Strategy Formation in anAdhocracy

Henry MintzbergandAlexandra McHugh

The widely accepted view equates strategy making withplanning, assuming that strategies are "formulated" be-fore they are "implemented." Based on the detailed track-ing overtime of the actions of a single project organization,strongly resemblant of an ideal type called "adhocracy,"this paper shows that strategies can "form" in a variety ofdifferent ways: from the precedents set by individual oper-ators, from thin streams of activity that eventually pervadean organization, from spontaneous convergence in thebehavior of a variety of actors, and so on. The paper firstidentifies and tracks the strategies pursued by this orga-nization across almost four decades of its history and thenpresents the history of the organization in terms ofstrategic periods. These findings are then interpreted inconceptual terms, focusing on three themes*, the emergentnature of the organization's strategies and the difficultiesof identifying intention in a collective context; the cycles ofbehavior that resulted from attempts to reconcile the con-current needs for convergence and divergence; and theorganization's quest for adhocracy and the problems thisposed forthe exercise of formal leadership. The paperconcludes with a "grass roots" model of strategyformation.*

© 1985byComenUnrversity.0001-8392/85/3002-0160/$1.00.

The authors are deeply indebted to WilliamLitwack, who initiated tfie cdfection of thedata and established the basic frameworkin which it was analyzed, and to the SocialScience and Humanrties Research Coun-cit, which funded the study.

"One best way" thinking has pervaded the field of manage-ment since Frederick W. Taylor (1947) coined the term early inthis century. It has been particularly InfluerMial in two spheres— the designing of organizational structures and the making oforganizational strategies.At least until recently, the underlying assumptions of organiza-tional design have been that organizations require articulatedobjectives, sharp divisions of labor, clearly defined tasks, well-developed hierarchies, and formalized systems of control. Infact, this configuration of elements — close to the ideal-type,machine-like bureaucracy Weber (1958) first described —appears to remain the predominant conception among practi-tioners in government, mass production, and the consultingprofession: to many of them, "machine bureaucracy" is notjust one alternate form of structure, it is structure.Strategy making still tends to be equated with planning — withthe systematic "formulation" and articulation of deliberate,premeditated strategies, which are then "implemented." Thetraditionai precepts of "making strategy explicit" (Tilles, 1963),formulating before implementing (Andrews, 1980), and design-ing structure to "follow" strategy (Chandler, 1962) remainintact in almost all of the literature. This view of strategymaking, however, is unnecessarily restrictive; it is inconsistentwith more contemporary forms of structure and sometimeswith the conventional forms as well.One important contemporary form is project structure, or"adhocracy," (Bennis and Slater. 1964; Toffler, 1970). Asdescribed by Mintzberg (1979), this configuration includes thefollowing elements: (11 The organization operates in an en-vironment that is both dynamic and complex, demanding in-novation of a fairly sophisticated nature. Each output tends tobe unique (e.g., a film, the prototype for a new product). (2) The

160/>WministrativeScienceQuarteHy,30(19K): 160-197

While Woodward (1965) equates processproduction with such a configuration, be-cause in her view the automation of ^ eoperating core renders the administrativecompetent of an organization a projectstructure, there is evidence that processproducers with large, nonprofessionalworic forces (such as steel connpantes)tend to resemWe nriachine bureaucracies(seeMintzberg, 1979: 257-^261.264-266.458-45^.

The original definition (Mint^wrg, 1972)included only dectsic«is; for a number ofreasons, not tf>e least being that decisions,too, represent intentions and that wenecessarily ended up studying actions, thedefinition was recerrtiy modified to includeactions. This point is ̂ abwated upon m anote available from the first author.

production of complex, unique outputs forces the organizationto engage highly trained experts and to combine their talents inmultidisciplinary teams. (3) These experts are housed m spe-cialized units, for administrative and housekeeping purposes,but are deptoyed in temporar/ teams to work on their projects;the structure thus takes on the form of a matrix. (4) Because ofthe complex and unpredictable nature of its work, the organiza-tion relies largely on mutual adjustment for coordination, whichis encouraged by semiformal structural parameters such asliaison personnel and standing committees. Coordination bydirect supervision and standardization are discouraged, as arethe more formalized aspects of structure that support them,such as hierarchy, performance controls, and rules. And (5) theorganization is decentralized "selectively"; power over differ-ent decisions is diffused in uneven ways, subject to theavailability of information and expertise needed to deal withthe issue at hand.

While adhocracy is here characterized as an ideal type, most orall of these elements have, in fact, been described in a numberof empirical studies — in Woodward's (1965) description of theprocess producers,"" Burns and Stalker's (1966) description ofelectronics firms, Galbraith's (1973) study of the Boeing Com-pany, Lawrence and Lorsch's (1967) study of plastics firms,and in Chandler and Sayles' (1971) study of NASA. In fact,consistent with Stinchcombe's (1965) proposition that struc-tures tend to reflect the age of founding of their industry, all ofthese organizations function in industries that developed onlywell into this century. Adhocracy seems to be the structure ofthe industries of our age.

This paper presents an in-depth description of strategy makingin one project organization, to accomplish three objectives: todevelop the concept of strategy, to present a very differentview of how it can form {without necessarily being formulated)in an organization, and to associate this view especially, but notexclusively, with the configuration we are calling adhocracy.

RESEARCH ON STRATEGY FORMATIONThis study is part of a research project that began in 1971 withthe intention of opening up the strategy-making process con-ceptually. Based on the definition of strategy as a pattern in astream of decisions or actions,^ it has sought to track ar>dstudy strategies as they form and disappear in organizationsover long periods of time.If strategy is defined only with regard to intention, the re-searcher is reduced to studying perceptions, devoid of be-havior. Defining strategy with respect to realization, however,enables the researcher to track the rise and fall of strategies inempirical terms. Moreover, the most interesting issues seemto revolve around the interplay of these two definitions so that,as shown in Figure 1, deliberate strategies (intentions realized)can be distinguished from emergent strategies (patterns real-ized despite or in the absence of intentions).The definition of strategy as pattern in action may appearcontroversial: the term is almost always defined formally withregard to intention. We would argue, however, that the defini-tion "in use" is often based on observed consistency inbehavior, that is, pattern in action, as when a manager infers

Strategy Formation

Deliberate Strategy

Intended \ y/̂ RealizedStrategy \ / Strategy

Unreali»d EmergentStrategy Strategy

Rgura 1. Basic forms of strategy.

the "strategy" of a competitor (to which he or she might, ofcourse, impute intentions).The concept of emergent strategy may also seem controver-sial — the notion that organizations can pursue "strategies"without intending them. After all, the term strategy has alwaysbeen associated with voluntarism and free wilt, with what Dill(1979: 48) has called "machismo management." Were "de-liberate" and "emergent" strategies two distinct phenomenain practice, then there might be merit in applying the labelstrategy only to the former. We contend, however, that thetwo represent the end points of a continuum, indeed that theremay be no such thing as a purely deliberate strategy (intentionsrealized precisely) or a purely emergent one (the total absenceof intention, despite pattem in action). Moreover, how are weto determine intentions in a collective context, that is, theintentions of an organization? To assume that the intentions ofthe leadership are the intentions of the organization may not bejustified, since others can act contrary to these intentions.Presumably, to be "organizational," intentions must be broadlyshared — truly collective. And yet, stated intentions can beliethe real ones — even the most detailed plans may be fanta-sies, or simply ptoys to fool the competition. Thus, to theextent that ostensibly deliberate strategies contain emergentelements, the two concepts deserve to share the same label, ifonly to force practitioners and researchers alike to recognizethem as part of the same phenomenon (Mintzberg andWaters, 1985).

The formulation of deliberate strategies would seem to accordwell with the configuration of machine bureaucracy, whichrequires tight coordination in order to mass-produce its prod-ucts or services. It seems to fit with "simple structure," too, inwhich an entrepreneurial leader in personal control of anorganization guides it according to his or her vision (Mintzberg,1979), although vision need not be articulated formally and sois less "planned" and more liable to emergent shift. Ourfindings to date bear this out in part (Mintzberg, 1978; Mintz-berg and Waters, 1982,1984; Brunet, Mintzberg, and Waters,1986), although it would seem to be more accurate to describemachine bureaucracies as elaborating, extrapolating, orcopying existing strategies rather than formulating radicallynew ones. In contrast, the formation of emergent strategieswould seem to be most compatible with the adhocracy con-figuration, in which many people — operating personnel, ex-perts and advisors of all kinds, managers at all levels — arepotentially involved in the establishment of precedents and,so, the strategies.

162/ASaJune198B

THE NATIONAL FILM BOARD OF CANADA AS ANADHOCRACYThe National Film Board of Canada (the NFB) was founded in1939 as an agency of the federal government of Canada toproduce and distribute films that would interpret Canada toCanadians and to people abroad. It has since developed anInternational reputation for the quality of its documentary film-making and for its innovations in film content, process, andtechnology. In 1975, the NFB had a permanent staff of approx-imately 950 people, with an annual budget of $23.5 million(Canadian). The NFB is an organization quite unlike any other: itis a film company with full production and marketing functions,concentrating on short, documentary films aimed at predomi-nantly nontheatrical markets, yet it falls under full stateownership.

The NFB seems to fit the description of an adhocracy. Each ofits films is unique, and many are distinguished for their sophis-tication and innovation. Each requires a distinct but temporaryproject, which draws together experts from a variety of func-tional departments. This suggests matrix structure, as is indi-cated in Figure 2, the NFB's organigram {area 1975), in whichthe filmmakers are shown suspended under a structure ofstudios and specialized functions, as well as regions, in fact,the absence of connections between the filmmakers and the

Figure 2. Organigram of tiw National Rim Board of Canada (ca. 1975).

Planning & Research

Director ofEnglish Programming

Commissioner

DeputyCommissioner

Public Relations

Director ofFrench Programming

1^ministration

1Distribution English

Production

FinancialManagement

ResearchCoordinator

FrenchProduction

TechnicalServices

OttawaBureau

{similar to English Production)ProductionCoordinator

TechnicalCoordinator

Studio AAnimation

Studio BFiction

Studio CDocumentary

Studio 0Documentary

Regional Program*British Columbia

Regional ProgramPrairies

Filmmakers Filmmakers Filmmakers Filmmakers

1Studio E

"Challenge'or Change"

Filmmakers

Studio GMultimedia

Studio HEnvironment

Regional ProgramMaritimes

Filmmakers Filmmakers

*No lines shown on original organigrann connecting Regional Programs to Studios or Filmmakers.

