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) an intuitive approach was favoured through the 1980s. However, selection from a set of ideas () after a new perspective had been espoused did offer possibilities for more structured (less intuitive) convergent approaches. Encouraged by the methods of the Buffalo group we continued to experiment. Various qualitative and quantitative approaches for convergence were proposed,10 such as voting, clustering, and hurdles (for dealing with a flow of ideas over time). The selection of one convergent approach over another was presented as a contingency decision ± that is to say the situational task, experience and preference of those involved all had to be taken into account in selecting a convergent technique. In a series of unpublished projects for industrial clients, in the early 1990s, we became aware of the great potential in practice of the Criterion Matrix
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approach for evaluating ideas and for enhancing their action potential.11 The approach found favour among managerial participants by according to their views of the importance of rationality in decision-making. However, our experimentation led us to encourage application of a qualitative version of the Criterion Matrix over the more quantitative possibilities. This view was summed up by one colleague who warned against `putting ourselves at the mercy of the numbers'.12 The general case is that the generation of criteria is itself based on uncertainties that become overlooked as a group begins to allocate numbers and weights to the criteria and to the ideas. In must be added that the facilitators were very frequently asked why the technique could not be `improved' by turning the qualitative assessments into quantitative ones. Indeed, some teams would take responsibility for their own decision-making and opt for quantification of criteria (even after the case for qualitative evaluations was made). There are profound differences between the qualitative and quantitative approaches to decision-making in general, and criteria matrix work in particular which can be illustrated by reference to a practical example. Our argument suggests that quantification requires reflection on the nature of the criteria, and for that we now advocate the Judgemental Analysis System (JAS) which will also be described here.
Encouraging a qualitative approach
The qualitative criterion matrix approach The qualitative approach is now described. The following steps for developing a criterion
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matrix can be adapted to many practical circumstances: 1. Generate your ideas using a deferred judgement process. 2. Generate criteria (again taking care that these are unambiguous). A set of 5±8 criteria is most convenient and effective. Typically these will contain a criterion of cost or cost/benefit; one of technical feasibility; one or time-constraints; one of acceptability; one of `potential for knockon adverse effects'; one of novelty. The set may have some criteria specific to the circumstances. 3. Evaluate each idea across all the criteria. Use a preliminary non-quantitative assessment to test the matrix. We recommend a `+' for a more acceptable than a less acceptable idea; a `7' for less acceptable rather than more acceptable idea. Items which resist a simple coding receive a `?'. The skilled facilitator seeks permission at the start of the process to allocate a `?' to any cell for which consensus cannot be reached within one minute. By definition, the allocation of a `?' is self-defining and beyond further delay. If one minute fails to produce a consensual `+' or a consensual `7' , the `?' marks a deferred decision. This approach quickly reveals the most promising ideas. You are left with the possibility of improving any of the frontrunners, within the time-constraints you are facing. 4. The team always has the option of reconstructing the matrix by modifying the criteria, if the result seems counter-intuitive. Fig 2a shows the outcome of such a criterion matrix in actual practice. Fig 2b shows how it might have turned out using weighted criteria. The application of the `?' convention is a simple but potent component within this. For the facilitator it speeds up what is often a notoriously lengthy process of reaching team consensus. Rather than debate the contentious idea/criterion item, the team can be swiftly moved on, having recorded their lack of consensus with the `?' mark. The subtle point here is that once the matrix has been completed, a majority of the items are clearly less fully developed or less highly rated. These can be shelved (in practice permanently) in favour of the minority. Time spent debating any specific cell is likely to be time wasted. The evaluation in each cell is yet another example of divergence followed by convergence. The process could again be written (as in the other diverge-converge sequences) as
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. The divergent part takes place as each team member quickly considers his or her decision. For a team to complete the matrix takes about half an hour, providing the team is indeed operating in a collaborative spirit, and has followed the broad structure of creative problem-solving ± that is to say the <mapping>
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Figure 2. Qualitative and Quantitative Criteria Matrix Versions R&D
Image
Mgt Style
Products
Processes
+ + + + 7
+ 7 + + +
7 7 + + ?
+ + + + 7
? ? + + +
Disney Microsoft Sony 3M Benetton
2a. The group's qualitative matrix presents more opportunities for `learning through doing', e.g. by highlighting areas of uncertainty (the `?' convention), and pinpointing criteria that fail to differentiate between the ideas (iteration and modifications called for).
Attribute
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22.3 34.0 16.2 16.7 10.8
26.3 26.3 21.1 13.2 13.2
22.2 24.6 18.5 20.5 14.3
23.7 30.1 18.7 12.6 15.0
23.0 26.5 16.5 15.7 18.3
23.8 28.4 18.7 15.5 13.6
Error
4.2 5.3 2.7 3.3 2.4
2b. Illustrative JAS results from one team member from a JAS session `This matrix suggests we have come up with quite a few ideas we believe to meet all our expectations. Can we check for a moment that we all agree to that?' These guided discussions ensure that the criterion matrix is a tool that promotes analysis and creativity, and is not a short-cut as a result of which the team never stretches or challenges previous mindsets. The Criterion Matrix is a qualitative asessment technique which enables a collaborative and constructive group to rapidly identify which of a list of alternative ideas or courses of action seem promising across a set of criteria or attributes. A quantitative evaluation process would usually be more time consuming and require use of IT, but offers some potential benefits and could be used instead of, or as a compliment to, the Criterion Matrix. It may be necessary to attempt to assess the relative strengths and weaknesses of a set of alternatives, all of which satisfy some minimum requirements. For example a scoring system might be used to attempt to further discriminate between promising ideas with similar spreads of `+'s in the Criterion
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Matrix. Quantification of assessments also allows some investigation of trade-offs between performance on different attributes, sensitivity of outcomes, and the degree of uncertainty or ambiguity in the assessments. Individual (or nominal group) instead of public group assessments can also be useful in promoting equal representation of each group member's point of view in difficult group or political situations, and in examining the sources and degree of lack of consensus (e.g. `?'s in the Criterion Matrix). The remainder of this paper describes one such quantitative assessment process.
Promoting analysis and creativity
Beyond the criterion matrix: the application of JAS in creative problem-solving Operational research and (quantitative) decision support A characterisation of the view of decision task and process prevalent in the (quantitative) decision-aiding disciplines was given by
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Disillusion with mathematical modelling
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Herbert Simon.13 He suggested a spectrum from programmed (structured) to non-programmed (unstructured) problems, and a four stage model of the decision making process: obtaining intelligence about the problem, design of alternatives courses of action, choice of a course of action from those available, and reviewing past choices. These (quantitative) decision aiding disciplines have been much criticised for drifting away from their original goals of supporting all types and phases of decision making.14 The great hopes of the `scientific' era of the 1950s and 1960s was followed by some disillusion with the potential of mathematical modelling to support decisions that mattered. Practical decision support tended to become restricted to more structured decision tasks tractable with the techniques in the toolkit (these tend to be tactical or operational problems, and so less prestigious and visible in organisations), while researchers concentrated on refinements to (largely mathematical) modelling techniques increasingly detached from the demands and richness of real world problems. By the late 1970s early 1980s this trend was seen by many prominent researchers and practitioners to have brought OR to the point of stagnation or even crisis, and prompted a bout of introspection in the field. The restrictions in scope and ambition of this type decision support might be characterised as a retreat to concentrating on support for the choice phase, to the neglect of the other phases of Simon's model. In terms used in the discussion of creativity earlier in this paper, disciplines such as OR might be seen as having come to specialise in, or even being limited to, convergent techniques: tending to take as given that problems had been well defined with simple (often single) objectives, alternatives had been generated, and that political, social and cultural issues would not stand in the way of `rational' decision making. Driven by a desire to provide practical support in the types of ill-structured, `messy' problem-solving tasks, increasingly addressed by groups, came a renewed interest in the `softer' (non-mathematical) aspects of decision making involved in the other phases of the process. Acknowledgement of the importance of creativity techniques in alternative generation, and ideas from psychology such as cognitive mapping and from systems thinking have lead to the formalisation of a new class of techniques.15 These techniques are designed to support problem exploration and structuring in low-structure situations, generation of options or alterna-
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tives (i.e. supporting divergence), and as a precursor to possible use of the `harder' mathematically-based tools for evaluation (supporting convergence). These techniques are primarily diagrammatic and linguistic. Numbers can still, however, have a useful role to play. von Winterfeldt (1988) writes ``in defence of numbers'' that using quantitative assessments to express knowledge ``force hard thought about what is being measured'', ``stretch people to the limits of their knowledge and force them to become precise as well as to acknowledge the degree of imprecision'', improves communication offering clarity and economy of presentation, and permits access to the array of mathematical tools ``to calculate consistency checks and the formal implications of numerical inputs''.
Decision support using the judgemental analysis system The Judgemental Analysis System, JAS,16 is a quantitative multiattribute decision making software program developed at Manchester Business School. It is a tool designed to support the choice phase of a problem-solving task in which the evaluation of alternatives or options can be structured and broken down into several attributes or criteria. JAS elicits judgements from a decision maker in the form of pairwise ratio comparison of attributes, and then of alternatives. The weighted-additive model is used to aggregate judgements on each attribute or criterion. Such mathematically simple models have been found to be robust and not significantly inferior to much more complex non-linear versions.17 When supporting a single decision maker, this type of multiattribute decision support belongs firmly in the tradition of `rational decision making', seeking to circumvent some of the cognitive limitations and strains which lead to illusions and biases.18 Elicitation of judgements in quantitative form aims to extract as much information from the decision maker as possible, forcing them to think hard about their preferences and pushing them to the limits of their ability to be precise. Using these quantitative inputs to generate numerical results makes trade-offs between attributes explicit and enables consistency of the user's judgements to be calculated. Sensitivity or robustness analysis of the preferences can also be conducted and, for example, can usefully investigate the possible effects of more information in areas of judgement in which the user cannot currently discriminate between alternatives. Fig. 2b shows the JAS
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results calculated from the judgements of one decision maker. The column marked ``error'' is a measure of inconsistency in the pairwise comparisons, and thus an indication of the ambiguity in the user's judgemental position. In group settings the conciseness of numerical presentation is particularly useful, and highlights the degree of preference in addition to its direction. Researchers from Manchester have used JAS longitudinally to monitor changes in judgements over time, for example in monitoring the progress of R&D projects,19 and with groups of decision makers. In this group context it is often used as part of wider decision support process in which divergent techniques such as elements of the nominal group technique 20 are used to generate attributes and, sometimes, alternatives. Group members use JAS separately to elicit their individual judgemental preferences, these can then be tabulated with those of the rest of the group for comparison. Particular benefits of this type of process include ensuring that all group members' preferences can be represented on equal terms, and rapid and relatively impersonal focusing on areas of agreement and disagreement is encouraged. Over a series of sessions preferences can be negotiated and developed, and more information about critical aspects of the decision collected. At some stage a group might decide to choose a set of front runners from amongst the alternatives under consideration to allow more detailed evaluation of those which are perceived to be most promising. Fig. 3 shows this type of multistage group decision support process. This longitudinal process has been used to facilitate, amongst other tasks, procurement decision making in the National Health Service.21 In this context numerical outputs from JAS at each stage proved very valuable for decision auditing, providing a trail showing how and where perceived strengths and
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weaknesses of the alternatives developed over time and amongst the group. A further benefit of generating numerical representations of judgemental preferences is access to graphical display tools such as multidimensional scaling, MDS.22 MDS allows much of the variation between judgemental positions to be represented as a spread of points on a two dimensional graph, enabling visualisation of the differences in preferences of the group. Fig. 4 shows an example MDS plot of the relative positions of a group of nine decision makers, labelled a to i.
Conclusions Members of groups using both the Criterion Matrix and JAS (including those that generated the data displayed in Figs 2 and 4) reported similar levels of satisfaction and comfort with the two approaches. We would suggest that the qualitative Criterion Matrix and JAS-type quantitative MADM tools are both useful convergent, choice-supporting techniques for inclusion in the problem solving / decision support / creativity toolkit, each with its own strengths. The Criterion Matrix is very quick and provides a broad overview of group judgements. Conversely, the use of JAS is more time consuming, but may be justified in situations in which it is important to ensure each member's judgements are explicitly considered, information is more plentiful and decision auditing is important.
Notes 1. The idea of a creative problem-solving paradigm was suggested some years ago in an article by Rickards and Freedman (1979) after the enormously influential concept of scientific
Facilitating decision making
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Figure 4. A two-dimensional representation of team company ratings from a JAS session. Plot simplifies the multidimensional scaling obtained in exercise assessing creativity of companies. Key: a± i : codes for positions of group members indicating preferences towards companies m : group average (mean) scores for companies wd : Walt Disney ms : Microsoft sy : Sony mmm : 3M bn : Benetton
paradigms had been proposed by Thomas Kuhn (1970). In this journal, similar views have been expressed by, among others, Pathak (1992), Prince (1994), Geschka (1995) and Snow & Couger (1995). The paradigm argument was supported by reference to the pioneering work of researchers associated with Alex Osborn (1963); the Parnes-Osborn creative problemsolving system (Parnes, Noller & Biondi, 1977);
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the techniques associated with the body of knowledge known as Synectics (Gordon, 1956; Prince, 1970) and lateral thinking (de Bono, 1971); and the studies of creative potential summarised in MacKinnon (1978). 2. See for example Torrance (1981) and (1987). 3. See Stein (1974) and (1975). 4. See Isaksen and Dorval (1994) and also Isaksen and Treffinger (1985).
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5. Rickards (1997). 6. This was famously explored by Arthur Koestler in The Act of Creation (1964). 7. Sid Parnes (often accompanied by Bea Parnes) visited Manchester several times during his years as President of the Creative Education Foundation, as did his successor Scott Isaksen. Their colleague Gerard Puccio successfully completed his doctoral research supervised by Reg Talbot at Manchester. Tudor Rickards and Reg Talbot from the Manchester group both became visiting Professors at Buffalo, holding the Alex Osborn Chair in Creativity there. 8. See Moger (1997) for an empirical evidence of the bias of practitioners towards divergence. The preference of managerial clients for convergence has some face-validity in view of their job requirements for risk management, and financial probity, often within technical and commercial contexts. 9. Rickards (1990) and Rickards and De Cock (1994). 10. Rickards (1990). 11. The basic principle of decision-making via weighted criteria has been known via the early work on rational decision-making by Kepner and Tregoe (1965) first cited from the Manchester group in Rickards (1974) as well as through our Buffalo colleagues. In addition, the Quality work was re-introducing the general principle in the well-known `house of quality' representation. 12. I am grateful to Reg Talbot for the spirit of this observation, and trust we have not misquoted him too much. 13. Simon (1977). 14. e.g. Rosenhead (1989) and Ackoff (1979). 15. These include cognitive mapping for strategic options development and choice (SODA) (Eden, 1989) and soft systems methodology (SSM) (Checkland, 1989). 16. Judgemental Analysis System, Lockett and Islei (1989). In many ways it is similar to Saaty's (1980) well known Analytical Hierarchy Process (AHP), though some mathematical refinements in JAS result in lower data requirements (see Islei and Lockett, 1988). 17. Fishbein and Ajzen (1975) and von Winterfeldt and Edwards (1986). 18. See for example Kahneman, Slovic and Tversky (1982). 19. Islei et al. (1991). 20. See Delbecq et al. (1975). 21. Proudlove et al., (1994). 22. See for example Young and Harris (1992).
References de Bono, E. (1971) Lateral Thinking for Management: a handbook, McGraw-Hill, Maidenhead. Checkland, P. B. (1989) `Soft Systems Methodology'. In: Rosenhead J (ed). Rational analysis for a problematic world (pp. 71±100), John Wiley & Sons, Chichester.
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Delbecq, A. L., Van de Ven, A. H. and Gustafson, D. H., (1975) Group techniques for program planning ± a guide to nominal group and delphi processes, Scott, Foresman and Company, Glenview, Illinois. Geschka, H. (1995) `Creativity techniques in Germany', Creativity and Innovation Management, Vol. 5, No. 2, pp. 87±92. Gordon, W. J. J. (1956) `Operational approach to creativity', Harvard Business Review, Vol. 34, No. 6 (Nov±Dec), pp. 41±51. Gordon, W. J. J. (1961) Synectics: the development of creative capacity, Harper and Row, New York. Fishbein, M. and Ajzen, I. (1975) Belief, attitude, intention, and behaviour: an introduction to theory and research, Addison-Wesley, Reading, Massachusetts. Isaksen, S. G., Ed (1987) Frontiers in creativity research: Beyond the basics, Bearly Publishers Inc., NY. Isaksen, S. G. and Dorval, K. B. (1994) `Expanding views of CPS: A synergy methodology.' In H. Geschka, S. T. Moger and T. Rickards (Eds.) Creativity and Innovation: the Power of Synergy (pp. 129±139), Darmstadt, Geschka and Partner, Unternehnmensberatung. Isaksen, S. G. and Treffinger, D. J. (1985) Creative Problem-Solving: The basic course, Bearly Ltd., Buffalo, NY. Islei, G. and Lockett, A. G. (1988) `Judgemental modelling based on geometric least square', European Journal of Operational Research, Vol. 36, No. 1, pp. 27±35. Islei, G., Lockett, A. G., Cox, B., Gisbourne, S. and Stratford, M. (1991) `Modeling strategic decision making and performance measurements at ICI pharmaceuticals', Interfaces, Vol. 21, No. 6, pp. 4±22. Kepner, C. and Tregoe, B. (1965) The Rational Manager, McGraw-Hill, New York. Kahneman D., Slovic P. and Tversky, A. (eds) (1982) Judgement under uncertainty: heuristics and biases, Cambridge University Press, New York. Koestler, A. (1964) The act of creation, Hutchinson, London. Kirton, M. J. (1994) Adaptors and innovators: styles of creativity and innovation (2nd Edn), Routledge, London. Kuhn, T. S. (1970) The structure of scientific revolutions. Chicago, University of Chicago Press. Lockett, A. G. and Islei, G. (1989) JAS: Judgemental Analysis System (Version 1.2), Manchester Business School, Manchester. MacKinnon, D. W. (1978) In search of human effectiveness: identifying and developing creativity, Creative Education Foundation, Buffalo, NY. Moger, S. T. (1997) Style preference and creative problem solving training, unpublished M.Sc. Dissertation, Manchester School of Management, UMIST, UK. Osborn, A. F. (1963) Applied Imagination (3rd Edn.), Harper, New York. Parnes, S. J., Ed. (1992) Sourcebook for creative problem-solving, Creative Education Foundation Press, Buffalo, NY. Parnes, S. F., Noller, R. B. and Biondi, A. M. (1977) Guide to creative action (revised edition of creative behavior guidebook), Charles Scribner & Sons, NY.
