11.6 Processes of change in other contexts
In the previous chapters many concentric structures in nature and man have passed in review. In this final chapter I have discussed examples pertaining to the delivery of health care, especially in cases of communication disorders, because they are in my area of expertise. Whenever I catch a glimpse of developments in other area's I see that a similar systems approach is being applied.
When R.Zuyderhoudt discusses processes of change in organisations, he mentions regression as the starting point for the development of a new order. Rigid defence of the old self-image is bound to succumb to the winning appeal of new experiments, one of which will be incorporated in the new and more complex order, having gone through a process of variation and selection. All living systems are bound to operate in the small margin between stability and chaos. They have been selected as such, because over-stability as well as chaos lead to a certain death.
Ian Metcalfe, an Australian organisational consultant, in a correspondence with me has contributed his views on organisations.
" There is no doubt in my mind that organisations when viewed as 'living, growing, organic' entities (rather than as mechanisms/machines as has been the prevailing view throughout the 18th & 19th centuries) exhibit the concentric pattern you describe. After all, organisations are just one natural way for people to gather (organise) to get things done (just like teams & societies). Humans and organisations are members of a special class of complex adaptive systems - that is they are made up of other components which are in themselves complex adaptive systems (in the case of us - cells, and of organisations, people). Gell-Mann has a special name for these, IGUS (information gathering & using systems) - they are self-aware, conscious and can manipulate the environment rather than just respond to it. "
I have to mention a book by Collins & Porras called "built to last" because while they do not look at it this way, they propose a concentric model for organisations derived from a study of hundreds of companies which have been in existence for over 50 years. They were specifically trying to work out why some companies were successful over decades (if not centuries) and others not so successful. They found that the companies which they called "visionary" were many more times successful (over time) than others based on a number of measures (including stock market price & profitability). These were the companies who maintained a "core" along with a very mobile & flexible outer layer which could interact (and change) with the environment. In the (genetic) core was the ideology of the company - why it existed, what did it aspire to, how would it conduct itself (a representative slice of the company's genetic code laid down by the founders) - a source of guidance & inspiration.
Ralph Larson, CEO of Johnson & Johnson once said "We would hold onto the core values even if they no longer provide competitive advantage - even a disadvantage in some situations." The core is irrevocably tied into the identity of the company - lose this and you are no longer Johnson & Johnson… (this has interesting consequences when you look at mergers & acquisitions through this perspective - see later).
About this and directly influenced by the core is the culture of the company 'how things work around here', 'what are the norms' etc. The duty of the culture is to protect the core and what it stands for. Further out are layers which hold shorter term more flexible elements such as strategic & tactical goals, the envisioned future - how to go forward in the foreseeable environment/markets. Descriptions of "what business we are in", "what business structure should we have", "how do we do work", "how will we look to our customers day-to-day", even "who are our customers" are on the outer layer - very flexible, very responsive to changes in the market place.
Visionary companies (Ford, Nordstrom, Citicorp, IBM, 3M, GE, Boeing, Amex, HP etc) do everything they can to "preserve the core" and "stimulate progress by changing the 'face' of the company in line with environmental pressures. Do this successfully and the company 'learns'. Organisational memory to store these lessons can be found in people's heads (short term memory), stories, myths, rituals, systems, documents, processes, policies, structures - all what Edgar Schein ("Organisational Culture & Leadership", Josey-Bass, 2nd Ed, 1997), calls Cultural Artifacts.
Organizational Coping Mechanisms
Organisations learn very early on that if they are doing well, you just need to keep on doing those things to be 'successful' - that is to survive and to make a profit. This is a more-of-the-same (MOS) mentality or survival method (coping mechanism). The problem is that if the market place/customers/world changes this is no longer an appropriate strategy. Because organisations are made up of people, and people can be blinded by success - some companies fail to evolve (learn) when the environment starts to change. They don't grow with the times or build new layers to defend or grow. These companies invariably go through crisis and die, or change rapidly (downsize, merge) and survive but at huge cost to their employees, customers and identity.
The Total Quality Management (Quality movement/reengineering) trend of the 1970's was an attempt at a different strategy where companies vied to be better - against some quality standard or benchmark. This is a "better" strategy where a company maintains some level of competition by being faster, stronger or quicker than it's opponents.