163/ASQ, June 1986

S&ategy Fonnation

Structure indicates the relative weakness of authority andhierarchy in the organization. Controls exist in the NFB andattempts are made at formal planning, but most of the realcoordination has to be achieved through mutual adjustment.Selective decentralization is perhaps best illustrated by theprocess surrounding the approval and funding of film projects.On average, the NFB has made about 75 films per year. Wereit structured as a machine bureaucracy, word would presum-ably come down from on high, dictating subject matter, length,style, etc., resulting in a stable and rather deliberate film-content strategy. The facts here are rather different. Asidefrom the specific films commissioned, or "sponsored," byother government departments, all the others draw on thegeneral budget of the organization, supplied by the govern-ment and supplemented by revenues from the sale and rentalof films. Film ideas generally originate with a filmmaker inconsultation with an executive producer and are eventuallyproposed to a standing committee — the Program Committee— which consists of representatives elected by the film-makers, appointees of the Distribution Branch (marketing), theDirector of Production, and the Director of Programming. Aschief executive officer, the Film Commissioner must approvethis committee's choices, and almost inevitably does. Thus,control over film choices is distributed across al! levels of theorganization and among various functions.

On first impression, then, this project-by-project workingrhythm would seem to epitomize adhocracy. As we probemore deeply into NFB history, we shall elaborate on thisconclusion, showing how its structure is in fact an evolvedcompromise, a balancing act worked out in response to thedemands of the individual project, on the one hand, and theneed for a certain order, on the other.

RESEARCH METHODOLOGYTo track strategies as we have defined them requires a longitu-dinal approach; the researcher either has to five with anorganization over time (through direct observation or periodicinterviews) or has to reconstruct its behavior after the fact. Theformer approach is discouraged by our finding that strategiescan remain stable over very long periods of time (Mintzbergand Waters, 1982). An historical reconstruction is, therefore,more feasible if not, in principle, more desirable. The method-ology accordingly proceeded through the following four basicsteps:Step 1: Collectior) of basic data. The study began in thearchives, with the search for traces of decisions and actionstaken by the organization, sorted into various strategy areas, aswell as traces of external trends and events in the environmentand indicators of performance. Sources for this data includedfilm catalogs, annual reports, in-house documents, and booksand articles on the organization, all supplemented by inter-views to fill in gaps.Step 2: Inference of strategies and periods. The data ondecisions and actions were arranged in chronological order,when possible plotted on common time scales, and wereanalyzed to infer patterns or consistencies over time, i.e.,strategies. The strategies were then represented in symbolic

164/ASQ,June198S

form, lined up on a common time scale, and scanned to inferdistinct overall periods in the history of the organization.Step 3: Analyses of each period. At this point, the character ofthe research changed, from the systematic collection of"hard" data to the more intensive investigation of more qual-itative data. Interviews were conducted with key people whowere present, and reports of the period were studied toexplain the major changes in strategies. A number of thirty- toforty-year NFB veterans were accessible, as were severalreports, books, and theses on or related to the organization,including the Massey Commission Report (1951), McKay(1965), James (1968). Gray (1973), Mclnnes (1974), Jones(1976). and Hardy (1979). Posing very specific questions in theinterviews, based on the data gathered, aided recall and helpedto avoid distortion.

Step 4: Theoretical analysis. The researchers then brain-stormed around a number of theoretical questions to try tointerpret each historical period, as welt as the entire study, inconceptual temis. Questions ranged across a variety of issues,including the patterns of strategic change, the relationshipsbetween deliberate and emergent strategies, the interplay ofenvironment, leadership, and organization, and the relationshipbetween strategy and structure.The study of the NFB from 1939 to 1975 took place on siteover a number of years and eventually resulted in a 383-pagedocument based on an extensive amount of data. In particular,each of the 2,839 original films completed between 1939 and1975 were categorized along a number of dimensions and thenwere plotted and analyzed in various ways.The report that follows reflects the basic steps of the research.The first section describes the various realized strategies thatwe inferred in the behavior of this organization across thirty-seven years. After using these to identify distinct periods in itshistory, we then describe each period in the second section,seeking to put some flesh on the skeleton of realizedstrategies and to consider the origin of these strategies asdeliberate or emergent. The final section develops a concep-tual interpretation of the entire study.

STRATEGIES OF THE NFB, 1939-1975The NFB, of necessity, took a large number of actions over thecourse of thirty-seven years. Discussion with its members, aswell as our own overall assessment of its activities, suggestedthe following areas to be of central importance; first, the filmsproduced, which could be analyzed in terms of various charac-teristics — the number made, their duration in minutes, theircontent, the original language of production (English orFrench), whether sponsored or not. in black and white or color,and in 16 or 35 mm — then in terms of finance, staffing,distribution (nnarketing), and the internal structure,A full presentation of all the strategies identified, together withthe data and text that support their inference. Is well beyondthe space limitations of this paper (but is available from theauthors). We therefore present here only those strategies

165/ASa June 1986

Strategy FonnatkHi

most revealing of the course of the organization over time andrelated material, in graphic ar)d symbolic form with a minimalamount of textual material, except for the area of film content(because of its importance and what it reveals about ourmethod of inferring strategies).Finance. Since most of the NFB's financing arrived as directgrants from the government, and some from sales revenues,the area of finance is not only one of strategy (mternal actions}but also of environment and performance (see Mintzberg et al.,1986, for a discussion of these ambiguities). Figure 3 showsthe total annual revenues of the NFB, by source. Of particularimportance were the sudden, temporary dips in appropriations(notably i m 947-1949,1958,1970-1971) known to em-ployees as periods of "austerity."

Figure 3. Sources of National Film Board's revenues.

30 -

28 -

26 -

24 -

22 -

20 -

REVENUE 18 -($ MILLION)

16 -

14 -

12 -

10 -

8 -6 -4 -

2 -

01939

TotalParliament appropriationSales to government departmentsRental royalties & other sales

Note: Due to the tack of consistent records, the data in the earlyyears are incomplete.

'40 '45

YEAR

^ 7'50 '55 '60 '65 '70 '75

Staffing. Figure 4 shows the number of persons on regularstaff since 1945, as wet! as temporary employees ("on con-tract") since 1957. The strategies inferred (for the most part,directly from these data) are represented symbolically below,in the Staffing diagram. In this representation of strategies, andall that follow, the vertical dimension is used to symbolizecertain characteristics of strategies but does not represent anyspecific scale.

166/ASa June 1^5

Figure 4. Staffing l e v ^ .

COocLU00S

1000 -

850 -

750 -

650 -

550 -

450 -

350 -

250

(Estimated)

Regular Staff plus /Contract People /

1939 '40 '45

YEAR

'50 '55 '60 '65^ t

70 '75

STMTING

'46I'60

Distribution. Distribution, the NFB's name for marketing, canbe divided into three main channels — theatrical, nontheatrical(e.g., schools, church groups), and television, A variety ofdistribution strategies were inferred from a number of sources,notably archival records on the media employed in differentperiods and a statistical analysis of the duration of films byyear. The latter, for example, revealed a heavy emphasis onfilms for television f ronn 1953 to 1957 (sharp rise of films in the12-15 minute and then 26-30 minute range to fill slots in thenewly created Canadian Broadcasting Corporation network),and the beginnings of a feature film strategy in the mid-1960s(first significant appearance of films longer than 60 minutes).These two strategies, as well as a number of others inferred(to be discussed later), are shown symbolically below, in theDistribution diagram.

DISTRBiniON

Rurat, IUnion CiroiiU

C TyFocu« \t5min.«)min. \

Taimision Distributic

Theatrical Distribution

60min. + more30min.

TamatiyBFeaturw

Nontheatrical Library ]t[Aborttve Rvntal Scbems

Panial Shiftto sProHkct Oriwitation

167/ASa June 1965

Strategy Fornnation

Structure. Of particular interest in the structuring of this orga-nization are the forms of departmentalization used in theproduction function over the years, as well as the separatbn ofFrench and English filmmaking (always a contentious issue).The various forms of structure are shown symbolically below,in the Production Structure diagram.

Informal Units 12 Units

Move to Montreal

4 Units

f TV Unit"

Science Unit

5 Engiish Units2 French Units

Pool System 7 English Studios(English & French} 3 French Studios

French Production Split

Ragionali-Ution

I1939

1'75

Nutnber and length of films. An analysis and comparison ofseveral types of records in the NFB archives uncovered 2,839original films completed between 1939 and 1975. A plot oftheir number per year, as well as of their average duration inminutes, led to the inference of the strategies shown in theFilm-Number-and-Length diagram.

FILM MiMaER AM) LfNGTH

Sharp Cycles around Higher Plateau(approK. 85film6/200Q min.l

RapidGrowth PlBtBBU?

—1'75

- p .'55

Language of films. Plots of the number and duration of films inthe French and Engiish languages revealed sharply differentpatterns for each, shown as strategies in the diagram below.

iANGUAGEOFFIUWS

ENGLISH FILMS

Slow long-tarm increase in number lapprox. 2/year) and length laf^rox. 20 min./year) of gnglish films

FRENCH RLMS

StMdy growth in minimum number of French films, with sharp peaks

(rHSraasing (ensth of Fmnch films

—r'661939

168/ASa June 1985

Spor)sorship of films. Films made by the NFB under directcontract to other government departments (e.g., training filmsfor the RCMP) accounted for exactly one-quarter of the totalover the years, and 21 percent of all minutes of films produced.Figure 5, which shows the proportion of minutes of sponsoredfilms by year, reveals one strong surge after World War ! l ,which is depicted as a strategy in the diagram below.

Rgure 5. fhvportion of minutes of sponsored fHms.

75

SPONSORSHfP

1940 '45r'50 '55 '60 '65 '70 '75

Content of films. Finally, and perhaps most importantly, is theactual content of the films made by the NFB. The 2,839 filmswere each assigned to one of 37 content or related categories,chosen partly with regard to the categories actually used inNFB film catalogs. The data for three years in the 1970s wascoded by two people independently, with almost completeagreement. We found it most useful to analyze each of the 37categories over time in terms of three basic flows:• trickle — defined as a stream of five or fewer films per year.• blip — defined as one or two years in which productionincreased by an increment of five, from a trickle before andafter.

