Organizational Innovation in Historical
Perspective
Change management as duality-management
Willem Mastenbroek
Holland Consulting Group, Amsterdam
Department of Economics, Free University, Amsterdam
Published in Business Horizons, July-August, 1996, pp. 5-14
What are the levers for the success of organizations? What conditions determine competitive power? To escape from the confusion expressed by the ongoing launching of new models and approaches, a historical perspective on organizational change is introduced. This historical approach is clarified with a range of examples. A description of the development of organizations - starting with changes in the organization of 16th century European armies - into the 20th century, reveals the structure of this development. It proves possible to distill from this historical perspective some factors critical for guiding change processes in our time.
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Introduction
Business Week (31-08-1992, pp. 42-50) provides a nice summary of recent trends in the fields of organization and management. We find: "The learning organization, reengineering, core competencies, organizational architecture and time-based competition". Are these valuable additions to our knowledge or doubtful fashions? Business Week of 20 January, 1986, described four decades of 'Business Fads'. Only occassionally does any of these trends and so-called innovations survive into the next decade. Will it be different in the nineties?
Are there more lasting changes amidst the fads and foibles? In practice a few seem to survive, as for instance: the flattening of organizational hierarchy and the tendency to delegate tasks and responsibilities. But there are more changes that go beyond the hype of the day:
- autonomous task groups;
- better quality;
- integration of functions;
- smaller staff and head office;
- clarification of core business and basic competencies;
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- output-based management;
- formulating shared values;
- special innovation teams;
- cultural change
- decentralisation
- customer orientation
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An interesting list but also very arbitrary. Some readers might disagree with this selection, others might want to add items. Another important drawback is its lack of consistency; it looks like a kind of laundry-list, there is no integration. What does the underlying pattern look like? What are the more fundamental factors? Do we need new paradigms and 'breakthroughs' in organizational theory like transformation-management and chaos theory to solve these questions? To escape from this confusion I introduce a historical perspective on organizational change. Long-term developments make it easier to recognize the crucial elements of organizational change. What proves its value over the centuries may give us something to hold on also in modern times.
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Historical perspective
A brief description of the development of organizations will clarify the concepts useful to catch the most crucial aspects of organizational change [ In developing these concepts the work of Norbert Elias (1939, 1994) proved to be of support. ] . The historical perspective will enable us to clarify the characteristics of organizational change, most crucial to organizational innovation and succes. Their implications for modern organizations will be described and explained.
Early army-organizations
Let me first introduce a man who was an authoritative pioneer in his own time, Prince Maurice of Holland (1567-1625). Armies are among the oldest large-scale organizations. In the period between 1590 and 1600 Maurice introduced a number of innovative organizational principles. His central problem was the discipline of a riotous soldiery against the overwhelming force of the Spanish troups in the Netherlands. Three examples of his interventions:
- The common formation in the 16th century was the so-called Spanish Brigade: 50 men across and 50 deep. A square formation, completely filled with troups. So most of these men couldn't even use their pikes. Their only function was to provide moral and physical back-up (by pushing!) for the front ranks.
Maurice succeeded in greatly increasing the performance of the available troups by introducing a shallow formation. This change in battle-array required major psychological changes. The earlier support of the mass was lost, vulnerability increased. Better training and tighter discipline were intended to result in the required increase in personal effort and self-confidence.
- Self-confidence was enhanced by, among other things, a thorough training. The use of the musket was based on a precise 'motion-study' of every handling procedure. The 43 (!) separate actions were classified in series of functional acts. Special commands were developed for these acts. Endless practice resulted in independent and fast execution.
- Short, clear, and most of all standardized commands were introduced. This style of command required silence from the troups. That was something new. The troups did not only have to be quiet, they also had to learn how to line up in fixed places in organized ranks and files, whereas before, they had been a motley, swarming horde.
In all three examples we see a mutually enhancing interaction of increased external discipline and growing individual discipline in terms of self-control and self-confidence. Maurice's military genius sensed exactly where earlier army reforms had failed. He gave shape to an interaction between both mechanisms. This mutual enhancement, consistently maintained over longer periods of training and also in the everyday functioning of the army, resulted in a level of strength never attained before. Victory upon victory was the result. These successes were so impressive, that between 1600 and 1630 most European states adopted Maurice's reforms.
