that hierarchies are here to stay and work hard to reduce their highly noxious byproducts, while making them more habitable for humans and more productive as well.â€
A very interesting Australian account of how the office of Prime Minister works, or doesn’t, and which gives examples of similar difficulties, is found in Don Watson’s award winning book, “Recollections of a Bleeding Heart A Portrait of Paul Keating PMâ€ (Knopff 2002).
Michael D Watkins &, Max H Bazerman, Predictable Surprises: The Disasters You Should Have Seen Coming, Harvard Business Review Vol. 81/3, p72, 9p (2003)
This paper might be summarised by saying risk management is poor!
Predictable surprises arise out of failures of recognition, prioritization, or mobilization. The best way to figure out whether a disaster could have been avoided is to ask if the threat had been recognized, if appropriate priority was accorded to it and appropriate action taken. Rigorous risk analysis-combining a systematic assessment of the probabilities of future events and an estimation of the costs and benefits of particular outcomes–can be invaluable in overcoming the biases that afflict organizations in estimating the likelihood of unpleasant events; however, it is often no undertaken. Predictable surprises arise out of systemic flaws in decision making.
Portents had been building up for years about the “9/11â€ disaster:it should not have been a surprise. There was awareness of Islamic militants being prepared to commit suicide, previous attacks on the World Trade Center, aviation security system was known to be “full of holesâ€. But no precautionary measures were taken. Different pieces of information were not connected, priority was not given to fixing known problems and plans to do so were subverted by lobying by certain industries.
Bill Bradley, Paul Jansen and Les Silverman, “The Nonprofit Sector’s $100 Billion Opportunityâ€, Harvard Business Review Vol. 81/5, p94, 10p (2003)
A study conducted by McKinsey & Company suggests that the United States nonprofit sector could free up an extra $100 billion a year by challenging the operating practices and notions of stewardship that currently govern the sector. Charitable organizations could free up that amount by making five changes: reduce funding costs, distribute holdings faster, reduce program service costs, trim administrative costs, and improve sector effectiveness.
Robert Goldberg (of Organization Insight, Greensboro, North Carolina) in “Awake at the Wheel” (Leadership and Organization Development Journal 21(5), p 225-234, 2000) recounts in some very useful detail the development of an executive team at a bank where the past leadership culture had to be abandoned as not working and a new culture of honesty and openness developed.
Phillip H Siegel (of Fairleigh Dickinson University, Madison, New Jersey USA) writes of “Using peer mentors during periods of uncertainty” in Leadership & Organization Development Journal 21(5), p 243-253 (2000). Peer relationships in work settings can affect adjustments and personal and professional growth during stressful periods caused by mergers and acquisitions. Such relationships may provide an antidote to stress at all administrative levels.
In “Saving Money, Saving Lives” (Harvard Business Review Nov-Dec 2000, p 57-65), John Meliones (Chief Medical Director at Duke Children’s Hospital in Durham, North Carolina) explores the advances to be made using more data, a fresh approach to teamwork and the balanced scorecard in keeping the mission lofty and the bottom line healthy.
A small article in the “Finance” column [of Sloan Management Review Winter 2000] reports that Chief Financial Officers prefer their own approaches to managing capital [and presumably other funds]. Even though experts such as Nobel Prize winner Franco Modigliani have shown that capital structure is best chosen on the basis of trade offs between benefits of debt (tax deductibility of interest payments) and the drawbacks of debt (higher interest payments) most CFO’s keep debt levels low in order to be ready for unforeseen opportunities. More than half the CFOs do not adjust either cash flows or their discount rate for risks presented by interest rates, foreign exchange, business cycle, commodities or inflation.
In “Employee Loyalty around the Globe” (The “Intelligence” column [of Sloan Management Review Winter 2000] p 16) a study by Walker Information Global Network, “an Indianapolis-based international partnership”, finds that the cultural differences between people we observe in cuisine, clothing and sport around the globe should not be confused with differences in work-force issues. “People are people wherever they live; they care deeply about the same few things.” In the workplace, people everywhere ask, Am I fairly compensated for my work? Am I well suited for my work? Does my employer trust me to do that work? The question is whether studies showing that loyal employees beget loyal customers beget greater profits are valid around the globe. Amongst other things the study found that employees who perceived their employers as ethical are more likely to be proud to be associated with the company. The cost of being an ethical company is cheap compared to the cost of replacing workers who leave because of dissatisfaction [relating to unethical practices].
House in Perugia, Umbria (More)“Driving organizational change in the midst of crisis” by John S Carroll and Sachi Hatakenaka of MIT’s Sloan School of Management (in Sloan Management Review Spring 2001, p70-79) recounts the handling of a serious situation at the Millstone Nuclear Power Plant in Waterford, Connecticut. In the late 1980’s a new CEO arrived and a consultant informed the company that in the face of deregulation a focus on cost containment would be essential.