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Pathak, R. D. (1992) `Quality Circles to creativity circles', Creativity and Innovation Management, Vol. 1, No. 2, pp. 63±67. Prince, F. (1994) `The paradigm shift process', Creativity and Innovation Management, Vol. 3, No. 1, pp. 29±32. Prince, G .M. (1970) The practice of creativity, Harper & Row, NY. Proudlove, N. C., NaudeÂ, P. and Bellingham, R. (1994) `Group decision support for IT system procurement: the use of multiattribute decision support in the NHS', OR Insight, Vol. 7, No. 3, pp. 6±11. Rickards, T. (1974) Problem-Solving through Creative Analysis, Gower, Epping, Essex. Rickards, T. (1990) Creativity and Problem-Solving at Work, Gower, Farnborough, UK. Rickards, T. (1997) `Creativity in action: A summary of the Manchester Approach'. In I. Getz, and H. Laroche, (Eds.), Cognition and creativity in organizational settings, Proceedings of the 3rd symposium (pp. 24±34), Groupe ESCP, Paris, June 10th. Rickards, T. and De Cock, C. (1994) `Creativity in MS/OR: Training for creativity ± Findings in a European context', Interfaces, Vol. 24, No. 6, pp. 59±73. Rickards, T. and Freedman, B. L. (1979) `A reappraisal of creativity techniques', Journal of European and Industrial Training, Vol. 3 No. 1, pp. 3±8. Rickards, T. and Puccio, G. (1991) `Problemfinding, idea finding, and implementation: An exploratory model for investigating small-group problem solving.' In P. Barrar and C. Cooper (Eds.), Managing organisations in 1992: Strategic responses (pp. 247±263), Routledge, London.
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Saaty, T. L. (1980) The Analytic Hierarchy Process, McGraw-Hill, New York. Simon, H. A. (1977) The new science of management decision (1st edition 1960, revised 1965 and 1977), Prentice-Hall, Englewood Cliffs, NJ. Snow, T. A. and Couger, J. D. (1995) `Creativity improvement in a systems development work unit', Creativity and Innovation Management, Vol. 5, No. 4, pp. 234±240. Stein, M. I. (1974) Stimulating creativity, Vol. 1: Individual procedures, Academic Press, NY. Stein, M. I. (1975) Stimulating creativity, Vol. 2: Group procedures, Academic Press, NY. Torrance, E. P. (1981) `Predicting the creativity of elementary school children (1958±1980) ± and the teacher who ``made a difference'' ', Gifted Child Quarterly, Vol. 25, pp. 55±62. Torrance, E. P. (1987) `Teaching for creativity.' In S. G. Isaksen (Ed.) Frontiers of creativity research: Beyond the basics (pp. 189±215), Bearly, Buffalo, NY. von Winterfeld D. and Edwards W. (1986) Decision analysis and behavioural research, Cambridge University Press, Cambridge, UK. Young, F. W. and Harris, D. F. (1992) `Multidimensional scaling'. In M. J. NorusÏis (ed), SPSS for Windows professional statistics (pp. 157±223), SPSS Inc., Chicago, Illinois.
Nathan Proudlove is a lecturer in Operational Research and Quantitative Methods at the Manchester School of Management (MSM), UMIST, Manchester, UK.
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Viewpoint: Blueprint for the Adaptive Organisation D. Keith Denton
C
haos theory is a mathematical term that refers to the discovery that much of the world operates in a nonlinear mode. Small events or actions can have big and often unpredictable or uncontrollable consequences. It also provides us with a way to understand how the ``insides'' of organizations work. Ralph Stacy, professor of management at the University of Hertfordshire Business School in the United Kingdom (UK) says that chaos theory offers a way of talking about what goes on inside organizations and making sense of a world in great uncertainty. He believes that the theory's most valuable insight is the complete unpredictability of the behavior of most systems, whether in nature or business. Most people know long-term plans rarely materialize, so if that is the case, why do we do it? Chaos theory, according to Barry Johnson, former head of Northern Telecom's training institute and now a consultant, says that companies should re-examine what they can and cannot control. Stacy says that such thinking has caused some companies to drop some longer-term planning processes altogether. Jim Cooper, human resource planner with Shell group's petroleum engineering division, says complexity asks useful questions about the reasonableness or otherwise of trying to predict the future (Management Today, 1995). Chaos theory tells us what underlies complex adaptive systems like the economy and organizations. What we know is that the world is nonlinear, that is neither stable nor too unstable. It is a world where change is always occurring, even if you do not notice it. It is a world that demands you either adapt or die, eat or be eaten. It is a world where we can never be sure what is the next best step to take, so we had better have pretty sensitive feedback about what is going on because we cannot predict, nevertheless control, the
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effects of our environment or our effects upon our environment. Chaos theory stresses that great uncertainty is a natural part of life, and attempts to rigidly control things is useless. The greater the distance from the present, the more complex the environment, the less likely you can predict nevertheless control the future. Stacy notes that ``anything useful'' about long-term future is essentially unknowable because highly adaptive systems are sensitive to small variations (Management Today, 1994). Knowing the true nature of highly adaptive systems like economies and organization means that strict control and prediction is useless and undermines the business wisdom that we can control things by our sheer will and vision. Management that gets together at a retreat and constructs its vision for where it wants to be in ten years are merely attending a social gathering ± not a strategy session. Strategy in chaos is at best reactive not proactive. Stacy notes that elaborate computermodeled forecasts presented to the board to convince them of the wisdom of a proposed business venture are a fiction and that their purpose should be to allay anxiety rather than perform any genuinely predictive purpose (Management Today, 1994). According to chaos theory, change is constant, its consequences unforeseen and not subject to control or accurate prediction. Staying the same or going through too much change is courting disaster. A certain amount of instability or change is essential for survival, but we can never predict the exact effect of the change, so stay flexible and be willing to manage without rigid control. Simon Caulkin, editor of The Observer notes, ``Attempts to make the system stable work only at the expense of making it incapable of interacting with the environment, . . . the result is stagnation and death'' (Caulkin, 1995). The message is to accept uncontrollable
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change as a natural part of life. It has never been more true than it is today that change, for the most part, cannot be ordered, controlled, or predicted.
Need for adaptability
The future is not controllable
First, the good news. If you work in a very, very stable environment, there is very little reason to change or adapt to changes. There is no need to change as long as other competitors, prey or potential partners do not change. The bad news is that stability, rather than change, is the exception. But it is easy to assume the world is stable, especially when we spend all our time following those neverchanging rules. Why wouldn't we assume that everything pretty much remains the same? The biggest risk for organizational leaders is where the environment is subject to change and there is little recognition of it. The chances of recovery when this occurs, or when you get blind sided, are very slim. When a new competitor, like Japan, acts in a predatory fashion and moves into the environment of automobile manufacturing, it spells long-term trouble for those still assuming they are in a stable environment. Automobile manufacturing, despite what many executives had assumed, is like so many other areas and is subject to rapid changes. It is extremely difficult for an original competitor to catch up once they have fallen behind. The United States automobile manufacturing industry provides a good example. They have been playing catch up ever since they slipped down the pecking order. Stabilizing their niche and market, if that were possible, would help more than Total Quality Management or Reengineering. However, it is doubtful that either the customers or their competitors would allow such stability.
Adaptive characteristics ± what do we want to change? When making a transition from one type of organization to another, McKinsey's Ostroff says start with asking yourself, ``Where do I want to be in ten years?'' That is what you should be drawn towards. Next you try to identify what it takes to get there. At Ford, they decided they wanted to build easy-torepair cars so they double-staffed upstream engineering. On the other hand, Korolinska Hospital in Stockholm, felt that speed of services would be essential for their survival so they immediately began reorganizing around patient flow. Instead of moving
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through specialties, as is typical of hospitals, patients now meets surgeons and a doctor of internal medicine together. The hospital created a nurse coordinator to minimize the number of visits by patients. Both their nurse coordinator and their doctors report to a nurse! The new arrangement was sold as a way of freeing doctors from scheduling (Rao, 1995, p. 94). Having everyone discuss issues about where you want to be in ten years certainly can help avoid being blind sided but it will not be enough, the future is not controllable. Competitiveness requires that you be able to adapt to shifts in direction. The greater adaptiveness, the greater one's chances are of remaining competitive. Likewise, the greater the number of adaptive characteristics the organization possesses the better. So what are some of the adaptive characteristics? Anything that gives you an ability to change directions, think in new ways, and respond in a flexible manner could be seen as adaptive characteristics. Rigid rules, regulations, routines, strict lines of authority, rigid divisions, functions, and departments' responsibilities may help maintain order, predictability, and even give one a sense of community, but it can impair your ability to respond in new ways. Allowing diversity in thoughts and organizational membership helps insure greater flexibility. Encouraging people to ``do things differently'' rather than doing things the same is a start, but systems must be in place for people to be able to think and act more independently. They must be taught how to see the whole rather than the pieces and be exposed to new thoughts. Adaptive organizations encourage flexibility by continually cross-training and accepting some maverick or mutated behavior. Other useful adaptive characteristics for remaining between the edges of unchanging order and chaotic irregularity might include: rapid speed in decision making, having an ability to quickly respond to changing market conditions, and devoting a huge percentage of revenues toward increasing research and development. The sheer number of adaptive characteristics possessed by an organization can be important but so too is the second condition of competitiveness. It is not so much the number of adaptive characteristics but also their interrelatedness that is important. List all of your adaptive characteristics and then assess the impact each has on the other. If one condition, like the degree of cross-training, is increased (greater adaptiveness), what will be the effect upon the increased speed decision making (greater adaptiveness)? In turn, do
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either of these increase or decrease the ability of the organization to respond to changing consumer preferences? Determining one's ability to adapt requires assessing the impact of each adaptive characteristic on the other characteristic. In some cases, there will be a great interrelatedness, in other cases, very little. If the interrelatedness of the characteristics is low in an organization, then we can say the organization is very stable. In such an organization you can increase the level of cross-training and improve adaptability but not cause disorder throughout the organization but there may be a more subtle but equally dangerous risk. Stewart Kauffman, often called the father of anti-chaos, observes that a system where few agents influenced other agents is not very adaptable. The connections were too thin. He said the systems he observed became more resilient when the number of links increased but he also said you can also have too many connections. An overly interdependent system has been shown to be as debilitating as too many uncoordinated loners. Kauffman has discovered that large connections with thousands of members adapted best with less than ten connections per member (Kelly, 1995, p. 399). Too many connections means each agent has too much information and nothing gets done. There can be too much communication or interdependence. Nothing gets done because too many actions depend on too many other contradictory actions. Bureaucratic rigor sets in and the system locks up. There can be too many faxes, phones, and Internet. There can be too much cross-referencing. Sometimes it is necessary to disconnect to get things done. On the other hand, if an organization's adaptive characteristics are highly interdependent, then a change ± even a small one ± can cause the work system to become chaotic. Theories on chaos and complexity show us that not all changes are of equal risk or value. One change can affect many others and the organization can lose direction and even face extinction.
Controlling change? If the organization has a highly interrelated set of adaptive characteristics, then it is best to change one at a time rather than institute the radical overhaul that reengineering sometimes promotes. Reengineering urges us to ask, ``Why are we doing this and should we continue to do it this way?'' Adaptive reengineering tells us that before you reengineer, identify your current adaptive charac-
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teristics; then decide what and how much to change. Organizations that have highly interrelated characteristics require careful monitoring before reengineering. On the other hand, interrelated variables can have one very big advantage. Since all factors are interrelated, you can indirectly keep all variables in control by only keeping one of them in control. For instance, suppose you have a variation that comes from either one of three variables and these three variables are highly interrelated. In such a case, it does not matter very much which one you control. What matters is that interrelation connection. If it is not essential that total nonvariability exists within those variables, then it can provide managers with an effective but minimum control system. If all variables are tightly interrelated and if you can manipulate one of them, then you can control all of the variables. In this scenario, there is less concern for correcting causes of variation and more emphasis on detecting variations and correcting them. All of this has direct economic implications. In the economy of Lenin's Russia, resources were allocated by senior officials who identified tradeoffs and controlled those resources. It was as unsuccessful as many current engineering efforts are at continually chasing down failures in the hope of bringing complete control over their projects. In most situations, it is impossible to control everything. It was Frederick Haye and other Austrian economists in the 1920s that argued for controlling a single variable ± the price ± that is used to regulate all other variables (Kelly, 1995, p. 121). This way you do not have to know how many bars of soap are needed by a person. It is control from the bottom up not, as in Lenin's case, top down. There is spontaneous order. The significance of identifying interrelatedness is it holds the promise that engineers or managers might be able to stop trying to seek perfect, uniform quality or inventory control. Instead, they could begin with the more realistic possibility imperfect process, materials and information. If the standard of performance or materials, etc. needs to be higher, you could set a higher standard. Chaos theory tells us that the outcomes of changing a complex system, like organizations, can never be entirely predicted but it is possible to place your bets on the changes with the greatest odds of having a significant impact on the organization's adaptiveness and ability to compete. The outside factors determining the risk of extinction vary from one competitive niche to another. Sometimes key forces include cost or competition or even
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customers' preferences. Factors for biological survival include geology, food sources, and competitors. Each species is attracted to those things that insure survival but the facts vary, even in nature. In the business world, organizations also have factors that attract them toward certain behaviors. Those factors (money, customers, etc.) also can vary from one organization to another. Identify the key factors affecting your business's survival and their stability, then identify key changes that are needed within your organization. For instance, if your market or customers are very stable, you may choose to improve efficiency (TQM) rather than concentrate on increased expenditures on new product and development. On the other hand, if your product or service is in a period of decline, then it is time to explore potential in a newer product or service niche. Making efficient buggy whips will not keep you from going extinct as fast as examining how to evolve the business. One final step beyond identifying your adaptive characteristics, examining their interrelatedness and isolating the key one is to focus on your overall fitness to adapt. Some markets and competitive conditions only demand minimum change while others may push you to the edge of chaos. Customers, competition, and cost all affect competitiveness. Each force and the interrelation of each force will affect likelihood of not surviving. It all seems so complex and beyond control but that is only an illusion. Control can come in the most unexpected ways.
Bottom-up rules
Complex actions from simple rules
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John H. Holland of the University of Michigan wonders how complex adaptive systems change and adapt to its environments. A hint comes from science which shows us that a few simple laws produce an enormously rich behavior of the world (Waldrop, 1992, p. 153). It is similar to chess which has a few numbers of rules but produces a game that is never the same twice. Complex actions from simple rules is the foundation of all complex adaptive systems. Murray-Gell Mann writes in his book, The Quark and the Jaguar, that all complex adaptive systems acquire information about its environment and its adaptation to it (e.g., where we are, how are we doing). These systems try to identify regularities in the information and then try to condense those regularities into a kind of ``schema'' (Mann, 1994, p. 17) or model. There is selective competition pressure among these operational models. Some are demoted
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in a hierarchy or eliminated altogether if it does not help predict future actions. It provides a simplified but effective way of interacting with and understanding its environment. NASA, like normal organizations, must also deal with the issue of control. Long distances in planetary exploration make the need for rapid feedback of utmost importance. Engineers at the Jet Propulsion Laboratory are creating micro rovers that will act more like ants than anything else. They are self-powered, self-guided and, once released, are out of control in the sense that they do not need constant supervision. They can be programmed with simple rules or so-called ``bottom-up'' control. If you break off one of the robot's legs, it will shift gaits to the others that are left so it maintains its gait. Their rules are simple such as, ``If I feel something I'll stop, if I don't I keep going.'' Other rules deal with overcoming obstacles, etc. Rodney Brookes, an MIT professor, describes some of his bottom-up rules for his robots. They provide a hierarchy of rules from bottom up including: (1) avoid contact with objects; (2) wander aimlessly; (3) explore the world; (4) build an internal map; (5) notice changes in the environment; and (6) formulate travel plans and anticipate and modify plan accordingly (Kelly, 1995, pp. 38±40). The behaviors involve adding new behaviors to older ones from the bottom up. Complexity is accumulated by incremental additions. Broader basic rules, like avoid contact, are not messed with but rather additional higher level rules are added but never altered. For instance, if a lower rule, like wander aimlessly, gets in the way of a higher rule or behavior, it is suppressed ± not eliminated. Broad bottom rules are never ignored, just suppressed (Kelly, 1995, p. 40). You begin with simple behaviors, almost instinctive or reflexive. You create a simple rule that handles simple jobs. You use a lot of these simple rules. Then you overlap these simple rules with a secondary level of rules for more complex behavior. Brooks recommends that complex behavior follows a certain process including: (1) Do simple things first. (2) Learn to do them flawlessly. (3) Add new layers of activity over the results of these simple tasks. (4) Don't change the simple things. (5) Make the new layer work flawlessly as the simple one. (6) Repeat, ad infinitum (Kelly, 1995, p. 41). All this focus on rules may not seem very different than centralized and bureaucratic organizations forces on rules, but nothing
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could be further from the truth. Most organizational leaders with a complex task to do often come up with a list of all the tasks needing to be done, figure out the order they are to be done, and then direct completion from central command. The best example of this approach is the former Soviet Union's. Such system collapses, not because of the rules but because of control from the top. Everything designed around central command cannot adapt. With the right rules, you can build a direction and a mind, without a mind. Rules must be aimed at learning, adapting, improving cooperating, competing. Otherwise, you have static bureaucracy. Complexity comes from simple rules arranged in hierarchy. A key point is that information and authority come from the bottom up and side to side, not top to down. Complexity is created from the bottom, not the top.