Maurice achieved increased tactical flexibility. The massive and inflexible square was replaced by a shallow formation. However, the disappearance of the massive back-up demanded a different type of soldier: one with more discipline and self-confidence, the ability to react instantly to orders, and the ability to retain group cohesion in spite of increased mobility.
The French Colonel Ardant du Picq wrote his 'Etude sur le combat' in 1868. In his day, the first quick-firing arms were introduced. To reduce his troops' vulnerability, he pleaded for an open battle-array. Just like in Maurice's situation, this change demanded a different attitude from the soldiers. Ardant du Picq wanted well-trained, relatively small formations: the platoons. The soldiers in these formations had to make good teams and also needed their own responsibility to act. To be able to utilize this responsibility, autonomous thinking and action became important and had to be practiced.
What we see here is the ongoing development of external means of control interacting with increased responsibility of individuals and small groups. Continuous discipline, formalization of behavior, strengthening of the hierarchy, growing solidarity and increased self-control, coupled with expanding responsibility are the most important behavioral changes in this context.
Early capitalism and organizational innovation
Our industrial organizations went through similar developments. In his description of the emergence of the factory regime in the 19th century, Iterson (1992, p.82), wrote: "The problems for the manufacturers were first of all problems of discipline and coordination. Factory regimes are based on a tangled combination of i) coercion (from the side of the manufacturers) and ii) willingness or motivation (on the workers' part)."
The discipline which seems so natural to us now, was not in evidence then:
"Bringing together men, women and children in one space implied the danger that people would get in each other's way, that arguments could erupt, sexual relations engaged in, or that they would 'overindulge' in other activities which were considered debauched (drinking) or idle (games).
Labourers also had to learn to control their language: subversive and obscene utterances also posed a threat to orderly labour and they were fined heavily. The same dangers also existed outside the factory, especially in combination with alcohol consumption. So conformance with the industrial regime was indirectly threatened by `corruption of the morals' in their free time." (Iterson, 1992, p. 83-84)
This can be illustrated by the case of the earthenware industry of Josiah Wedgwood [ With thanks to Jan Onland who provided me with detailed research-findings. ] (1730-1790), a liberal reformer in public affairs and a patriarchical factory owner in eighteenth century England. During his lifetime he transformed a local pottery, with a dozen men at work, into an international firm .
When he started his own firm, called Etruria (Staffordshire), he recruited from his personal network of family and friends two partners with whom he formed a team in which the functions of technique and product innovation, marketing and management of two separate factories were integrated. How did Wedgwood find a balance between discipline and motivation?
Wedgwood had two disciplinary adages: To make Artists ...(of)... mere men and second to 'make such machines of Men as cannot err'.
First he concentrated all workers in one general workplace and held to his original 'scheme of keeping each workshop separate'. They were not allowed to wander around as they were used doing in the traditional workplaces. At the same time the work was organized in such a way that there was a smooth progression from the ware being painted, to being entered into the books to being stored'. (McKendrick, 1961, p. 32) By doing so he heightened the interdependence of his workers and at the same time gave them some task autonomy in separate places.
But the traditional 'careless habits of the older generations' presented an ongoing problem in the development of high quality production for the new markets. Wedgwood had to fight a long local tradition of 'customs in common', in particular the 'stoppages for Wakes', (a local annual feast lasting several days and nights which were spent eating and drinking intemperately and 'fornicating'), but he also had to combat 'waste', 'idleness', 'the ban of drinking', 'working by the rule of thumb', 'inefficiency', 'arbitrariness', 'irregularity', (McKendrick, 1961, p. 38; see also Thompson, 1965, p. 408 and Weatherhill, 1988).
His own personal control over his men was effective enough. But he was 'forced with increasing frequency to leave them 'without any head to look after them' (McKendrick, 1961, p. 39, p. 39, J.W. to B., 3 feb. 1770). There was no tradition of supervision in his factory in his absence. For instance when he put an older worker in charge, it turned out that this man lacked authority, due to his familiarity with colleagues. The resulting informality 'lapsed too easily to irregularity'. An example Wedgwood described to Bentley:
" Daniel does pretty well at work and I am here every day, but he often leaves the work and drinks two or three days together, and has no taste to direct at any time" (McKendrick, 1961, p. 39, J.W. to B., 3 feb. 1770).