169/ASQ, June 1986

Stovtegy Formation

• focused strategy— defined as five or more films in acategory for at least three consecutive years.The apparent ambiguities that arose from these definitions(e.g., a sequence of 0-6-3 films, not quite a blip, or one of2-6-4-7-3 films, not quite a focused strategy) were few andminor and were dealt with on an exception basis; no sequenceoccurred of 5-5-5, which could technically be defined as eithera trickle or a focused strategy.The content categories fell into a number of distinct patterns.Nine of them revealed only trickles, whether steady or spo-radic (accounting for 10 percent of all films made). In effect,attention to each of these categories was always marginal,even if sometimes steady, as shown in the example in Figure6a. A further 13 categories contained trickles with a blip or two,while four more had recurhng blips (accounting in all for 38percent of all films produced). Many of these blips representedsponsored series, as in Figure 6b, of films in the "educationalpractice" category. Finally, there were the categories thatcontained focused strategies, in five cases (and 21 percent offilms) trickles and/or blips that grew into centers of focus (e.g..

Rgure 6a. Natural en^ronment category: Example of steady trickle.

48 films, 948 minutesAll but 2 English; 50% sponsored42% 6-12 minutes, resl spread above that (includinga tew famous features, such as Crv of t/)eW//f/)

1939 '40 '45

YEAR

Figure 6b. Educational practice category: Example of trickle with blip.

16 - .15 -14 -1312 -11 -

CA

2 10 -tL 9 _

8 .

4 -3 -2 -1 .0

55 films, 1 5 ^ minutes16-film blip in 1974,9 in Frencfi series38% French: 9% sponsoredSpread across all length categories lincludingtwo languagB^eaching features)

'40 '451'50 '55 '65 '70 '75

170/ASa June 1985

Figures 7a, 7b, 7c), in three cases (11 percent of films) centersof focus that reduced to trickles (possibly with recurrirtg blips,e.g.. Figure 7d). In only one category (7 percent of films) didrecurring focused strategies appear. In another important case

Figure 7a. Experimentai fllms: TricMe ^twinng Into focused strategy.15-]14 -

12 -

8 -

6 -

4 -

2 -

103 films, 907 minutesGrew into focused strategy in mid-19605 after long steady trickle28% French; only 1 sponsoredShort (37% 0-5 minutes, 43% 6-12 minutes)

I, iH. I f Mil•45 '50 '55 '60

billI

1939 40

YEAR

'65 '75

Rgure 7b. "Otallenge for Change": Blff» followed by focused strategy.3 0 -

2 8 -

26 -

24 -

22 -

20 -

1 8 -

oECmm 14 -D

12 -I

1 0 -

6 -

2 -

134 films, 4229 minutes66% French; 17% sponsoredSpread evenly across all length categories, except formore (24%) in 26-30 minutes and less (2%i in 0-5 minutes

ITl»40

YEAR

I'45 'SO '55 •60 '65 '70 '75

171/ASaJune198S

Strategy Formction

Rgure 7c SocKrfogy ̂ nw: Tfidde gnmvH^ mto ItWMed sti«t*gy.

197 films, 7716 minutes48% French; 11% sponsoredin al4 length categories, but especially 6-12 minutes (22%)26-30 minutes (22%), and over 60 minutes (24%)

Figure 7d. Defense films: Focused strategy reducing to trickle with recurring blips.25 124 -

22 -

20 .

18 -

16 -

I 14 -

10 -

8 -

6 -

2 -

124films, 2292 minutesOnly 3 in French; 63% sponsoredAlmost all in the 6-50 minute range, especially 6- 12 m .iui>jsl2;?%;and 16-M minutes (25%)

, IJ939 '40

YEAR

'50 '55 '60 •65 •70 '75

172/ASa June 1^6

Ftgure 7e. Gefienrf Series: RiciMwd steategy Avowed by two l^» .

75

70 H

65

35 -

30 -

25 -

20 -

15 -

10

5 H

354 films, 7003 minutes22% French; none sponsored

37% 6-12 minutes18% 13-15 minutes44% 26-30 minutes

II'1939 '40YEAR

'45 '50 '55 '60f '

'65' I ''70 '75

(12 percent of all films), a single focused strategy disappearedafter two blips (Figure 7e), and finally there was one case of asmall, isolated focused strategy at the end of the study period.Figures 7a-7e show some of the more important contentcategories that will be discussed below.What seems to stand out in this analysis is the great diversityof activity: with one possible exception, no content categorysustained the attention of the organization. Some did so tem-porarily, in waves or single surges, and a remarkable numberreceived steady or recurring marginal attention (i.e., trickles).But, overall, films ranged widely across these content areas.Indeed, further analysis revealed that in every year but threesince 1947, more than half the 37 content categories havebeen represented.Yet diversity does not tell the whole story, indeed, does notcorrectly capture the reality of these data. It is when thetrickles, blips, and focused strategies are each combined thatthe most revealing picture emerges. Figure 8 shows thecumulative number of films that fell into the trickle, blip, andfocused strategy categories per year. The number of tricklesclimbs sharply to a peak at the end of the 1940s, declines forseveral years, and then grows again periodically. Blips seem to

173/ASQ, June 1985

Sbvtegy Formstion

be cumulatively what they are individually: they tend to occurin clusters but irregularly (except for the early 1960s). Like-wise, focused strategies seem to be cumulatively what theyare individually. In other words, the organization seemed tofocus on focused strategies for certain periods, notably duringthe war, around defense and then industry themes, the mid-1950s, around general series for television, and the mid-1960sand then the 1970s, around experimental, social, and sociolog-ical themes.

Rgure 8. Simulative tridde, blip, and focused strategy films

ILM

u.i±,OCCUJCD

3Z

100-

9 0 -

8 0 -

7 0 -

6 0 -

5 0 -

4 0 -

3 0 -

Cumulative Focused Strategies

5. General Leisure13. Challenge for Change14. Sociology15. Social Environment17. Primary Industry18. Internal Industry25. Science28. Experimental Films29. Arts/Crafts/Culture

32. Children's Films33. Defense Categories34. Canada and the World36. General Series37. Restricted

11939'40 '45

YEAR

174/ASQ, June 1985

These patterns are more clearly illustrated in Figure 9. whichshows the percentage of trickles, blips, and focused strategiesper year. One message seems evident: this was an organiza-tion that cycled into and out of focus, at least partially. Severalperiods of focus stand out: the early 1940s, the mid-1950s, themid-1960s, and the 1970s. Of course, it would be equallyaccurate to conclude that periods of pervasive diversity standout as well — one largely of trickles in the late 1940s and early1950s, a second of mixed trickles and blips in the late 1950sand early 1960s, as well as a brief period of trickles and someblips in the late 1960s. Of course, this organization could neverbe characterized as highly focused, since at least half of itsoutput was almost always in trickles and blips. Nevertheless,given the substantial diversity among the various film-contentcategories themselves, the cycling between periods of focusand diversity seems to be remarkably regular (6, 6, 5, 6, 4, and2 years, as well as at least 6 years in the last cycle). Thissuggests some intriguing order in diversity, with perhaps somefundamental forces at play.

Rgure 9. Proportion of trickle, blips, and focused strategies.

100

80 -

60 -

PERCENT

Shown symbolically in the diagram below are these periods offocus and diversity in film content. Because of the importanceof film content itself in this organization, as well as the fact thatmany other important strategies changed in accordance withthese periods (e.g., the sponsorship surge in the first period ofdivergence, the initial rise and decline in hiring in the first twoperiods, etc.), we used these primarily to identify the majorperiods in the history of the NFB.

FOCUS AND DIVBISrTY IN RUM CONTENT

/11M0

Wartime Focus ^ \ ^ ^

•45

Postwar Di(trickle

•60

ContlmiQUS Diversity (trickles)/ M>ost-TV Diversity __,

- \ - 1•55 '60

175/ASQ, June 1985

(blips)

/— 1

•e

- - . - BriafDiversitv/ \ (trickles and ^ ^

/ XWips)^,,,,.'^

Exparimental ft Sodal Issues Focus

I 16 '70

1'75

Strategy Formation

PERIODS IN THE NFB's HISTORYWhile the previous section introduced the skeleton of thisorganization's history, in the forn'i of its reaWzed strategies, thisone adds some flesh, describing its story across six periods toexplain how these strategies developed.

There is a touch of irony in this, giyen thecontroversy that erupted in early 1983when the United States Govamment in-sisted that three films marketed by theNFB in the U.S., including one on nudearwarfare, be formally labelled "propagan-da, " This latter film subsequently wonan Oscar.

1939-1945 Wartime Focus: Building the FoundationIn 1938, the Canadian government invited John Grierson, aScot with a missionary zeal for the making of documentaryfilms, to report on government filmmaking. Grierson recom-mended the establishment of a strong film unit, and on May 2,1939. the Canadian Parliament passed an act providing for theestablishment of a National Film Board. Four months later, warbroke out. and several weeks after that, sensing an opportunityto pursue his belief that the documentary film should serve apositive propaganda function in a democracy,^ Griersonaccepted an invitation to head the new organization. He hiredcreative and energetic but inexperienced Canadians and beganto train them under a trio of trusted colleagues he brought overfrom England. Organic in the extreme — in its on-the-spothiring practices, rapid job shifts, and deliberate and gleefulflaunting of civil service procedures — the organization wasdominated by a sense of excitement and mission. By the endof the war, the NFB contained over 700 people.

Under Grierson's dictum, "Bang 'em out and no misses,"production rose to about 60 films per year by 1943 andstabilized there, About half of the films were made under theWartime Information Programme, with others on subjectssuch as Canadian agriculture, cultural activities, and industry. Afair proportion of films in 1940-1942 was sponsored by gov-ernment departments (notably the armed forces), with Grier-son the master salesman.Thanks to special wartime government allotments, importantnewsreel series developed for distribution in commercial thea-ters. This was part of a four-pronged, intended (and subse-quently realized) strategy of distribution, announced in 1940:to reach urban audiences through theaters and special screen-ings (e.g., in factories), to make films and projectors availablefor private screenings, and to reach, through traveling NFBprojectionists, the rural half of the Canadian population thatcould not get to theaters.in conceptual terms, this was a period of formation, of theestablishment of a basic, tightly integrated set of strategies(referred to in Mintzberg, 1978. as "gestalt" strategy) whichcreated a strong foundation that sustained the organization fordecades. Although specific strategies changed, the fun-damental norms established in this period did not — a concen-tration on documentary-style filmmaking, a concern for thesocial impact of films, grass-roots distribution, and high stan-dards of excellence and innovation. A confluence of threesituational factors gave rise to the gestatt strategy: the new-ness of the organization, which allowed for organic structureand the enthusiasm of creation; the outbreak of war. whichprovided an unexpected but compelling sense of mission; andthe naming of a highly charismatic leader, who could resistbureaucratic pressures and exploit the first two factors to

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impel the organization on a course of excitement andexcellence.A number of strategies, notably, growth in staff and number offilms and the favored channels of distribution, were clearlyintended by the leader and so can be called deliberate,although the film-content strategies were largely imposed bythe circumstances of the environment and so were moreemergent (while an intended strategy of attention to Frenchproduction was partially unrealized). For the most part, thestrategies were bold and proactive, in part a consequence ofthe vision of the leader. Thus, the mode of strategy making canbe characterized as entrepreneurial (Mintzberg, 1973) and theorganization structure as close to simple structure, althoughexhibiting clear indications of the coming characteristics ofadhocracy.

