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The Challenge of Simultaneous Management and Creativity

Bruce Murray

Bruce Murray is a business consultant based in Portland, Oregon USA. He teaches Business at Portland Community College and serves as a Board Officer for the Organizational Development Network of Oregon. He has a degree in Interdisciplinary Studies, a Masters in Business Administration, and held certification as a Professional in Human Resources. A Director at Barde Career & Corporate Solutions, he also served as Office Manager of John Labatt Foods, General Manager of a McCracken Motor Freight, Director of Administration at SignArt, Inc., and Vice President of VTM Group. With interests focused in organizational development and human resources, in 2012 Bruce published two articles in The Training Journal and another in Training Magazine.

Author Contact Information: Bruce Murray 503-803-4405 7537 N. Elmore Avenue Portland, Oregon USA 97217 [email protected]

Structured Abstract

Title: The Challenge of Simultaneous Management and Creativity

Background: A literary review of John Kotter’s article, “Change Faster. How to Build Adaptive Genius in Your Organization” published in the November 2012 issue of The Harvard Business Review, pages 44-58. Manuscript Type – Practitioner Paper Article Type – Literary Review

Purpose: This reviews a proposal by John Kotter that asserts that the traditional business hierarchy shares governance with a networked group of volunteers who identify opportunities and initiate the organizational changes to exploit them. This paper investigates the challenges facing implementation of such a system.

Design/methodology/approach: This paper briefly cites two recent biology findings concerning homeostatic governance before performing a literary review of Kotter’s new proposal that modifies his past work. Employee motivation is central to the proposal’s viability. The author uses Daniel Pink’s criteria of evoking employee motivation to guide implementation efforts. The author concludes by linking the biological studies

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Originality/value: This paper anticipates a logical next-step in the role of virtual networks in effecting crucial business decisions. Its value is in the issues it raises to assure success of these networks, particularly among volunteer teams.

Keywords: John Kotter, Leading Change, corporate governance, hierarchy, guiding coalition, volunteer

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to the evolution of emerging matrixed systems of business organization.

Findings: The paper provides empirical insights into the implementation challenges that Kotter’s proposal does not address. The author finds that Kotter’s “volunteer army” will be challenged to maintain motivation. The executive hierarchy must modify its mindset from that of “controllers” to “enablers.”

Research limitations/implications: This paper does not claim new research. It uses the existing research of Daniel Pink and Steve Denning to guide the implementation of the system Kotter proposes.

Practical implications: In the rapidly evolving, globalized business world, virtual networks are playing an increasingly important role. Kotter’s proposal makes a big leap forward by suggesting that a virtual network be granted co-governance authority. This paper addresses concerns in making that giant leap, and speculates about the end of the era of hierarchical governance.

Social implications: Power relationships are a key element in social dynamics. The powerful are known for their reluctance to yield, yet Kotter’s proposal requires senior executives to cede half of their power to a virtual network of employees extending down to the lowest ranks of the power hierarchy. Kotter’s proposal also demands that the power- sharing network consist of volunteers with little or no compensation for the additional responsibilities they undertake. Such actions have broad and deep impacts on its participant’s social interactions in both their personal and professional lives.

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This spring I wrote an article on group brainstorming that put systems of creativity in my mind. In this paper, I share a little of my subsequent reading and concentrate on a bold proposal by John Kotter. He concludes that business must shift from its current managerial paradigm to one of two coexisting governing systems. This paper outlines Kotter’s proposal, offers some critique, and it fills in a few crucial details. Gina Kolata (2012) wrote an article about science’s increasing attention to DNA “junk” matter (para 2). Since Watson and Crick identified the double helix structure of the DNA, attention has focused on the 23 pairs of chromosomes in our genes that create the specialized cells in our bodies. The 90-95% of the nucleic DNA that is not in our chromosomes, known as microbial DNA, was considered nothing more than “junk matter.” Recent findings, however, have found that the microbial DNA plays a key role in managing the timing of chromosomal activity. Diseases such as multiple sclerosis, lupus, rheumatoid arthritis, Crohn’s disease, celiac disease, and many cancers are now believed to be profoundly affected by microbial DNA. Reflecting a physics meme, the phrase “dark matter” has now replaced the pejorative use of “junk.” Then I read Michael Specter’s “Germs are Us” (2012) about the tens of thousands of bacterial species in each of our bodies. Nearly every human infant in history developed the H. pylori bacteria in their digestive tracts. It was found to cause major health problems, including stomach ulcers and cancers, when combined with sanitation problems. In response, Western medicine created antibiotics that have eliminated H. pylori in 95% of Americans. New research is now correlates the lack of H. pylori with asthma and obesity—two scourges of modern

