Chapter 8

Naskapi planning
Using history
Organization learning
Amoeba organization
Sustaining growth


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Apple Computer


Baby Bell's 

B.F. Goodrich

Digital Equipment

General Motors




U.S. Air











excel at:

- Pure survival

- Rolling with 
  the punches

- Adaptability

- Fast change

- Making do 
  with what 
  they have

- Learning 
  from mistakes

- Avoiding 

































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The Improviser's

- Action-oriented

- Realists

- Good bluffers

- Impulsive

- Fast and flexible

- Lean and mean

- Relish challenges

- Result-oriented



















































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sustain growth 

- Organizational 

- Making use 
  of their past

- Keeping overhead 

- Minimizing 

- Mimicking 
  the amoeba

- Replacing 
  jobs with 

- Giving 
  term limits







































































































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Chapter 8

Profit from change by rolling with the punches


Excerpt from Go For Growth

By Robert M. Tomasko


Imagine working in an industry where everything seems up in the air - almost all the time. Whenever a company advances two steps, it falls behind at least one. How can a business possibly grow when:

- Many aggressive competitors, from a variety of industries, are preparing to enter its market.

- Its largest customer plans to be its biggest competitor.

- Smaller competitors are skimming-off the most profitable customers and lines of business.

- Some of the most promising growth possibilities are industry segments dominated by its biggest customers.

- The technologies underlying it products are in a state of near complete flux. New, competing technologies are being announced monthly and no one is certain what the new industry standards will be. It has a multi-billion dollar investment in fixed assets that may loose much of its value if several emerging technologies live up to their promise.

This, in a nutshell, is the competitive situation of America's local telephone companies. These businesses, the Baby Bells and a score of independent companies, are facing a battery of pressures - each sufficiently strong to topple well established corporate giants. But they have not gone under, and several have made impressive gains, growing both revenues and profits. How does a company grow while facing threats, uncertainty and inconsistency on all sides?

It improvises.

A growth strategy for the future
Improvisation is the growth path to choose when no other good choices are available. Improvisers lack the sharp focus of Specialists, and for good reason. Improviser's target markets are in such flux than any attempt to zero in on a particular segment is pointless. Yesterday's promising niche too easily becomes today's cash trap and tomorrow's dead end.

Instead Improvisers make up for a lack of concentrated effort with an organization built around speed, cunning and flexibility. They have a great gift for rolling with the punches, for shifting strategies to meet whatever immediate challenges must be faced. Improvisers can be very exciting places to work - for the right person. But for many individuals, this is a path to be avoided. While exhilarating for some managers, others are sure to find it only a source of depression, burnout and ongoing frustration.

Improvisation is especially useful in two situations:

1. When a market is on the verge, or in the midst of, massive, hard-to-predict-how-things-will-sort-out change.

2. When a company's competitive position has slid to the point where just doing the customary things better is unlikely to improve prospects for growth.

Improvisation is the least appreciated, most misunderstood path to growth. It is the one most likely to cause a company to stumble. But it is also a very important path. Along with Specialization, it is likely to be the most traveled path at the start of the new century.

A blue chip growth strategy
There are, as is true with Rule Breaking, many easier ways to make money. Leaders of Rule Breakers, though, choose that path because they feel an inner compulsion to follow it. In contrast, Improvisers seldom volunteer to take this approach to growth. They are driven to it, instead, by strong, external pressures.

At least Improvisers find themselves the good company of organizations such as: American Express and Kodak, many Madison Avenue ad agencies, industry giants like A.T.&T. and General Motors, Westinghouse (the Specialist General Electric's historical rival), IBM, many of IBM's rivals - Apple, Digital, Unisys, and most of the world's airlines.

B.F. Goodrich an Akron, Ohio industrial company has been a classic Improviser. It has demonstrated a remarkable ability to change course - from spinning off its traditional tire business so it could focus on making polyvinyl chloride, to selling the PVC operation to allow its to emphasize other chemical products and to, eventually, enter the aerospace business - all within ten years!

Hallmarks of Improvisers
Improvisers do have some consistency behind their inconsistency. For them, strategy and tactics often blur. Survival and growth are synonymous, and both driven by being fast on their feet, being able to do whatever it takes to remain competitive at the moment. Shifting gears from emphasizing product quality to service delivery to low cost is all in a day's work. Long range planning, for some Improvisers, means having a good fix on how the next quarter's likely to turn out.

Guerrilla warfare
When at their best, Improvisers are like guerrilla soldiers. Both move fast, get off a few shots quickly in the general direction of their opponent, see where the shells land, and keep improving their accuracy by trial and error. Then they go into hiding, lest they attract too much attention from more powerful enemies. Improvisers and guerrillas avoid fixed positions requiring defense, and live off the land as best possible.

Even in asset-laden businesses such as telecommunications, this philosophy holds. A "the best defense is a good offense" spirit characterizes the moves of cable TV companies into telephony, and experiments by local telephone service providers to offer home movies on demand through existing phone cables. In addition to poaching, each competitor is racing to develop interactive video shopping systems - not so much because consumers have signaled a deep desire for this service - but to preempt other companies from offering it.