1946-1953 Postwar Diversity: A Period of GropingIn 1945, World War II ended, and on October 31 of that yearJohn Grierson resigned his post and left Canada. The NFB hadsuddenly lost both its charismatic leader and much of its earlypurpose. But signs of change had preceded these two keyevents. Toward the end of the war, the structure began toconsolidate: in 1944, a personnel office was established andthe first organigram issued, production was divided into twelveunits, and the accounting function was strengthened, as weregovernment controls over the NFB. Before he departed, Grier-son issued a memo in an attempt to define a postwar missionfor the NFB — "a living and growing educational service."Unfortunately, however, these new intentions lacked the def-inition, appeal, and sense of urgency of the previous mission,and without Grierson's presence, they were not to be realizedso easily.

Many of the NFB's realized strategies changed shortly afterthe war. Affected by government austerity, staff levelsdropped, as some filmmakers quit and others were let go, andthe rural circuits were replaced by film libraries; the focus ontheatrical distnbution declined and, most notably, the overallcontent focus disappeared: first defense and then industrystrategies faded, with only a small content strategy in socialenvironment continuing until 1948.Grierson left behind a well-trained staff at the NFB, all ready togo but not sure where. And so they went everywhere. In 1948,27 of the 37 film-content categories were represented; duringthe next two years trickles peaked at over 80 percent of allfilms produced, and the year after that, films in focusedstrategy categories reached an all-time low of 10 percent.The NFB, now without focus or purpose, let the market definepurpose. Filmmakers became particularly responsive to thenumerous film ideas suggested by the Canadian public.Moreover, the prc^)ortion of sponsored films rose, as attentiontumed from war themes to government department priorities.Helping to explain this responsive posture were the pressuresexerted on the HfB in the late 1940s. Vociferous complaintsfrom the private film industry of unfair competition led the NFBto avoid films on specific subjects in favor of more generalones. Moreover, fueled by anti-Communist feeling in the

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Strategy Formation

United States as well as the NFB's own reputation for unortho-dox behavior, the so-called "NFB Red Scare" erupted. TheRCMP issued a questionnaire requesting information aboutfellow employees and eventually produced a list of abouttwenty suspects, people who had been "outspoken." Somewere fired and others resigned, with "disastrous" effects onthe filmmakers' willingness to take risks (Salutin, 1978: 20).

Ross McLean, who had lured Grierson to Canada to do theoriginal study and who joined the NFB in its early years, hadbecome its second commissioner in 1945. As an insider,McLean was well liked by the staff, but he did not try toimpose his own ideas, and power naturally diffused down thehierarchy, at least to managers at middle levels. In 1949, theBoard of Govemors replaced McLean with Arthur Irwin, aformer magazine editor with no film or government experi-ence. The appointment caused a furor among the staff, whoviewed him as a hatchet man. Nevertheless, as Griersonremarked in later years, Irwin "saved the Board. No one e\secould have done it" (quoted in McKay, 1965: 89).

As Irwin arrived on the scene, a management consulting firmwas completing a study of the NFB's finances, and a govern-ment royal commission (the "Massey Commission") wasgearing up to study cultural agencies in Canada. The formermade constructive recommendations for reorganization (whichled to the consolidation of filmmaking into four units), while thelatter drew out strong testimonials of grass-roots support forthe NFB and concluded that it had provided pride and satisfac-tion to Canadians, helping to protect "the nation from exces-sive commercialization and Americanization" (Massey Com-mission, 1951: 58). The result was a new film act in 1950,drafted by Arthur Irwin in consultation with governmentalofficials, and the end of austerity: new growth began in bothgovemment appropriations and staff levels. Thus, Irwin hadwell managed the "boundary conditions" of the organization,although he was frustrated in his personal desire to becomeinvolved with filmmaking. Like his successors, Irwin had littleinfluence over the actual content of films. The NFB wasmoving closer to the adhocracy form.

In conceptual terms, this period began with global, or "quan-tum" change (Miller and Friesen, 1980, 1984), as the importantstrategies suddenly reversed themselves. Strategy-making be-havior changed just as dramatically — from integrated, vision-ary, proactive, and somewhat deliberate and centralized, todiverse and disjointed, lacking in direction, emergent, reactive,and more decentralized. All of this refiected quantum changein situation too — in leadership, purpose, financing, and exter-nal pressure.That the NFB survived at all must be explained in good part byGrierson's legacy — the establishment of a firm foundation,built of competent staff, an ideology that stressed excellenceand service, and the grass-roots support this engendered. In itstime of crisis, the NFB felt back on the seeds of strategies thatdeveloped during the war, notably sponsorship and the filmlibraries. These sustained it until new leadership brought a newconsolidation and renewed growth. But that leadershipbrought no new strategic purpose or focus. This was clearly aperiod of groping.

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White the "general series" category,which alone dominated in this period, istechnically not one of content, the fact thatthe films were related and were the onlyones not individually titled (named byseries and number) supports thisconclusion.

1954-1957 Tetevision Focus: A Period of ConcentrationThe first television station in Canada, government-owned,operted m September 1952. The new medium provided apurpose for the NFB, and its effect was dramatic, if ultimatelymixed, in consequence.The advent of television, which was to alter distribution chan-nels permanently, forced the NFB to rethink its entire role. Theinternai debate centered on the NFB's position vis-a-vis thegovernment-owned Canadian Broadcasting Corporation (CBC).One group of filmmakers wanted nothing to do with the newmedium, which it considered a rather debased form of film,whiie another not only pushed for an active strategy of sup-plying films to the CBC but was also ready to revolt over delaysin pursuing it. The Director of Production was caught in themiddle, whiie the Commissioner "did not want to jump intotelevision. He doubted that the Production units were strongenough to undertake the volume required and maintain qual-ity" (McKay, 1965: 100).

A single decision was. however, made to adapt existing NFBfilms for a television series, and then one filmmaker's proposalfor a "15 minute (weekly) series of location films in thedocumentary tradition to be shot very quickly on locationsacross the country" was accepted and rushed into production(McKay, 1965: 97). A script would be written one day and shotthe next, sometimes with no editing and with most of thecommentary ad libbed. With that precedent established, otherfilmmakers leaped in, and the organization focused its atten-tions as never before or since, in terms of style of production,channel of distribution, and content of films.* At the limit,"General Series" accounted for 70 percent of al! films pro-duced in 1956 and 64 percent in total from 1954 to 1957. Inconsequence, trickles dropped to their lowest levels ever, onlythree blips appeared in the four-year period, and the number ofcontent categories dropped in 1956 to 14, its lowest point ofthe study period, excluding the first four years.

Strategies in areas other than content and distribution alsochanged as a result of the TV focus. The number of filmsincreased rapidly, and French production experienced a surge.The French filmmakers, lacking the grass-roots distributionchannels so well established in English Canada, seized on thenew medium to reach their audiences (and were encouragedby the transfer of NFB offices from Ottawa to Montreal). Theyconsequently formed a missionary pocket within the organiza-tion, reflecting the atmosphere in English production duringthe Grierson years. The sponsorship strategy also came to anabrupt end, dropping to about 7 percent of films produced in1954. In 1955, theatrical bookings began a dramatic decline, ascommercial cinemas felt the impact of television, althoughnontheatrical audiences were less affected, with schooi book-ings in particular rising significantly. Circumstances were thusvindicating Grierson's departing vision for the NFB, althoughwithout him, the educational orientation appeared to emergefrom forces in the environment rather than being deliberatelyimposed by the leadership.

Once again, things seemed to be working for the NFB — in asense, a new gestalt strategy seems to have been achieved.But this was not quite right. During this period, by producing

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films designed for regular spots on television, the NFB wasforced to tailor material to a series of 13 or 26 films, each auniform 15 and, later, 30 minutes. This encouraged formulawork instead of innovation. The filmmakers thus discoveredthat their organization was rather specialized, that creativeexcellence produced on an ad hoc basis could not easily beconverted into a film every Tuesday at eight. Routine proved tobe anathema to this emerging adhocracy.

The result was that by 1958 the NFB had dropped the televi-sion focus virtually as fast as it had picked it up. It would, infact, continue to produce for television and promote thatchannel of distribution vigorously, but on its own terms: thelength of films might be controlled but not the regularity or thecontent. Ad hoc films for television could reflect the NFB'sintrinsic strengths.This return to ad hoc excellence was perhaps signaled by theemerging role of production Unit B, one of four, which relied onthe general budget to make nonsponsored films. A loosegrouping of several highly creative filmmakers. Unit B pro-duced several internationally acclaimed innovative films, win-ning major awards at festivals in Cannes and Venice. But UnitB was a unique group producing unique films, and its orienta-tion was not easily copied. Thus, while one focus was dissipat-ing, no overall new one was yet emerging.

In conceptual terms, this was a period of sharp focus, ofunprecedented concentration of resources, built around a newchannel of distribution. Yet this focus did not reflect anydeliberate strategy emanating from central intentions. Quitethe contrary, the film content strategy emerged as one deci-sion set a precedent that stimulated a pattern of actions bymany people at the base of the organization, a pattern incontradiction to the intentions of senior management. Remark-ably, the pattern formed quickly: the strategy was literallyspontaneous. One gets a sense of how quickly (and thorough-ly) a project organization can change direction of its ownaccord, independent of its formal leadership. With little stan-dardization, it can change virtually as quickly as its variousprojects terminate. And ironically, because the NFB's newstrategies were bold and aggressive in response to environ-mental change, we can characterize them as proactive, eventhough emergent, and aggressive, even though adaptive.