Western life. That organisms have multiple systems interacting in very complex ways is hardly news, but I had not spent much time considering the internecine battles between systems to establish managerial dominance. Next, I read an article by John Kotter (2012) in the Harvard Business Review, in which he describes business organizations with traditional, authoritarian management dominance of the subsystems under their control. Its hierarchy is constructed to optimize, that is, to efficiently control costs in order to maximize profits. Management in this system is culturally risk-averse, constrained by old habits and rules, and therefore resistant to change. It is also politically driven; the only actions taken are those pre-approved by one’s manager, upon whom one’s career advancement depends. Management guru, Peter Drucker, captured its essence when he advised, “Nevermind your happiness, do your duty” (BrainyQuote, n.d.). Inevitably, however, every business must change. While history shows that these hierarchies can create ideas for change, it repeatedly demonstrates that implementation is slow, awkward, and often futile. This not only applies to old, traditional business models, but even to modern Six Sigma-based organizations whose idea of change is non-stop, but incremental. Research and books sought to establish best practices for business to deal with the problem of organizational change.

Figure 1. Image courtesy of ContXt Corporation, 2012

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In Leading Change, Kotter’s 1997 book, he outlined eight critical steps to implement organizational change: establish urgency, creating a guiding team, develop a vision and strategy, communicate it for understanding and buy-in, empower others to act, produce short-term wins, and consolidate gains in order to produce more change. This model remains a mainstay in academic and business circles, and following his eight steps is an accepted best practice. Kotter’s new article builds on this model with one significant new proposal. In the face of the global market’s ever- accelerating pace, the need for change is no longer sporadic. He says businesses now incessantly fear “being disintermediated, out-Googled, or otherwise being made irrelevant.” (Kotter, 2012, p. 47).

Figure 2. Image reproduced from The Big Orange Slide

Because the hierarchical system is no longer able to keep pace, he contends that the traditional system should share governance with a permanent network of volunteer change-agents. Combining his earlier principles with this new proposal, Kotter says the first essential element to bringing about change is to establish a sense of urgency. I quibble with his use of this word. Urgency has two components: importance and a pending deadline. A deadline implies finalization, and in the face of incessant change,

finality never occurs. People confronting constant urgency become neurotic, a condition described by Dr. Boeree (2002) as resulting in “confusion… cognitive problems…cynicism… [and] the inability to change” (para. 1). The distinction I propose may be merely semantic, but if we replace “a sense of urgency” with “incessant flexibility,” I believe the adjustment will be less psychologically toxic. The mindset I wish to establish is best captured in legendary UCLA basketball coach John Wooden’s instruction to his players: “Be quick but don’t hurry.” (Hill & Wooden, 2001, p. 69). In Kotter’s earlier system, the next step in establishing change was to create a specialized group under the leadership of a senior executive. It would brainstorm ideas leading to creative new strategies. Once this secondary system completed its work, it would hand it back to management for efficient implementation, and the group is then shelved for a year or two until the next time it’s needed. For more than a century, change has been implemented in this manner, despite the confusion, resistance, fatigue, and higher costs that Kotter says are incurred with each use. He recommends replacing these temporary, ad hoc groups with a permanent guiding coalition (GC). This GC is not a handful of the executive committee’s chosen few, but a volunteer army comprising about 10% of the workforce.

Figure 3.