In the late 80's / 90's the "Learning Organisation" came into vogue - the idea being to be "smarter" than everyone else - to have innovation & creativity, to respond to the external environment, to keep the outer layer visible, conscious, scanning, capable by matching external change with the same rate of internal change. On the whole the internal environment (one of trust, compassion, low fear, low anxiety etc) required to support learning organisations just couldn't be tacked onto bureaucratic, hierarchical, old-fashioned cultures. For this change to be made, deep surgery (deep realignment of previous layers - down to a change of culture) is required. (That is where organisational change consultants try to help). The same 'culture' you describe for the optimal raising of self-aware, happy, well-adjusted children are precisely the same internal environment required for learning organisations to exist and for exactly the same reasons.
In the new millenium a new strategy has evolved - "different". This is where organisations stop trying to compete with the market place as a level playing field, but attempt to change themselves and the environment so that they look completely different to the customer! Take the coffee shop chain "starbucks" for example - they don't sell coffee, they sell "an experience".
Compliance & Innovation:
A pair of growth/balance systems found in organisations are compliance/innovation. To adapt to environment (market) companies must be creative, change, innovate products & services etc. On the other hand internal and external compliance is seen as important to "defend against" governmental rules, other companies and the unruly element within which might get out of hand. (There are many cases of individuals 'going rogue' and bringing down a company. Ie: Barings Bank a few years ago.) I wonder if it is the oscillating interplay of these forces/systems which gives rise to a similar concentric 'structure' in businesses as you have found in other complex adaptive systems (ie: man).
As per your analogue of a castle/town being built up to a walled village - with depressions still visible of the moat, motte & bailey etc… we too see "artifacts" that mar the rings of organisations. Often compliance-generated-rules (policies, processes, procedures) outlive their intended purpose and can be found living on well after they should. The environment has moved on, the needs changed, but such artifacts remain embedded in organisational memory - the culture, documents, work-practices and structures.
Sometimes the natural re-alignment of a new concentric shell with previous shells doesn't work and we get a very uncomfortable/unhealthy 'bulge' in the system. Really good companies are looking inward AND outwards - scanning for internal inconsistencies and removing them while being on the look-out for new changes in the market-place.
Merger & Acquisition:
In the world of business we have acquisitions and mergers (which certainly have implications on the identity of the new entity) and well as symbiotic relationships (strategic partnerships). Mergers must be akin to the process of procreation - the intake of foreign material in order to create new life (a substantially different company with new capabilities). Unfortunately the company's auto-immune responses can be triggered and quite often the culture of one of the businesses is destroyed - invalidating the reason for the merger in the first place.
Mergers and acquisitions of companies should be very different things, but often the same processes are used and the outcomes identical. One company ‘adsorbs’ the other and gets bigger very quickly. I struggle to find ‘natural’ analogues but the following come to mind.
Acquisition - Company A eats company B and breaks down B for food/energy using little of B’s form. B dies. A thrives but must incorporate the new 'B' material core-to-surface & surface-to-core to ensure alignment, removal of artifacts, etc.
Merger – viewed as natural reproduction. Two companies (male, female) come together and give birth to a third (and then like butterflies, the parents die). The newly formed company has a ‘gene’ mix. In a healthy merger, the new company should have its own identity and start developing from the ‘core’ outwards, building up new protections and adaptations. If it is really lucky, the parents (and we speak of parent companies) stay around long enough to provide a nurturing environment.
Strategic partnerships on the other hand, are symbiotic relationships.
Healthy merger or acquisition rarely happens. Because mergers/acquisitions are ‘man-directed’ we play God with the genetic structure or one parent stays (the board or executive) while the ‘losing-side’ moves on too soon. With mergers we try to get instant-maturity and competitive advantage from day one. “Integration” is the word used for the process of bringing two companies together, but it is only skin-deep. The focus is only the outer layers and not what the ‘new’ core should look like. What is “merged” are the plastic/flexible bits on the outside (because these are the easiest to change and the more visible) – the company structure (hierarchy), products, employees. Instead of a healthy new beginning, we are faced with two concentric entities sharing a single ‘skin’ but with two ‘cores’ – Siamese twins.
Healthy merger: growth from new center out in same skin (and back in again). New layers forming.
Competing cores (separate identities) with internal conflicts
Over time one ‘core’ will shrink (ex-employees leave, processes destroyed, memory erased) and we are left with what appears to be a single company, but with a lot of scar tissue. I suppose how ‘healthy’ a merged entity turns out is a function of how conscious the “creators” are of the natural processes at work, how much they simply let these take place without ‘meddling’ and how close the core values/ideologies of the companies are in the first place."
As complexity increases, patterns of form make room for dynamic temporal patterns (J.Pringle 1965).
Future research will profit by taking this into account.