Was this reorientation good forthe NFB? In terms of providinga focus and a shot in the arm, the answer must be "yes." Itgave French production a real start and for English productionformed a bridge from the groping of the postwar years to arenewed excellence. But the answer must be "no" in terms ofthe NFB's particular demands. In retrospect, the TV focusseemed to be an aberration, unsuited to the distinctive compe-tences of the NFB. On the surface, the television mediumlooked so appropriate — after all, film was film, a screen was ascreen. But a seemingly innocuous difference — the need toproduce regularly, on schedule — proved significant, at leastfor an N FB intent on retaining its standards of excellence andits character of adhocracy. This organization, like others wehave studied (e.g., Mintzberg and Waters, 1982), proved to bea highly specific instrument, restricted in its ability to exploit itsstrengths through diversification.

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As the television focus came undone, new precedents werebeing established in the more flexible, creative filmmaking ofUnit B, but these were not to spread near\y so fast or perva-sively. The NFB had discovered its weaknesses rather quickly;it would take longer to know its strengths. Structure may havefollowed strategy in this period, as Chandler (1962) prescribed;in subsequent periods, the reverse would prove the case.

1958-1964 Post-TV Diversity: Experimentation andEvolutionHistory repeated itself. With the TV focus gone and with thecoming of a brief period of austerity, staff levels stabilized;trickles increased sharply and were then partly displaced by asurge of blips (themselves widely diverse); only a few smallfocused-content strategies appeared; and the diversity of con-tent categories reached its highest levels (in 1958-1960). Thistime, however, sponsorship was not the response, although itdid rise temporarily, perhaps tentatively. The NFB was now amore established and secure organization; because its oldstrategies seldom disappeared, but instead remained in thesystem at lower levels of attention, the existing orientationscould take up the slack left by the loss of focus. Instead offocusing on a single strategy, therefore, the NFB pursued aportfolio of its existing ones.

This was perhaps clearest in distribution. Television bookingscontinued to be pursued and, after dropping sharply in 1960,began pronounced growth again to 1963. Theatrical bookingscontinued to decline but, after some concerted promotion, alsobegan to recover to previous levels in the early 1960s, with asharp rise provided in 1965 by the first feature films. Nontheat-rical bookings, through the NFB's unique grass-roots distribu-tion channel, continued to rise, as a diversity of audiences —e.g., schools, colleges, exhibitions, national parks — wastapped.While there was no clear focus in film content, a number oftendencies were manifesting themselves. The year 1960heralded what could be called a series strategy, reflected in theincrease in blips. Several were dramatic; writers, directors, andactors were honing the skills necessary for making dramaticfeature films. The first of these, in 1963 and 1964, emergednot from any managerial intentions, nor even from the film-makers' own initial intentions, but from films approved Inshorter lengths, which grew to feature proportions (suggestingthat "decisions," like strategies, can emerge).Unit B continued to experiment, coming up with a classiccalled Lonely Boy (about singer Paul Anka) in 1962. Unit B'sactions were to affect the rest of the NFB deeply, as Jones(1976: 124-125) noted, but "the beginning [of this iconoclasticorientation] does not seem to have been a planned or aconscious one" (p. 125). For example, the climate of experi-mentation was encouraged by technological developments: assound and camera departments reduced their equipment toabout 15 pounds by 1963, more candid shooting stylesdeveloped.Unit B's days were numbered, however. Near the end of thisperiod, a poll of English filmmakers found almost universaldissatisf actbn with the unit system — with the barriers it

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Strategy Formation

While there is no obvious measure of per-formance in such an organization, the re-sponse to its films — awards won, criticalreviews, number of bookings, and sizes ofaudiences — does give some indication ofthe perceived quality and acceptance ofits films.

imposed on communication and with the impediments engen-dered by the position of executive producer, the middle man-ager who headed each of the units — and those polled urgeddecentralization to the level of film director. Thus, as the periodended, a new structure was created; the pool system. Theunits were disbanded and the members of each languagegroup combined in a large pool, free to float from project toproject.in conceptual terms, for the second time, there was a suddenshift from focus to diversity. Yet this did not give rise toanother period of groping, partly because the organization wasnow more secure and partly because it had inherited a legacyof leftover strategies that provided it with several establishedorientations. Thus we characterize this as a period of experi-mentation and evolution.Ironically, the NFB in this period of diversity appears to havesucceeded rather than failed, building on strengths rather thansuccumbing to weaknesses.* In fact, the environment wasnow benign (the austerity being at least brief), and so encour-aged experimentation, as did the absence of focus itself, tneffect, in contradiction to the prescriptions of strategic man-agement, here was an organization experiencing some of itsmost successful years with neither clearly articulatedstrategies nor well-defined target markets. Diversity, emer-gent strategy, a virtual absence of planning, and a steadyweakening of direct managerial authority over operations wereall associated with excellence and creativity.In an odd way, there was integration in the diversity, in that thethree major elements of the period all combined neatly: di-versity in film content, diversity in distribution, and an increas-ing structural orientation toward adhocracy. Diversity in con-tent encouraged innovation, much of it in categories that hadreceived little attention in the past. In effect, strategies weregrowing where seeds had been sown years earlier. Concurrentwith the range of content and the experimentation, a variety ofdistribution channels were promoted. And as the distributionbranch responded to production, increasingly tailoring itsefforts to individual films (as opposed, for example, to pre-marketing series to television), it, too, inevitably approached anadhocracy orientation. Production, meanwhile, was not onlyremoving the last blocks to filmmaker control over films butwas doing away with departmentalization altogether. Yet therewas to be a limit to adhocracy, too.

1965-1968 Focused Experimentation and Self-Expression:A Period of ConvergencesThe NFB was at this point poised for a change, and a radicalshift in the environment in the mid-1960s provided the im-petus. In part, there was opportunity: preparations for Cana-da's Centenary of 1967, accompanied by Expo 67 in Montreal.As a result, appropriations, after falling slightly in 1963, beganto grow rapidly. So, too, did contract personnel. There was alsosocial upheaval, which the earlier wartime experience showedto be a means of defining purpose for the NFB. The "QuietRevolution" was changing the nature of Quebec and its rela-tionship with the rest of Canada. Canadians were feeling theimpact of the Kennedy assassination of 1963 and observingwith dismay the intensification of the war in Vietnam. And

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popular music was revolutionized by the arrival of the Bea-tles, while directors such as Godard and Richard Lester werecreating new styles in filmmaking. A revolution in cultural andsocial norms was thus in progress, to culminate in the upheav-al at the end of the 1960s. And what better organization tointerpret such upheaval than a creative, nonprofit filmmakingagency specializing in documentaries? And so the NFB entereda third cyde of relative focus, though it was not to concentrateits efforts as it had previously.In film content, two small focused strategies carried throughfrom the previous period, while two others began in 1964,including a major one in sociology that was to be sustained tothe end of the study period. Two others arose in 1966, includ-ing one to be sustained in experimental films, which is ofparticular interest. Up to 1960, every single film but one in thetrickle of experimental films was made by Norman McLaren,the NFB's most celebrated filmmaker. For years he wasalmost a unit unto himself, allocated an annual budget for hisown use. But in the 1960s, experimentation in film contentbegan to pervade the organization, culminating in Unit B'slavish production for Expo 67 of Labyrinth, hailed by AmericanCinematographer as "the most ambitious film project in Cana-dian film history" (quoted in the HFB's Annual Report, 1968).

The proportion of trickles remained rather steady at about 40percent throughout these years, and blips were erratic, whilecontent categories grew sharply, peaking in 1966 at 55 percentof production before declining sharply for the next two years(perhaps a reflection of the passing of Expo 67 and theCanadian Centenary). Overall we identified a focus acrosscontent categories, on experimentation and self-expression ofvarious kinds, representing the convergence of trends thatarose in the previous periods. (A future Commissioner definedthe filmmakers' philosophy as "Je veux faire mon film"— 1want to make my film.)

Much the same was true in distribution. The traditional chan-nels remained strong. Theatrical bookings rose dramatically in1965, as a result of new "art theaters" and a new contract withColumbia Pictures. Telecasts continued to grow, while non-theatrical bookings experienced some increased growth andthen more than doubled at the end of the period. This last formof "custom distribution" continued to receive considerableattention: distribution officers across Canada and abroadassisted local libraries and film councils and sold prints to awide variety of audiences.Meanwhile in production, the "radical restructuring — or de-structuring" (Jones, 1976: 200) — into pools was manifestingitself, putting the onus on filmmakers to initiate projects andculminating almost thirty years of progressive decentralization,as Jones (1976: 199) noted, from Grierson who brought aus-terity inside the NFB, to the Director of Production, next to theExecutive Producers, then to the filmmakers themselves.In conceptual terms, this is a period of convergences — first ofa variety of external factors and then a variety of internal ones.The social environment seemed to undergo a kind of gestaltshift around 1963, perhaps triggered by the dramatic politicalevents of that year in the United States, but encouraged, too,by accelerating change in Canadian politics and Anglo-Saxon

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6The permanent staff continued to declineto the end of the study period, from 654 in1969 to 272 in 1976. after which the gov-ernment agreed to put many contract peo-pie on permanent staff.

culture. Whatever their effect on society at large, all theseevents served to define purpose for the NFB. Thus, for a thirdtime, the NFB found focus not in any intended strategies of itsown managers but in the conditions of its environment.This time, however, the focus reflected certain tendencies inthe previous period, namely, the budding experimentationcomplemented by the decentralization to the pool system. Thevariety of strategic changes initiated by the NFB may appear tobe rather diverse and disjointed, but they, too. converged onthe themes of experimentation and self-expression, naturalresponses to the new environment. The filmmakers werecertainly making their own films, but together, and with acertain consistency.Supporting these themes and being supported by them, thestructure of the NFB shifted closer to pure adhocracy, in bothproduction and distribution (and in staffing, with the emphasison contract hiring). Strategy-making behavior reflected this,too. Many of the key strategies continued to be emergent,more the result of nnutual adjustment among operating person-nel than imposition by a central management. Yet, here again,the strategies, even when emergent, comprised elements thatwere bold and proactive, more than ever.