Simple rules for organizations The message is clear. It is this simplicity not complexity that is the centerpiece of adaptive organizations. Chaos theory teaches us that simplicity in design can produce complex reactions through sheer multiplication of possibilities. A good example of how this occurs comes from a computer program calls ``Boids.'' Craig Reynolds of the Symbolics Corporation in Los Angeles created simulation where he placed a large collection of autonomous bird-like agents called ``boids'' into a computer screen full of walls and obstacles. Each boid was programmed with only three simple rules of behavior. (1) Maintain a minimum distance from other objects in the environment, including other boids (translation: don't crash into each other). (2) Try to match the velocities with boids in its neighborhood (translation: fly at the same speed) and (3) Try to move toward the perceived center of mass of boids in its neighborhood (translation: reduce your drag). None of these rules said form a flock, but they did. The rules only referred to what an individual boid could see and do in its own vicinity. If a flock was going to occur, it would have to occur from the ground up rather than being directed by some central authority. Flocks did form into the familiar ``V'' shape that geese and other birds assume. Each dot acted selfishly, but was driven to work together through common assumptions. They would spontaneously collect themselves into a flock that could fly around obstacles in a
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natural and fluid way. Sometimes the flock would even break into subflocks that flowed around both sides of an obstacle, then rejoin on the other side, just as if it had been planned. In one run, a boid accidentally hit a pole, it fluttered around for a moment as though stunned and lost, then darted forward to join the flock as it moved on (Waldrop, 1992, p. 242). There is a lot of good that could be done if we simulated this computer program by insisting that our people (1) work together; (2) don't cut each other's throat; and (3) go to the same place. We need a set of simple assumptions to guide complex reactions for changing environmental conditions. The first fallacy chaos theory exposes is the one that assumes that complex actions require complex organizational structures or that simple organizational structures can only produce simple reactions. Chaos theory says otherwise, simple events can cause complex reactions. Any adaptive organization needs to simplify their response to its business environment. It can do this by concentrating on at least three rules for their behavior. The first of these, like the computer program, is to know your identity. In the Boids, the dots were told to act like birds by reducing their drag. In organizations like the medical center, it is essential for us to determine how to work together. To do that, we need to know ``who and what we are.'' This does not mean describing our department or defining our job. In adaptive organizations these are subject to constant change. Rather it entails reaching a strong consensus about the parameters of our culture and clarifying what we are trying to accomplish. This definition is neither vague nor detailed. For instance, everyone may know ``we sell shoes'' and that ``customer satisfaction is our most important objective.'' The reality though is often far different. Sometimes there are hidden agendas, sometimes people seek to selfishly put themselves in a better position regardless of others. As a result, some end up developing their own unique perspectives about what is involved in selling shoes or satisfying the customer. We do not ``act like birds,'' but rather like individual dots that randomly drift from left to right and up and down. Knowing who and what we are cannot be a vague idea (sell shoes, put out fires, drive a truck). Everyone within the organization must be absolutely clear about the specific rules that are the centerpiece of all actions. It must be a ``cultural thing,'' not a job description. People within the organization need to
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Keep a broader perspective
A vision with feedback
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know what to do when conditions change. It is not a set of instructions, but rather a set of moral or religious guides to behavior. If you are to act like a bird, a shoe salesman or truck driver, what are you trying to accomplish? Birds try to stay in the air, shoe salesmen and truck drivers may be told to satisfy the customer or make money, but there is a difference. Birds intuitively know what is needed to keep them up there. Salesmen and truck drivers rarely know how to get up there or where they are headed. They may be told what to do but are not told how to evaluate decisions. If customer satisfaction is really the objective, and everyone really does know their job, then we should not need someone telling us how to do it. Let them know what customers expect and leave it up to them to figure out how best to satisfy them. If we really do not know what customers want or how to make money, or how to provide quality service, then we are in trouble. In fact, we are lucky to be here. If we do know and if we have intelligent people who also know, then we should get a pretty good decision. It may not have been the exact decision you would have made, but it will be an equally good one. This all assumes we have equal understanding about our customer, profits, or quality. Chaos theory teaches us to keep a broader perspective. Do not manage the details, instead change assumptions, continually teach people about them, then they will be attracted to assumptions ± the work system will self-evolve. Adaptive organizations spend far less time teaching people how to be good truck drivers or shoe salesmen, less time controlling the details and far greater time clarifying assumptions involving your customers then hammering home what it takes to satisfy customers, make money, or whatever else is essential to survival. Leaders in such organizations will spend most of their time discovering what is needed and the rest of the time as teachers, explaining what they have discovered. So what happens to supervision? How do we insure what we know is converted into action? I recently presented a seminar and workshop on teamwork and leadership to a large bank. As part of this process, I anonymously asked a few basic questions of their senior managers (officers), the middle managers, first line supervisor and a group of technicians called analysts. Some of these questions asked each group to answer some broad scaled questions about who they were and where they were going. When I received the questionnaires I decided I would show the
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diversity of responses by showing the responses as if they were a flock of birds. Each person would be a symbolic bird flying toward these different ``directions.'' One of these graphs is seen in Figure 1. Respondents were asked to identify whether they thought the company was one that sought either marginal profits, customer satisfaction, quality, etc. or looked for an acceptable level or sought to maximize one of those issues. Senior management, not surprisingly, were a tightly packed flock drawn to this third direction which was to maximize or deliver great service. It was a different story for the rest of the group. Supervisors especially seemed to be flying blind. Well, at least senior management knew where they wanted to be. The trouble was, nobody was following.
Adaptive leaders The senior officers and their subordinates were acting in the traditional manner where they created the vision (great customer service), developed a mission and formulated the necessary strategies, and expected to follow the rules and adhere to their goals. The trouble was that they could do all that and not deliver great customer service because they spent too much time managing the details and too little time clarifying their direction. Leaders need to broadly define both who we are and where we are going. They need to describe the realities about where we are headed and what we are supposed to be doing. These parameters are similar to vision because both require broad forethought, but vision describes what is supposed to be while leaders should also provide continuous feedback about what really exists. It's a vision with feedback. Leaders need to define who you are, what you want to do, and how you are doing. Typical leaders usually try to clarify their vision about what they would like the organization to be. In military fashion, they create a mission statement that identifies specific tasks to be carried out, then strategies are developed for achieving certain goals, objectives are clarified, goals defined, and rules established. The adaptive leader minimizes the number of rules and regulations and only creates temporary goals, objectives, strategies, and missions. The more dynamic the environment, the more likely each of these will need to be flexible. Defining who we are and where we are going should be the only things that have any resemblance to a sense of permanence.
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Marginal Profits Customer Satisfaction
89
Acceptable Level
Maximize Profits Customer Satisfaction
Senior Manager
Middle Manager
Superintendent
Analyst
Figure 1. Where are we going? In order to be competitive, leaders of typical organizations might decide they need to be a top service or low cost provider. Then relevant missions, strategies, objectives, goals, and rules are formulated. There is little need for these so long as we keep our direction in focus. Doing this requires relevant and rapid feedback about performance and changes in your environment. Rather than create a vision and construct strategies, today's leaders need to first survey the organization. They often discover their organization probably is pretty good, but not a great one. In which case these leaders then try to create both a vision and feedback by identifying where you want to go, which might be to (1) try to deliver great customer service (reduce drag ± your identify); (2) do not be a roadblock (don't crash into each other); and (3) always be aware of
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where you are (requires feedback) in meeting this vision. Feedback on performance may mean achieving reasonable cost efficiencies, profits and productivity but your numbers should not distract from who you are and, in this case, it is to be a great service company. To do that will require using measures that track great service. A critical test will be to develop a link between customer service and improved financial efficiency. If you are not doing this, then you are not measuring the right things. Measuring results that contribute to increased financial and productivity performance include things like loyalty or retention rates, increased business or resistance to lowering prices (Steward, 1995). Customer satisfaction measures should address at least some of these issues. Find out what keeps
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customers coming back and loyal by asking them, then measure those results. Creating lots of rules, goals, objectives and strategies might be acceptable for organizations that manage for the past, not the future. Rigid controls do often work reasonably well provided your competition, cost, customers or outside environmental forces remain stable. Adaptive leaders recognize you can only control the past, the future is in a constant state of flux. If you need flexibility, speed, and greater competitiveness, then try to avoid getting distracted by the details. Rather keep people focused on your assumptions about who you are and where you are going and then provide good feedback and lots of communication about how you are doing. Effectiveness should be measured by how close you come to meeting your assumptions.
The case of Xerox
New perspective, new mission
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Xerox provides a fairly good example of identifying key environmental forces, deciding what key adaptive characteristics to change and coordinating this effort. John Seely Brown and Elise Walton at Xerox were directly involved in Xerox's self-evaluation. They came up with changes they felt they needed and called it Xerox 2000. A transition team was charged with identifying the key characteristics that would be needed to help Xerox remain competitive. The team, over a nine month period, designed detailed changes that would be needed to be taken to meet Xerox's 2000 strategy (Brown, 1993). They began the process by first doing a reality check. The team wanted to see what was actually being done rather than what was being said. They wanted to know ``how do our people actually behave'' rather than what they were supposed to do. Such a reality check is often disturbing, but almost always useful. Xerox's management was not only interested in where most of the organization was headed but also where the stragglers were going. They wanted to discover divergent behavior, radicalism and innovation, as well as their normal culture. When they did find radicalism, they hired anthropologists to take a closer look so they could understand the whole picture rather than simply accepting what people said was happening. Once the anthropologists were inside these pockets of radicalism, they were then withdrawn and were asked to summarize their insights. Analysis of six such experiments around the world brought them some interesting insights. They learned not only about the
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whole organization but also about why there were isolated pockets of radicalism rather than the rule. Xerox discovered what they called the ``double blind,'' which were beliefs that were self-canceling and self-sealing set of beliefs (Brown, 1993, p. 6). For instance, they found out, to no one's surprise, that Xerox personnel deeply believe in teamwork (e.g., Team Xerox) as a means of achieving greater fitness. While teamwork was highly valued, they also discovered that the culture had a strong hero-worshipping mentality which gave special status to the superstar. Two such viewpoints are self-canceling since hero worship runs counter to a team-based culture. Xerox knew they would need to be more than simply a copier company if they hoped to survive in the 21st century. They felt that a new direction was needed for them to remain competitive. They needed to create a new identity, a new species had to be evolved. As long as everyone thought of themselves as working for a copier company, things would remain the same. They would keep coming up with new technology to make working with documents easier and more efficient or slowly grow extinct. They knew however that when you change your definition of what you are, you change everything. They changed the definition of who they were about halfway through their change process. Rather than thinking of themselves as a ``document processing company'' they began to see themselves as simply a document company. At first this might seem like a simple change. They only eliminated one word, but the people on the team began to change their attitudes and perspectives. The new focus at Xerox was to begin to associate themselves more with documents than with processing those documents. With this new perspective came a new mission. They would attempt to focus their people more on creating value by enabling documents to be an integrating force in and across corporations (Brown, 1993, p. 7). Previously, Xerox had concentrated on creating new processing technologies for eliminating waste and making it easier to work with documents. Now, they began to concentrate on ``live time'' as well as eliminating dead time. Before they focused on eliminating waste, now they were thinking of creating value.
Conclusion The need to be able to adapt to constant change grows more intense with each year that passes. Xerox recognized this, decided
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they needed to change direction, and spent a considerable amount of time to identify what adaptive characteristics they would need and how to ingrain those within the organization. Changing their definition of who they were helped Xerox rethink the way they were organized. They began to ask fundamental questions about what they were doing and, most importantly, why. The team eventually came up with 17 interrelated and adaptive characteristics they would use to define what they wanted to achieve. The criteria they chose were not particularly unique and included tenants like reduced time to market and simplifying the organization. This analysis though caused them to reorganize divisions based on distinct decision-makers who would buy a group of products. The team spent a great deal of time clarifying each new function that would exist at each level of the company and what type of people they wanted filling those positions. Chaos theory shows us that small changes like changing a definition can have big impacts, but it is not enough to simply recognize that change is needed. The degree of interdependence of what you want to change is a central factor in the ultimate impact of that change. It is a two-edged sword. Greater interrelatedness of what you want to change insures that small change will have a major impact. On the other hand, it helps us control the impact of change because we can prioritize and narrow our efforts to control one variable (like price) when all variables are highly interrelated. We can have rigid order and stability but ultimately we lose our ability to adapt. We can adapt to change but only if we encourage people to respond in new ways. Diversity of thought creates adaptiveness but it also makes us less stable. It makes us more flexible but we increase our chances of becoming chaotic. Ultimately, which way we go depends on change in our customer, competition, cost and other outside forces. The greater the change here, the greater is the need for adaptability and to identify our key adaptive characteristics. The most dangerous place for your organization would be if your adaptive characteristics were highly interrelated and you were operating in a stable environment! That's right, a stable environment. Chaos theory shows us that under these conditions any change can have a dramatic and sometimes deadly effect. It is also perhaps not surprising to recognize that high interrelatedness and operating in a highly chaotic environment can carry a high degree of risk. When Gottlieb Daimler and Ramson Olds invented an
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improvement on the horse, they did not know automobiles would fill the countryside (Steward, 1993). When the automobile did come, not only did the horse and buggy go extinct but so too did the smithy, harness maker, and a variety of other related niches. This single change in turn created thousands of jobs building houses, making lawnmowers, and delivering pizza. The automobile also brought forth entirely new niches like gasoline stations, motels, shopping malls, and even fast food restaurants. Then as now, when one goes, others both obvious and subtle will come and go. Global competition can both create and destroy a wide range of niches. It pays therefore to closely monitor your whole business environment. Global societies are exciting but that means even small changes on the other side of the world can eventually affect you and your livelihood. Change will occur, it will be impossible to predict or to adequately control. Our best offense is to continue to evolve the adaptive organization.
References `Applications of Chaos', Management Today, July, 1995, p. 17. `Order from Chaos', Management Today, November, 1994, p. 65. Brown, J. S. and Walton, E. (1993) `Reenacting the corporation', Planning Review, September/ October, pp. 5±8. Caulkin, S. (1995) `Chaos Inc'., Across the Board, July/August, p. 34. Cohen, J. and Stewart, I. (1994) The Collapse of Chaos: Discovering Simplicity in a Complex World, Viking Press, Penguin Books, New York, USA. Kelly, K. (1995) Out of Control, Addison-Wesley, Boston, MA, USA. Mann, M-G. (1994) The Quark and the Jaguar, W H Freeman & Company, New York, USA. Rao, R. M. (1995) `The Struggle to Create an Organisation for the 21st Century', Fortune, 131 (6), pp. 90±99. Stewart, T. A. (1993) `Welcome to the Revolution', Fortune. Stewart, I. (1994) `Why Are There Simple Rules in a Complicated Universe', Futures, 26 (6). Waldrop, M. M. (1992) Complexity: The Emerging Science at the Edge of Order and Chaos, Simon and Schuster, New York, USA.
D. Keith Denton is Professor of Management and Distinguished Scholar, Southwest Missouri University, Springfield, Missouri, USA.
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Wiping with a Viper!
K
eeping the wing mirrors on heavy duty trucks clean has been a headache for drivers for years. Dirt and moisture builds up and impairs visibility. For many drivers the answer has been to tie a rag to the mirror and wipe it periodically. The major truck manufacturers have researched the problem and came up with one answer, to heat the mirrors to keep them dry. Unfortunately, this had the side effect of baking the dirt to the mirror! Collin Brooker was intrigued by the presence of the rags. He had experience of setting up and running a successful electrical contracting business and had sold this to a bigger company. With time to develop ideas, he talked to a lot of drivers and realised that it was possible to make something that would deal with the problem. His answer is the Viper Autowipe. The artificial chamois wiper is attached to the back of the wing mirror, the `wings' trimmed to the required length, and the negative pressure of the air against the mirror ensures it is wiped regularly. An answer to a lorry driver's prayer. This simple device actually involves several innovative processes, as Collin describes. `To find a solution to the problem I thought about high tech and low tech ideas. Complicated solutions would be too expensive and possibly risked being stolen. A simpler idea, like the Viper, needed to have extra potential, otherwise it probably wouldn't work. That extra potential proved to be the use of the product as a give away, as promotional material as well as a cheap product for the users to buy. We tested quite a few materials before we decided to use artificial chamois leather. I eventually found a supplier who would cut it for us, but he was very surprised to be asked and at first said he couldn't do it. Then we wanted to print logos onto the surface, so that it could be used as marketing material. I went to several printers, who all told me it
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couldn't be done! The printer who eventually did the job was even more surprised when I asked him to glue the holders on! We had an interested party who wanted to use the wipers as marketing promotional material, and so the designs were important. We ended up testing the prototypes on the motorways at midnight, because we had to keep the designs a secret!! We went into production and sent our first promotional material out just before Christmas. At the beginning of January we had orders for 500,000 units and calls asking for details of licensing the product from the USA and a number of European countries. As a promotional device it's really taken off. It astonishes me that such a simplistic product, although very useful, has caught everyone's attention. And yet, when I think about it, an awful lot of development and persistence went into making the idea real. One of the great things is that now my chamois supplier and printer have done this work for me, it seems to have made them think of the different things they can do with the processes they've got'. Longer term Collin would like to help other idea generators to realise their potential. In the beginning you really need someone to listen to you, and to help you be realistic about your ideas, without telling you can't do it! For further information about the Viper, please contact Collin Brooker Guildhall Promotions Ltd Portland Place 18 Mottram Road Stalybridge Cheshire SK15 3AD Tel 44 161 304 9818 Fax 44 161 303 9808 www.guildhall.uk.com [email protected]
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Paradigm Change and Leveraged Learning During the Rover-Honda Collaboration James Fairhead Stories from the Rover/Honda collaboration suggest that after a period of intense puzzlement, many Rover engineers eventually `made sense' of the unfamiliar ways of their Japanese counterparts and (somewhat against the predictions of theory) changed their world-views quite fundamentally and painlessly as a result, only latterly facilitated by senior management. This is suggestive of the powerful sensemaking and learning leverage that may be derived from story-telling processes naturally functioning at operating level, especially when they make knowledge available of alternative `paradigmatic' assumptions about organising and identity. The paper draws from a wider ten-year programme of inductive case-based research into product innovation, organisational learning and change.