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It includes—but is not managed by—a senior executive who plays a key role in selecting the other members. The GC must include every functional department and represent all levels of the hierarchy. Without a hierarchy, this permanent network is not subject to waiting for direction and approval of others. The resulting agility is a boon to creativity. Kotter is vague about when volunteers perform their networking duties, but is firm in dictating that they do not replace their full time responsibilities. He adds that the rewards for their volunteer service are “rarely monetary” (p. 54). Jessica Stillman (2012) cites a CareerBuilder survey indicating that 70% of a workforce searches for jobs as part of their “regular routine” (para. 4). Where will a business find 10% who are willing to volunteer for change-agent duty in addition to their current duties, and without pay? Among the remaining 30%, there is undoubtedly a contingent of workers who are fully engaged and motivated. Service in a GC advances all three conditions to fulfill employee motivation outlined by Dan Pink (2012) in his book Drive. The self-managed GC network offers autonomy to control how employees do their work. The GC offers many opportunities for employees to master new skills. The third condition is passion, indulging employees’ desire to take meaningful actions that will make a difference in the larger world. Certainly, the charter of the GC will incite the passions of many, but for how long? To sustain workers’ motivation, the GC’s roaming efforts must have access to relevant resources and training. If direct compensation for their volunteer service is not offered, then GC service must lead to opportunities for advancement through the ranks of the hierarchy. At the risk of making a circular argument, if 1.) the elements of Kotter’s

implementation strategy are enacted, and 2.) the GC creates successes, then the result will be a self- perpetuating system of promotion opportunities, and those rewards will be able to attract and retain a huge volunteer army. But those are two big ifs. If the growth is slow to come about, the hierarchy would be wise to reward GC contributors with modest bonuses, tuition reimbursements, or additional vacation time. This could result in the impression of another hierarchical divide: the network receiving benefits not allowed to the rank- and-file. Therefore, deployment must be modest and accompanied by skilled communication. In any case, regularly rotating membership in the GC would give needed rest to avoid burnout, and open opportunities for volunteers who were not chosen in the first round. In addition, rotation would diffuse impressions of the network as a “second hierarchy.” Assuming the volunteer GC is formed, let’s look deeper into the implementation strategy. Establishing a sense of urgency (or incessant flexibility) begins at the top. Leadership must continually acknowledge and reinforce that change is required for survival. Explaining the rationale for change with logic and numbers is necessary, but an emotionally-based emphasis is more motivating. Many change initiatives are launched, in the words of Kotter (2012) with a “we-must” attitude. Communication should invoke a vision of opportunity. Issue a call of action by showing a better future, and create a “we-want” attitude toward change (p. 49). Leaders’ visions and attempts to inspire most often fail as a result of cynical distrust. When leaders show their own change before asking others to join them, then buy-in is far more likely. The boldness of Kotter’s proposal is his demand that the hierarchy share power with the new, networked GC. Yielding power to the GC

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certainly qualifies as leaders’ acceptance of change, but skeptics will await proof of the shared power.

Figure 4.

Once the GC is convened, the executives begin sharing their high-level knowledge about the organization and its external markets with this co- governing second system. They give the GC guiding principles and resources to identify and pursue the opportunities it finds. The GC’s initial pursuits are translated into a draft of a high-level vision, both feasible and easy to communicate. Not only must it be strategically smart, but it must incite emotional engagement. This draft is presented to the executive committee where it will undoubtedly elicit questions and criticism. Until a GC establishes both its internal processes and achieves some credibility, its work should be limited to short cycles with clear, simple objectives. As personal connections are made and the network processes become established, cycle times and objectives can be emboldened. When the network submits findings, the executive committee’s reaction must be given considerable weight, but ultimately—and here’s where the rubber meets the road—the GC has unbridled permission to make the call of what changes are required.

The GC work proceeds without having to get permission at every step, yet it continues to meet with the executives regularly. As unity is achieved, the crucial communication of the vision to the rest of the organization begins. Because the GC membership permeates all areas of the organization, it can organically build support and buy-in. To start, the network of volunteers will be more trusting of the leadership than the workforce-at-large. If the leadership follows through on its promises, the multi-leveled, networked nature of the CG will ensure that trust will infiltrate the organization quickly and dramatically. The hierarchy, liberated from the burden of selling the change, can then do what it does best: manage the implementation of the changes required in pursuit of the new opportunities. The GC will undoubtedly flounder in its early days as it works out its methods, and as members get acquainted with one another’s personalities, talents, and quirks. The executive hierarchy must be patient and supportive. Look for early successes, regardless of how inconsequential they may seem. Bringing to light short-term wins will boost the GC’s confidence and endurance. Reinforce the need for constant change by rapidly implementing the smaller ones ready to deploy. Never let up until the changes are incorporated into the organization’s culture, and then celebrate them. Kotter does not discuss the psychological impact on the executive hierarchy. If they are no longer responsible for identifying and planning strategic changes, what is their role? Denning (2012) suggests that senior managers shift their mindset from being controllers to becoming enablers. The job of management is no longer overseeing task execution. It is remove impediments that are hindering the work and leading by inspiring, motivating, encouraging the collaboration.