1969-1975, Rethinking and Partial Renewal: A Period ofDichotomies and StruggleIn 1968. the dip In focused strategies reached its low point andin the next year began a sharp rise again to a new peak in 1972.Because that dip was briefer and less extreme than the onesof the earlier periods labeled diversity (never reaching the lowproportions of focused films of the others and sustaining twoimportant focused strategies, on sociology and experimentalfilms, throughout), we did not identify it as a distinct period ofdiversity. But neither is it a continuation of the last period,because the dip and the severe budget cuts announced by thegovemment immediately following it seem to have causedmore than an interruption in strategies. They appear to haveevoked a kind of pause within the NFB. which led to a partialshift in orientation.

Government austerity hit the NFB's appropriations especiallyin 1970 and slightly in 1971 but perhaps did more damagethrough its effects on other departments of the government,whose purchases from the NFB dropped by 34 percent in1969. As a consequence, staff levels began to fall after 1969,by 18 percent up to 1972, before beginning to recover, in theform of contract hiring.^The austerity measures, although severe in production, provedtraumatic in distribution. While production could delay workduring austerity, distribution was forced to make permanentchanges, especially in the nontheatrical area. It virtually dis-mantled its dispersed system of traveling representatives andcustomized services, consolidating its activities into 29 region-al offices. And in 1970 it introduced for the first time a rentalfee for the loan of films. This strategy lasted only nine weeks,however, until the public outcry forced the government toinsist that it be terminated. Nevertheless, the damage wasdone: between this and the consolidation of offices, nontheat-ricai bookings plummeted to half their 1969 level in two years.

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Theatrical bookings, however, grew significantly in this period,due to feature films {notably. Cry of the Wild), the growth offilm societies, and a few particularly successful shorts. Televi-sion bookings, after peaking tn 1970, declined somewhat tothe end of the study period due to shifts by the CBC.Not all the NFB's problems of these years were externallycreated, however. An 'tnterna\ report in 1968, four years afterthe pool structure reorganization, recommended a vastly ex-panded administrative component — planning office, manage-ment committee, training program, more thorough accountingprocedures, etc. Most of the recommendations were adopted.Jones (1976: 234) argued that this was a direct result of the"anti-routinizing character of the pool system" and became themeans of coping with the uncontroliabiiity of the organization. To alarge extent, the purpose of the measures was not to exercise priorcontrol but to "pick up the pieces," to rationalize, after the fact, theirrational character of the operation so that it would appear to conformto government operational norms, (p. 234)But conventional bureaucracy had never served the needs ofthe NFB either: "By 1970 . . . the authority of the individualfilmmaker had been severely diminished. A growth of commit-tees had sapped a portion of the productive energy of thefilmmakers, who increasingly had more hurdles to jump beforebeing able to start a film" (Jones, 1976: 240). The pool systemhad thus backfired, producing the opposite effect intended. Itwas so unstructured that it evoked new, dysfunctionalstructures.Thus, in 1971, the NFB reverted partly back to the unit system,now called Studios, "voluntary associations of filmmakers,from 5 to 15 per studio, dealing with areas of common con-cern" {Crisis Committee Report, as quoted in Jones, 1976:241). Moreover, in one of the rare instances of the realizationof explicit managerial intentions (outlined in the 1966 NFBAnnual Report), a strategy of regionalizing production beganin earnest in 1971 with the opening of a filmmaking officein Vancouver, followed by offices in Halifax, Winnipeg,and Toronto.Overall, by the early 1970s, the NFB began to settle downor>ce again. Austerity ended, the crisis in distribution was over,and the structure was moving back into a natural balance. Filmcontent, too, was coming back into focus, or at least multiplefoci, after the sharp dip in focused-content categories in 1967-1968. The rapid rise in focused-content categories of the early1970s was spread across a number of content areas, withseven appearing in parallel after 1972. Only experimental and,more significantly, sociology films remained in focused cate-gories throughout the dip and austerity years, while newcategories appeared In the early 1970s, the most importantbeing "Challenge for Change."

In a way. Challenge for Change was to the making of filmswhat the pool system had been to the organization of filmmak-ing. As such, it was a natural experiment for the NFB andprobabfy doomed from the outset. Conceived in 1967 as aradical reaction against "mair>stream" cinema and the "glorifi-cation" of the filmmaker. It was designed to involve in themakirig of films the subjects of the films, particularly disadvan-taged people who were to speak out on social issues. Thus,

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power over production, which had over the lifetime of the NFBmoved down the hierarchy in steps, was now to take theultimate step and go to the people, beyond the formal orga-nization altogether.Challenge for Change appears in our statistics as two giantblips (the result of two forerunner series in 1965 and 1968)before sustaining itself as a major focused strategy beginningin 1970. It was stimulated by the development of the hand-held video camera, a light, flexible unit that provided theimportant feature of instant playback. Challenge for Changealso evoked a proliferation of discussion groups, workshops,and new methods of distribution, well integrated with produc-tion, tn 1972. a videotape center was established in downtownMontreal (and later in federal penitentiaries) where groupswhose proposals were accepted were taught the skills offilmmaking and were loaned the equipment. As in a number ofthe NFB's earlier experimental initiatives, this one gainedworldwide attention and left its mark on the NFB as well as onfilmmakers around the world. By 1980, however, it had dis-appeared, like the pool system, perhaps valid in principle butdifficult to sustain in practice.

In conceptual terms, the clearest characteristic of this period isits confusion. For over three decades, the NFB, while cyclinginto and out of focus on a surprisingly regular basis, had alsobeen gradually blurring the distinction between focus anddiversity. As strategies tended to cumulate over time, remain-ing in the system at ieast as echoes of earlier foci, there was acontinuing trend toward greater diffusion. Moreover, experi-mentation reached its ultimate and future peak in this period,both in organization (the pool system) and in filmmaking (Chal-lenge for Change).Thus, we label this a period of dichotomies and struggle, withthe organization exhibiting focus and yet. at the same time,groping. The pause provoked a reoriented focus, with ele-ments of old strategies combined with certain new onesaround the themes of experimentation and social involvement.Film content focused, not in a few but in several categories,while filmmakers moved across the land, temporarily (forChallenge for Change) or permanently (through regionaliza-tion). Challenge for Change in particular represented a movetoward greater diversity and eclecticism — particularly inwhere films were made, how, and by whom. In effect, to beexperimental in the NFB of this last period was not to experi-ment in films themselves so much as in the social process ofmaking films. The NFB, while perhaps more deliberate in someof its strategies during this period, remained (after austerity)bold and proactive.

These same dichotomies appeared in other areas as well.Distribution, which had gradually been diffusing power, adopt-ing more of a project orientation and becoming somewhatmore emergent in its own strategy-making behavior, suddenlybecame more centralized, more rationalized, and more deliber-ate. Yet, while this was happening, the filmmakers themselveswere evolving newer and more eclectic methods of film dis-tribution, too.The dichotomies in structure were even more interesting. Thelimits to adhocracy had become apparent. The ideals of freely

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floating filmmakers, of delegating production to the people inthe film, and of merging distribution with production on afilm-by-film basis, al! helped to define the need for structure.An organization can diffuse power and deny procedure only toa point, before it ceases to have meaning. Coordination, de-partmentalization, and expertise proved to have some func-tion, no matter how limited, even in the National Film Board ofCanada. Thus it reverted 6acfc toward adhocracy.We leave the NFB in 1975 in a somewhat confusing state. Itknew itself to be a high-quality innovator — that had alwaysbeen its unique niche — but having pushed the limits ofinnovation past the point of feasibility, it was not clear how itwould be able to use that distinctive competence. It had alsolearned, again by exceeding the bounds of feasibility, how ithad to structure itself. But for what? At the end of the studyperiod, the NFB had competence and it had structure; al! itneeded was purpose.

A CONCEPTUAL INTERPRETATION OF STRATEGYFORMATION AT THE NFBThe Origin of StrategiesIn an organization in which al! things — actions, decisions,projects, and especially the basic outputs, the films thenn-selves — are so loosely coupled, in which management,hierarchy, and systems of control are so weak, it becomes fairto ask why patteming of behavior, namely strategy, appears atall. Yet patterns are evident throughout the NFB's history andacross all of its activities. Why should an organization withsuch an overwhelming need for uniqueness in its outputs, alsoexhibit a need for consistency?Perhaps the strongest force for consistency is the intrinsicneed to take advantage of established skills and knowledge.Qnce a technical problem is solved (e.g., filming in northernclimates), or an external constraint removed (e.g., breachingthe television medium), then there is a natural tendency toexploit the situation. Primarily through mutual adjustment,highly specific skills seem to diffuse and become deeplyentrenched within organizations. A second force for consisten-cy is fashion. Current norms about preferred subject matter(sociology after the mid-1960s), channels of distribution {televi-sion in the mid-1950s), even methods of making films (experi-mentation in the 1970s) can be no less stringent at the cuttingedge of an art than in its mainstream. In effect, any artist whoholds his finger in the wind before deciding which way to turnencourages the prevalence of strategies.

There are, of course, also administrative needs for consisten-cy, usually related to efficiency or economy, which are tvpicallyencotiraged by the centra) management. In fact, a few of thepatterns in the NFB did appear in the form of conventional,top-down strategies, deliberately imposed by management inresponse to such needs: staff cuts, for example, had to beimposed pen/asively in response to budget reductions. Evencertain changes that grew out of grass-roots consensus had tobe agreed upcff) formally and implemented deliberately fromone center (as in the pool system or regior^ization).

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But this process of formulation followed by implementationwas hardly pervasive in the NFB, especially in the importantarea of film content. Pattems formed aside from or sometimeseven despite managerial intentions, often in response to theneeds of a variety of people in the organization, as well asforces in the environment.In a number of important cases, a single, seemingly inconse-quential decision, meant to be ad hoc, established a precedentthat evoked a pattern (e.g., television series), in some others, apattern formed without even that single decision (e.g., featurefilms). Sometimes strategies took longer to appear, althoughthe process was similar. A thin stream of activity (a trickle)eventually took hold and began to pervade the organization(e.g., the experimental focus that grew out of McLaren's"personal" strategy). This process of the peripheral strategyeventually pervading an organization to become a center offocus is probably more common and important than is realized.Especially when casting about for new directions — perhapsthe result of a crisis — an organization at large may seize onsome long-established but peripheral pattern and make itpervasive. In effect, the trickle can serve as a bellwether,suggesting a new direction based on skills already establishedin the organization. Failure to recognize this phenomenon can,if excessive rationalization destroys these trickles, dry up thesources of future strategies.