In 1997 Northeast Utilities, its parent company closed the plant down. The plant was facing bankruptcy after the Nuclear Regularity Commission (NRC) placed it on the “Watch List” and required demonstration of compliance with licensing requirements, regulations and safety analyses before giving permission for the plant to restart. The focus of the change management was the addressing of staff’s safety concerns and the building of trust with management. Involvement of staff in the committees which developed new procedures was also a critical part of the change process. The NRC and Northeast Utilities insisted that Millstone pursue strategies that would involve staff meaningfully in the change process.
Amongst other things it was emphasized that managers would be judged on how they handled complaints, not on the absence of complaints, so overturning the proposition that in the nuclear industry good managers don’t have problems! Millstone didn’t resolve the situation by a transformational manager putting forth a top down plan for change: spaces were created for wider participation, managers watched the organization “move forward, stumble and try again”, many individuals stepped in at key moments to offer the components from which to fashion change. Everyone from expert and manager to staff member learned to respect one another’s contributions and build effective working relationships.
In the change process, “the learning was not in the policy and the structures but in the behaviours [of the people in the organization] that made the structures come to life.”
In late 2000 Millstone was again producing electricity, the stock had recovered and Northeast was able to sell the power station.
Jeffrey Pfeffer of Stanford University (“What’s wrong with management practices in Silicon Valley? A lot” in Sloan Management Review Spring 2001, p101-102) asks questions about the manner in which companies in Silicon Valley manage their staff and criticises many of them. Far from being a model to follow Jeffrey Pfeffer (in Sloan Management Review Spring 2001, p101-102) asks questions about the manner in which companies in Silicon Valley manage their staff and criticises many of the practices. Far from being a model to follow, practices such as use of the free agency model of employment with limited attachment, extensive use of outside contractors, use of stock options as a form of compensation and encouragement of long working hours, are more expensive in the longer term, reducing commitment of employees, increasing staff turnover and more.
“Why would a company entrust activities that are its lifeblood – to a third party?” asks Jerome Barthelmey of Audencia Nantes’ Graduate School of Management in France in “The hidden costs of IT outsourcing” (Sloan Management Review Spring 2001, p 60-69).
Issues of vendor search, transitioning and managing the process influence hidden costs. Choose activities that are safe to outsource, hire people experienced in outsourcing, draft tight contracts and keep key people in-house are amongst the critical strategies.
Michael Schrage, in “The Real Problem with Computers” (Harvard Business Review, 00178012, Sep/Oct97, Vol. 75, Issue 5 – in the Books in Review Section) reviews two important books. (Yes, that is 10 years ago, so what?) Even the best-designed systems can’t overcome faulty relationships. The books are
The Squandered Computer: Evaluating the Business Alignment of Information Technologies by Paul A. Strassmann New Canaan, Connecticut: The Information Economics Press, 1997
Information Ecology: Mastering the Information and Knowledge Environment Thomas H. Davenport with Laurence Prusak New York: Oxford University Press, 1997
Schrage asserts that “Businesses worldwide-and particularly in the United States- have wasted billions of dollars believing the big lie of the Information Age. For almost two decades, that lie has encouraged a massive spending binge, absorbing over half of every dollar that U.S. business has invested in itself. And it has governed the ways in which both entrepreneurs and global juggernauts seek competitive advantage. The big lie is pervasive, and it offers a seductive logic that actually makes it believable.
“The lie says that if organizations only had greater quantities of cheaper, faster, and more useful information, they could increase their profitability and enhance their competitive positions in the global marketplace. On the surface, that makes sense. If you offer employees greater quantities of better information more quickly and at a lower cost, you should reasonably expect their performance to improve as a result.”
Schrage also deals with these issues in an interview in Technology, Silver Bullets and Big Lies: Musings on the Information Age with Educom Review Staff in Sequence: Volume 33, Number (January/ February 1998)
Michael Schrage, currently a research associate with the MIT Media Lab, is a widely read author whose soon-to-be-published book, Getting Real (Harvard Business School Press), focuses on the role of modeling, prototypes and simulations as media for innovation. Previous works include Shared Minds (Random House 1990) and No More Teams (Doubleday 1995) – books about successful collaboration and collaborative media in business, art and the sciences. His work can also be found on the pages of Wired and Computerworld magazines. In addition, Schrage also serves as a Merrill Lynch Forum Innovation Fellow, and as executive director of Merrill Lynch’s Academic Venture PhD Competition.
EDUCOM REVIEW: You’ve thought a lot about technology as it’s used in education at various levels. What’s your opinion of what you see out there?