Naskapi Indian-style planning
How do Improvisers plan in the face of near-total uncertainty? Let's start at what might seem like an unlikely place, the Naskapi Indians of Canada's northern province of Labrador. These native North Americans are born Improvisers. Like many of their counterparts in business, they are hunters. Their land is not especially fertile, and they move around too much to be disciplined crop tenders. So they are faced, very frequently, with the need to decide where to go next hunt for game.

The Naskapi set their course with a well established methodology. They obtain some dried caribou bones, remains from a previous successful hunt, and build a fire. Then the hold the bones over the flames until cracks appear. These cracks are then "read" by the tribe's designated strategic planner. He interprets the cracks to indicate the direction the hunter should take to find game.

The Naskapi practice has a lot of credibility because it allows a place for their gods in the planning process. Its application is also popular because it works. Though not every hunting trip is successful, enough are that the Indians are reasonably well fed.

Planning for an uncertain world
Karl Weick is the Cornell University theoretician who has had a great influence on much of Tom Peter's thinking. He has analyzed the Naskapi planning process, finding a number of useful features that are applicable beyond Labrador.

- No person, or group is blamed if game is not found. The gods are considered at fault, and team cohesion is maintained.

- The location chosen has no relationship to places where game were found to be plentiful in the past. This is good - otherwise the most likely place the tribe would return to hunt would be where they had best luck before. Seems an obvious course of action, but also very counterproductive. Revisiting past successes is a way to guarantee future failure - the animals there would become soon depleted. (Refer back to "The New Rules for Growth," Chapter Two)

- The Naskapi's actions did not follow any set patterns. Irregularity extremely useful - whether chasing game or battling tough competition. Regular patterns will, over time, serve to sensitize the prey to the hunter's habits (just as antibiotics eventually induce bacteria to breed resistant strains, rendering the once-miracle-drugs impotent). Game animals are like their hunters. Animals like to survive too. Game will just move to a more distant feeding ground.

Avoid predictability
What this tribe has done, Weick observes, is to intentionally complicate human behavior. It would have been much more straightforward for the group to vote on the direction to hunt, or listen to the hunter with the best practices or greatest number of past kills. But in this situation, just as in the constantly changing competitive positions held by many Improvisers, there are real advantages to avoiding predictable or fixed patterns of activity.

Improvisers must also thrive in inherently unpredictable environments. Their chances of accomplishing this are greatly diminished if they approach planning and decision making with the deterministic rigor appropriate for Specialists or Rule Makers. This is not to suggest the planning department be replaced by a table of random numbers, but planning in a way that surprises and throws off balance the competition has a lot to recommend it in the world of the Improviser. When everything is up for grabs in the marketplace, a company is not likely to be worse off by behaving randomly than attempting to follow a lock-step plan. It is not especially productive to follow traditional planning techniques in an unplanable industry.

A management style based in part on randomness has some key advantages. It helps a business forget what made it currently successful. Managers tend to remember only what is producing results today. Using recent memories is a good way to be efficient, but a poor approach to coping with uncertainty and the need for constant change. It is easy for an Improviser to stumble when it is too adapted to its situation.

Benefits of improvisational planning
Karl Weick found many advantages to the Naskapi planning approach. These also can serve as a checklist to judge the appropriateness of a planning process to the unique situation of an Improviser. These benefits, to paraphrase Weick, include:

1. Mistakes have little consequences (the hunt can begin again tomorrow).

2. Decision can be made when facts are otherwise insufficient.

3. A choice can be made among look-alike alternatives.

4. Competitors are confused, employees are not - they know how the course of action was arrived at.

5. A near-infinite number of alternatives are available (thinking-out-of-the-box is built-in to this method). Real novelty is introduced into the plan.

6. Decision can be made swiftly, without a lot of debate (why argue about something with no knowable answer?)

7. It is easy to change a streak of bad luck.

8. This is a low overhead technique, requiring minimal data collection and recording keeping .

9. Bias is eliminated, all possible choices are weighed equally.

10. The process is fun.

Insightful Improvisers know absolute control is an illusion. They leave this practice to Rule Makers and Specialists (whose natural markets are less dependent on serendipity). Improvisers can do a lot worse than following the principles that guide the Naskapi's tactical planning. Taking small steps this way helps Improvisers avoid being bet-the-business companies. Improvisers like to survive.

Fresh thinking, outside leadership
A key to successful Improvisation is fresh thinking about the company and its situation. Creative planning procedures can provide some insights, but many Improvisers also require a change of leadership to move them forward.

- George Fisher, ex-chief executive of highly successful Motorola replaced generations of inbred leaders at Kodak. Like many of his predecessors, Fisher has a technical background. But his PhD. is in math, not Kodak's traditional core competency of chemistry, and he learned how to manage in an electronics environment.

- IBM's chief executive, Louis Gerstner, came from RJR Nabisco, a consumer products company.

- 25% of Nynex's top management group were hired with no telephone business experience. The head of Ameritech's endangered residential phone service monopoly, James Firestone, came from a successful career managing American Express's travelers cheque business.