The problem was not only the absence of Wedgwood himself, it was also the growing complexity (more workers, more tasks, all kinds of interdependencies). Wedgwood wrote to Bentley comparing the small scale pottery with his own firm:
"To keep 150 hands of various professions and more various tempers and dispositions, in tolerable order was a more difficult task " (McKendrick, 1961, p. 39, J.W. to B., 3 feb. 1770).
Wedgwood solved his problem by introducing functions with responsibility to 'one steady man' for each process - the 'Clerk of the Manufactory', the 'Clerk of Weights and Measures', the 'Porter and General Inspectors' - to 'look after the men and wages'. For all task and supervising functions he formalized his disciplinary rules by writing them down in the Potters Instructions (1780) and in the 'Common Place Book'. Some examples of external rules and regulations and sanctions for enhancing and steering the regulation of self control:
"Any person seen throwing within the yard of this manufactory for forfit 2s.6d,..", "any workman strikeing or otherwise abuseing an overlooker to lose his or there place..", any workman conveying Ale or Licquor into the manufactory in working hours forfits 2s...", "any person playing af fives against any of the walls where there are windows forfits 2x.." (McKendrick, 1961, p. 45).
McKendrick summarizes the 'instructions and regulations':
"They cover every aspect of factory discipline. Containing a remarkably detailed knowledge of every workshop and every process, the Instructions recognize all the minor techniques, the tricks and petty evasions of the idle workman". In this way Wedgwood armed his overseers with the experience, his knowledge of prevalent faults and his remedies. They also provided clear instructions on 'how to show marks of approbation' to the skilful and the punctual and how 'to reprimand those more slovenly and careless'. (McKendrick, 1961, p. 40).
Wedgwood lacked trained, specialized painters and modellers. So it was not easy 'to make Artist ...(of)...mere men', just as it was not possible 'to make such machines of Men as cannot err'. He contracted well known artists from 'outside'. But some of these artists disappointed him. They had a disrupting influence on factory discipline: they proved too lofty for the factory system or were selling industrial secrets or worked not hard enough and were idle (McKendrick, 1961, p. 36). Wedgwood separated their activities from the rest of the factory labourers and contracted them for buying and/or commissioning their designs by piece. In that way the artists, in fact, 'submitted to a discipline hardly less stringent than the common workmen'. (McKendrick, 1961, p. 37).
The other side of this sometimes harsh regime was that Wedgwood offered his workers housing and care for the sick. That was not only out of economical reckoning. He felt himself morally obliged. He wanted to improve his workmen's lot. He was concerned with civilizing their behavior and educating them to discipline and self-respect. 'Liberal but unsophisticated in his ideals, he felt hat his workmen should be disciplined for their own good and offered security in return for obedience' (McKendrick, 1961, p. 50). His regime combined harsh steering with developing self-discipline and responsibility.
The remarks of Iterson (1992, p. 82) that early factory regimes are based on a tangled combination of coercion (from the side of the entrepreneur) and willingness (on the workers part) are illustrated by these examples. Also we witness a process of trial and error towards an articulation of interdependency as well as autonomy in factory-relations.
Organizational innovation as duality-management
The progressive extension and densification of dependencies within and between organizations raise problems with regard to coordination and flexibility: If we cannot combine these increasing interdependencies with some amount of self-organization the results will be increased rigidity. It is especially interesting that in conjunction with a growing self-control, new opportunities for entrepreneurial initiative emerge while the risks of disorganization are kept under control. In his description of the organization phenomenon, Van Doorn distinguishes the `late-organizational stage' in which he observes a shift from social control to self-motivation. This, however, does not imply a shift to chaotic individualism or anarchy.