MICHAEL SCHRAGE: I think that there is an extraordinary amount of experimentation going on in educational technology and in bringing technology to education. Unfortunately there is as much unhealthy experimentation as there is healthy experimentation. My personal experience is that the overwhelming majority of people who want to bring technology and the Internet and interactivity to the schools believe that they are inherently doing a good thing, that they are doing God’s work for education, K-12 or beyond. And I think that’s a hypothesis to be tested, not a proven fact. I think there are ideologues and idealists in the worst meaning of the phrase and I am afraid it is that bias – the bias that better technology or more technology is an inevitably good thing rather than something to be self-critical and self-skeptical about – that is provoking a backlash against technology in education.
In “The Brainstorming Myth” (Business Strategy Review 11 (4), p21-28, 2001), Adrian Furnham asserts that research shows unequivocally that brainstorming groups produce fewer and poorer quality ideas than the same number of individuals working alone. … Understanding why brain storming is usually ineffective, and why people still do it, gives a basis for suggesting how managers can improve the way they use it, according to Furnham. He considers that the group context enables each person to make less effort (“social loafing”), people fear their ideas might look foolish and only one person can suggest an idea at any one time. “Electronic brainstorming” may, according to Furnham, reduce the effects of these three processes.
I find this interesting because of contrasting research by Miriam Erez and Anit Somech (“Is Group Productivity Loss the rule or the exception? Effects of Culture and Group-based Motivation”, Academy of Management Journal 39(6), p 1513-1537, 1996) which found that teams are very effective when team members are familiar with each other, are motivated to maintain a positive self-image, when specific goals are set and when communication is good; apprehension about the evaluation of the work does not contribute positively.
At best Furnham’s research findings are counter-intuitive.
Thomas Davenport, Jeanne Harris, David De Long and Alvin Jacobson (Accenture, formerly Andersen Consulting) point out, in “Data to knowledge to results” (California Management Review 43 (2), p 117-138, 2001) that while firms have unprecedented access to transaction data its is seldom sifted into the sort of knowledge that can inform decisions and create positive results. Most firm have yet to develop the very capability that prompted them to gather the data in the first place. The authors say that they present a framework that identifies and articulates the primary success factors that must be present tin order to build broad organizational capabilities transforming data to knowledge to results.
In “How increasing value to customers improves business results” (Sloan Management Review Summer 2000, p 27-37) Sandra Vandermerwe (Imperial College, University of London) examines the success flowing from thinking through what customers actually want and what it is that the business is providing. An example is BP offering customers the least costly form of fuel suited to their needs rather than trying to sell more fuel. Conservation expert Amory Lovins deals with that issue extensively. (See the ABC Radio National Background Briefing website.) Peter Drucker emphasised the importance of this long ago; it is an important issue for museums because if one actually understood what it is that visitors and other users of museums really expect from museums then, the argument goes, museums would be more successful.
Darrell Rigby (in Sloan Management Review Summer 2000, p 139-160) reports on a major study in “Management tools and techniques: A survey”. More than 70% of companies world-wide use strategic planning, mission and vision statements, benchmarking and customer satisfaction measurement. North American firms are more likely to use tools dealing with growth, assist a focus on key issues and help speed up the business cycle. International firms more often use tools dealing with market uncertainty and quality improvement. There has not been a lot of change in the tools used over the last 10 years.
In “Innovation Means Relying on Everyone’s Creativity” (Leader to Leader, No. 20 Spring 2001), Margaret J. Wheatley writes, “Innovation has always been a primary challenge of leadership. Today we live in an era of such rapid change and evolution that leaders must work constantly to develop the capacity for continuous change and frequent adaptation, while ensuring that identity and values remain constant. They must recognize people’s innate capacity to adapt and create — to innovate.
“In my own work I am constantly and happily surprised by how impossible it is to extinguish the human spirit. People who had been given up for dead in their organizations, once conditions change and they feel welcomed back in, find new energy and become great innovators. My questions are How do we acknowledge that everyone is a potential innovator? How can we evoke the innate human need to innovate?”
* In “Innovation: The New Route to New Wealth” (Leader to Leader, No. 19 Winter 2001), Gary Hamel and Peter Skarzynski explore innovation. Gary Hamel is founder and chairman of Strategos, a consulting firm focused on strategy innovation, and is visiting professor of strategic and international management at the London Business School. Hamel is coauthor of the best-selling Competing for the Future and author of the recently released Leading the Revolution. Peter Skarzynski is CEO and a founding partner of Strategos. His work on strategy, innovation, and enterprise systems has spanned a number of industries, including consumer products, energy, telecommunications, and high technology.
This article explores the way “path-breaking products” of the past few decades, such as the minivan, the Walkman, and CNN have been identified and developed. Such innovations succeeded not because they responded to market need but because they created a need consumers had yet to sense themselves. According to Hamel and Skarzynski, the greatest rewards go to companies that create new business models — ideas that spark new sources of revenue based on changing technology, demographics, and consumer habits. .. the First Law of the Innovation Economy [is that] companies that are not constantly pursuing innovation will soon be overwhelmed by it. Strategy innovation is the only way to deal with discontinuous — and disruptive — change.