Can we call emergent the process by which a single precedentor trickle becomes a focused strategy? Consider the mostdramatic example of it in this study, the spontaneous conver-gence on the television focus of the mid-1950s. This had all thecommon ingredients — a single actor acting in his own in-terests, the reaction to his precedent by a number of hiscolleagues through mutuai adjustment, and an environmentripe for these initiatives. This seems to be a perfect example ofan emergent strategy. Not only did the pattern not reflectmanagerial intentions, it positively violated them. Yet the pat-tern did reflect a certain consensus of intentions among film-makers themselves, even if these were not formally articu-lated. Likewise, the feature film strategy seemed to reflectfilmmakers' intentions, however implicit or even subcon-scious. Getting prime time in a theater is, after all, the dream ofmost people in this business. But what if the filmmakers justfell into the pattern, for example, because they simply couldnot bring themselves to cut their films short? Can we then saythat the "organization" (if not the management) acted deliber-ately in one case, emergently in the other? Emergent strategymeans unintended order. Did the "organization" intend thepattern? How do we read the collective mind?

Our point is not that these strategies should be labelleddeliberate or emergent, but that the determination of inten-tions in a collective context such as this is complex andinteresting, worthy of much more of the attention of organiza-tion theorists. This matter goes to the heart of the verymeaning of "organization" itself, by which we mean collectiveaction in the pursuit of common mission.Cycles of Strategic ChangeNot only did this loosely coupled organization achieve patternsin its behavior, but it also regularly achieved patterning among

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these patterns, that is, convergence or focus in its variousstrategies. A number of forces drove the organization towardconvergence. Proteibly paramount was the simple need for asense of definition, in a way, if an organization does not standfor something, does not represent some comprehensibletheme or orientation, it lacks definition in the minds of thepublic as well as in the minds of its own members, and this canundermine it externally and internally. Another force for con-vergence was the presence of strong environmental influ-ences periodically—the war, television, shifts in culture. Asnoted earlier, the NFB tended to find its own definition in socialdisruption — in society's loss of definition. A third force forconvergence, as Miller and Friesen (1980,1984) and Miller andMintzberg (1983) have argued, is that organizations often find itconvenient to converge around certain themes, achievingstable and harmonious gestalts or configurations for certainperiods of time before allowing themselves to undergo thedisruption of periodic revolutions. This may help to explain whythe television focus was maintained so clearly for four yearsand then was dropped so suddenly.

Leadership, a force for convergence in many organizations,was not a major factor here, at least after Grierson's formativeyears. Planning — a formal means to achieve convergence —also seemed to play virtually no role in this organization,although other common bureaucratic pressures did: rules andprocedures emanating from the government, as welt as thenatural drive to rationalize, standardize, and formalize.

Alongside the forces for convergence in this organization werealso those for divergence, or variety. Prime among these wasthe obsession with innovation. Above all, no two films mustever be alike; artists must not get into a rut. Filmmaking is afashionable business and fashion dictates regular changes instyle. Thus, even while it was encouraging patterning, fashionwas also acting to break down established patterns.

Moreover, the members of the NFB could not help but realizethat the only way to maintain the creative and flexible characterof the organization was to shake it up periodically, to changenot only the content of its films, but channels of distribution,procedures, structures, even people. Change for its own sakemay become a logical activity in such organizations. Withoutchange, adhocracies die (i.e., become bureaucracies). Thethreat of the TV focus was that it forced the organization intoregularity, which encouraged bureaucracy. Likewise, much ofthe later pressure to bureaucratize was deflected by thevariability of the organization, its refusal to settle down. Peoplecame and went on contract, activities escaped rules under theguise of being experimental (even when they were not), struc-tures were shifted frequently and rules flaunted for the sake offreedom, if not art. It seemed that every time the NFB was indanger of sinking into comfortable regularity, a Unit B or aLabyrinth film or a Challenge for Change program would shakeit back into diversity. Thus, the NFB never stayed still longenough for anyone to pin any effective performance measureon it (although govemment technocrats continue to try).

Of course, the enviroriment contributed to divergence, too.When an organization must be particularly reponsive to itsenvironment, as is t ^ c a l of the adhocracy form, change in the

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Strategy Formation

environment becomes a force for divergence. And, as wesaw, the environment of the NFB underwent a number ofgestalt shifts.How did the NFB reconcile the conflicting needs for conver-gence and divergence, for focus on one hand and variety onthe other? As Cyert and March (1963) suggest, they gavesequential attention to each — over the course of the years, atremarkably regular intervals. No sooner did the NFB havedefinition for a while than suddenly everything went off in aildirections, whether because of a shift in the environment orbecause the convergence no longer worked. But the systemseemed likewise to tolerate divergence for only so long beforethe need for a new definition was felt. Thus the NFB cycledinto and out of focus.

This pattern of strategic change is quite unlike the ones wefound in the bureaucratic and entrepreneurial organizations westudied. There, the periods of convergence around givenstrategic orientations were typically much longer (15-20years), while those of divergence were very brief. In effect,these organizations could not tolerate much divergence andhad to leap from one strategic orientation to another, throughone of Miller and Friesen's strategic revolutions. The NFB, incontrast, could tolerate such periods for a time, a characteristicprobably typical of adhocracies. It could function withoutfocus; indeed, at times it thrived on divergence.Superimposed on these regular cycles of convergence anddivergence seemed to be a long-term trend toward greaterdiversity, blurring strategic definition. There always was con-siderable diversity at the NFB, always, for example, a signifi-cant proportion of trickles in film content and attention toseveral channels of distribution, as opposed to an organizationsuch as Volkswagenwerk that could focus almost all of itsattention on one automobile model for a long period of time(Mintzberg, 1978). But that diversity seemed to increase signif-icantly over the years.

The explanation for this seems to lie in another characteristicof the NFB: it tended to retain its old strategies, albeit atreduced levels. For example, hardly any film-content categorydisappeared after being the center of attention; likewise, newchannels of distribution, after being the center of attention fora time, reverted to more modest places alongside existingones. Each strategy seemed to have its time, perhaps becausethis organization, ever oriented to what was fashionable,tended to overdo ("overrealize") its new strategies beforefinding appropriate places for them. This meant that the NFBtended to accumulate its strategies much the way a libraryaccumulates its volumes. Over time it became the agglomera-tion of all its past and present patterns.

This accumulation of strategies would appear to have itspositive side, as noted earlier, enabling an organization tomaintain multiple capabilities and so to have several optionswhenever reorientation of attention becomes necessary. Butthe price can be losing the capacity to focus, to achievedefinition. As the organization ages, it becomes increasinglydiffuse, more and more difficult to understand and direct,whether through leadership or the consensus of mutual adjust-ment. Not only did the NFB lack definition in its later years, but

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there was room for serious doubt about whether it would everagain be able to achieve any real definition, at least in theabsence of major crisis.

The Guest for AdhocracyOf course, the reason for the diversity was the tolerance of theorganization; there was plenty of room to hide in a pocket andexperiment, as did the unknown Arthur Lipsett when, workingas an assistant, he produced his award-winning film Very Nice,Very Nice from unwanted outtakes of other films.Machine bureaucracies, top-down and obsessed with rationali-zation, tend to sweep clean after strategic revolutions. Thenew regime focuses on its target markets and chosen prod-ucts, integrates production around these, and works to rid theorganization of the vestiges of any leftover strategies. Adhoc-racies, in contrast, cater to impulse, to peripheral patternstolerated or simply lost within the system. That provides theirgreat strength — their ability to innovate — but it also givesrise to the problem of achieving focused direction.In fact, the NFB was not created with an adhocracy structure.That too emerged; indeed, the organization had to exceed thebounds of adhocracy in order to find a workable balance. Thecharismatic leadership under which the NFB was createdestablished an internal ideology that was to carry the organiza-tion for decades and laid the groundwork for the comingadhocracy. The NFB moved toward this structure in steps, as itdeveloped internally and as external social norms changed,making more acceptable the various elements of this structure(e.g., matrix form, decentralization to internal experts, anemphasis on multidisciplinary teamwork, continuous innova-tion). This happened in distribution, with customization, as wellas production, where power moved down the hierarchy to thefilmmakers. But then, with the pool system in which filmmak-ers floated freely and Challenge for Change, which tried tosend power outside the organization, the NFB discovered thatthere were limits even to how far adhocracy could go.

The essence of adhocracy, in contrast to machine bureaucra-cies that seek to control their environments in order to supporttheir standardized systems of mass production (Woodward,1965; Galbraith. 1967), would seem to be rapid and continuousresponsiveness to the environment, with minimal organization-al momentum. In this regard, the NFB had an ironic relationshipwith its environment. In one sense, it was highly responsive —to social trends, new fashions, new media, social turmoil.Ultimately, the NFB found its purpose — when it did — in theworld around it, not in itself: it truly was a mirror for its society,and. in terms of the quality of so many of its films, it performedits mission brilliantly. Yet in another sense, this was truly anorganization that "did its own thing." Except during the waryears, the NFB as a whole catered largely to its own needs, forthe most part selecting those parts of the environment towhich it cared to respond. It was, in other words, far quicker topick up the opportunities that pleased its insiders than it was tohelp resolve the problems that plagued its external constitu-ents. That is why the organization could be so proactive, whileso much of its behavior was at the same time emergent. Andthat also helped to make it so creative.

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Strategy Fomuiti(»i

A government intent on bringing it under control could havedone so — at the expense of the quality of the NFB's work. Orit could have been cut off to fend for itself in the marketplace— probably with the same result. The fact is that the NFB hasserved a particular and valuable role, providing a Canadianpresence in the film industry that would not likely have existedwithout government support and, in the world at large, some-times setting standards of quality and innovation met by noother organization in the industry.The dilemma of leadership in managing adhocracy lies in tryingto exercise influence without being able to rely on formalcontrols. NFB managers had their hands on some levers ofdecision, such as staffing levels and the design of the structureitself, but not on others, notably the content of specific films.Trying to manage in this situation is a little like trying to drive anautomobile without controlling the steering wheel. You canaccelerate and brake, but not determine direction. As we havenoted elsewhere (Mintzberg et al., 1986), when a creativeorganization develops strategies for design, it cannot easilydesign strategies.Interestingly, the NFB did have strong leadership at varioustimes, particularly during periods of little order — the chaos ofthe founding years, the groping after the war, and the diversityfollowing the television focus. Moreover, the organization alsosustained strong grass-roots leadership through people who,despite their lack of formal authority, established the tone andset the precedents for others to follow.The effective leaders in an organization such as this were oneswho well managed the "boundary condition" — Grierson, whokept government bureaucrats at bay (a role he explicitly re-served for himself), and Irwin, who dealt with scandal andnegotiated the favorable legislation. Creativity Is inherentlycontroversial; it can flourish only if the artists are well bufferedfrom public attack. And much of the responsibility for thatbuffering falls on the formal leadership of the organization.Another aspect of managerial work, given that the actualcontent of some key strategies cannot be managed, is ensur-ing that the right kinds of people are hired and that they areprotected by the appropriate structures. Experts can beselected but they cannot be remade. A film can be no betterthan the capabilities of the people who get to make it. That iswhy conventional administration — which assumes that out-puts can be determined by rules, standards, and plans — is sofruitless in an organization of experts. Such devices can neverimprove poor performers, only impede good ones. Hence,management has to ensure that the organization is staffedwith the best possible people, that hiring mistakes are cor-rected quickly (so that resources are not wasted while deadweight begins to sink the enterprise), and that structures aredesigned largely to leave these people free to work as theyknow how. Some controls are obviously necessary—just tokeep the lid on spending, for example — but the obsessionwith control found in machine bureaucracy is anathema to theexercise of expertise.