`On the contrary, the realization of this social control has only become really possible in a societal structure, whose members have learned through the centuries to - in psycho-analytical terms - regulate their drives.' (van Doorn, 1956, p. 200). Van Doorn observes that in this phase direct external control has been replaced by more indirect, more subtle binding agents and a greater evenness and allroundness of restraints. According to Van Doorn it is the combination of this all-round control and the internalization in terms of self-discipline and a sense of responsibility that makes the `late-organizational stage' possible. This is an explicit link with the work by Elias (1939). Van Doorn remains a bit vague about the nature of `all-round control and control mechanisms'. Nevertheless, he clearly sees the connection with self-discipline. He also makes the connection with Mannheim's principles of `self-rationalization' and `self-organization' (Mannheim 1935/1940, p. 55-57). So the skill of self-organization, which has been so highly praised and recommended recently, turns out to have a long history. Apparently we have become more successful over the centuries in combining a wide array of steering and coordination mechanisms with bigger opportunities for autonomous functioning. We could even say that organizations which develop a more articulate balance, either by accident or thanks to the intuition of a talented leader, gain a substantial competitive advantage.
From this perspective certain recent recommendations begin to gain importance. For instance, recommendations like: Integration of functions and specialisms on levels that vary from autonomous task forces to business units, more focus on (internal) customers, a higher accountability in terms of results, a stronger orientation on the output of units. We arrive at a sophisticated profile of both the coordinating forces and the self-organizing ability. On all levels of the organization the tension-balance between steering and self-organization becomes more outspoken. Also, the central-decentral balance becomes more articulate: A strong centralism in a few critical areas can be combined with a high degree of autonomy of organizational units.
The characteristics of this concept of organizations can be summarized as follows:
- An organization is a continually changing network of relations. What we witness over the centuries is a progressive extension and condensation of organizational networks and an increasingly complex interweaving with suppliers and customers.
- A crucial characteristic of organizational relations is the autonomy-interdependence balance. From a historical point of view this balance shows a development towards more and stronger interdependence as well as more autonomy. On a slightly lower level of abstraction one could say that better steering was developed in close relationship with more self-organization. External controls become internalized as self-discipline. This higher level of self-organization enables more adequate steering. Gradually, the ability of organizations to deal with complexity improves.
- Some organizations breed fruitless bickering and endless friction; the effect is stagnation. Other organizations have a mobilizing effect; they generate energy in their employees. The way the balance between autonomy and interdependence is managed offers an explanation. The tension between these two impulses can be expressed as in figure 1.
Figure 1 The tension balance autonomy-interdependence
| Stronger interdependence, more steering |
<== versus ==> |
More autonomy, more self organization | |
If managed right this balance becomes a source of energy and vitality. It provides an ongoing dynamic towards commitment and dedication. Some of our modern organizational designs are based on a high-tension balance of binding agents and autonomy. Franchises, some cooperatives, companies like Brown Boveri and Microsoft, develop a strong central steering ànd extensive unit autonomy.
In retrospect we can describe the development over the centuries fairly clearly. Being part of the development often means not being able to see the wood for the trees, whereas from a more distant position we discover structure in the change process. For people directly involved it often feels like a process of chaotic search and trial and error. During the process, disorientation dominates.
This disorientation is very much present in our times, which generates the following question: do the developments described above stand up in the context of recent developments? Does the changing tension balance between closer interdependencies and more autonomous units really point to organizational innovations related to competitive advantages? If so, are we then able to indicate more concretely how competitive advantage can actually be mobilized?
Mobilizing Competitive Advantage
The development of more competitive organizations is mainly based on experience, that is to say, on processes of trial and error. Is it possible to develop an organization with the right profile of both interdependency ànd autonomy more consciously? So far this has often been a matter of intuition: Managers sense that a higher degree of self-organizing leads to a more powerful whole. They are able to escape from thinking in terms of central versus decentral, and they have the courage to confront the permanent struggle of combining both central ànd decentral. How can we make this a more conscious process? What is the required "arsenal of steering and coordination mechanisms" and how can we combine this with increased autonomy and responsibility? In practice we are becoming more and more sophisticated in this respect. The four integrative mechanisms (including procedures, informal contacts and coordinating bodies) as described by Lawrence and Lorsch (1967), or the six coordinating mechanisms (including immediate supervision, standardization of skills and standardization of outputs) of Mintzberg (1979) barely reflect the extensive and refined possibilities at our disposal. We refer to the `balancing act' in which stronger interdependencies are combined with more possibilities for self-organization. Elsewhere I have addressed this assortment of possibilities extensively (Mastenbroek, 1991, 1993). A number of organizations derive their competitive power from combinations of seemingly contradictory organizational principles. We are referring to organizations that strengthen their duality and function both central ànd decentral, 'loose ànd tight', 'small in large'.