There are some exceptions to bringing in outsiders, but not many. B.F. Goodrich's multiple, chameleon-like business reinventions were all led by one chief executive, John Ong. General Motors' chief executive, John Smith, spent his career at this Detroit car maker, but the company's senior change agent, board chairman John Smale, was the former Procter & Gamble CEO. GM also brought in a senior manager from Bausch & Lomb, a BMW-owner to boot, to revitalize its worldwide marketing operation, and Bob Lutz from Chrysler to serve as "senior car-guy."

Forget the organization chart
Official versions of an Improviser's organization chart are even less useful than in most companies. Improviser's organization's have only coincidental correspondence to the rapidly-evolving strategies they follow. These structures, and on-paper depictions of them, both lead and lag current reality.

Some organization units shown are, in reality, empty boxes, divisions that have been announced, but not yet staffed. The value of these departments is primarily aspirational. Other departments may exist, and be populated, but are more a memorial to a past business plan than the current strategy. Individuals working in these functions are sometimes called "the walking dead." Their jobs are redundant, but their employer has been too distracted with other matters to redeploy or outplace the individuals in them.

Restructuring can be a substitute for real change
Improvisers seem fated to be on the receiving end of frequent reorganizations - each usually occurring before the dust has settled from the last wrenching change. Even though these are often intended to signal significant directional shifts, reordering lines and boxes is seldom sufficient to establish a new growth path. Too often it is a substitute for the real, deeper changes that are needed for a business to thrive as an Improviser. John Scully was known for his frequent reorganization of Apple Computer ("check your e-mail each morning to see what department you're working in that day"). Kodak's employees, before George Fisher arrived, experienced five major restructurings, none going far enough to reenergize growth.

Catching the disease of the market
A problem too-frequent organization changes bring - along with their seemingly unending waves of downsizing - is the importation of the turmoil and uncertainty of the market into the Improviser's inner workings. While it is vital to roughly align organization with marketplace dynamics, too close a coupling with an industry lacking clear direction can become very debilitating. Employees tire of the constant change in their work, hunker down and cling even more tightly to the old ways as a way to cope with their fears. Effective Improvisation requires discovering ways to erect a "zone of relative stability" between the company and the maelstroms in which they operate.

Some Improvisers keep their structures simple and stable, but accommodate change by more-frequent-than-usual personnel reassignments. Others:

- establish several senior-level troubleshooter or coordinator positions to oversee the key business processes of the moment

- give departments intentionally-overlapping charters, acknowledging the need to continually develop alternative approaches to meeting market needs

- manage key operations through a structure of temporary teams, drawn from employees in the ongoing departments, overlaid on the existing structure, and set-up and disbanded as needs arise.

Hockey stick projections
A few Improvisers try to deny the need for immediacy. They hunker down, avoid risks, and spend long hours developing elaborate ten year plans. While this approach to planning runs completely counter to the widsom of the Naskapi , it fits into another Indian tradition. These plans are the business equivalent of tribal amulets, they are expected to ward off an evil future. Successful Improvisers who go through these rituals are usually savvy enough, though, to ignore them when quick decisions eventually need to be made.

A few years ago a manager at one troubled steel maker responded to headquarter's request for a new strategic plan by sending a copy of last year's plan with an updated title page. No one at headquarters ever noticed!

Hockey stick-like, wishful thinking projections, showing a quick reversal of a long negative trend, abound in many long range plans. Prosperity (and stability) is foreseen just around the corner. Hope springs eternal. For some companies, these are appropriate expectations. But Improvisers endanger themselves when they view their path as only a temporary detour, a transitional stage requiring only holding one's breath until stability returns. The reality, for many Improvisers, is they will be on this path for many years. They need to know how to manage themselves to thrive through flexibility. Setting realistic expectations is a good first step.

An Improviser's personality
What is the personality of company as fast at making tactical shifts in the market place as Pele was scoring goals on the soccer field? Here's what an Improvisers might have to say for him or her self, assuming as in previous chapters, that it is useful to understand an organization better when it is thought of as if it were an individual.

"I'm a consummate realist. I deal with the world as it is and avoid being distracted by the world-as-somebody-might-want-it-to-be. I've never been much for fairy tales.

"I do get excited by the unknown. Ask my friends and they will tell you I'm chronically dissatisfied with the status quo.

" But my approach is different from most reformers'. I'm a take-charge pragmatists. I'm good at making do with what I've got. And I'm capable of rapid and unhesitating action. I may be hard to pin down, to be cornered, but that's what works best for me.

"I like to quickly master challenges and then move on. Non-Improvisers may need to clean up after me. I have little toleration for endless debate. "Life is short, let's get on with it' is my motto.

"I may be a bit egocentric, but I'm never not to proud to roll up my own sleeves when the situation demands. I keep trying until I get what I'm doing right.

"Watch-out if you and I ever play poker.. I'm great at bluffing my way around a weak hand."

Many Improvisers have a broad repertoire of behaviors. They will act, in true Rule Breaker fashion, like adolescent rebels when it suits the situation, or as loyal, Game Playing supplicants when necessary to win the support of people more powerful. Few Improvisers enjoy being at the mercy of others, but frequently they have no choice.