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The use of a matrixed network to investigate opportunities is not groundbreaking. For two generations now, high-tech companies like Nokia, IBM, Goretex, and Schlumberger have adopted a matrixed structure. They have demonstrated its merits and potential, but it is gutsy to grant such a network equal governing status to the executive hierarchy. I go back to thinking about chromosomes and the “junk DNA” that manages it; and to the battles between digestive bacteria and antibiotics. Evolution chooses winners and losers. Human engineering tries to create winners and losers as well. Sometimes, it develops systems that cooperate and/ or compete to bring about sustainable environments; at other times it fails. The Industrial Age was suited for a uniform, top-down, authoritarian structure, but in the Knowledge Economy, it has neither the creativity nor speed to keep pace. The dynamic tension of co- governance offers the promise of being adaptive in shifting circumstances while also managing with efficiency. Whether or not the two-system governance succeeds depends upon how effectively an organization fulfills Kotter’s steep demands— an unpaid volunteer army living with incessant urgency, and power-driven executives willing to cede power to them. I believe Kotter’s system deserves a shot, but the testing laboratory will be in a reality-based setting. If an organization can pull it off, both sides will be rewarded by a market dazzled by its optimized agility. Kotter’s proposal begs an even larger question: Should the hierarchical system be abandoned altogether? Mark Frederick points out that Lenovo and McKinsey Global Institute, among others, have abandoned brick-and-mortar headquarters. Meetings of their senior managers rotate globally and their key development teams

are a globalized, virtual network. Are they taking first steps that will atrophy their hierarchies into vestigial remnants?

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References

Boeree, C.G. (2002), “A Bio-social theory of neurosis.” Shippensburg University, Pennsylvania USA. Retrieved October 17, 2012, from http://webspace.ship.edu/cgboer/ genpsyneurosis.html.

BrainyQuote.com. (n.d.). “Peter Drucker.” Retrieved October 15, 2012, from, http:// www.brainyquote.com/quotes/quotes/p/ peterdruck120334.html.

Denning, S. (2010). “The leader’s guide to radical management: Part 3: From controllers to enablers.” Retrieved November 23, 2012, from http://stevedenning.typepad.com/ steve_denning/2011/01/the-reinvention- of-management-part-3-from-controller-to- enabler.html.

Frederick, M. (2012). “Becoming a strategic global HR leader.” IOR Global Services. November 2, 2012 presentation to the Global HR committee of the Portland Human Resource Management Association.

Hill, A. and Wooden, J. (2001).Be quick─ But don’t hurry. Simon & Schuster, New York City.

Kolata, G. (2012). “Bits of mystery DNA, far from ‘junk,’ play a crucial role.” The New York Times. Retrieved September 14, 2012, from http:// www.nytimes.com/2012/09/06/science/far- from-junk-dna-dark-matter-proves-crucial- to-health.html?pagewanted=all&_r=0.

Kotter, J. (2012). “Change Faster. How to build adaptive genius in your organization.” The Harvard Business Review. November 2012, pp. 44-58.

Pink, D. (2012). Daniel H. Pink: Drive. Retrieved October 29, 2012, from http://www.danpink. com/books/drive.

Specter, M. (2012). “Germs are us.” The New Yorker, October 22, 2012, pp. 32-39.

Stillman, J. (2012). “No joke: 70% of your employees are job hunting.“ Inc. Start It Up. Retrieved October 22, 2012, from http:// www.inc.com/jessica-stillman/70-percent- of-employees-are-job-hunting.html.

Graphic Images

Figure 1. “John Kotter’s Eight Critical Steps in Implementing Change.” Permission obtained… Image courtesy of ContXt Corporation (Source: http://www.contxtcorp. com/contxt-process.php.)

Figure 2. “The Prospect of Being Out-Googled.” Article and image reproduced from The Big Orange Slide with the permission of Grip Limited, Mike Koe(author) and Nancy Ng(illustrator) Source: http://blog. whatrunswhere.com/googled-advertising- adwords/

Figure 3.”An Army of Volunteers.” Image courtesy of the author.

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Figure 4. “Shared Governance.” Image courtesy of the author.

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