The inability to dictate fundamental strategic direction —establish target markets, select products or services — doesnot, of course, preclude management from trying to influence

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it. Managers can, for example, seek to define broad boundariesaround what Is done, developing "umbrella strategies" (Mintz-berg et al., 1986). They can also exercise their influence on theemerging patterns, encouraging or discouraging the ones inwhich they find promise or danger. In effect, managers ofadhocracies must do what we do as researchers — look forpatterns in streams of actions — in their case, in order to acton them.Of course, this can only be done by leaders who have vision (orcan perceive it in others and borrow it). And this brings us to afinal aspect of managerial work in adhocracy, perhaps the mostcritical one — the creation of ideology or missionary zeal, inSelznick's (1957) terms, "the embodiment of purpose," "theinfusion with value." That was what made Grierson such agreat leader: he defined the organization in a way that peoplecould understand and rally around, Adhocracy provides onlythe structure; vision infuses the purpose that produces in-spired innovation. The NFB sustained itself on Grierson's vi-sion for decades and would likely have blown apart without it.But that vision had to fade eventually, the enthusiasm recur-ring only in pockets of the organization. The NFB found newareas of focus but, aside from these pockets, it never seemedto develop a new surge of purpose. Without this, and withincreasing diffusion of its energies, one wonders how muchlonger this organization of paradoxes — of developing patternamid uniqueness, of cycling between convergence and diver-gence, of achieving direction without being directed, ofstrategies that emerge while being proactive, of finding itsorder in disorder — could survive.

CONCLUSION: A GRASS-ROOTS MODEL OFSTRATEGY FORMATIONThe findings of this study put into question virtually everyconventional belief about how strategies are supposed to formin organizations. Is the reader to conclude, therefore, that theNFB was some kind of aberration — a government agencywith a quasi-market function, lacking the discipline of thebottom line and operating in the never-never land of cinema, toboot — whose experiences can hardly be generalized to otherorganizatiorfrs, even profit-making adhocracies, let alone moreconventional bureaucracies? Such a conclusion would be tooeasy, in our opinion. The NFB may be an extreme case, butas such it can be used to highlight types of behaviors thatwe believe are to be found, in muted form, in all kindsof organizations.

Indeed, the findings of this study reflect a thin stream ofwritings in the literature, which are pursued here to theirnatural, if overstated, conclusion. The notion of emergentstrategy can. for example, be found in Ouinn's (1980) discus-sion of "logical incrementaiism," which characterizes strategymaking as a learning as well as a maneuvering process,although Ouinn retains for the chief executive the key role inthe management or at least the integration of that process.Bourgeois and Brodwin (1984), in their "crescive model," gofurther, focusing on the rise of strategies within the organiza-tion, although they say little about how this happens, and theytoo hestitate to let go of the central rote of the chief executive

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Strategy Fonnation

For his views on "conastency" — specifi-caity. the difficutties he claims in achievingeven the very weak form of consistency heacknowledges — see Lrnchatom (1965:ch. 13).

(who, for example, selects among strategic alternatives, p.254). In other recent papers, Burgelman (1983,1984) doesshed some light on how strategies may emerge, at least in thecontext of venture projects in large corporations. In his originalwritings on "disjointed incrementalism," Lindblom (Lindblom,1959; Braybrooke and Lindblom, 1963) certainly dispensedwith the role of formal leadership, replacing it with mutualadjustment among many actors. But Lindblom failed to recog-nize the emergence of consistencies (i.e., strategies) fromsuch a process,' although Cyert and March (1963), in a relatedbut more general description of the process, did.Perhaps more germane is Pascale's (1984) vivid account ofhow Honda actually developed its strategies for the Americanmotorcycle market, as opposed to how the Boston ConsultingGroup (1975) rationalized that process after the fact. Briefly, incontrast to that group's imputation of a brilliantly conceivedintended strategy, the Japanese managers who were sent tothe United States described to Pascale a myopic and disorderlyprocess in which they fumbled upon their realized strategydespite themselves. What made that strategy brilliant was notforesight but a capacity and willingness to learn, supported bya tolerant organization and its committed personnel. And thiswas no government adhocracy, but a commercial mass pro-ducer of consumer goods, famous (according to the BostonConsulting Group, anyway) for its ability to manage costs.Perhaps then, the model implied in our study has relevance formachine bureaucracies, too, at least when they really have todevelop novel strategies (as opposed to extrapolating orcopying existing ones through highly analytic planning proce-dures). Indeed, maybe it is the conventional view of strategymaking that can be misleading in these circunnstances, forexample, by encouraging the British motorcycle manufacturerswho received the Boston Consulting Group's report to retreatto their offices and mire themselves in detached analysisinstead of getting out in the field and learning.

All along, we have been developing a different model ofstrategy making, which we would like here to label "grass-roots." It has six main components:

7. Strategies grow initially like weeds in a garden; they are notcultivated like tomatoes in a hothouse. 1 n other words, theprocess of strategy formation can be overmanaged; some-times it is more important to let patterns emerge than to forcean artificial consistency upon an organization prematurely. Thehothouse, if needed, can come later.

2. These strategies can take root in alt kinds of strange places,virtually wherever people have the capacity to learn and theresources to support that capacity. Sometimes an individualactor in touch with a particular market niche creates his or herown pattem (or a small, detached subunit does the samething); sometimes he or she does not even do that, but simplytakes an initial action that evokes its own pattern; other times,the extemal environment imposes a pattern on an unsuspect-ing organization; in some cases, many different actors con-verge around a theme, perhaps gradually, perhaps spon-taneously; or sometimes senior managers fumble intostrategies, these, in some cases, developing gradually in theirminds to emerge in a form that makes everyone believe they

were deliberate and suddenly designed. The point is that wecannot always plan where the strategies will emerge, let aloneplan the strategies themselves.3. Such strategies become organizational when they becomecollective, that is, when the patterns proliferate, to pervade thebehavior of the organization at large. Weeds can proliferate andencompass a whole garden; then the conventional plants maylook out of place. The same holds true for emergent strategies.But, of course, what's a weed but a plant that wasn't ex-pected. With a change of perspective, the emergent strategy,like the weed, can become what is valued (just as Europeansenjoy salads of the leaves of America's most notorious weed,the dandelion).

4. That process of proliferation may be conscious but need notbe; likewise, it may be managed but need not be. The processby which these ln\tta\ patterns work their way through theorganization need not be consciously intended, by formalleaders or informal ones. Patterns may just spread by collec-tive action, much as plants proliferate themselves. Of course,once the strategies are recognized as valuable, the process ofproliferation can be managed, just as plants are selectivelypropagated.

5. The pervasion of new strategies, which themselves may beemerging continuously, tends to occur during distinct periodsof divergence that punctuate distinct periods of convergenceof established, prevalent strategies. Organizations, like gar-dens, appear to accept the biblical maxim of a time to sow anda time to reap (even though they can sometimes reap whatthey did not mean to sow). Periods of integrated continuitytend to be interspersed with periods of quantum change, inclear cycles (for reasons cited in Miller and Friesen, 1980,1984, and Miller and Mintzberg, 1983). Sometimes thesecycles are of shorter duration and are more balanced betweenconvergence and divergence, as seems to happen in adhocra-cies, which appear to require distinct periods of experimenta-tion and renewal to work out new strategic themes, althoughat the risk of excessive diffusion. Sometimes they are of longerduration with an emphasis on continuity, which is interruptedby occasional, brief, but highly disruptive strategic revolutions,as seems to happen in machine bureaucracies (Mintzberg,1978), which appear to require these long stretches of con-tinuity to ensure efficiency in their operations, though at therisk of inflexibility. Either way, the blurring of the distinctionbetween these two kinds of periods would seem to indicatedeterioration in the organization (if this study is any guide), justas confusion between sowing and reaping would destroy theproductivity of a garden.

6. To manage this process is not to preconceive strategies butto recognize their emergence and intervene when appropriate.A destructive weed, once noticed, is best uprooted immedi-ately; but one that seems capable of bearing fruit is worthwatching, perhaps cultivating, even building a hothousearound. To manage in this context is to create the climatewithin which a wide variety of strategies can grow (to establishflexible structures and supporting ideologies, to define guidir>g"umbrella" strategies) and then to watch what does in factcome up and not be too quick to cut off the unexpected. While

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keeping one eye on this process of emergence (the results ofwhich must sometimes be made deliberate), managers mustkeep the other eye on the cycle of convergence and diver-gence, knowing when to promote change for the sake ofexternal adaptation and when to resist it for the sake of internalefficiency. Most important is to avoid the excesses of each —failure to focus or capture by bureaucratic (or psychological)momentum, in other words, managers have to be able tosense when to exploit an established crop of strategies andwhen to encourage new strains to displace it.This grass-roots model of strategy formation is false, as any-one who seeks to test it in a broader context will quickly findout. But it is no more false than the widely accepted conven-tional model — the "deliberate" (or "hothouse") view ofstrategy formulation — which no one has bothered to test. Aviable theory of strategy making must encompass both mod-els. No organization can function with strategies that arealways and purely emergent; that would amount to a completeabdication of will and leadership, not to mention consciousthought. But none can likewise function with strategies thatare always and purely deliberate; that would amount to anunwillingness to learn, a blindness to whatever is unexpected.We present this paper because we believe that there has to bea little bit of the National Film Board of Canada — a fewstrategic weeds at ieast — in every organization.

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