Improvisers can be strongly committed to a particular course of action, and then able to change plans and go off in a different direction without any signs of remorse or second guessing. They can also return to an abandoned plan and be totally immune to "I-told-you-so" criticisms. Improviser's plans and egos are kept separate. Mid-course corrections are, for Improvisers, a way of life. Their ideas and strategies are always subject to last minute changes, especially when new information arrives. They can easily hold two contradictory ideas in their minds at once, and not feel paralyzed by uncertainty.

Most Improvisers prefer procrastination to being forced to make an unalterable decision. At their worst, though, Improvisers can be impulsive, too quick to react. They may act before having sufficiently thought through what they are doing. They may try to use the need to be flexible when faced with uncertainty to mask their own mistakes and indecisiveness.

The dark side
All paths to growth have their strengths and weaknesses, a light and a dark side. At their best, Improvisers are industry's true "learning organizations," businesses capable of advancing forward, stumbling, figuring out what went wrong, and investing their energies into renewed forward movement, not into apportioning blame and punishment for the initial misstep. This is a process, however, that eludes many Improvisers. Instead they become prisoners of Improvisation's dark side and succumb to near-constant stumbling and economic performance that is marginal, at best.

Growth eludes Improvisers when they fall into one, or several of the traps that almost inevitably line this path. The five most dangerous pitfalls include group think, pulling back from reality, avoiding what needs to be done, impulsively winging-it, and just giving-up. These dangers can effect any company, but Improvisers - with their limited margin for error - are especially prone to the problems they cause.

1. Group think
Working in a high pressure, high uncertainty business environment requires managers and employees able to cope with a great deal of anxiety. Banding together in teams is one, increasingly common, way to do this. Teams, especially ones that include employees with a mix of organizational and functional backgrounds, can be very valuable. But they also can, in Improvisers, be equally as dangerous.

In pressurized situations teams begin to value their own cohesion - an antidote to the chaos the company is in - over dealing directly with the the conflicts that naturally arise from differing perspectives and opinions about courses of action the business needs to consider. This reaction to stress tends to make a bad situation worse. Team, or department, members loose contact with outside sources of information - especially information that may threaten their unity - and are very susceptible to delusions about the company, its markets and competition. Not all shared visions are good shared visions. An "us against the world" mentality may ensue, making the situation even harder to correct. These dynamics were common in the Pentagon during the Vietnam War and in Detroit in the early 1970s as Japanese imports started to trickle into the U.S.

Companies where group think is entrenched tend to make things worse for themselves by perpetuating a sense of isolation. They discount the value of thinking that does not harmonize with their own. Independent-minded subordinates, they fear, will only make matters worse, increasing through dissension and confrontation the already-high level of anxiety. So managers in these Improvisers tend to hire in their own images, and weed-out or exclude from decision-making any non-conformers. All of which limits the diversity of options considered, constraining the Improviser's ability to easily adjust to its changing environment.

2. Pulling-back from reality
The delusions generated from "group think" can lead some Improvisers to experience even deeper problem: individuals or groups "detaching" themselves from the ongoing operations of the business. Managers acting this way may be very involved in life-outside-the-office, but inside they are withdrawn and uninvolved. They, almost Howard Hughes-like, seem to have lost interest in both the company's day-to-day and future concerns. These managers are often indifferent to either praise or criticism, acting along the lines of Nero while Rome burned. This is most commonly the behavior of entrenched senior executives, and can easily leave the rest of the company feeling leader less and adrift. Managers in the next tier can either use this withdrawal as an opportunity to fill the breach with their own involvement and sense of direction, or they can take advantage of their bosses' distraction and uses their positions solely for personal gain.

Before George Fisher arrived at Kodak, the company "detached" itself from action by a great willingness to study, almost forever, whatever problem had arisen. A symptom of this behavior in other Improvisers is the tendency for managers to miss performance targets by a mile, but suffer no ill consequence.

3. Avoiding reality
It is an open issue whether detaching from reality is worse than another tendency of Improvisers-in-decline, avoiding it altogether. Companies that act this way seem to have given up on maintaining any single sharp focus of attention. Executives make decisions based more on hunches than facts or disciplined analyses The situation is often even worse than "my mind's made up, don't bother me with the facts." Managers in these companies have so internalized the vicissitudes of the market that "who they talked with last" is likely to be the voice having the greatest influence. These managers cope by being impressionistic. To the extent they have any long range vision for the company is is vague, romantic and based on a "when the ship comes in everything will turn out all right" form of logic.

Employees of Improvisers that foster this kind of denial also tend to have a very nostalgic, or idealized, view of the company's past. And they exhibit genuine surprise when things turn out unfavorably - even though the business press had long before predicted rough waters for their company.

4. Winging-it
The opposite of ducking or detaching from reality is giving it too fond of an embrace. Some Improvisers attempt to match the dizzying rate of change in their outside world with equally rapid changes in the way the business is operated. These companies give the appearance of being out-of-control, or acting on whims, rather than searching-out facts and judging actions based on any assessment of consequences to the business. The time between a manager having a thought and taking action on it is minimal, and seldom integrated into any view of where the business is headed or what it must do to get there.