Introduction
T
he decision to forge a collaboration between Rover, the UK-based car-maker then called British Leyland Motor Corporation (BLMC) and the Japanese company, Honda, was made, during the late 70s after `careful analysis' ± according to a source close to the decision-making process (Snowdon 1987). In particular, BLMC urgently needed a partner to reduce the cost of developing and maintaining a complete and viable product range, and to help remedy its historic problems with product quality. As well as sharing development costs, Rover could in return aid Honda's ambitions for growth in Europe (where it had a relatively weak presence at the time) by making available its spare capacity to the company, and also by contributing its understanding of industry infrastructure and consumer tastes in European markets (Faulkner 1997). Yet although the decision to collaborate was made by senior managers primarily to fulfil technological, market and financial imperatives, the collaboration was, in an important sense, self-organising, and its purposes emergent. For various reasons, and in various ways, the partnership apparently helped precipitate not just a re-alignment of assets, procedures, techniques and technologies, but an amount of deep-rooted cultural # Blackwell Publishers Ltd 1998. 108 Cowley Road, Oxford OX4 1JF and 350 Main St, Malden, MA 02148, USA.
change of a `paradigmatic' nature which could not even have been conceptualised at the outset.
The nature and significance of paradigmatic assumptions To illustrate the nature and significance of paradigmatic assumptions, we can usefully draw from well-documented stories about the personality and leadership style of Margaret Thatcher. Not only media reports but analytical biographies (e.g. Gardner 1996) have invariably discussed at length her oft-stated beliefs about who was `one of us' (in her own celebrated phase) and who was not. As Gardner notes, her tendency to see life in terms of a struggle between good and evil, with people populating either one camp or the other, was reflected in the way she would dichotomise and marginalise in myriad different spheres of life: free-marketeers (`drys') versus interventionist and consensualist `wets'; business people, self-made individuals and people working in science and engineering versus government bureaucrats, trade unionists and the intelligentsia; patriots versus traitors. From just one insightful observation about Thatcher's tendency to dichotomise and marginalise, a whole complex range of idiosyncratic actions, behaviours and beliefs
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suddenly make a whole lot more sense ± not just to us, as readers of her biography, but evidently to those who dealt with her on a day-to-day basis. Ultimately, Gardner suggests, this tendency to dichotomise and exclude helps us make sense not just of Thatcher's career but her downfall. While other leadership figures might be less explicit and articulate about what we might call their theory of context or inclusion, both history and common-sense suggest that, from the earliest days of our childhood, we all like to `know where we stand' with significant others, and that in the absence (usually) of explicit and unambiguous information on the subject, we will expend a considerable amount of mental energy trying to infer this. Moreover, how we act (and who we are) is significantly determined by a small set of such basic `paradigmatic' assumptions, which together effectively constitute a theory, or grammar, of action and process. More formally, following Brown (1978 p. 373), we might see paradigms as ``those sets of assumptions, usually implicit, about what sort of things make up the world, how they act, how they hang together, and how they may be known. . .'' This paper aims to examine how organisational actors of all sorts possess such theories, how these may, in exceptional circumstances, change, and how they might usefully be at the heart of any theory of innovation. For as Boland and Tenkasi (1995) note, surfacing and challenging the often implicit assumptions that underlie a paradigmatic argument is an important element for innovative knowledge-work. What is interesting in the Rover stories, I shall suggest, is first that they very graphically support this contention, while qualifying, extending and illustrating it. For the stories effectively describe and deal not with specific first-order assumptions about the nature of task and technology and how these frame, promote and constrain the innovation task (the traditional Kuhnian emphasis) but with how innovation is even more fundamentally framed by more generalised second order assumptions about the nature of identity, action and belief. Secondly, the stories are interesting for what they reveal about the processes by which such deep-seated paradigmatic beliefs can change. In short, the stories suggest a dynamic that would seem to run totally against the flow of play envisaged in both the sensemaking and culture literatures. For one thing, paradigms are conventionally seen as difficult to surface and difficult to change (Schein 1985). Indeed some have
Nature of paradigms
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argued that paradigms are so difficult to `unlearn' that wholesale managerial firings may be required in order to effect significant culture change (Nystrom & Starbuck 1984). At the very least, a well-established paradigm has a `deadly power to reject ideas which are perceived as challenging it' (Czarniawska & Joerges p. 37). And where paradigms are less developed and there is disagreement about paradigm validity, then conflict is likely (Thompson & Tuden 1959; Pfeffer 1981; Weick 1995). For another thing, to the extent that the literature does actually admit of the possibility of paradigmatic change, the traditional emphasis has been on the important role of leadership and top management teams in effecting such change (Lundberg 1985; Gagliardi 1986; Dyer 1985; Schein 1985; Brown 1995). At the very least, that the role of leadership is to envision a `future state' which can be aspired to by employees, is promoted as a central tenet of both Western ODoriented approaches to managing change (e.g. Burke 1992 p. 145) and in the popularised version of Japanese big company management (e.g. Nonaka 1998). Yet this would not be the Rover scenario, at least in the view of operating-level managers, as revealed in their stories of innovation learning and organisational change. Thus, the research questions inspiring this paper can be set out as follows. In broad terms, how and why did this change process unfold in the way it did? More specifically, what was it that prompted and promoted the surfacing and revision of deep-level assumptions about the nature of the project and organisational world? How come this was achieved with relatively little conflict and such an unusually high degree of explicitness? And finally, what was the nature of the role played by Rover's senior management in this process?
Research method and empirical data sources The field research on which this paper was based took place between 1985±1986, and between 1989±1993. The research was part of a wider study of change processes within innovation projects, and organisations and their environments more generally. Interviews within Rover, in the earlier period, took the form of open-ended and very generalised discussions of how the New Product development Process was currently managed, and how current practice differed from practice in the past. These interviews
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frequently took the form of story-telling sessions, and these were noted verbatim as far as possible. Interviews at Rover, in the later period, were also open-ended, but focused more specifically on a number of recently-completed projects. Project participants were interviewed at various different levels in the organisation, up to and including Director level. But while focusing on specific projects, the data-gathering approach was sufficiently open to allow for diversions into company and industry history, wider organisational context and some private personal background, too. This second phase of research within Rover was, as it happens, part of a much wider and ongoing study of changing practices and rationalities within product innovation. This involved seven business units drawn from four companies and ranging across five engineering-based sectors, including Rover, and was likewise both contextual and processual in its focus. This more comprehensive study was likewise conducted in two phases. The first phase focused on strategically significant innovation projects, and consisted of retrospective analysis. Of the nine major projects, Rover provided two ± the development of the Land Rover Discovery and the `Roverisation' of the old Mini Metro whereby the ageing car was re-styled, given a new `K-series' engine and re-branded as the Rover Metro. The second stage of this research involved predominantly longitudinal analysis of 10 further small-scale projects in just one of the previous firms. These projects were undertaken and reviewed at a time of considerable widescale change both in the organisation and the industry. The research emphasis in this latter phase therefore widened, to examine more explicitly not just processes of change within innovation practices, but processes of wider organisational and environmental change. The relative emphasis on planned, directed, change in this firm provided an interesting contrast to the more emergent processes of change observed in Rover that we describe in this paper, and lends support to theories of change which allow both for control and contingency (Czarniawska & Joerges, 1996).
The interpretive perspective Throughout these various research studies, an `interpretive' perspective underpinned both data-gathering and analysis ± as has been recommended but rarely attempted in the field
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of innovation studies (Van de Ven & Rogers 1988). An interpretive approach to studying new product development projects involves a number of assumptions. First, that the subjective experience of people involved in projects, however contradictory, is not only valid but of primary concern to the researcher (cf Burrell & Morgan 1979 p. 28). As Van de Ven & Rogers point out (1988 p. 638), product innovation `is a highly uncertain and complex type of behavior which can best be understood from the point of view of the actors involved. . .' Secondly, and more specifically, the aim of an interpretive approach is to try and understand the (more or less explicit) interpretations of participants ± how they individually and collectively `define their situation' (Silverman 1970) and how they socially construct their `realities' based on such interpretations through their interactions (Berger & Luckman 1967). Thirdly, that the `meanings' inherent in the social world, including these interactions, is significantly constituted by symbolism and symbolic action, so that an interpretive approach to management is significantly concerned with the nature and meaning of managerial symbolism. This entails a fourth, and less widely appreciated aim of interpretive approaches, which is to generate `outsider' and higher order interpretations of how these myriad particular behaviours and participant interpretations may be both revealing and reinforcing more general rules, recipes and `programmes' for the governing of behaviour. The search, in other words, is for the conceptual articulation of `systematic relationships' between all sorts of diverse behaviours, artefacts and other symbolic phenomena (Geertz 1973 p. 44). Interpretivism therefore, is concerned with both the particular and the general. Neither, it is argued, should predominate, for if so, an academic study can either become `imprisoned in the immediacy of its own detail' (ibid. p. 24) or else `locked away from its proper object, the informal logic of actual life' (ibid p. 17). As it happens, this methodological prescription for developing generalised higher order `rules' of behaviour, explicitly grounded in an understanding of particular operational behaviours at a detailed level, was quite unintendedly followed by many of the participants in the Rover change process. Effectively, many of the participants in the Rover/Honda partnership were engaged in precisely the same sort of inductive theory building or `sensemaking' described and practised not just by interpretive anthropologists, but sociologists and organisational
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theorists (e.g. Glaser & Strauss 1967; Weick 1995). It is through an interpretive approach, in other words, that both academics and practitioners may try to reveal the sort of paradigmatic assumptions, discussed above, which may or may not be supportive of innovation and change processes, and yet are conventionally not seen as easily susceptible even to articulation, let alone management. Finally, we should note that the data we present as evidence of this very subjective (or rather, inter-subjective) sensemaking process will itself, appropriately enough, not make any claims to objectivity. The data will initially be presented in the form of quotes or `stories' which recount people's recollections of both `historic' and evolving ways of behaving, interpreting and constructing their operational world. From the non-positivist perspective implied by the interpretive approach, the appropriate criterion for judging these observations is not their objective accuracy but for, organisational participants, their plausibility (Weick 1995) and, for others such as ourselves, their capacity to provoke some occasional insight into an unfamiliar world. As Weick notes, people in organisations make sense of the world, in all its complexity, largely through the `enlargement of small cues' and their embodiment into stories: ``a good story holds disparate elements together long enough to energize and guide action, plausibly enough to allow people to make retrospective sense of whatever happens, and engagingly enough that others will contribute their own inputs in the interest of sensemaking'' (Ibid p. 61). In other words, accounts of `what happened' during the Rover/Honda collaboration may differ substantially in terms of actual detail, but this does not necessarily disqualify them from having the status of `truth' ± in the view of people within Rover, and hence for interpretivists. More significant is the extent to which stories are interesting enough to be listened to and re-told, and plausibly suggestive enough of some more or less explicit `moral' or `morals' that stimulate action and gives sense, direction and meaning to it. Thus, while we may be trafficking in `fictions' (Geertz 1973 p. 15), they are fictions which promote the construction of events that are factual, even if these are in turn fictionalised, and so on.
A few sample stories #1 Strange English Ways ``Not so long ago, you had to make an appointment even if you wanted to lick senior management's boots''
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[Reminiscence of late-70s British Leyland, interview 1985]
#2 Strange English Ways ``You could be designing a body panel, and you wouldn't even be allowed to know what vehicle you were designing for. It was as if you were doing secret government work ± everything was done on a `need-to-know' basis'' [Reminiscence of late-70s British Leyland, interview 1985]
#3 Strange English Ways ``It was 1979, and the future of the whole company was pinned on the Mini Metro. We were about half way through the programme when we had to get through a major review with the NEB [National Enterprise Board]. This was the thing that would decide whether the government would underwrite our capital investment programme. They asked to see the results of our consumer testing ± but we hadn't done any. We were still following the old Issigonis principle that he laid out for the Mini twenty years before. `What the customer wants is `maximum interior space; minimum exterior dimensions'. That was all we needed. It was like an article of faith, handed down on tablets of stone. So the Review board insists that the prototype car is put into test, and it completely bombs out. It was too bare and tinny. People had come to expect car interiors where the trim was much plusher and more sound absorbent. That was much more important than an extra few inches elbow room. So we completely re-designed the car ± and that was the Metro that we eventually launched.'' [Interview, Austin-Rover, 1985]
#4 Strange Japanese Ways ``A few years back, whenever we hit a problem, our managers would bang the table and shout: `no excuses ± I just want action. Don't come back till you've fixed it!'. So people would hurry away and work on some sort of quick-fix to mask the problem but never really got to identify the root causes. But what we saw the Honda guys doing was quietly going off and getting together a whole pile of data and analysis, documenting absolutely everything, taking whole piles of photographs, trying things out and going very slowly and methodically. To begin with we thought it was quite funny, they'd take so long doing it, and the amount of information they gathered was vast. Whereas we'd come
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up with something within the day, all on one side of paper. But the difference was, they'd make sure they really understood the problem and that it was fixed once and for all. When we had to make presentations side by side, the difference was embarrassing. So now, when we've got a problem, the first thing we shout for is information. Unless you've done your homework and got all the information together, no-one's interested in hearing what you've got to say . . .'' [Interview, Production Engineer, Rover Group, 1989]
#5 Strange Japanese Ways ``Above all you have to be impressed by their sheer attention to detail, especially at the front-end of a programme. They go round and round the same buoy dozens of times until they decide it's right, then they go for it. Almost to the point where we're saying: `we've got to release, we've got to release the drawings and get going'. And they're saying `no, not time, we've got to think about it, we've got to talk about it.' Then suddenly they say: `now it's time to go' and they go straight in, straight to the product, all the problems are settled, no re-runs, no re-issues, no re-works, no deviating. . .'' [Interview, Technology Manager, Rover Group, 1989]
#6 Strange Japanese Ways ``I remember once we have some sort of design/production problem so we were setting up a meeting with some suppliers and some new guys from Honda. It was only a couple of days before the meeting but we were still a bit vague about who was going to be there from the supplier side. The Honda engineers wanted it all spelt out ± who was going to be there, what their job responsibilities were, what was their technical background. We thought they were being a bit pernickety, particularly when they insisted we should postpone the meeting, since we couldn't be sure who was coming. When we did eventually have the meeting, the supplier's real technical experts were there, the specialists, who knew everything there was to know about the part, and likewise from our side, we had all our relevant specialists. Normally it would just be a few of us relaying the problems we were having to some message-takers, who would duly report back and eventually get back to us with some suggestions. This time, we had an in-depth technical discussion and virtually solved
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things there and then. To do this, the last thing you are interested in is people in smart suits being polite. You have to talk face-toface with people who really know what they are doing.'' [Interview, Engineering Manager, Rover Group, 1992]
#7 Strange Japanese Ways
We shout for information
``When the Honda people first came over, one thing we could never quite understand was why on earth their meetings went on for so long and why on earth so many people were involved. Sometimes they would still be going late into the evening, and you'd even see people curled up in the corner fast asleep. I remember going to my first meeting with Japanese engineers and being astonished by the way they did things. There was some Rover engineer who didn't have the information he needed, so he summarised the situation, promised to work on the problem back at base, once he'd got his information, and said he'd report progress at the next meeting in a couple of weeks time. As he was getting up to go one of the senior Honda engineers suddenly said: `No! You no go! You fax!' He had to say it a few times before the message got through, but eventually he understood. The engineer went off to fax for the information to be sent through, and meanwhile, he had to wait patiently in a sort of roundtable queue for several hours before they returned to sorting out his problem. It makes for horrible long meetings, but by working things through there and then, when everyone concerned with the problem is actually in the room, you make much faster progress than if you just have meetings to report progress and rubber-stamp decisions that actually stick and don't have to be undone the next time round. [Interview, Engineering Manager, Rover Group, 1991]
#8 Strange Japanese Ways ``We have one very small joint venture. . . where we had to take in a number of very bright young designers who worked with us and a senior manager. As far as we could see, he did nothing ± he just sat around at meetings ± he came to every meeting and just sat there and didn't contribute anything. Eventually we found out that his role was to go round all the team members after each meeting asking `are you all right?' `did you understand all that?' `is that OK?' and `how's the wife?' Seriously. . . making sure that their family life is all right, that they're not over-
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worked. . . They don't worry about the technical issues ± they've got all the young guys to take care of that. . .''