This organizational design of `small-in-large', as a network of relatively autonomous units, blends into network organizations in which the units also retain their autonomy as independent firms in various degrees. There are entrepreneurs who find their strength primarily in organizing such networks. They don't produce anything, they take on the role of middlemen. Take for example the following situation: an ice hockey helmet is designed in Scandinavia, made ready for production and tuned to the demands of the global market in the US, it is produced in Korea and distributed from Japan. Miles (1989) presents a series of examples of such network organizations in the fashion industry, the film industry and publishing companies. In itself such a network organization is not new. The new element is the diffusion of this model to an increasing number of market sectors. Being the intermediary in such a network organization is not necessarily an independent function. Any of the participants can act as intermediary. It is, however, the crucial function. Companies that take on this function are sometimes given the derogatory name `hollow company'. In my opinion it is more appropriate to regard this as a high-quality type of entrepreneurship. In this way we find a modern and catching variation of Schumpeter's definition of entrepreneurship as `neue Kombinationen machen', (searching for new combinations) (Schumpeter, 1954).
Sharing ánd stimulating, cooperation ánd competition, are other examples of important dualities. Mutual exchange, learning from each other and also prodding each other have a mobilizing effect. Revans (1983) uses this idea to make organizations more competitive with remarkable results. His point of departure is refreshing. Managers learn most from other managers, and in particular from those who struggle with the same problems. Revans called this `Action-Learning'. We now refer to it with a term like `The learning organization'. This learning from one another is often obstructed by awkward mutual communication and a lack of openness and trust. From this perspective, Evans (1991) hits the mark when he makes the increase of personal relationships and the systematic development of openness and easy communication the cornerstone of his approach to Management Development. Managers must develop a mental matrix. That is to say managers need a network of personal relations throughout the company: An informal easy accesible network that enables them to create winning combinations of skills and knowledge to hit the market place. This mental matrix will beat the most sophisticated structural matrix.
Organizations are becoming more and more networks of units that are free to act while retaining their links to one another. Units are autonomous, while cultivating simultaneously those interdependencies that give them a competitive edge. In addition, organizations rely on more horizontal market-like coordination mechanisms. This gives a different substance to the relationship of centralized to decentralized. The swing of the pendulum from central to decentral becomes a dynamic tension balance of both central and decentral. The direction in which the network moves and the quality of relations within it are shaped by the more central units, but the decentral units also show responsibility for this. Horizontal exchange and coordination demand every unit to be an active network member. This theme is repeated within units: Teams are effective only if they behave responsible for their organizational unit; individuals can be prominent only if they feel a responsibility for the team of which they are a part.
Theoretical and practical applications
Organizations are seen here as changing configurations of relations. By means of the historical perspective the changing tension balances in these relations are clarified. Over the ages up until our time we see a gradual articulation of autonomy and interdependency. I have the impression that during the 90s organizational science will receive its most important impulses from a sharper and more transparent view on this development. Already many authors observe certain aspects of this development and conceptualize it in their own way (Evans, 1991; Grove, 1983; Hampden-Turner, 1990; Handy, 1992; Pascale, 1990). Evans emphasizes the skills of communication and conflict handling to sustain closer interdependencies; Grove provides means to develop the autonomy and performance orientation of units, as parts of a larger whole; Hampden-Turner describes ways to come to a strategy which brings to a synthesis opposing interests and different concerns; Handy describes a federalistic organization design; Pascale tries to develop a higher tolerance for the simultaneousness of cooperation and competition. Their ideas and findings are complementary. They are all concerned with finding better solutions for tension balances and dualities within large configurations of units. As a central integrative concept we find support in the historical perspective focusing on organizational relations and seeing them as changing tension balances between interdependence and autonomy, between steering and self-organization. This concept not only applies on organizational change but also on change management. It provides insights to guide decisions in matters of organizational design and organizational culture (Mastenbroek, 1991, 1993). It can give us some very important levers for organizing and managing the change process itself. Let me provide you with some examples applying on the cluster of TQM, continuous improvement and cultural change. These approaches are very popular but also under some serious criticism; about 75% of the efforts are reported to fail. Like TQM, continuous improvement also focuses on cultural change. Its goals are not temporary; the spirit of improvement has to catch every worker, not for a few weeks but enduring. Management wants a lasting change, a sustainable competitive edge. This relates these efforts to the balance between steering and self-organization.