“What stands in the way of companies failing to innovate in many cases is the tried-and-true recipe that brought them past success. Over time, every business model and every strategy goes stale.”
To address really challenging issues that don’t fit the organization’s existing processes and values organizations need “heavyweight” teams, people from different parts of the organization working in an autonomous environment. This is the view of Clayton M. Christensen, a professor of business administration at the Harvard Business School and author of “The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail”. In “Assessing Your Organization’s Innovation Capabilities” (Leader to Leader, No. 21 Summer 2001). This article offers a framework to help managers confronted with necessary change understand whether the organizations over which they preside are capable or incapable of tackling the challenge.
Christensen notes that the amount of information available to managers and the amount of work required to sort the important from the less important is increasing dramatically. “Warnings are all about us that the pace of change is accelerating. The amount of information available to managers — as well as the amount of work and judgment required to sort the important from the less important — is increasing dramatically. The pervasive emergence of the Internet is exacerbating these trends.”
“… When managers assign employees to tackle a critical innovation, they instinctively work to match the requirements of the job with the capabilities of the individuals they charge to do it. In evaluating whether an employee is capable of successfully executing a job, managers will look for the requisite knowledge, judgment, skill, perspective, and energy. Managers will also assess the employee’s values — the criteria by which the person tends to decide what should and shouldn’t be done.” Unfortunately, according to Christensen, some managers don’t think as rigorously about whether their organizations have the capability to successfully execute jobs that may be given to them. Often, they assume that if the people working on a project individually have the requisite capabilities to get the job done well, then the organization in which they work will also have the same capability to succeed.”
* In Leader to Leader, No. 21 Summer 2001 on the Peter Drucker Foundation website, Harvey Seifter, Executive Director of Orpheus Chamber Orchestra writes about what he describes as “The Conductor-less Orchestra”. For the past twenty years Seifter has provided artistic and managerial leadership to performing arts institutions including San Francisco’s Magic Theater and New York’s Theater for the New City. He is the co-author of Leadership Ensemble: Lessons in Collaborative Management from the World’s Only Conductorless Orchestra.
Gina Colarelli O’Connor & Mark P Rice of the University of California discuss “Opportunity recognition and breakthrough innovation in large established firms” in California Management Review 43, p 2 (2001), or how to encourage the development of radical innovations in organizations in the face of all the changes that take place over time. Not surprisingly they conclude that the process of moving from a reservoir of technical knowledge to the initiation of a project with “potentially game-changing opportunity” seems to be almost capricious and to a large extent dependent on chance events, supra-normally motivated individuals and rich informal systems, “many of which have been destroyed with early retirements and downsizing activities”. They continue “further, the individuals in positions to see opportunities aren’t always as motivated as the champion literatures would lead one to believe.” (They note that the champion literature errs methodologically in that it identifies champions after the project’s been initiated and then studies behaviours, attitudes and skills. This ignores those who recognised opportunities but elelcted not to champion them.) “The criteria applied by opportunity recognized in the initial evaluation of breakthrough innovations are different for the conventional criteria applied to decision making regarding incremental innovation and is highly dependent on an individual’s capacity to clarify the ways a technology can be used to substantiate a large enough market.”
O’Connor and Rice identify distinctive skills, multiple waves of opportunity recognition, sustained effort and mechanisms, stimulation of divergent thinking, attendance at conferences and interaction with research labs and universities, informal discussions with renowned scholars as extremely important. Genuine leadership which encourages idea generation is essential.
In “Outsourcing Innovation: The new engine of growth” (Sloan Management Review 41(4), 2000, p 13-28) James Brian Quinn, one of the leading writers on management, especially managing knowledge-based enterprises and innovation, asserts that innovation calls for the complex knowledge that only a broad network of specialists can offer which is why so many companies are starting to outsource innovation. He notes that demand is doubling, the supply of knowledge workers is skyrocketing, interaction capabilities have grown and new incentives have merged. “The most effective companies keep core competence activities in house and outsource the rest to best-in-world suppliers.”
Quinn discusses the challenges facing companies that outsource innovation. Any organization that considers innovation to be a significant part of what it does should make a point of having this article widely discussed in the context of other articles about innovation and how to exploit it. In particular, an agreed position would be essential on how this issue is managed. If a museum, for instance, hasn’t done this then one might ask whether it is taking the development of the future seriously!
I am seriously challenged by Quinn’s perspective. If innovation is one of the central issues for an enterprise then surely outsourcing it means losing control of it, quite simply because it is very difficult to be prescriptive enough. Does one simply say, “We want you to be innovative”?