Some executives prefer this kind of impulsiveness to its direct opposite, feeling immobilized by indecisiveness. In reality, impulsive behavior is more likely to amplify the uncertainty in the marketplace, not to provide a way to effectively manage it. When "winging-it" becomes ingrained into the corporate culture it easily leads to temptations to cut corners, abandoning attention to product quality or concerns about legal or regulatory restrictions. The eventual result: spilled toxic wastes, tainted pharmaceutical products, or planes taking off with insufficient fuel - all behaviors likely to accelerate a would-be Improviser's downward spiral.

5. Giving up
A final, too-common, response to chronic uncertainty is simply throwing in the towel. When companies do it it is called bankruptcy, for individuals, it is burnout. Without strong, positive leadership it is especially easy for an Improviser to attempt to run on "auto-pilot," letting habit and routine drive the business instead of flexible adaptiveness. The result: a depressed corporate culture. Feeling of hopelessness and inability to change the course of events plague managers and employees. No one seems able to produce positive change, and much like the situation at the Walt Disney Company in the years after its founder's death, the business looses its edge, its ability to follow any path to growth.

The light side
At Disney, deteriorating financial performance led to an attempted take over, and the eventual hiring in 1984 of Michael Eisner to reenergize the entertainment empire's growth. His success, and shift of the company from the Improvisers' to the Rule Makers' path, is the stuff of modern business legend. Eisner knew Disney's employees craved returning to the growth track, but that memories of the company's dead founder were not sufficient to take them there. Eisner did not attempt to become the "new" Disney, replacing one cult figure with another. Instead he led by holding the company to applying its founder's values in a way relevant to the company's current situation. Full length animated feature films were again made, Disney's genius at "total control" rediscovered as a strategy for re-releasing classics from the company's film library in a contemporary video format, and advanced technologies used to add thrills back to the amusement parks.

Going back to the future
A similar approach to revitalization was begun by George Fisher at Kodak. Fisher moved this Improviser away from its dark side by reemphasizing the growth-oriented, inventive ways of its founder, George Eastman. Rather than spending his energies fighting Kodak's dysfunctional habits, Fisher reaches around them, putting the spotlight on even older traditions. Kodak, Fisher discovered, was once a genius at mixing technology with market savvy. This historical mix, refreshened with digital imaging technology instead of 100 year old silver halide-based photography, is the basis for Kodak's renewed growth as an Improviser.

Before Fisher took charge, Kodak had already invested $5 billion in research on electronic imaging, with minimal results. Fisher, realized the missing element was the kind of marketing orientation Kodak used a century before to build consumer interest and acceptance for the then new technique, amateur photography. Kodak, Fisher found, was amply staffed with technical types. He added the missing piece, marketing, by bringing in managers like Carl Gustin, an ebullient ex-advertising professional to pull together the vast array of new technologies that were languishing in Kodak's labs.

Fisher symbolized Kodak's need to "go back to it's future" in a very personal way. When he moved to Rochester, New York, he and his wife made a point of buying a house on East Avenue, the same street Kodak's founder lived during the company's first golden era.

The present value of a company's past
This kind of search for a corporation's "roots" can serve Improvisers well. Understanding a company's past history, and extracting from the past what is missing today, can restore a missing sense of integrity to an Improviser long buffeted by change.

Improvisers having problems coping with change frequently misunderstood the source of the difficulty. It is no so much their habits and traditions that give them problems, it is that these old mind sets have become disconnected from their original context. When so detached, traditions take on a life of their own, unconnected to current market realities. They appear to drive employees' current behavior, but only in a hollow, ritualistic manner.

The trick to successful change is not so much to abandon the past (an impossibility, anyhow) but to reinterpret it to serve the needs of the present. :

- Discover what used to work when the company was last on a growth trajectory.

- Examine the business history closely to understand why it worked then.

- Then look hard at the company's current situation to see what new role these past practices can play in generating today's growth.

This approach is what historian Alan Kantrow calls an intelligent mining of a company's past. He sees the challenge for Improvisers, such as A.T.&T. and General Motors, as not so much trying to become something they never were, but rather "to recapture part of what [they] used to be and [have] been all along."

The ability to find pay dirt in a business' past requires the same skill essential for an Improviser to find growth opportunities its present. Improvisers must know how to do organizational learning.

Organizational learning, or the learning organization?
Since Peter Senge's book, The Fifth Discipline, popularized the idea of the learning organization many companies have rushed to become this latest corporate species. Businesses that once fancied themselves "process-driven," "virtual," "networked," or "team-based" now want to become "learning organizations." Senge ideas have struck a resonant chord with many managers who tire of businesses' tendency to repeat its old, failing ways. Staff positions dubbed "Vice President for Learning" have been created and many training and development budgets received well deserved boosts.

Senge deserves great praise for melding the ideas of MIT's Jay Forrester on system thinking with those of Harvard's Chris Argyris, the original organizational learning guru. Senge made these academic's insights accessible to many managers in ways their originators were never able. These ideas probably have more pressing relevance to Improvisers than to company's on any other growth path. For many businesses, mastery of the process of knowledge creation and learning will payback in better prospects for long term growth. Improvisers, however, will see the results much sooner; for them, the ability to detect and correct mistakes is central to ongoing survival. It is a necessity, not a luxury.

