Last week at the Managing Partners’ Forum held on March 12 in London, Caspar de Bono of the Financial Times opened this high-level conference for leaders of professional services firms with an observation about the biggest single concern besetting CEO’s. He argues that despite all the other things that could provoke a CEO’s angst – natural events, war, price shifts, competition, whatever – that all these things are wrapped up in a single question: “Is my organization changing fast enough?”. That set the tone for a most interesting conference in which we heard from futurist Gerd Leonhard and myself on The End of Competitive Advantage, followed by a series of stimulating exercises and a panel discussion. Nobody disagreed with de Bono’s analysis.
A similar theme echoes through a recent Strategy + Business piece in which my view of transient advantage is compared to John Kotter’s observations that hierarchy, although necessary, can eventually lead an organization to its own destruction. He recommends a somewhat different organizational approach than the one I am partial to (which is separating to some extent the exploitation oriented businesses from those that are trying to do new things).
As Strategy + Business quotes:
Kotter has a different prescription. He thinks that both management systems can exist within the same business as a “dual operating system.” Behind the hierarchical system is a secondary system that has a network structure with multiple nodes and connection points, and is charged with executing strategic initiatives. This network has “no bureaucratic layers, command-and-control prohibitions, and Six Sigma processes” and it is “populated by a diagonal slice of employees from all across the organization and up and down its ranks,” writes Kotter. Thus, the people in the network system are simultaneously working in the hierarchical system.
I have to confess that I have my doubts about this. When I look at how time-stressed most executives are today, a lot of that agita comes from having to maintain elements of the old hierarchy (budgets, update meetings, reports) together with elements of a new, networked way of working (midnight phone calls to India, a deluge of emails, information too voluminous to sort through). I’ve always thought of it as a transition from hierarchy to something else. I’m not sure I’d be thrilled to be living that way permanently!
Nonetheless, I think we can all agree that being slow to change is more dangerous than ever, with hierarchy being a prime culprit.