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Change management implicates steering and self-organization
Very often change efforts are programmed in ways that are difficult to link with steering and self-organization. Change management always means steering and directing. But are we steering in such a way that something of lasting value is developed in the organizational web of relations? Is more responsibility combined with more adequate steering? The next two examples show how good intentions have doubtful effects.
A few years ago a commercial bank set out on a large-scale project of quality improvement. The campaign was launched by a few top managers with much fanfare; spectacular events, special start-up days, posters and special quality symbols typified the first phase. Task forces and project groups set to work throughout the company and an extensive training programme was implemented. The central project organization, which coordinated all the efforts, has worked out a well-constructed 18-step plan that was to be used as a scenario.
Today the project is stagnating. Employees are disappointed. For the most part, the measurement and analysis techniques to which the expensive training programme devoted so much attention are not being applied. The top managers who launched the project now give the impression that they have lost both their interest and their enthusiasm; few of them are even suggesting that "now things are back to normal". Many of the middle managers are acting downright obstreperous; they feel that the blame is being thrust upon their shoulders, even though they never had any influence on the project. They were the ones who had to keep things moving despite the loss of their personnel to training and project group activities.
It is becoming increasingly apparent that, although there are plenty of ideas for improving quality, the old points of contention such as struggles for competencies, centralization versus decentralization and faulty communication and inflexible relations are making progress difficult. In a recent evaluation, the central project group revealed that the project, with its carefully worked-out 18-step plan and exemplary organization, had in fact stimulated bureaucratic tendencies, whereas the objective had been to convert rigidity and bureaucratization into motivation and entrepreneurial action. They are now looking for a way of breaking through the impasse.
Indeed, change came to an halt. Steering and self-organization were not developed; even worse, they were hampered. Line management was lead to irresponsible behaviour. The next example explains this in greater detail.
Recently I was told by a visibly pleased manager of a large production department that the quality project was as good as dead. At last work could get back to normal. He felt that for years he had been pressured by all kinds of requests (i.e. orders) to have employees participate in project groups. A merry-go-round of training and education had put impossible pressure on the planning. Everybody had been forced to improvise and work overtime to keep things going. In addition there were countless research activities by external characters who kept getting in the way. The report on avoidable quality costs in particular had gone down very badly with him and his people. "As if we don't work like crazy here!!" Anyway, the training courses were over, the project groups had done their jobs. There were just going to be some meetings to pass on the results. "Well, let them figure it out, maybe the coordinators will know what to do with it." By then most of the Q-coordinators had chucked it in. The man presently in charge did not have to be taken seriously, and his assistant was still a rookie!
"The responsibility for improvement belongs in the line-organization!" Everybody always agrees with this statement. Subsequently every effort is made to undermine that responsibility. The ample use of project-groups, steering committees, training programmes and nice looking 10-step change packages drive out this responsibility.
How to prevent this? I described how succesful change is related to steering and self-organization. Prince Maurice was doing this in his way. What are our possiblilities now? Each situation asks for an approach of its own, guided by the same principle.
The management of DECS (approx. 750 employees) that installs and supplies food-dispensing machines concludes that increasing competition demands improved customer orientation. It concerns Douwe Egberts Coffee Systems in the Netherlands, a subsidiary of Sara Lee/DE. In the Netherlands they run 55.000 machines with 33.000 clients. Among others these machines produce yearly 2,5 million cups of coffee. The management team of DECS develops an approach to improve the customer orientation in two meetings. It is decided that all the units in the organization will work systematically on four questions. These questions are:
- Who are our (internal) customers?