Improvisers, though, cannot spare the time necessary to follow any gurus's ten-step program to transform themselves into a trendy "learning organization." Most Improvisers have gone through enough change and zig-zags to last a corporate lifetime. The last thing they need is a new business role model requiring yet another shift in direction. Nor can they afford the overhead expense from adding new "learning expert" staff positions. Improvisers cannot be distracted becoming learning organizations, but they must practice organizational learning.

This is not just a matter of semantics. Becoming a certain kind of organization implies reaching an end point, achieving a definable objective. It is something acquirable, a quality that can be coupled with whatever a company is already doing. Doing organizational learning is different. It is an ongoing process, a way of managing the business, not something added-on or changed to. It is something ingrained in every employee and manager. It is what separates perpetually struggling Improvisers from those able to thrive and growth in a hard-to-pin-down business environment.

A no-fault corporate culture
The Naskapi Indians planned their hunts in a way than insured survival, but not necessarily growth. Their random course-setting process, though, sets the stage for learning to happen. The Naskapi's "corporate culture" is a no-fault one. Mistakes do happen, no game may be found in the direction chosen by the hunters on a particular day. But they avoid the time-consuming, energy-draining process of searching for scapegoats and targets of blame. They just pick up the pieces the next day and try again, the essence of good Improvisation.

Pull back from some of the conceptual hype about learning organizations and ask what, concretely, do they do when they are doing "organizational learning." It has little to do with sending armies of employees off somewhere to be trained. Instead, other practices dominate the company's management style. Reduced to its core, organizational learning occurs when:

- New knowledge is generated or acquired, and

- Its insights are spread widely throughout the company, and

- There is change in what employees and managers are doing as a result of the new insights, and

- These changes are made in the spirit of experimentation, not 100% sure-fire certainty.

Improvisers acting along these lines have many balls in the air at once. Rather than rushing to implement any single solution, they mimic the scientist and launch multiple attacks on each problem. Improvisers are good at creating variations, wary of ultimate solutions. They realize that just because one approach succeeds today, there is no guarantee it will prevail in tomorrow's changed market.

Look for productive failures
Improvisers take to heart Xerox 's distinction between "productive failures" and "unproductive successes." Productive failures are those that generate new insight and understanding. They are mistakes that are not buried or orphaned, but are mined for all they are worth. They may lead to short-run writeoffs, but pay for themselves in increasing a firm's net intellectual capital. Unproductive successes, on the other hand, are positive results that nobody understands where they came from. They are nice icing on the cake, but no guarantee of future performance.

Where does all this new knowledge come from, in the first place? Mistakes - when turned into productive ones - are one key source. Insights can also be generated from existing information in the businesses' data bases when the techniques of "knowledge discovery" are applied. Using artificial intelligence software, and Silicon Graphics-type data visualization equipment, previously unknown information can often be extracted from a company's records and files. Also important as a source of "new" knowledge is a careful reexamination of a businesses' history, conducted in light of its current most pressing needs.

A fourth, often neglected, source of business insight is a periodic gathering of a cross-section of the company's employees to "put on the table" for discussion all the firms's current assumptions about its customers, competitors, technologies and management practices. Which beliefs still hold up, what are leading the business astray, and which need some mid-course correction? Such meetings - held in a "no-fault" spirit - are unnatural acts in most companies. But they are vital if "learning" is to be a practice with real teeth to it. Holding these every two years is not too often.

Successful organizational learners
Improvisers need to put teeth into what has become, for some companies, today's flavor of the month. Learning is a way to rebound and make money, not just acquire new skills and knowledge. It is what Toyota did in the late 1960s when it shipped it first cars to America, only to see them sitting on the docks because they were too boxy to attract tail fin-weaned auto buyers. Honda suffered a similar experience when its early cars were laughed at by 1970s consumers as looking like two motorcycles bolted together. Honda's vehicle size, in a market where good cars were called "boats," kept the cars from being taken seriously until the first Arab oil embargo. But chance favors the prepared company. Both Japanese car makers - once floundering Improvisers - rethought what they were making and adapted the vehicles to the American market. Their Detroit competitors responded by doing what most successful companies like to do, more of what had always made them successful.

Boeing, the leading American airplane builder and a star-Improviser, mimics the Japanese car makers in systematically learning from its past successes and problems. After difficulties arose with the introduction of its smallest and largest planes, the 737 and 747, Boeing set up a high-level review group dubbed "Project Homework" (as in what the company forgot to do in the first place, its "homework"). The group's charge: examine closely the details of how Boeing's two earlier, and most profitable, planes, the 707 and 727 models, were developed.

After three years of analysis (plane makers have more breathing room than most Improvisers) and an inch-thick list with hundreds of recommendations, the team felt it had a good grasp on the lessons to be learned. Then several group members were transferred to guide the start-up of the next Boeing aircraft families, the 757 and 767. These, in turn, were the most trouble-free product launches in Boeing's history. Buoyed by this success, Boeing is keeping up its use of organizational learning, drawing from all experiences with past jet development programs to introduce, in record time, the 777 two- engine intercontinental plane. While the 777 project used state-of-the-art digital design technology - no paper drawings or mock-up models were ever made - the human side of its creation was guided by insights gleaned over several decades.