Stumbling towards a cosmopolitan process-based identity Phase one ± the big freeze
Managers from the glory days Volume 7
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In the old days at BMC/BL/Rover, we might guess that theories of action and identity were simple enough: `we' are clever and talented, but misunderstood by `them' (see stories #1, #2 & #3 and the first half of story #4). There was a proliferation of `thems': `they' could be other functions, project teams or (as the stories suggest so vividly) more junior or more senior managers. Thus the prevailing world view can be inferred as `separated', exclusive and, above all, parochial ± that is, locally-rooted and narrow in its scope of concern. It was a common belief, and doubtless true, that there were many talented engineers within the company (attracted in some cases by a heroic zeal to help turn the company round) but that they were soon ground down by `the system' and that they either put up with the way things were, or left As if to legitimise this outwardly positive self-image, in the face of consistently negative feedback from public opinion, stories were told of such talented people, who came and left at the highest level. But deep down, the reverse of this self-image would doubtless also have held: at times like British soldiers in World War One `lions led by donkeys' but also `donkeys led by lions'. Other stories from this era, in the same pessimistic vein, concern how senior managers were in the habit of usurping car design decisions, with disastrous and sometimes comic effect. And stories would also be told about the pressure to meet deadlines ± whatever the consequences. Better to release a car to production that was riddled with faults than to miss the appointed hand-over date. While it was common knowledge that this sort of short-termism persisted, nothing systematic was ever done about it. A relentless pressure for `cost effectiveness' and `action' (see also story #4 and #5) was later seen as a major reason for cost effectiveness and action being mostly frustrated. And either to preserve some hope for the future, or to justify current feelings of helplessness, stories were also told of heroic and charismatic managers from what sound very much like the company's glory days ± Alec Issigonis, who designed the Mini, and Spen
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King who designed the Range Rover. The moral of such stories, doubtless, was either (for optimists) `one day the Messiah will come' or (for pessimists) `we shall not look upon their like again'. It was into this perverse and parochial world (made just about tolerable by the fact that everything would always go wrong whatever you did, and that it was always somebody else's fault and someone else's problem) that the first Japanese engineers started arriving in the early 80s. Except, perhaps, for a few fervent Messianics, initial reactions to the Japanese, we might infer, were of amusement and puzzlement, perhaps tinged with jealousy and feelings of threat. Initially, at least, they would presumably have been seen as just another `them' group. The tendency (at least among engineers who were not yet involved in the collaborations) might at first have been to use the bare plot-lines of stories #4, #5, #6 & #7 (i.e. just the puzzling bits) to justify attempts at psychologically marginalising them. For example: `Japanese engineers are pedantic and stubborn.' `They are always asking questions.' `They are nosy.' `They are always distracting the track-workers.' `They take forever.' `They go round in circles.' `They work stupid hours.' `They love big meetings.' `They are meant to be such hard workers but they go to sleep on the job. . .' The shock must have been twofold: bad enough to have people intrude deep into your professional life, like a cuckoo in the nest, and doubly shocking that nothing they did seemed to make any sense. In Barley's (1986) terminology `all the standard plots of encounters' were disrupted, thus precipitating, we might guess, a flurry of sensemaking activity, whose traces are vividly preserved in retrospective accounts of change. And with a disruption to plots or scripts, inevitably comes a threat to identity. It is through coherent interactions with significant others, after all, that a sense of identity is sustained (Weick 1995 pp. 18±24). This threat to identity also prompted the usual defence mechanisms of humour and disparagement. Bitter-sweet jokes about sleeping on the job and going round in circles, for example (stores #7 & #5). It is difficult for outsiders to judge how long such rejection lasted or how serious or commonplace it was. The younger and more junior managers, who were the source of many of these retrospective stories, might of course have overplayed the extent to which they were quick off the mark to appreciate Honda working practices, and how they were, by implication, part of a special eÂlite, with privileged connection to
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Table 1 Story-telling within Rover Phase 1: stories from the big freeze THEME
SUB-THEME
The glory days
Issigonis was a hero Spen King was a genius
Bloody Management
Managers are idiots Managers are autocrats
Poor us
We are lions (led by donkeys) We are donkeys (led by lions)
Strange Japanese
They are pedantic They're always asking questions They are info-maniacs They take forever They work stupid hours They love big meetings Their meetings last forever People go to sleep in them They go round in circles They are nosey They read your computer screen They talk to the track-workers They're so slow at prototyping Their prototypes are boring They're so quiet But they're so stubborn The older guys do nothing etc
more senior champions of change. And even discounting such politically partisan attempts at `sense-giving' (Gioia & Chittipeddi 1991) we should bear in mind that all stories need to tell well ± there is something rather satisfyingly mythic about exaggerating the extent to which once-proud Rover engineers were reduced to spending a full forty days in the wilderness, before seeing the true light and achieving redemption (cf Campbell 1985).
Phase two ± the organisational iceberg starts to disintegrate But for all the accumulated historical inertia, enlightenment ± of some initial glimmering variety ± might not have been too long in coming. For a start, the race to make sense would have been run in a highly committed way. Many of the factors pre-disposing to commitment were present (Staw 1977; Weick 1995 pp. 156±162). From the point of view of individual Rover engineers in the first colla-
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borative projects, the act of collaboration was largely voluntary, it was seen as an irrevocable opportunity and above all it was highly public. Project members would have been aware that all eyes were upon them ± not just within the firm, but within the industry, and among the public at large. Moreover the Honda engineers, for all their funny ways, could not easily be rationalised away as just a bunch of foreign eccentrics. For one thing, it was universally acknowledged that they managed to design and launch cars twice as fast as their counterparts at Rover, and to universal acclaim within the car industry, and the engineering profession. And for ambitious young Rover engineers, doubtless the men from Honda would have been seen as a fast road (at last) to the salvation that was rightfully theirs ± if only they were clever enough to understand. . . Thus, being archetypes, the bare plot-lines of stories #4, #5, #6 & #7 would have been reinterpreted by at least some Rover engineers, soon enough, to make rather more positive
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Symptomatic and recipe knowledge
inferences than the ones suggested in Table 1. For example (see Table 2) subsequent iterations might have yielded simple but often quite particularistic morals like `take time to release drawings'; `involve your suppliers' `use meetings to solve problems' and `look after your team' ± and many more messages besides. But we should be clear that these initial understandings interpret the basic story-lines in only a literalist sort of way. These sorts of interpretations add enormously to the stock of knowledge about how to run projects in a Honda-approved way. But the likely result, to begin with, is a wild proliferation of what we might call `symptomatic' or `recipe' knowledge. It is a sort of received dogma but it is not yet deeply understood enough to be bent, stretched and, above all, rationalised. All that results is a long list of project management prescriptions which, in the absence of a simplifying schema of some sort, are difficult to hold in consciousness ± especially in the midst of what is already a very fraught and complex project process. And doubtless, in the absence of any deeper underlying rationale, it is difficult to avoid contradictions and arguments about the `right thing to do'. In short, the initial acquisition of symptomatic knowledge, for all that it would later be consensually validated, was, we suspect, accompanied by a fair degree of confusion.
Phase three ± slow re-freeze through deep-processing learning Perhaps quickly in some cases, and rather more slowly in others, an underlying pattern eventually emerged to this mixed mass of sense, nonsense, description, prescription, fable and moral. Stripped of their contextual particulars, through the editing and labelling process that is typical of institutionalisation processes (Sahlin-Andersson 1996), almost all the confusing symptomatic lessons from the Honda collaboration could be (and were) reduced ± and hence given extra explanatory and rhetorical potency ± to two basic prescriptions or `meta-values') relating to assumptions about identity, space, reality/truth and time (Fairhead & O'Sullivan 1997). The first of these was `involve all factholders'. The second was `understand your process'.
Meta-value #1: `Factholder involvement' For many Rover engineers, the word `factholder' was a deceptively simple neologism that gradually came to cover and govern
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a multitude of situations and behaviours, and by inference, could be seen as conferring status and a strengthened sense of identity upon the lowliest employee. The meta-value `involve all factholders' can be seen to emanate naturally from a number of the stories cited above. When Honda engineers refused to have a supplier meeting without including supplier engineers (story #6) they were demonstrating this basic norm. Likewise, when they refused to release drawings before exhaustively checking with front-line production workers (and others) that the drawings would work (story #5). Similarly, it is, in large part, factholder involvement that explains the over-sized Japanese meetings referred to in story #7. And factholder involvement also allows junior engineers (who typically have the most up-to-date technical knowledge) to exercise their talents to the full ± without having to work through a screen of more senior managers (cf story #8) and helps deprecate the traditional aloofness of senior management which was suggested in stories #1 & #2. It also implies the desirability of reducing reporting levels and encouraging informal, all-status get togethers, with no-holds barred, wherein was enacted an enhanced, less parochial, vision of identity and role. Indeed, such meetings were also neologised ± as `events' and `gebas' ± from the Japanese word `geba-kai', meaning `everybody meeting'. Thus suppliers could legitimately be invited to view and comment on even the earliest prototypes, and customers could be involved at very early sensitive project stages ± rather than being assumed away by company dogma, as in story #3. The norm of factholder involvement could also be used to suggest and justify a whole range of other revised working practices, such as . co-location of design engineers, pur-
chasers, production engineers working on the same car area in the early design phase (this helped increase the extent of designs that were `right first time' and thus remove lengthy and costly re-iterations) . setting up of `New Mode Centres' where design engineers, purchasers and production engineers worked collaboratively to design and build successive prototypes and early production vehicles (this helped speed up the complex flow of information on late-stage design changes) Already, we begin to see how a multitude of actions and behaviours can be associated with a single concept, `factholder involvement', and how this tends also to imply a
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Table 2 Story-telling within Rover Phase 2: partial unfreezing a minority of engineers begin to challenge past interpretations and develop sometimes paradoxical `symptomatic' inferences about Honda behaviour THEME
SUB-THEME
The glory-days
Issigonis was a hero Spen King was a genius Were Issigonis & King geniuses?
Poor us
[As Table 1] At least we knew where we were
Clever us
We're learning all the Honda tricks
Strange Japanese
[As Table 1]
Clever Japanese
Development speed is everything But take time to release drawings Get things right at Design stage Get all angles covered Get everyone onside Don't be domineering Sometimes you have to be stubborn Discuss things before accepting Talking is important Listening is important Information is key Tell people what's going on Milestones are everything Milestones aren't everything We need to prototype earlier We should make more prototypes Perfect prototypes are not the point Avoid prototype components Release test results earlier Bring all your papers to meetings Get everyone together Involve your suppliers Work together Chaotic meetings often deliver Young engineers often know best Young engineers often don't know Look after your team Let your team look after itself Progress meetings are a waste of time Use meetings to solve problems Know your suppliers Trust your suppliers Don't trust your suppliers Blame process not people Know your process Process is important Process is only half the battle Details are important But don't get bogged down in them etc etc
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certain view of time and process. Both the `factholder' concept and what I will call below the `short cycle' principle, can help make sense of 1001 different situations, otherwise overladen with symptomatic detail, that never made much sense before, except in a (more or less ineffectively) rote-learned recipe sort of way.
Meta-value #2: `Understand your process' With these `everybody meetings', process inevitably becomes less planned, more emergent, and more iterative ± at least in the early stages of a project or endeavour. Information about projects flows in a pattern characterised by `little, often and early'. It might, metaphorically, be called a `just-in-time' approach to information processing, whereby information is not inventoried and released in batches, but flows more naturalistically. Problem-solving iterations effectively become short-cycle rather than long-cycle, and consequently more tolerant of complexity, ambiguity and changing circumstances. This represents a radical shift in the conventional theory of action (inherited originally via Ford and the US Aerospace industry) typical of programming planning (PPP) approaches, whereby design tasks are `functionally decomposed' and separated into specialised activities that are hermetically sealed into relatively lengthy agglomerated phases. Compared to the PPP approach, an `everybody meeting' project philosophy, that even extends to suppliers (e.g. story #6) will inevitably entail unscripted problem-solving meanderings (see stories #5 & #7). It may therefore appear messy and difficult to predict, measure and control. But process paradoxically becomes more central than under a more conventional bureaucratic reÂgime where a long-cycle `end-result fixation' may paradoxically undermine process in the here and now. Under a short-cycle reÂgime, each little step of process is frequently and minutely checked and adjusted, and quite possibly rechecked, and re-adjusted, so that subsequent process can become direct, linear and inexorably focused on tightly-defined outcomes. This, Rover engineers found, helps explain why Honda can develop cars in half the time, even though they `take forever' in the early stages. Stories #4 & #5 make the point well ± it is sometimes possible to go fast by going slowly. Story #7 reminds us that even sleeping can serve as an effective action-oriented policy ± a strategy, if you like, of holding back in order to make more rapid advance subsequently ±
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as the French say: `reculer pour mieux sauter'. Story #4 suggests that an unbalanced fixation on end-result can be self-defeating. Eventually, once this underlying pattern became clear to at least some Rover engineers, and was subsequently (or perhaps concurrently) espoused and championed by senior managers, `process' effectively became the second paradigmatic pillar of the emerging `official' Rover world-view. If anything went wrong, or needed to be improved, then the first question that Rover neophytes were encouraged to ask was `what's the process?' This question became the trigger for attempts to identify an underlying pattern in recent project actions and events and compare this to what was effectively a generalised and idealised theory of process, running somewhat on the lines described immediately above. Like the `factholder' inclusion theory described above, this new generalised theory of `process' had immense explanatory power, helping to identify and make sense of a multitude of more specific potential actionpaths and helping suggest preferred options. For example: . early reporting of possible bottlenecks to
. .
. .
.
Project Managers, even by lowly functionaries (the design equivalent of factory workers being empowered to `stop the line' early verbal reporting of test errors, rather than waiting for the end of lengthy testphases the deconstruction (or de-agglomeration) of all project phases (and sub-tasks within these) to see if early information release can enable downstream phases to get off to an early start the making of more prototypes, of a more provisional nature, earlier in the project process the sharing of prototype-build responsibility to encourage faster, short-cycle information flows between engineering and production the adoption of `learning on the job' neologised as `focused learning' (cf Lave & Wenger's (1991) notion of `situated learning')
While some of these behaviours, such as `focused learning', may simply have been imitations or adaptations of existing Honda practices, many others would have been autonomously generated. They would simply be extrapolations of the basic assumptions implied by the two meta-values. For example, assuming that the generalised underlying assumptions about process are threefold:
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i) that action steps should be taken bit by bit, ii) that they should be taken as soon as feasible, and iii) that they should be repeated, taking mistakes and potential improvements directly into account, then it would not have been difficult for anyone at Rover to see the advisability of building more prototypes, of a more provisional nature, earlier in the process and also, for that matter, the desirability of eliciting earlier responses from customers, suppliers and, indeed, from any other relevant factholders. In such a way, not just these specific actions and behaviours, but all the other aspects of `symptomatic knowledge' cited in Table 2 could, in theory, have been predicted by the two generalised structuring principles (or meta-values) outlined above. In practice, they were doubtless used both to make sense of, and extrapolate, many other new behaviours and situations. This is depicted diagrammatically in Table 3 below. Not only this, but these two simple principles offer to both individuals and groups a revised sense of identity. One based a conception of role that is less static and narrowly structurally-determined than in the traditional engineering organisation. An identity based, instead, on a `cosmopolitan' conception of self (cf Gouldner 1957; Hage & Dewar 1973; Fairhead & O'Sullivan 1997) that is rooted in process or `doing' rather than `being' (cf Chia 1996). Such a revised selfconcept has, thereby, the advantage of being both stable and adaptive ± in the face of confusing organisational demands for both
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change and certainty, on the one hand, and for both speed and quality, on the other. From a cognitive point of view, moreover, it has the supreme advantage of simplicity (cf Weick 1996) and of inducing action while reducing anxiety. For initially, the inevitably piecemeal introduction of practices listed in Table 2 might have had a de-stabilising impact on project organisation, and an eroding effect on traditional engineering and management identities. In traditional organisations, engineers and managers are defined not just by professional competence, but by occupation of a particular structural position in the organisation. Such a position implies a quasi-monopolistic right to exercise these competences to the ultimate degree and without significant compromise. People `know where they are' and derive comfort from such a structured approach (cf Menzies 1960; Perrow 1986). Practices such as those listed in Table 2, however, effectively dissolve these props to identity, requiring product engineers (for example) to release information for consideration and commentary by others, at an early stage, such that it is only probabilistically `right' and is subject to demands for questioning and compromise. Engineers can find this irritating and even threatening ± as in the Rover Discovery project, begun in 1987, where design engineers were spatially located not by function but according to vehicle area (such as `rear door'), and expected to discuss their early drawings with their counterparts allocated to the same area by Purchasing, Production and Commercial.
Two simple principles
Table 3 Story-telling within Rover Phase 3: slow-refreeze A growing minority begin to make sense of paradoxical Honda behaviours, (and begin to be able to develop a coherent behavioural repertoire of their own) by having recourse to two `deep process' meta-values 1001 ASPECTS OF SYMPTOMATIC KNOWLEDGE
EMBODIED IN TWO ORGANISING PRINCIPLES
Development speed is everything But take time to release drawings Get things right at design stage Get all angles covered Get everyone onside But some people don't matter Don't be domineering Sometimes you have to be stubborn etc etc [As Table 2]
Know your process Involve factholders
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`Plus cËa change' paradox
Once, however, such practices are seen in relation to the two organising principles or meta-values, and the benefits of these are seen to flow through to performance outcomes, it seems likely that a new more fluid and cosmopolitan sense of identity can be established (Fairhead & O'Sullivan 1997) which, while founded on a bed-rock of unchanging second-order assumptions, is capable of generating and giving meaning to a multitude of first-order operational actions and behaviours which change and develop according to perceived situational contingencies.