- On what points can we 'score' with these customers?
- What actions do we take to that end?
- How do we make our results visible?
All units start off with a brief work conference lasting half a day/one day. Progress of the process becomes a fixed item on the agenda for the team meetings of all units in the organization. Every three months meetings of all managers are organized to exchange up-to-date information on the state of affairs. Progress is reported in an internal periodical. Every unit makes its progress visible through a simple reporting system. Departments with outstanding performance records are publicly acknowledged.
After one year 150 improvement projects have been started. Countless tangible results have already been achieved: reduced lead times on orders, reduction of the number of complaints, improved financial results, improved control of the work flow, reduction of temporary labor.
This project was not organized in the common way. There were no project groups. The steering group was the top team, and that was it. No studies were conducted, except by departments and teams themselves. The line organization was included every step of the way. Each manager was challenged to show more responsibility for the (internal) customers of his unit. Issues on the inter-unit level were the responsibility of the higher manager in question. Every unit in the company was expected to show results. In this way change management is more in line with developing the capacities of steering and self organization in the normal work-organization. Does this approach mean that projects always go smoothly and without any problems? Not at all; there is no easy way out. A case where the process went much less smoothly will be described next.
A company in the chemical industry aims to achieve 'quality improvement' and 'cost leadership'. As in the first case units have to come with improvement plans of their own. The start seems promising. Some examples of improvements are:
- Considerable reduction of re-setting times between particular types of products.
- Reduction of rejection rates for two products.
- Reduction of production breakdowns thanks to improved cooperation between operators and the technical department.
However, there develops no momentum; improvement remains isolated. Supportive work conferences for the regular work teams (about action planning and working with indicators) keep things rolling. But this is only on a superficial level. It takes two years to get to the point that improvement is discussed on a regular basis. Even then, results remain few. Apart from occasional actions as described in the examples above, there is still no momentum. Mentality and company culture have an obstructing effect. Also, there remains doubts about management's motivation. Managers declare their maximum commitment over and over, but they are unable to translate it into action. Furthermore, other issues, including many operational problems, distract attention. Two interventions eventually put the project back on the rails. (1) All managers are obliged to put the improvement project on the agenda of every meeting they have with their people. (2) Each unit must report on the results using performance indicators. These indicators are kept up to date by the people involved, and they are displayed in such a way that all can see and examine them. These two stimuli are consistently maintained, even sometimes enforced, by management. This deliberate steering proves to work.
What causes the different pace in these two examples? In both cases the essence of the approach is that the units come up with improvement actions and that the regular line organization remains responsible. The difference lies in the steering capacity. In the first case management steers more powerfully. They are able to do this because they are more of a team. Also, this steering is responded to better by the organizational units. They have the ability to extract the message and go to work. In the second case managers are enticed into getting involved with operational details time and again. One might say: the managers in the first case are better able to delegate and coach. But also: their job is much easier, because the lower echelons are quicker on the uptake and better able to develop a plan for their own unit.
Change management as steering and self-organization
Maurice and Wedgwood wanted better results. They were not concerned with the balance between steering and self-organization. They could'nt care less. Results! That was the name of the game.
Retrospectively, we see the evolutionairy pattern in their interventions. In our times there is the possibility that the awareness of this pattern gives us something to hold on. With this pattern in mind we are able to correct actual fashions like empowerment without strong steering or topdown directed reengineering without the responsibility and creativity of the work-units. How does this pattern show in the two examples we discussed above? Figure 2 summarizes the approach.
Figure 2 The balance steering - self-organization
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- Top develops a vision for the organization
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- Each unit develops own improvement actions within the vision
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- The line organization directs and monitors
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- Each unit shows visible results
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Support is available to the units; they also have the opportunity to decide their own pace and make their own choices within the overall policy and planning. In these activities you may recognize a strong articulation of steering as well as self-organization. Put concisely: policy down, improvement actions up. Sometimes we encounter impediments. Teams and managers are not always able to produce improvement plans for their own unit. Continuous improvement helps clarify shortcomings in management style and communication skills, which can subsequently be developed all the more effectively. "More effectively" because they can be focused directly on the behavior necessary to improve results. Steering capacity and self-organization and their implications in terms of management style, cultural change and improvement of communication, all pass into the spotlight while working on better results. Interventions in these areas continue to take place in the context of arriving at concrete actions to reduce costs, improve quality and increase customer orientation.
