The stmtegic management paradigm, the dominant management paradigm inNorth America, fails when it comes to helping a company move successfullyinto new ventures. The author proposes placing strategic managementwithin the larger "creative management" paradigm.

Why Strategic ManagementIs Bankrupt

David K. Hurst"We had the experience hut missed the meaning."

—T.S. Eliot, Four Quartets

ver the past 35 years. North Americanmanagement thinking has become dominatedby the strategic management paradigm, ormodel, of the management process. Thestructure of this model, outlined here, is fa-miliar to all who work in the managementfield:

1. The environmental scan. An analysis ofwhat the business does, a prediction of theenvironment's direction and risks, and theidentification of corporate strengths andweaknesses.

2. The setting of objectives. A generalizedmodel of how the business should compete inthe environment and a summary of perfor-mance baselines and targets.

3. The development of options. The iden-tification and analysis of alternative policiesand an evaluation of consequences and theprobability that they will occur.

4. The strategic decision. The selection ofoperating policies consistent with resourcesand purpose.

5. Organization. The development of ac-tion plans and timetables that take into ac-count competitive responses.

6. The strategic review. A periodic reviewof the strategy.

The strategic management process,illustrated here, is a sequential step-by-stepaffair, based heavily upon an objective, ra-tional, systematic assessment of the businessand its environment. The emphasis is onscanning, selection, and decision making; im-plementation primarily involves developingaction plans and timetables.

The use of the word strategy to de-scribe the core tasks of management is a rela-tively new one. Although the notion ofstrategy was developed in the military field

1986 by David K. Hurst.

centuries ago (the word is composed of twoGreek words: "stratos," meaning an army,and "legein," meaning to lead), it has been ap-plied to management only for the past 35years.

EVOLUTION OF STRATEGIC MANAGEMENT

Several factors seem to have been importantin the introduction of the concept of strategyto management during the 195Ds and in therapid growth of its use during the 1960s and1970s. First, the military requirements ofWorld War II led to the allocation of vast re-sources for scientific research and the devel-opment of new technologies. With the comingof peace, the new discoveries and technolo-gies were applied to all areas of industry. Thehigh-technology commercial corporation,which then came of age, faced logistical prob-lems more complex and planning horizonsmore distant than any that had been encoun-tered before. The planning systems developedto deal with these new problems broke newground, and their developers became pi-oneers in new techniques. For example,George Steiner and Igor Ansoff, two of theearly strategic planners, both served theirplanning apprenticeships at Lockheed beforebecoming vocal advocates of strategicplanning.

In addition, management theoryduring the 1950s was characterized by thesearch for and purported discovery of thefundamental principles of management.Management theorists at that time believedthat they had isolated the elements of admin-istration that were common to all manage-ment situations. Because they thought theseprinciples were universal, they believed thatmanagement skills could be transferred fromone business to another.

This belief was soon put into prac-6 tice by the founders of the fledgling con-

glomerates (such as Litton, Textron, andITT). Even Peter Drucker, who avoidedenumerating principles, claimed to find evi-dence in the histories of companies like SearsRoebuck that management was fundamen-tally a rational, systematic activity. {See hisbook. The Practice of Management.) His arti-cle "The Discipline of Innovation," which ap-peared in the May-June 1985 issue of Har-vard Business Review, proves he has retainedthis belief to this day.

Moreover, developments in opera-tions research and the theory of systems gavescientists new insights into decision makingin organizations. The organizational modelmost accepted just after the war was Max We-ber's hierarchical bureaucracy; the newmodel viewed the organization as a cyber-netic system that processed informationthrough programs and feedback loops.

The most notable use of the conceptof strategy during the 1940s was in the enor-mously influential Theory of Games and Eco-nomic Behaviour, written in 1944 by JohnVon Neumann and Oskar Morgenstern. Theclassical notion of the profit-maximizing"economic man" had lost ground during the1930s. Although Von Neumann and Morgen-stern cautioned that the scope of their workwas very limited, the use of their metaphorstarted to spread. The new view of man as arational strategist, a game player, soon be-came popular. The manager came to be seenas an analyst and programmer, someone whocould control the system. According to Her-bert A. Simon, author of The New Science ofManagement Decision, published in 1960,"We can think of white-collar organizationsas factories for processing information. Theexecutive is the factory manager, with all theusual responsibilities for maintaining the fac-tory operation, getting it back into operationwhen it breaks down, and proposing and car-rying through improvements in its design."