Conclusions The Rover-Honda story that we present suggests that paradigmatic `deep-process' learning is, indeed, possible. Furthermore, it may be more than usually `leveraged' than other sorts of learning, in the sense that it has a far-reaching impact on people's ability to make sense of highly complex and uncertain situations, and take appropriate and effective action. Yet despite the sense-making leverage that the concept of paradigm change offers (both to organisational members and to students of organisation), organisational researchers have tended to reserve the concept of paradigm for discussions of their own high theory (e.g. Burrell & Morgan 1979; Astley & Van de Ven 1983; Chia 1996). With a few notable exceptions, (e.g. Green 1987), rarely is the paradigm perspective applied to the organisational world itself, rarely is the nature of paradigmatic knowledge and paradigm change illuminated by empirical observations, and rarely is this omission even commented on. More specifically, while the generative and explanatory significance of such second-order concepts is explicitly recognised in other areas, such as interpretive ethnography (e.g. Bateson 1972; Geertz 1973); cognitive anthropology (e.g. Kluckhohn & Strodtbeck 1961); the psychology of change (e.g. Watzlawick et al. 1974); the psychology of belief and personality (e.g. Rokeach 1960) and cross-cultural management (e.g. Hofstede 1983) many accounts of organisational and strategic change and learning (with some notable exceptions such as Argyris & Schon 1978]) do not explicitly distinguish between first and second-order concepts and how they relate one to another. Thus, beyond raising doubts about the possibility and longevity of profound change (e.g. Nystrom & Starbuck 1984), they shed little light either on how such change might nonetheless possibly be achieved ± or on how, by contrast, change is sometimes more apparent than real in its
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consequences, to the extent that things can seem to change, yet remain ever more fixed in essential nature. This latter condition, which we might call the `plus cËa change' paradox, would seem to be of both academic and practical interest. This brings us now, full circle, to the research questions posed at the beginning of the paper. Given that change is so often only superficial, what was it that, in this case, prompted people to do rather more, metaphorically, than just re-arrange the organisational deck-chairs? More specifically, what was it that promoted the surfacing and quite drastic revision of deep-level organisational assumptions? How come this was achieved with relatively little conflict or resistance, and such an unusually high degree of explicitness? And all this, furthermore, in the absence of a triggering crisis situation? From our analysis above, some answers, at least, can be proposed. While both sensemaking and story-telling are doubtless a continuous feature of most organisational environments, they may apparently be elevated to fever pitch by the irruption of a real-life alien role model into the supremely `action laden situations' (Weick 1995) provided by product development projects. For Rover engineers, the Honda role model was not distant, and diffuse, packaged blandly by authors or consultants in such a way as to inspire positive feelings (cf Sahlin-Andersson 1996) but raw, immediate and uncomfortable. All the more so, because it was undeniable, in a way that packaged role models can never be. This uncomfortable role-model immediacy was of course a primary factor that made it possible, but we should also note the sheer persistence of the psychological processes set up by cognitive dissonance (Festinger 1957) acting in tandem with ``man's propensity for inductive generalisations'' (Weick 1995). Further, somewhat against the flow of much of the change literature, we should recognise the criss-crossing interplays of authorship between different hierarchical levels. On the one hand we should pay tribute to the sense-giving contribution of people at the operating level and the sheer energy of their story-telling and sense-making processes. On the other, we should not underestimate the role of senior managers who also participated in this process, and who recognised, by looking back at operating-level experiences in the recent past, and talking these through with their people, an emerging sense of the future. This they helped enact through their whole-hearted espousal of neologisms and new practices, through
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modifying existing structures and creating new ones, and last but not least, through encouraging the harnessing of artefacts and environments. Special spaces (e.g. the `New Model Centres') were designated for newstyle `geba' type meetings and events, and all manner of graphically-powerful information and artefacts were made highly visible ± to all comers ± who, themselves, enacted both newstyle behaviours and artefacts. Finally, echoing both interpretivism (e.g. Geertz 1973) and the actor-network perspective (e.g. Law 1992) we should, in conclusion, not underplay both the symbolic and instrumental role of inanimate objects in helping precipitate this unusually profound change of consciousness, and should doubtless discuss this in more detail in the near future. At least one question remains. How come this change apparently happened without an undue amount of conflict? The answer, perhaps, lies in the unusual order of consideration (cf Pfeffer 1993). The conventional planned change approach would involve changing structures and procedures at an early stage. But this is a highly visible sort of change, however innocuous it might seem. In any organisation, everyone is watching how the metaphorical deckchairs are arranged, and linking this symbolically into deeper meaning systems related to power, authority and other sensitive aspects of personal and organisational reality. By contrast, within a more diffuse and emergent approach, as enacted by people at Rover, change is less sudden and cues are only ambiguously connected to outcomes. It therefore presents few obvious direct ramifications and political leverage points, and there is more time available to make sense of these, bit by bit, and adjust accordingly. Finally, to conclude our discussion of paradigmatic change and learning processes at Rover, we might ask ourselves how much the actual content of this learning or change is new ± or even foreign. For all that it was profound ± and hence unusual ± perhaps not very much. We might, in fact, suspect that is largely the re-presentation and re-enactment of traditional knowledge which has been historically marginalised, at least in larger firms, by the influence of modernising discourses. In other words, this new `Japanese' knowledge may not be so specific to Japan. When we say, for example, `concentrate on process' we might recall such well-worn proverbs as `it's not what you do, it's how you do it' or `less haste, more speed'. Instead of saying `involve all factholders' we might substitute `talk not to the monkey, but to the organ-grinder'. And when we next encounter
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the concept of `just-in-time' we might call to mind any number of old adages, not least the one about a `stitch-in-time' ± which `saves nine'. Our grandmothers knew all this, and much more, before the engineers at either Honda or Rover were even born.
References Astley, W. and Van de Ven, A. (1983) `Central perspectives and debates in organization theory'. Administrative Science Quarterly, 28, 245±273. Barley, S. (1986) `Technology as an occasion for structuring. . .' Administrative Science Quarterly, 31, 78±108. Bateson, G. (1972) Steps to an ecology of mind. New York: Ballantine. Berger, P. and Luckmann, T. (1967) The social construction of reality. Doubleday, New York. Boland, R. and Tenkasi, R. (1995) `Perspective making and perspective taking in communities of knowing'. Organization Science, 6:4. Brown, A. (1995) Organisational culture. Pitman, London. Brown, R. (1978) `Bureaucracy as praxis: toward a political phenomenology of formal organizations'. Administrative Science Quarterly, 23, 365±382. Burke, W. (1992) Organization Development (2nd edition). Addison Wesley, Reading, MA. Burrell, G. and Morgan, G. (1979) Sociological Paradigms & Organisational Analysis. Heinemann, London. Campbell, J. (1985) Myths to live by. Paladin, London. Chia, R. (1996) `The problem of reflexivity in organizational science'. Organization, 3:1. Czarniawska, B. and Joerges (1996) `Travels of ideas.' In Czarniawska, B. & Sevon, G. (eds) Translating Organizational Change. De Gruyter, Berlin. Dyer, W. (1985) `The cycle of cultural evolution in organizations'. In Kilmann, R. et al. (eds) Gaining control of the corporate culture. Jossey-Bass, San Francisco, CA. Fairhead, J. and O'Sullivan, D. (1997) `Marriages made in heaven: the power of network latency'. In Gemunden, Ritter & Walter (eds) Relationships & Networks in International Markets. Elsevier. Faulkner, D. (1997) `The Rover/Honda alliance'. In Johnson, G. & Scholes, K. Exploring Corporate Strategy. Prentice Hall, London. Gagliardi, P. (1986) `The creation and change of organizational cultures: a conceptual framework', Organization Studies, 7:2, 117±134. Gardner, H. (1996) Leading minds. Harper Collins, London. Geertz, C. (1973) The interpretation of culture. Basic Books, New York. Gioia, D. and Chittipedi, K. (1991) `Sensemaking sensegiving in strategic change initiation'. Strategic Management Journal, 12, 433±448. Glaser, A. and Strauss, B. (1967) The discovery of grounded theory. Aldine, Chicago.
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Gouldner, A. (1957) `Cosmopolitans & locals: towards an analysis of latent social roles.' Administrative Science Quarterly, 2, 281±306. Green, S. (1987) `Beliefs, action & strategic change: a study of paradigms in the UK Domestic Appliance Industry'. Academy of Management Best Paper Proceedings. Hage, J. and Dewar, R. (1973) `Elite values versus organizational structure in predicting innovation'. Administrative Science Quarterly, 18, 279±290. Hofstede, G. (1983) `The cultural relativity of organizational practices and theories'. Journal of International Business Studies, Fall, pp. 75±89. Kluckhohn, F. and Strodtbeck, F. (1961) Variations in value orientations. Harper & Row, New York. Lave, J. and Wenger, E. (1991) Situated learning: legitimate peripheral participation. Cambridge University Press, New York. Lundberg, C. (1985) `On the feasibility of cultural intervention'. In Frost, P. et al. (eds) Reframing Organizational Culture, pp. 169 ±185. Sage, London. Menzies, I. (1960) `A case-study in the functioning of social systems as a defence against anxiety'. Human Relations, 13, 95±121. Nonaka, I. (1988) `Toward middle-up-down management: accelerating information creation.' Sloan Management Review, 29:3, 57±73. Nonaka, I. and Takeuchi, H. (1995) The knowledgecreating company. Oxford University Press, New York. Nystrom, P. and Starbuck, W. (1984) `To avoid organizational crisis: unlearn.' Organizational Dynamics, 13, pp. 53±65. Perrow, C. (1986) Complex organizations. Random House, New York. Pfeffer, J. (1981) Power in organizations. Pitman, Boston.
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Pfeffer, J. (1992) Managing with power: politics and influence in organizations. Harvard Business School Press, Boston. Rokeach, M. (1960) `The open and closed mind; investigations into the nature of belief systems.' Basic Books, New York. Sahlin-Andersson (1996) Imitating by editing success. In Czarniawska, B. & Sevon, G. (eds) Translating Organizational Change. De Gruyter, Berlin. Schein, E. (1985) Organizational culture and leadership. Jossey-Bass, San Francisco. Silverman, D. (1970) The theory of organizations. Basic Books, New York. Snowdon, M. (1987) `Austin Rover: the joint venture with Honda. International Journal of Technology Management, 2:1, 67±73. Staw, B. (1977) `Commitment and the control of organizational behaviour and belief'. In Staw, B. & Salancik, G. (eds) New directions in organizational behavior. St Clair Press, Chicago. Thompson, J. and Tuden, A. (1959) `Strategies, structures and processes of organizational decision.' In Thompson, J. (ed) Comparative studies in organization (195±216). University of Pittsburgh Press, Pittsburgh. Van de Ven, A. and Rogers, E. (1988) `Innovations and organizations: critical perspectives'. Communications Research, 15:5, October, 632±651. Watzlawick, P., Weakland, J. and Fisch, R. (1974) Change: principles of problem formulation and problem resolution. Norton, New York. Weick, K. (1995) Sensemaking in Organizations. Sage, Thousand Oaks, CA.
James Fairhead is a lecturer in the Department of Management and Marketing, University College Cork, Cork, Ireland.
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From Maturity to Entrepreneurship: A Stakeholder Model of Innovation Oswald Jones In this paper I set out a framework which is intended to act as a guide for managers of smaller firms in mature sectors who want to develop an entrepreneurial culture. Such a culture is defined as the ability to adopt new working practices within the organisation as well as introducing new products and services. There are two key factors in the proposed framework, first, stakeholding which encourages mutual commitment between employer and employee. Secondly, IT which is seen as the catalyst in culture change by stimulating the sharing of information across all organisational boundaries.
Introduction
T
he importance of smaller firms in the constant cycles of creative destruction which fuel economic growth has been acknowledged since Schumpeter's (1943) seminal contribution to the literature. Consequently, public policy has placed considerable emphasis on the new technology-based firms (NTBFs) which are found in sectors such as biotechnology and software (Oakey, 1994). Within the UK a number of initiatives such as the Teaching Company Scheme, Business Links and The Carrier Technology Programme have been introduced by the DTI (Department of Trade and Industry) to encourage SMEs (small and medium-sized enterprises) improve their innovative capacity (Jones and Tang, 1997). This illustrates government recognition of the need to develop the innovative capacity of small firms operating in mature manufacturing sectors such as metalworking, auto-components, chemicals, food, ceramics and textiles. Official figures (Annual Abstract of Statistics) indicate that between 1989 and 1994 the number employed in UK manufacturing firms fell by almost 8% despite the creation of 25,000 new firms. This paradox occurred because companies with between 1 and 19 employees accounted for all the growth (Jones and Smith, 1997). However, firms in mature sectors with less than 20 employees are unlikely to have the capacity to innovate. Therefore, maintaining the number of medium-sized manufacturing firms within # Blackwell Publishers Ltd 1998. 108 Cowley Road, Oxford OX4 1JF and 350 Main St, Malden, MA 02148, USA.
the UK is important because they have a number of advantages over larger organisations: the ability to react quickly to change, efficient internal communication, a lack of bureaucracy and managers who are willing to act as entrepreneurs. At the same time, such firms are disadvantaged by the cost of patent litigation, their lack of technical expertise, poor external communications, shortage of finance and inadequate managerial skills (Rothwell and Dodgson, 1991: 127). According to Hardill and Wynarczyk (1996) it is widely accepted that small firms contribute to economic vitality by competing with larger firms as well as acting as their suppliers. Small firms are also important to local economies because they are less likely to globalise their production activities. The authors assessed the impact of computer networks and telecommunication services on 181 SMEs in the British textile industry. It was concluded that if those in government are serious about regenerating the UK's manufacturing base then SMEs must be encouraged to adopt information technologies such as EDI, CAD and CAM (Hardill & Wynarczyk, 1996: 115). In this paper it is my objective to set out a framework which provides a template for the creation of an innovatory culture in mature SMEs. This is not to suggest that the approach is inappropriate for larger organisations but simply to stress that improving the capacity to innovate is likely to be more problematic for firms which generally lack depth in managerial knowledge and skills. The paper
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begins by discussing the nature of entrepreneurial culture and this is followed by an examination of research which links national culture and innovation. I then review key studies in the area of innovatory climate and suggest how such a framework can be modified to accommodate the broader concept of innovatory culture.
The Strategic Staircase New products Improved products Better quality & lower costs
Creating Entrepreneurial Cultures The importance of `change masters' in helping progressive companies innovate earlier than their rivals was established by Kanter (1983). Segmentalism leads to a `local rationality' in decision-making and this fragmentation discourages problem-solving, creates structural barriers, stifles entrepreneurship and the spirit of innovation. An `integrative' approach emphasises the importance of creating conceptual unity by loosening boundaries which encourages problem-solving and organisational change. Three sets of new skills are required to manage change effectively in integrative, entrepreneurial organisations (Kanter, 1983: 35): first, power skills for persuading others to invest information, support and the resources demanded for entrepreneurial initiatives. Secondly, the ability to manage in an innovatory manner requires greater use of teams and high levels of employee participation. Thirdly, there is a need to integrate individual, micro-changes with the macro-changes resulting from strategic reorientation. In most mature companies `managers believe the industry is stable with slow demand growth and incremental changes in technology' (Baden-Fuller and Stopford, 1994: 4). However, the authors go on to argue that in mature sectors managerial choice rather than industry structure is the most important determinant of profits and growth. This proposition is based on the work of Schumpeter (1934) who pointed out that progress is only achieved by making people inside a business perform more effectively. BadenFuller and Stopford suggest that rejuvenating businesses should utilise the concept of the `strategic staircase' to create new capabilities. Initially, IT is used to improve processes so that the organisation can deliver higher quality products with fewer rejects. This gradually reduces costs and increases variety in the products offered by the company. Eventually, as employees develop their IT skills the system enables the company to produce more innovative products. BadenFuller and Stopford (1994: 113) then outline the five principle features of entrepreneurial organisations.
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IT improves processes
Teams: are a key element of the entrepreneurial organisation as solving difficult problems demands employees with a range of skills and experience. Teams must cross all organisational boundaries including functions, territorial units and hierarchical layers. Aspirations: reaching for challenging solutions is an important factor in differentiating innovatory organisations: moving beyond a culture in which the immediate reaction is `we cannot do that it is too difficult'. High aspirations can be developed as a result of managerial initiatives but they must also be encouraged at an operational level as departments and workgroups extend their communication boundaries. Experiments: organisations which have begun to stagnate need to perform experiments and broaden organisational skills through a process of learning-by-doing. This means that managers must instigate procedures which constantly move through cycles of experimentation, assessment and adjustment which leads to organisational progress. Capabilities: building a new range of capabilities allows organisations to explore a much wider range of innovatory possibilities. Critical learning goes beyond individual skills to the generation of organisational capabilities by mobilising teams, aspirations and experiments. Entrepreneurial organisations constantly attempt to expand their expertise and knowledge-bases. Dilemmas: `mature' and `entrepreneurial' organisations have very different approaches to dilemmas such as reduced costs or higher quality. Mature firms tend to oscillate between extremes as one policy is seen to fail: from cost reductions to quality (Baden-Fuller and Stopford, 1994: 135). Entrepreneurial organisations spend more time building the skills and competencies requires to resolve cost versus quality dilemmas which are not
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seen as mutually exclusive. Other dilemmas which must be resolved in all organisations include: organic or mechanistic; made-in or outsourced; cost-based or differentiation; autocratic or democratic and so on. Entrepreneurial commitment to innovation is based on: `the willingness to move beyond received wisdom to combine ideas from unconnected sources, to embrace change as an opportunity to test limits' (Kanter, 1983: 27). Entrepreneurs operate on the edge of their competence instead of focusing on what they already know but this must be linked to integrative thinking which encourages organisational change. Segmentalist companies have structures and cultures which inhibit change because they `compartmentalises action, events and problems' (Kanter, 1983: 28). For example, centralised R&D departments became segmentalists as they were isolated from the issues and problems confronting the wider organisation (Coombs, 1996).