Surviving and growing

The role of top management in guiding an Improviser's renewal and growth cannot be underestimated. In a meeting in St. Louis held just after he was appointed chief executive of Monsanto, Robert Shapiro, tried hard to get across the point that this chemical maker's days of tranquil growth were over. He feared that, in the wake of a major company-wide restructuring, many managers were now waiting for things to settle down so they could get back to business as usual. This attitude, Shapiro lamented, was completely off the mark. There was no reason to expect the old, calmer times, would ever return. Instead Monsanto needed a way to structure itself to accommodate ongoing change and regular reorganization.

No more steady state
What Shapiro realized was that the model of change many managers were taught in business school did not hold up any more in his and other turbulent industries. This once useful formulation said that companies, and the people working in them, went through three steps when deal with change. First the "unfroze" their old ways of acting, then went through some sort of transition process, and finally ended up in a new, steady state. Nice, neat and simple, but no longer very relevant to the Improviser's situation, one that never really settles down in phase three.

Sustained Improvisation requires an organization that is trim, fit and flexible - a structure able to reshape its form with a minimum of turmoil. And it needs, as Shapiro is starting to shape at Monsanto, employees with expectations appropriate for a company in ongoing metamorphosis, not settling into a new form of homeostasis.

Organizations with these attributes have more in common with biological organisms than with architectural structures. Insects have external skeletons. When they grow they first discard their old skeleton, then secrete a new one to support the enlarged body. This is not unlike what Shikkar Ghosh, chief executive of the cellular communications division of Electronic Data Systems did when he took charge of the business.

Discarding old skeletons
Ghosh's first structure was a Japanese-like set of concentric circles, with himself in the center. It was great for blurring boundaries between groups, and it allowed for quick response to market changes. But it also blurred accountabilities and relied on informal communication - two features that caused trouble as they business grew. So he, after six months, reorganized.

A more traditional functional structure was created, complete with two tiers of managers. It lasted a few more months. It dealt well with the accountability problem, but soon employees began to identify more with their function than the overall company goals. Next change: cross-functional teams, one for each line-of-business. This approach lasted for seven months, but was very dependent on a limited talent pool available to serve as general managers for the teams. Eventually the teams were consolidated into self-contained divisions, better able to accommodate increased business growth.

Companies are organisms, not machines
Ghosh's basic principle is to treat a company like an organism, not a machine. An organism reacts when something happens to it. A machine just sits still and, if perturbed enough, eventually breaks. Ghosh kept changing his division's form, observing the ensuing reactions, and took them into account in planning his next change. No single form was right or wrong, each was just a tool to create a temporary balance between conflicting needs.

At some point in all this reorganization Ghosh feels his employees caught on to the reasons behind the changes, and some even started to look forward to them. Ghosh feels employees learn a lot from experiencing the pros and cons of different configurations, and that the learning stays with them long after the old structure is history. Ghosh also suspects the constant changes force people to relate more to broad company objectives - they no longer have time to establish a power base within any particular structure.

Amoeba's outlast dinosaurs
Other Improvisers have taken the amoeba as their prototypical form. Amoebas reorganize themselves every time they move forward. IBM is doing the same, including a willingness to swallow, amoeba-like, Lotus Development Company to add key groupware products to its multi billion dollar software unit. Madison Avenue ad agencies, like McCann-Erickson are subdividing themselves into independent satellite operations that mimic the small, creative boutiques that have been stealing away many of their long established clients.

These companies are, at least implicitly, aware of a principle of geometry that drives the shape of most biological organisms: in any structure bulk increases much faster than surface area. A company's surface area consists of the employees on its periphery - those keeping in direct contact with customers and suppliers. The larger an organization becomes, relatively fewer people are spending time connecting the business with the outside world, a dangerous situation for a company whose survival depends on quick reaction time.

What to avoid
Sustaining an Improviser's growth involves doing some things, and undoing others. Improvisers should work hard to avoid:

- Too many organizational levels. All growth-oriented businesses need to minimize the levels of management between senior executives and everyone else. For Improvisers this is a necessity, not just another trendy practice. Tall management hierarchies add overhead expense and, even more deadly to Improvisers, distort information flows. Improvisers can not Improvise unless key decision makers have timely, unfiltered information about the company's situation. Delayering is a must; few global corporations require more than six levels of management. Most Improvisers can function well with three or four tiers, maximum.

- Too much headquarters staff. High overhead is toxic to an Improviser. In addition to minimizing "checkers-of-checkers" Improvisers need to find alternatives to traditional staff departments, such as outsourcing, using networks or designated gurus instead of bureaucratic units, and establishment of internal service businesses. At Improviser Pacific Telesis, all in-house attorneys have to bid for the company's legal business in competition with outside law firms. Improvisers have no room for internal monopolies; growth requires all employees share a common entrepreneurial bent.

- Swiss cheese-looking organizations. At most Improvisers, downsizing just comes with the territory. Improvisers that emerge from these staff cuts stronger, not weaker, are those that went in to them with a clear idea of the kind (not just the number) of people they will need in the future. The avoid untargeted early retirement windows and across-the-board involuntary layoffs, knowing these almost inevitably result in a company loosing the people most essential to rebuilding and renewing growth.