David K. Hurst is executive vice-president ofRusselsteel Inc., a major distributor of steel andother industrial products across Canada and

the United States. The company has been awholly owned subsidiary of Federal IndustriesLtd. of V\/innipeg since December 19S3. Hurstbegan his career in retail distribution but soonbecame involved in mergers, acquisitions, andbusiness turnarounds, particularly in the steelindustry. He moved to Canada in 1977 and, af-ter two years as a management consultant,joined Hugh Russel Inc. as manager, financialplanning. When York Steel acquired Hugh Rus-sel in 1980. he became general manager, steelfabrication, and was appointed executive vice-president in 1982.

Hurst has written about the experiences ofthe Russelsteel management team in an articleentitled "Of Boxes, Bubbles, and EffectiveManagement" CHarvard Business Review, May-June 1984). He has spoken on topics such asplanning, organization, team buitding, motiva-tion, and business turnarounds at numerousbusiness functions and for organizations suchas the North American Society for CorporatePlanning and The Canadian Association forCorporate Growth. He has also taught businessstrategy in the Canadian Management Associa-tion's programs and has contributed to theManagement for the Eighties series of programsbroadcast on CJRT-FM. a local Toronto radiostation. He is presently writing a book on theapplication of his ideas to many aspects ofbusiness. Hurst received a B.A. degree in psy-chology from the University of the Witwaters-rand and an M.B.A. degree in finance from theUniversity of Chicago.

Along with these three factors, wemust also include the general atmosphere ofoptimism that pervaded North America 30years ago. It seemed then that science andtechnology had our social problems on therun. This optimism peaked during theKennedy administration with the beliefs, forexample, that economists could "fine tune"the economy and that government could im-plement policy with some precision. In thefield of management, this spirit is best illus-trated by the former chairman of Ford, ErnestBreech, in his widely quoted statement, "Webelieve it is our business, and that of otherlarge companies, to make trends, not to fol-low them. A confident, aggressive spirit,backed up by intelligent planning and hard-hitting management, can be contagious."This belief was echoed in a thousand cor-porate offices across the continent—indeed,across the Western world. If managers couldcontrol their own destiny, it seemed, theycould certainly control the growth of their or-ganizations.

Since the mid-1960s the form of thestrategic model has remained essentially thesame, but the scope of its applications hasgrown steadily. The introduction of manage-ment by objectives, for example, expandedthe scope of the original planning model tocover strategic management. Strategic con-cepts were popularized by strategic manage-ment consultants, who found they had apowerful marketing tool for their services.

When the strategic concepts werecombined with insights from modern portfo-lio theory, the view of the master strategist asa detached, rational decision maker was fur-ther enhanced. Now each business could beviewed as part of a portfolio of investments.

Throughout the 1970s the range andcomplexity of the concepts covered by thestrategic management paradigm grew stead-ily. In part this was a response to the chang- 7

ing environment as the relatively smoothgrowth of the post World War II world econ-omy began to fade. But it was also a responseto a feeling that something important wasmissing from the earlier, narrower versions ofthe paradigm. This feeling was reflected in theescalating grandeur of the words used to de-scribe corporate purposes. As soon as objec-tives were reduced to concrete measurabletargets, "goals" appeared, then "missions,""creeds," "beliefs" and, most recently, "su-perordinate goals."

In the 1980s some enthusiasm forthe strategic model began to wane because ofdisappointing results where it had been ap-plied. Critics argued that it and other tech-niques had encouraged managers to take tooshort a perspective in the running of theirbusinesses. Today the debate between advo-cates and critics of the model continues. Thisarticle approaches the conflict from the view-point of a practicing manager and places thestrategic model within a larger paradigm ofthe creative management process.

ONE COMPANY'S EXPERIENCES

Our experiences over the past 25 years withthe strategic management model are instruc-tive and, as the reader will see, appear to par-allel those of many North American corpora-tions. When our company first went public in1962, it was a tiny steel distribution businesswith five branches and $14 million in sales.The management group consisted of the pres-ident, the only member of the founding fam-ily working in the company, and his manager,a seasoned steel operator who had spent 20years in the business. Both men were inti-mately involved with the day-to-day activi-ties of the steel distribution operation, andtheir objectives and strategy reflected a deter-

8 mination to stick to that business.