National, Culture, Entrepreneurs and Innovation The links between national culture, entrepreneurship and innovation is not an area which has been extensively researched (Albach, 1994). This is particularly surprising given the extent to which R&D has been globalised in recent years (Archibugi and Michie, 1997). There are certain advantages which can accrue from doing R&D outside the home country: maximising exposure to innovation opportunities; bringing R&D closer to export markets; obtaining incentives from governments wishing to encourage technology transfer and economic development. Decisions to locate abroad are based on the idea that social structures and national culture influence R&D productivity. For example, it is suggested that individual freedom and autonomy are fundamental to R&D and, therefore, authoritarian regimes are detrimental to the pursuit of science (Barber, 1952; Merton, 1973; Richter, 1981). It has also been suggested that scientific concepts are western `inventions' and this combined with a lack of individualism blocks creativity in Japan (Dreyfuss, 1987). Bergen et al. (1988) identified differences in the R&D productivity of 54 scientific instrument manufacturers in the UK, US, Germany and Japan which were attributed to national culture. Other writers have ascribed R&D productivity to technology (Dumbleton, 1986), organisational factors such as adminis-
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trative systems and public policy (Tornatzky and Fleischer, 1990) and to the creativity and motivation of scientists (Pelz and Andrews, 1976). In examining the link between R&D performance and national culture in Austria, Belgium, Finland and Sweden, Kedia et al. (1992) utilised the work of Hofstede (1980) who classified culture according to four dimensions: Power Distance (PDI); Uncertainty Avoidance (UAI): Individualism/Collectivism (IND): Masculinity/Femininity (MAS). Austria, which had an exceptionally low PDI rating and a high score for MAS, had higher R&D productivity than Belgium, Finland or Sweden (Kedia et al., 1992). Although there was no relationship between UAI (uncertainty avoidance) and R&D productivity, the study does provide some evidence of a link between innovation and culture. This is significant because proprietorial rights are more transparent in small, traditional companies and, consequently, culture closely reflects the founder's values (Goffee and Scase, 1995: 18). A study by Birley et al. (1991) confirms that there are very distinct national differences in the management of smaller firms particularly with regard to `personal contacts and informants'. Birchall et al. (1996) compared national approaches to innovation management by examining 233 SMEs in the UK (68), France (77) and Portugal (88). The authors suggest that innovation in SMEs depends on managerial ability to create core competencies by balancing internal and external R&D. At the same time, market pressure, links with customers and suppliers, financial resources and organisational culture all influence an organisation's ability to innovate (Birchall et al., 1996: 293). Portuguese firms were low spenders on R&D and had very strong external relations with competitors, universities and equipment vendors as well as with local chambers of commerce. In contrast, UK and French executives placed greater emphasis on R7D spend and made less use of external sources of new technology. However, the authors provide no evidence of the role played by national culture on attitudes to innovation in the three countries. A recent study which compared a small sample of mature SMEs in the UK and Portugal indicated that the culture of small firms may differ from the prevailing national culture (Jones et al., 1997). The limited sample also confirmed the findings of Birchall et al. (1996) which suggested that Portuguese firms are more likely than UK firms to acquire new technologies from external sources.
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From Climate to Culture The concept of innovatory climate has been extensively researched in recent years (Siegel & Kaemmerer, 1978; Abbey & Dickson, 1983; Nystrom, 1990; King & West, 1987; Amabile, 1983; 1996). By contrast, the few studies which have investigated culture and innovation have concentrated on national rather than organisational culture. The distinction between climate and culture is that the former is a psychological attribute while the latter is an organisational attribute (Glick, 1985). There have been numerous attempts to define and operationalism the concept of organisational and corporate culture (see Meek, 1988). Schein (1985: 9) is probably the most influential theorist and he describes culture as:
Most studies examining the management of R&D confirm the importance of autonomy as a key element in the motivation of scientists and engineers (Jones, 1996a). Freedom to choose methods of working provides a strong sense of ownership and control. This is often referred to as operational autonomy and should be distinguished from strategic autonomy which refers to decisions about which projects should be funded (usually decided by senior managers).
3. Resources
In addition to basic assumptions shared by group members Schein's definition of culture includes values and artifacts. Most of those who have tried to establish a link between culture and innovation have utilised psychometric scales to operationalise the construct. For example, Amabile et al. (1996) reports on the development and validation of an instrument referred to as KEYS. The instrument has five conceptual categories which are believed to influence a creative environment: encouragement for creativity; autonomy and freedom; resources; pressures; and organizational impediments to creativity (Amabile et al., 1996: 1159).
4. Pressures
a) Organisational Encouragement; the extent to which senior managers value innovation by encouraging risk-taking and idea generation. This also includes the provision of suitable rewards for those who engage in innovatory behaviour. b) Supervisory Encouragement; project managers who help define problems and provide goal-clarity are central to improving creativity. A management style that is open and democratic also reinforces individual motivation. c) Work Group Encouragement; diversity in background, openness to ideas, constructive challenging of ideas and a shared
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`. . . a pattern of basic assumptions ± invented, discovered, or developed by a given group as it learns to cope with its problems of external adaption and internal integration that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, feel in relation to those problems.'
1. Encouragement for Creativity
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commitment to the project are all helpful in creating a positive approach to innovation.
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Having adequate resources is also a key element in encouraging innovatory activity. Inadequate resources (finance, human, time and equipment) are usually de-motivating because team members may assume that the project is not valued within the organisation.
a) Challenging Work; (together with autonomy) is usually regarded as the most important factor in motivating professional (knowledge) workers (Raelin, 1991). This is likely to be an increasingly important source of motivation as promotional opportunities are reduced by flatter organisational structures. b) Workload Pressures; this factor is a little more complicated because having some work-related pressure is important in acting as a motivating factor. That is, time pressure to produce results can stimulate individuals and teams to work effectively and creatively. Excessive workload leads to stress and anxiety which will undermine innovatory activity.
5. Organizational Impediments Internal dissent, excessive conservatism, highly rigid organisational structures and authoritarian managers can act as very strong impediments to innovation and creativity. Such features are typically found in large bureaucratic organisations in all sectors. The `encouragement for creativity' construct was operationalised by means of 34 items each of which had four-point response scales to avoid the mid-point `default' option. All
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five scales were found to have high levels of reliability and validity (Amabile et al., 1996: 1169). The instrument developed by Amabile et al. is based on a traditional psychometric approach which aggregates individual perceptions into an organisational attribute. The validity of using aggregated measures as indicators of organisational properties has been extensively debated in the literature. The approach adopted here is that aggregation is legitimate in the case of an organisational attribute, such as innovatory climate, but serves little purpose for individual traits such as job satisfaction (for a review of the debate see Jones, 1996a). Amabile's model has many similarities with the result of my own study which established the determinants of internal reputation amongst R&D scientists in high-technology organisations (Jones, 1996a). However, I believe that Amabile's conceptualisation of the links between culture and innovation can be usefully extended by including two additional factors: stakeholding and information technology.
Stakeholding and Innovation There is little consensus about the extent to which security encourages or discourages innovatory activity. Some argue that uncertainty is a stimulus to creativity while others believe that employees concerned about their future are unlikely to be innovatory (see Raelin, 1991). I strongly subscribe to the latter view and think that a secure working environment is a prerequisite for all types of innovatory activity. For example, shopfloor employees are unlikely to be fully committed to TQM-type initiatives if they suspect that improving work efficiency will threaten their employment prospects (Jones, 1997). Equally, it may be difficult to maintain motivational levels amongst R&D staff in a science-based company threatened by takeover or merger when it is widely accepted that R&D jobs will be lost (Jones, 1996b). Consequently, it is suggested that the concept of stakeholding is central to the creation of an innovatory culture. Employees at all organisational levels will only fully commit themselves to innovation if they believe that they, as well as the organisation, are likely to benefit in the longer term (Kay, 1993). At the same time, this emphasises the importance of all those within an organisation accepting responsibility for improving products, services and processes. Equally, in smaller firms, accessing the cumulative benefits of numerous incremental improvements is a more realistic approach than running the risks associated with a
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radical innovation strategy based on being `first-to-market' (Zahra et al., 1994). I suggest that in operationalising the concept of stakeholding there are a number of dimensions to consider. One vision of `stakeholder capitalism' is that it must be based on a new `financial architecture' which broadens shareholding, creates a bias to the long-term and decentralises decision-making. Takeovers would be made hard to mount by `tightening lax accounting standards, setting upper limits for adviser's fees and allowing firms a `public interest' defence against hostile takeovers' (Hutton, 1995). Therefore, stakeholding companies eschew short-termism in favour of long-term planning which is demonstrated via a commitment to in-house R&D and employee training. Secondly, there should be encouragement for employees at all levels to express their ideas and opinions about the organisation's activities. Thirdly, although monetary incentives may stimulate some organisational improvements it is suggested that `job security' is much more likely to encourage an innovatory culture than shortterm financial rewards. Fourthly, stakeholding companies will have a management style that encourages wide-ranging participation in the decision-making process. Finally, such companies will have a good reputation with their employees as well as with external stakeholders such as customers, suppliers and the local communities in which the organisation operates (Jones, 1996a).
Extending Amabile's model
Creating new Cultures Through IT The tremendous impact of information systems (IS) and information technology (IT) on business and society is changing the way in which organisations operate (Alter, 1996). Many businesses are under pressure to provide wider access to information which will improve performance monitoring and extend investigative analysis. However, the effective use of even relatively simple technologies such as email demands that senior managers demonstrate their commitment to open systems of communication. Widespread use of email also requires technical support to ensure that systems are reliable and have adequate communication capacity. Training helps users set up their own storage and retrieval mechanisms which aids the effective management of email information. The term `groupware' encompasses information systems designed to electronically bring together individuals who are separated by time and/or space. Groupware includes systems that co-ordinate the schedules of
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Cultural transformation is not automatic
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team members as well as co-ordination tools to track each member's responsibilities in group projects. In addition, document annotation systems eliminate the need for hard copy by allowing several people at different locations to simultaneously edit the same document with each individual able to view proposed changes on their own screen. Other IT-based technologies such as electronic data interchange (EDI), computer aided design (CAD) and computer aided manufacture (CAM) are also important means of improving both internal and external communications (Hardill and Wynarczyk, 1996). Whatever system of electronic communication are adopted, automatic benefits to the organisation are not guaranteed. Studies have shown that though people may have fewer reservations about voicing their opinions through groupware it may take longer to reach a decision (Clegg et al., 1997). Staff who see new technology as a threat may resist change and groupware alone cannot promote information-sharing if team members do not believe it is in their interests. Harvesting the benefits of new technologies requires sensitivity to implementation as there are both technical and people-related challenges. Hence, information technologies have the potential to create cultures of cooperation and entrepreneurship in mature firms. Nevertheless, cultural transformation does not automatically follow the introduction of email or groupware (LotusNotes). Rather, the shift from maturity to entrepreneurial culture demands that senior managers have a clear vision of what can be achieved by introducing new information technologies. Hence, there must be a `strategic choice' to encourage open systems of communication and greater transparency in decision-making. Nor is there a simple causal relationship between the introduction of IT and the creation of entrepreneurial cultures. For example, it is possible to hypothesize that the more entrepreneurial firms will be early adopters of IT systems. Secondly, as pointed out by Shutt and Whittington (1987) the circumstances under which firms are founded is likely to have a substantial impact on managerials attitudes to risk-taking. Many small firms are formed as a result of `spinouts' from larger firms which remain their major customers. Thirdly, a firm's position in the supply chain will also have an influence on managerial entrepreneurship. `Supplier dominated firms' (Pavitt, 1984) are less likely to be innovative in developing new products and new markets than firms which have a range of customers with varying demands. Finally, if existing markets are stable or
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growing then there will be less incentive for managers to seek new opportunities than if markets are in decline. Therefore, a number of factors, other than IT, have an influence on the nature of entrepreneurial activity within mature firms and it is important that these be considered when attempting to identify organisational culture. To summarise, introducing information technologies into a mature organisation offers managers the opportunity to stimulate entrepreneurship by encouraging cross-functional information sharing. New communication technologies can help democratise organisations by permitting wider access to decisionmaking processes. Such democratisation may provide the impetus for the move from employee to stakeholder which it is suggested will strongly influence organisation-wide commitment to innovation (Figure 1).
Conclusions While New Technology Based Firms have received considerable attention in recent years the importance of innovation in `mature' firms is increasingly recognised by policy makers (United Nations, 1993). The ability of organisations to become more entrepreneurial is heavily dependent on breaking down functional barriers by encouraging teamworking (Kanter, 1983; Baden-Fuller & Stopford, 1994). While structural change is important in facilitating new working arrangements the links between organisational performance and culture have been accepted since the publication of `In Search of Excellence' (Peters & Waterman, 1982). However, those interested in stimulating creativity in R&D-based organisations have tended to concentrate on climate rather than culture. An important exception is Amabile who has broadened her approach to include factors which are strongly related to culture. In this paper I have extended Amabile's framework to provide a template by which managers in mature, small firms can utilise IT as a mechanism for creating an entrepreneurial culture. Such a culture is defined as the ability to adopt new working practices within the organisation as well as introducing new products and services. The introduction of key communication technologies such as email and groupware can act as a catalyst for organisational regeneration by improving communication across functional boundaries. Therefore, IT provides the opportunity for managers to develop a stakeholding company which encourages innovatory activity amongst all employees. As a consequence,
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Figure 1. Creating and innovatory culture
innovation becomes the responsibility of everyone within the organisation rather than being concentrated amongst senior managers and technical staff. This is essential if smaller manufacturing firms are to continue to contribute towards economic activity in the UK.
References Abbey, A. and Dickson, J. W. (1983) `R&D Work Climate and Innovation in Semiconductors', Academy of Management Journal, 26:2, pp. 362±368. Albach, H. (1994) Culture and Technical Innovation: A Cross-Cultural Analysis and Policy Recommendations, New York, de Gruyter. Alter, S. (1996) Information Systems: A Management Perspective (2nd ed.) Benjamin/Cummings. Amabile, T. M. (1983) The Social Psychology of Creativity, New York, Springer-Verlag. Amabile, T. M., Conti, R., Coon, H., Lazenby, J. and Herron, M. (1996) `Assessing the Work Environment for Creativity', Academy of Management Journal, 39:5, pp. 1154±1183. Annual Abstract of Statistics (1990±1996) London, HMSO.
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Archibugi, D. and Michi, J. (1997) Technology, Globalisation and Economic Performance, Cambridge University Press. Baden-Fuller, C. and Stopford, J. M. (1994) Rejuvenating the Mature Business: The Competitive Challenge, Boston, Harvard Business School Press. Barber, B. (1952) Science and the Social Order, New York, Free Press. Bergen, S. A., Miyajima, R. and McLoughlin, C. P. (1988) `The Research & Development/Production Interface in Four Developed Countries', R&D Management, 18: pp. 201±216. Birchall, D., Chanaron, J. and Soderquist, K. (1996) `Managing Innovation in SMEs: A Comparison of Companies in the UK, France and Portugal', International Journal of Technology Management, 12:3, pp. 291±305. Birley, S., Cromie, S. and Myers, A. (1991) `Entrepreneurial Networks: Their Emergence in Ireland and Overseas', International Small Business Journal, 9:4, pp. 56±74. Clegg, C. et al. (1997) `User Reactions to Information Technology: Some Multivariate Models and their Implications', Journal of Information Technology, 123:1, pp. 15±32. Coombs, C. (1996) `Core Competencies and the Strategic Management of R&D', R&D Management, 26:4, pp. 345-355.
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Dreyfuss, J. (1987) `How Japan Picks America's Brains', Fortune, 116: pp. 79±89. Dumbleton, J. H. (1986) Management of HighTechnology Research and Development, New York, Elsevier. Glick, W. H. (1985) `Conceptualising and Measuring Organisational and Psychological Climate: Pitfalls in Multilevel Research', Academy of Management Journal, 10:3, pp. 601±616. Goffee, R. and Scase, R. (1995) Corporate Realities: The Dynamics of Large and Small Organisations, London, Thompson International Business Press. Hardill, I. and Wynarczyk, P. (1996) `Technology, Entrepreneurship and Company Performance in Textile and Clothing SMEs', New Technology, Work and Employment, 11:2, pp. 107±117. Hofstede, G. (1980) Cultures Consequences: International Differences in Work Related Values, Beverly Hills, Sage. Hutton, W. (1995) The State We're In, London, Jonathan Cape. Jones, O. (1996a) Human Resources, Scientists and Internal Reputation: The Role of Climate and Job Satisfaction', Human Relations, 49:3, pp. 269±294. Jones, O. (1996b) `Mergers and Innovation: Declining Commitment to Pharmaceutical Research', Creativity and Innovation Management, 5:1, pp. 22±37. Jones, O. (1997) `Changing the Balance? Taylorism, TQM and Work Organisation', New Technology Work and Employment, 12:1, pp. 13±24. Jones, O., Cabral, C. and Beckinsale, M. (1997) `Mature SMEs and Technological Innovation: Entrepreneurial Networks in the UK and Portugal', International Journal of Innovation Management, 1:3, pp. 1±20. Jones, O. and Smith, D. (1997) `Strategic Technology Management in a Mid-Corporate Firm: The Case of Otter Controls', Journal of Management Studies, 34:4, pp. 511±536. Jones, O. and Tang, N. (1997) `Networks for Technology Transfer: Linking HEIs and SMFs', International Journal of Technology Management, 12, 7, pp. 820±30. Kanter, R. M. (1983) The Change Masters: Corporate Entrepreneurs at Work, London, Unwin-Hyman. Kay, J. (1995) Foundations of Corporate Success, Oxford University Press. Kedia, B. L., Keller, R. T. and Julian, S. D. (1992) `Dimensions of National Culture and the Productivity of R&D Units', Journal of High Technology Management Research, 3:1, pp. 1±18. King, N. and West, M. A. (1987) `Experience of Innovation at Work', Journal of Management Psychology, 2, pp. 6±10. Meek, V. (1988) `Organization Culture: Origins and Weaknesses', Organization Studies, 9:4, pp. 453±73.