- Self-managing teams. These sound like the organization form of the future, but they are destined to fail in the fast-paced uncertain world of the Improviser. Keeping on track in the short run, and adjusting quickly to changing circumstances, requires strong leadership. Never assign work to a team in an Improviser without designating its leader and clearly laying-out the ground rules in advance. Leave self-management to the slower-paced, less anxiety-ridden paths of the Game Players and Specialists.

Practices to follow
There are some management practices that, on the other hand, should be second nature in growth-oriented Improvisers, including:

- Cultivate pragmatism. Improvisers chart a middle course between the Prussian determinism of Peter Drucker and the laid-back looseness of Tom Peters. Pragmatism is America's unique contribution to philosophy, and nineteenth century pragmatist William James its greatest exponent. For James, an idea was to be judged by its practical consequences - what it allows someone to get done - not its theoretical correctness. Pragmatic managers, according to Harvard Business School researchers Nitin Nohria and James Berkley:

- adapt their actions to the specifics of the situation in which they find themselves;

- creatively find ways to make do with what resources they h

- focus more on results than the processes used to achieve them; and

- avoid wasting time running from uncertainty - change, for pragmatic Improvisers, is a welcome source of unexpected opportunities.


- Set the right kinds of goals. The rougher the seas, the more a ship needs a clear idea of where it is going. Improvisers need goals, but not the lock step, rigid objectives that drive Rule Makers and Specialists. Improviser's goals should be sufficiently broad as to allow a lot of room for flexibility and opportunistic maneuvering. Goals should also be far enough away in time so that it makes sense to develop more than one option for achieving them. Finally, an Improviser's goals should not be imposed from a distance by top management. They have a much greater chance of being achieved if they are set to reflect what already seems to be an emerging consensus employees throughout the business.

- Provide lifeboats. Do not assume all the survivors of the reorganizations and downsizings will be necessarily happy or content in the change-prone structure of an Improviser. Allow employees to opt out of the new organization, and without committing career or economic suicide. Provide self assessment, outplacement and financial assistance to employees who know where the company is headed, and know they do not want to be along for the ride. These programs cost money, but in the end everyone benefits.

- Use sun-set laws and half-lives. Every policy and procedure in an Improviser should be assigned a half-life - the date when each needs to be reconsidered. This applies especially to organization charts. Somewhere on them should be indicated an "Effective as of" date, but they also need to be stamped with a future date on which they are no longer valid.

- Give assignments, not jobs. Many Improvisers will be best able to accommodate Monsanto's Robert Shapiro's idea of a structure in continual flux by replacing all jobs with portfolios of assignments for each employee. A job is usually defined by a laundry list of activities; an assignment is more focused. Assignments have clear beginnings, middles and ends: resources, measurable results and deadlines. Jobs, on the other hand, have an implicit expectation they will go on the way they are forever. This approach is also a great way to accommodate demand for flextime and telecommuting, practices than can significantly contribute to an Improviser's adaptability.

- Establish term limits for managers. One of the greatest mistakes many companies make is to keep managers in place long after the reason they were originally selected disappears. Pre-specified, well-thought-out terms can also slow down the too-fast, fast-track common in some Improvisers. This dangerous form of management-by-musical chairs rotates managers before they have had a chance to make a real contribution, or to clean up the consequences of a bad decision. Matsushita has applied the term idea to its top R&D performers. Each scientist is given a renewable five-year contract to replace the old Japanese lifetime employment doctrine. Hefty performance bonuses are paid at the end of the term, based on the individual's contributions (which are difficult to judge over shorter periods).

- Manage people-flow. Cash is not the only critical flow in Improvisers. Often the best way to move ideas from one part of the company to another is by moving the people who practice them. Time-Life moved the manager of its high growth music division, skilled in innovative approaches to marketing, to its book division where profits were flat and market methods traditional. General Motors learned little from its Fremont, California joint venture with Toyota until it began to transfer intact teams from Fremont to key positions in more traditional GM plants. Do inplacement as well as providing outplacement. Set up "organizational holding patterns" or internal temporary services units to provide homes for high potential employees between assignments.

- Celebrate successes! Improvisers should not allow Game Players to have a monopoly on all the hoopla and partying. The best way to combat burnout and low morale is to provide careful attention to communications and recognition. Provide awards for employees, teams and groups, for both absolute performance peaks and for those "most improved." The once-every-Friday celebrations of the Silicon Valley Rule Breakers is just about right for Improvisers that need to keep everyone focused on the here-and-now.

A path for individuals as well as companies
The path of the Improviser is a route to growth for individuals as well as corporations. Considering the seemingly never-ending waves of cutbacks and reorganizations in many American businesses, the roll-with-the-punches flexibility of the Improviser may well be today's most commonly practiced career strategy. The Specialist orientation is a good model for many ex-corprocrats who have spun off and gone into business for themselves; the Improviser serves a similar purpose for those who have remained in large organizations and want to thrive amid the chaos and uncertainty.


© Robert M. Tomasko 2002

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