The style of the change manager
An important issue, right from the start but also recurring continually, concerns the role of management. The concrete and practical detailing of this role to support change is of major importance. Key words are care and commitment. However, we have never heard a manager say he lacked care or commitment, so these buzzwords do not express what this is about adequately. The essence is concrete behavior. The behavior needs to be consistent with steering and self-organization. Figure 3 provides a compact overview.
Figure 3 Management style: Steering and self-organization
Management Style
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| Steer |
and |
support |
| Top-down |
and |
bottom-up |
| Direct |
and |
delegate |
| |
|
|
This means:
- Clarify frameworks
- Let people fill in their own responsibility
- Coach for results
- Guide towards team goals
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Writing down in a few keywords the characteristics of this style makes it deceptively simple. As described in the first part of this article it took ages to develop this paradoxical mix of specific skills. To return once more to the army-organization, the basic question is: How detailed should central steering and command be versus how much freedom for local commanders, given the turbulent, unpredictable events on the battlefield. Since Napoleon defeated the Prusian Army in 1806, German army command has been geared to this question. This resulted in the so-called 'Auftragstaktik' ('Policy-deployment'), which was, in fact, a method of delegation. Von Moltke articulated this doctrine around 1860. In the German army the commanders, including the lowest ranks, were trained to solve their problems in the context of 'worauf kommt es eigentlich an'. (The essence of the overall strategy) This policy was linked deliberately to increasing the autonomy and the team spirit of small units under the turbulent circumstances of the battlefield. Is not the steady continuity in this development remarkable? From Maurice to the 'Auftragstaktik'! During World War II the American army had not achieved this relatively high articulation of central command as well as autonomous action by local commanders. According to Dupuy (1977, p. 234-235) this accounted for the fact that, under all circumstances, American losses on the battlefield were 50% higher than those on the German side!
Figuring out the balance between autonomy and interdependence is an important issue on every organizational level, up to and including intra-team relationships. Elsewhere (Mastenbroek, 1991, 1993) the implications on these levels in terms of specific social skills have been clarified.
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Conclusion
Organizations are seen in a historical perspective as changing networks of relations. These relations are best characterized in terms of balances between interdependence and autonomy and between steering and self-organization. These balances cover slightly different aspects of the same development. Over the centuries we witness an increase in interdependence as well as autonomy. External controls become internalized as self-discipline. This higher level of self-organization and autonomy enables more adequate steering. Gradually, the ability of organizations to deal with complexity improves. New types or organizations are not new. The articulation of steering and self-organization is a process which shows a remarkable continuity. So-called new types of organizations are recent expressions of this same process.
This concept of organizations finds promising theoretical and practical applications. This is demonstrated by relating the concept to organizational design and to change management aiming at cultural change for instance by means of TQM or continuous improvement. The concept of 'both better steering ánd more self-organization' provides a framework for getting a clearer view on the interventions needed for successful implementation. It is a most interesting conclusion that TQM and continuous improvement often does not live up to their promises because the line organization is involved in rather awkward ways. The ample use of project groups, task-forces, steering committees, special coordinators, elaborate training programs and all kinds of analysis and research by internal or external agents and consultants obstruct the development of steering and self-organization in the line-organization. This impedes the cultural change necessary to give continuous improvement momentum. The capacities for steering and self-organization are critical assets for such a culture. An approach more in line with the development of these capacities is briefly described.
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About the author
Willem Mastenbroek, Ph.D., is professor of Organizational Culture and Communication at the Department of Economics of the Free University of Amsterdam. He has authored numerous articles and books, including Conflict Management and Organization Development (Wiley, 1993) and Managing for Quality in the Service Sector (Blackwell, 1991). Mastenbroek is partner of the Holland Consulting Group in Amsterdam. His activities concern the management of structural and cultural innovations in organizations.