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Merton, R. K. (1973) The Sociology of Science, University of Chicago Press. Nystrom, H. (1990) `Organizational Innovation', in: M. A. West and J. L. Farr, Innovation and Creation at Work: Psychological and Organizational Strategies, Chichester, Wiley. Oakey, R. (1994) High Technology Small Firms, London, Frances Pinter. Pavitt, K. (1984) `Sectoral Patterns of Technical Change: Towards a Taxonomy and a Theory', Research Policy, 13:6, pp. 343±73. Pelz, D. C. and Andrews, F. M. (1976) Scientists in Organisations: Positive Climates for R&D, University of Michigan. Peters, T. and Waterman, R. (1982) In Search of Excellence, New York, Harper Row. Raelin, J. A. (1991) The Clash of Cultures: Managers Managing Professionals, Harvard Business School Press. Richter, M. N. (1981) The Autonomy of Science: A Historical and Comparative Analysis, University of Michigan. Rothwell, R. and Dodgson, M. (1991) `External Linkages & Innovation In Small & MediumSized Enterprises', R&D Management, 21:2, pp. 125±137. Schein, E. (1985) Organizational Culture and Leadership: A Dynamic View, San Francisco, Jossey-Bass. Schumpeter, J. A. (1934) The Theory of Economic Development, Boston, HBR Press. Schumpeter, J. A. (1943) Capitalism, Socialism and Democracy, New York, Harper Row. Shutt, J. and Whittington, R. (1987) `Fragmentation Strategies and the Rise of Small Units: Cases from the North West', Regional Studies, 21:1, pp. 13±23. Siegel, S. M. and Kaemmerer, W. F. (1978) `Measuring the Perceived Support for Innovation in Organizations', Journal of Applied Psychology, 63:5, pp. 553±562. Tornatzky, L. G. and Fleischer, M. (1990) The Process of Technological Innovation, Lexington Books. United Nations (1993) Small and Medium-sized Transnational Corporations: Role, Impact and Policy Implications, New York, United Nations. Zahra, S. A., Sisodia, R. S. and Das, S. R. (1994) `Technological Choices Within Competitive Strategy Types: A Conceptual Integration', International Journal of Technology Management, 9:2, pp. 172±195.
Oswald Jones is Lecturer in Technology Management, Strategic Management, Aston Business School, Birmingham, UK.
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Book of the Quarter Reviewed by Tudor Rickards Tidd, J., Bessant, J. and Pavitt, K. (1997) Managing Innovation: Integrating Technological, Marketing and Organizational Change, Wiley, Chichester, UK, ISBN 0-471-97076-X pback, 376pp, light index. £21.50.
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onsidering the practical and theoretical importance of the subject, there are surprisingly few textbooks on managing innovation, and none that could claim to be the market leader. One well respected text for more technologically oriented courses is the lengthy case-based work Readings in The Management of Innovation, by Tushman and Moore. In Europe, Harry Nystrom's Technological and Market Innovation is a welcome recent contribution. Managing Technological Innovation, by Brian Twiss has gone through several editions over a period of decades. More recently, Managing Innovation, by Jane Henry and David Walker has been used as the course text in the Open University's distance learning MBA programme. My own effort led to Stimulating Innovation, a text that made the case for a systems view of innovation. Regardless of the merits of that text (I remain one of its few faithful supporters) it had little impact on the market. So the search for that elusive market leadership is on. Tidd, Bessant and Pavitt have contributed a promising candidate text. The three authors together make up a formidable team with a wide range of academic and educational experiences. Joe Tidd is Head of the Management of Innovation Group, Imperial College, London. John Bessant has been particularly active in disseminating technologies for supporting incremental process innovations from his CENTRIM group from the University of Brighton. Keith Pavitt has had an equivalently illustrious career, particularly for his contributions to establishing the reputation of the influential Science Policy Research Unit (SPRU) at the University of Sussex. So have they pulled it off, and produced the definitive textbook on innovation management? Or will they find themselves, in some years time, reviewing a new generation text, trying to # Blackwell Publishers Ltd 1998. 108 Cowley Road, Oxford OX4 1JF and 350 Main St, Malden, MA 02148, USA.
decide if it has features that might set it apart as that elusive best-seller? At such times the prudent reviewer tends to follow the practice of one of the earliest technological forecasters, the Oracle at Delphi, and offer some well-considered but ambiguous pronouncement (`This book will earn the success it deserves'). I will avoid such prudence and offer the view that the book will become recognised as a valuable contribution to the field. It may even become established alongside the other well-cited texts, mentioned above. Beyond that, the ceiling to its progress is probably determined by factors such as the structuring of contemporary University courses, and the advantages of texts published out of North America in the Global marketplace. The book is aimed at postgraduate and other management students, while seeking to be relevant also for managers concerned with innovation and change. Early in the book the authors suggest that innovation is `a core process concerned with renewing what the organization offers (its products and/or services) and the ways in which it generates and delivers these' (p. 14). Shortly afterwards they offer another definition as: `a process of turning opportunity into new ideas and putting these into practice' (p. 24). They also indicate various other definitions at that point. The reader is thus prepared for the sad news. Innovation remains a concept that is not easy to clarify. It lacks a coherence that is sometimes brought to a field by general consensus around an accepted orthodoxy. The proposed orthodoxy in this book is that innovation management is a matter of contingency, so that ultimately each firm has to sort out its own recipe for innovation. While this view is preferable to a generalised fiction, it nonetheless poses the authors with
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problems of providing a clear route map through the territory they are operating in. The book states clearly its intent to present innovation in its broadest sense. The emphasis is on an integrative and holistic approach. The authors reject the more common approaches that put excessive emphasis on one factor at the expense of others. In practice this is a warning that managing innovation is more than managing technology. Stated in this way the point might appear self-evident. The authors are, nevertheless, identifying an influential theme in the literature. And to some extent the existing technological mindset has to be treated with respect. Innovation is probably more widespread in management of technology courses than anywhere else. So practising lecturers have to be attracted away from existing course materials with the `inclusivity' agreement of the claimed integrative approach. In an early chapter, the general model of innovation is described as scanning the environment; deciding which external signals to respond to; obtaining resources to make desired response; and implementing the response. This format captures the rationalistic components of innovation. It sits well with models within the rational schools of planning, problem-solving and strategic decisionmaking. The authors can claim that implied in the model are the less rational elements of personal motivations; Schumpeter's creative gales of destruction; even Simon's bounding of rationality especially under environmental conditions of turbulence. These stages are served by `routines' clustered around four themes: effective external linkages; strategy; supportive organisational context; and effective implementation linkages. The authors are too honest to seek some `obvious' simplification that would arise if the stages are linked to one or two of the themes or routines. This intellectual honesty has its price. Perhaps not for readers seeking to accumulate knowledge about innovation as a subject of study. However, it is very important for readers in search of ways of improving innovation practices. Having identified a particular stage in which the organisation may need further help, the practising manager still has to sort out which themes should be studied more carefully in order to develop some action ideas.
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The book has many excellent qualities. Above all it is authoritative and up-to-date. This is where multiple authorship has advantages. The inclusive approach taken protects readers from some of the naive assumptions of innovation that follow from everyday notions of causality (for example, the assumption that innovation can be understood as a simple well-connected series of events triggered by a technological discovery). The authors call such views `partial', and demonstrate how partial views are likely to be refuted in empirical trials. If innovation is `only seen as technological', attention to user needs may be insufficiently integrated into the product development processes. The danger of such an approach is that the study of innovation risks becoming blurred with studies of contemporary management under conditions of high environmental uncertainty. It offers much as a course textbook for managing innovation. That being said, the difficulties of multiple authorship sometimes reveal themselves. Each of the three authors could probably have written a book of, say, half the length (200 pages) that would have been a simpler and more coherent version of the final product. Textbooks in general seem to be evolving into larger and larger species. This form of Giantism has evolutionary survival potential in a Jurassic Park sort of way. That being said, it stands up well against the few serious rivals, certainly from the major European writers in the field. I have indicated some reservations I have for the text as an instruction guide for the practising manager. The format also sometimes seems to work against it as a reference text. For that, I would have liked a better general index (it is very light on content detail), and perhaps an additional author index. Since receiving the review copy I have from time to time browsed unsuccessfully in search of some nugget of information I thought I had encountered. The materials that arguably could have been included are themselves substantial. it may well be that a future edition will evolve to be even larger and more comprehensive (Innosaurus Rex), or follow the trend towards nimbleness, flexibility, and focus (Innosaurus Dynamicus). In whatever format, this, and its future editions, make a welcome contribution to teaching texts on the management of innovation.
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Book Reviews Bennis, Warren and Ward Biederman, Patricia (1997) Organizing genius; the secrets of creative collaboration, Nicholas Brealey Publishing, London, ISBN 85788-194-X (Hardback), 237pp, indexed, £18.00 UK only.
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his book is written by a prominent academic researcher into leadership, Warren Bennis, from the University of Southern California and a journalist from the Los Angeles Times, Patricia Biederman. In it they examine the characteristics of high achievement groups (Great Groups in their parlance). They studied seven projects and organisations; the Walt Disney studio, Xerox's Palo Alto Research Center (PARC) and Apple, pioneers in developing computers with human faces, the 1992 Clinton presidential campaign, the elite group of engineers at the aeronautical engineers Lockwood, the arts school known as the Black mountain College, and the Manhattan Project, which developed the first atomic bomb. The spectrum of cases, across the scientific, engineering, political and entertainment sectors, in a time period from the 1940s to the 1990s, provides an intriguing basis for their analysis. The groups were chosen to give a wide disparity of contexts. The authors defend their decision to study the excellent despite their rarity by stating; `. . . our conviction is that excellent is a better teacher than mediocrity. The lessons of the ordinary are everywhere. Truly profound and original insights are to be found only in studying the exemplary. We must turn to great groups if we hope to begin to understand how that rarest of precious resources ± genius ± can be successfully combined with great effort to achieve results that will enhance all our lives' . . . p. 8 The source material for the book includes interviews with key individuals involved in the projects, some archival material and secondary sources which are listed by the authors. The projects were chosen because in the opinion of the writers, they changed the shared reality of American society in some way. The book begins with a summary of the characteristics of the Great Groups under
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study. Of particular interest are the following points; they are predominantly male, young (to be over 35 years of age is considered old), they have an almost anarchistic attitude to authority described by the authors as an adolescent sub-culture, and they are held together by an almost Messianic vision of the future product or state they want to achieve. In the authors' words, `they set out to change the world'. Almost indifferent to their physical surroundings, as groups they generate an energy and confidence which draws other like-minded individuals to them. The authors are honest enough to admit that there is a darker side to this creative momentum. Personal relationships are frequently sacrificed to a project. (One of the PARC engineers was only half joking when he told his wife that the company included alimony payments in their benefits package.) Once the project is over many teams disband and it can be difficult for members to work with `ordinary individuals'. There is an almost post partum like depression following the achievement of the group's goal. They suggest that one reason for the all male membership might be because there is less access to professional training for women, for a variety of reasons. Although sexism may have kept women out of some groups the authors speculate that there is something about the Great Group dynamic itself that has discouraged participation by women. One reason might be the intense, almost anti social emphasis nature of the groups, which made any other relationship difficult if not impossible. According to the authors, Great Groups have superb people and strong leaders who love talent and know where to find it. They think they are on a mission from God, see themselves as winning underdogs and always have an enemy, someone they can focus on to pull the group together. Optimistic not realistic, blinkered to everything but their project, action oriented, they have the capacity for good and evil. This is exemplified
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by the Wannsee phenomenon. Wannsee was the suburb in Berlin where Hitler's subordinates put together the details of the Final Solution. A Great Group can have a vision which is all embracing and not necessarily for the good of mankind. Do the authors succeed in their desire to teach lessons from the study? Partially. We still have to accept that as most of us are not geniuses, it may be difficult for us to behave as a Great Group would. There are, however, important managerial insights. Bennis and Biederman point out that although a Great Group may be an island, it usually has a bridge to the mainland; someone who can help to communicate their ideas and let them tap the resources they need. Organisational managers can look for talented individuals and look to provide them with the freedom they need to achieve their goal. Perhaps most importantly, they can learn to accept that these individuals will not be with the organisation forever and that they will move on at the end of a project. Perhaps we all have to accept that highly unusual achievements come from highly
unusual people. Many of us might be apprehensive at the thought of working within such a group, and are certainly not prepared to make the social and emotional sacrifices it appears are necessary to be part of a Great Group. What this book makes clear is that we can make choices about the way we manage unusual individuals and that we may have to apply different criteria to their rewards and to the way their career paths are managed. This book makes some very perceptive comments about the nature of high achieving groups, and goes beyond the `let's encourage the mavericks' creed of some management books. It will be of interest to anyone who is interested in managing achievement in organisations and will provide examples for training and development programmes. The authors acknowledge that the examples are from the United States and do admit that characteristics are particularly suited to that culture. Susan Moger
Kleiner, Art (1996) The age of heretics: Heroes, outlaws, and the forerunners of corporate change, Nicholas Brearley, London, ISBN 1-85788-5, hardback, 413pp, notes, bibliography and index, £20.00 Every good book has a creative hook to catch the reader. Perhaps I should use a less fishy metaphor. Every good book has a way of attracting the reader's attention and sustaining it. This book does this by connecting the change agents of modern day business culture to the heretical figures who changed earlier cultures. My first ungenerous thoughts were that the book was just another simplistic metaphor for trundling out yet another classification of human behaviours. There is a steady flow of such books, most of which have little to add to the well-grounded classifications of Jung. These thoughts ran through my head, in a less than positive fashion, when the book arrived for review. Several hours later my mood had changed. Art Kleiner has written a very readable and enjoyable book. There are echoes of Alvin Toffler in the writing. Like Toffler, the author is deeply concerned with socio-cultural shifts at the global level. Like Toffler, the author delights in the epochal metaphor. Toffler had his third wave, and his future shocks; Kleiner has his heretical figures raging against the orthodoxies of the age.
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Both Toffler and Kleiner have the skills of the great journalists. Perhaps Kleiner is a little more selective and avoids piling up mountains of illustrative anecdotes. His preference is the more extensive reworking of critical events and texts. The behavioural pioneers are given considerable space. There is of particularly good historical account of the origins and development of the National Training Laboratories in America, and briefer notes on the McKinsey and Boston Consulting Group consultancy practices. The heretical side of management gurus is also well developed. I particularly liked the sketches of Tom Peters, Herman Kahn, and Chris Argyris. The book has, as a running theme, vividly described incidents of the great heretics, and the ultimate impact of their heresies. An attempt is made to weave these accounts into the needs of their modern counterparts. So we encounter Pelagius, the monk who took on Augustine and lost. The Pelagian heresy preached self-development and perfectibility. Kleiner connects it to the humanistic psychology movement of the twentieth century.
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Parzival (Parsifal) is the young knight who struggles to do good, only to fail at his moments of crisis. Here the metaphor is stretched to suggest that the great dilemma of Parzifal connects with the struggles of change agents in today's world, and the tensions between beliefs and pragmatism. Well, maybe. . . . I can certainly subscribe to the notion of Tom Peters as a religious zealot, a Pelagian figure, and Charles Handy or Abraham Maslow as a latter-day monastic
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reminding us of the religious dimension concealed in secular social systems. The book makes an entertaining and instructive read. Like all good journalism it has its fair share of factual material. I would recommend it to anyone interested in imaginative historical documentaries or in the origins of the human dynamics movement. Tudor Rickards
Ellinor, Linda and Gerard, Glenda (1997) Dialogue: Rediscover the transforming power of conversation, Wiley, NY and Chichester, ISBN 0471174661, 366pp, light index and bibliography, £24.95 (UK price). This book carries a message of optimism and hope. Teams and organisations can change when individuals interact in ways that develop mutual understanding and respect. The authors have been at the leading edge of a movement that has developed primarily in the United States over the last decade or so. They acknowledge the influence of contemporary social scientists such as Chris Argyris, Don Schon, and refer to the `Fifth Discipline' work of Peter Senge. The most specific acknowledgements are for the physicist and transformational thinker David Bohm. Elsewhere in this issue we note the work on The Age of Heretics by Art Kleiner. In his terms, these authors are on the side of the visionaries and heretics who dream of a better world. They derive from a line that can be traced back to the great Kurt Lewin, pioneer of participative and experiential psychology. (Kleiner traces it back to the Monastics who challenged the Western religious orthodoxy that denied human kind the possibility of selfredemption.) The book operates on several levels. There is a philosophic level around what used to be called New Age thinking in the 1970s. This is a form of inclusive philosophy which over time has accumulated ideas from an eclectic bundle of religious, ethical, mystical sources, including some scientific ones such as chaos theory. The essential message is that of transformation. The book also provides case illustrations of how the process of dialogue has been applied in interactive group sessions. Additionally there are numerous ex-
# Blackwell Publishers Ltd 1998
amples of approaches for anyone seeking to apply them in practice. Participants in gatherings of a humanistic kind will be familiar with versions of some of the approaches that encourage openness and trust-building. For example, there are versions of constructive sharing of ideas and active listening. Other suggestions are newer, and will appeal to those more experienced coaches and facilitators who are seeking a few novelties. I found much that connected with the efforts of creative problem solving movements around the world. The respect for individual differences, and the efforts to find win-win insights rather than either-or ones. There is a particular richness of ideas for encouraging reflection and through reflection, and experiential learning. Dialogue is presented as a life skill that has the potential to go far beyond discussion and debate. The authors are honest in the difficulties of transforming organisations. Nevertheless, the movement they represent has something to offer organisations large and small. This particular book is likely to be read with appreciation by many readers. However, it has a style that is more likely to encourage those with a shared set of beliefs about the potential for improving behaviours in social groupings, without winning many converts. While the broad ideas can be `translated' for use in other cultures, I would see the books as of primary appeal to the North American culture. Tudor Rickards
Volume 7
Number 2 June 1998