The early 1960s was a good time tobe in the steel service-center industry inCanada. Driven by the demands of the babyboom, the country was developing an infra-structure with the necessary manufacturingindustries, and steel users were poorly ser-viced by distributors. The general economyappeared in excellent shape, and there wasmuch talk of economists' newly found abilityto fine tune the important variables. Govern-ment at last seemed to have solved the peren-nial problems of cyclical recessions and un-employment. In the private sector the talkwas all of growth and planning.

Sometime between 1962 and 1964our company president caught that growthbug and resolved to make the company grow.His operating manager, a tough, hard-nosedtaskmaster from the old school, was clearlynot the man to make this happen. But thepresident found an individual who fitted therequirements perfectly. An engineer with aHarvard M.B.A., this man had spent 15 yearsat Proctor and Gamble. He was organized,understood strategic planning, and was deter-mined to make businesses grow. He joined thecompany in 1965 as executive vice-president.

The organization changed in severalways after he joined. First, it became a gooddeal more formal, with written policies andplans. Second, a split was created betweenoperating units and the holding entity —asplit between managers and investors, be-tween divisions and the head office.

At this time, comprehensive plan-ning was introduced into the corporation. Di-visions were asked to submit five-year fore-casts to the corporate office which, faced withcompeting demands for scarce funds, wouldthen allocate capital using various financialtests and minimum requirements for returnon investments.

Two groups with distinctly differentperspectives and interests began to emerge in

the company: the operating managers whoran the profit centers and the "investors," thecorporate office heads who ran the holdingcompany on behalf of the public share-holders. This second group acted as a kind ofmediating investment group, investing on be-half of the shareholders in a portfolio ofdivisions.

To give themselves the perspectiveand space needed to plan for growth, thepresident and executive vice-president movedtheir offices away from the steel operations.They saw themselves as "informed directors,"supplying advice and counsel to the divisionsas required. They recognized that they couldnot be operators and could not providegeneral management support. Their manage-ment function was limited to the assessment,reward, and replacement, if necessary, of theoperating management.

This form of organization, dubbedfederal decentralization by Peter Drueker, isundoubtedly good for operating managers. Inour company it gave them the necessary spaceto operate without interference, even thoughat times their autonomy bordered on com-plete independence. But federal decentraliza-tion creates a head office of powerful, driven

managers who have no businesses to run,only a group of autonomous divisions tooversee. The head office makes decisions inthe areas of portfolio structure, capital allo-cation, and senior personnel, but these ac-tivities are not enough to engage the full at-tention of top executives. The temptation forthe corporate office to buy something isnearly irresistible. Thus, when the presidentand executive vice-president moved to a cor-porate office, the stage was set for the com-pany to grow by acquisition.

LESSONS FROM ACQUISITIONS

Between 1964 and 1980, when we were ac-quired by another firm, our corporationmade 27 separate acquisitions, which in-volved more than 40 distinct businesses. Thisprogram expanded the company's sizetremendously through the 1970s; but in theprocess, the investment function and its needstotally overpowered the management func-tion and its concerns. The situation made thecompany vulnerable to a takeover and was amajor factor in the subsequent collapse of theorganization.

In the 1980s some enthusiasm for the strategicmodel began to wane because of disappointingresults where it had been applied. Criticsargued that it and other techniques hadencouraged managers to take too short aperspective in the running of their businesses,''

Specifically, the initial four acquisi-tions were failures. The first company boughtwas a small manufacturer of precision equip-ment, primarily for the auto industry. Sincethe owner/manager wanted to retire, ourvice-president of administration was put incharge "to introduce the necessary organiza-tion and control" and to work with the ac-quired company's existing management.However, the acquired company's manage-ment was in turmoil for the next 18 months:All managers were replaced, and manyskilled workers were lost.

Fortunately, a surge in the market-place brought the business back into theblack. At that time, our corporation decidedto acquire a similar business and merge thetwo. This led to the second disaster.

On paper the numbers look impres-sive. It seemed that a combination of cost sav-ings and margin improvements would resultin a significant profit. Instead the combina-tion of the two businesses became almost in-stantly unprofitable. Sales sagged and marginsshrank as the business cycle turned down. Itbecame clear that the businesses were notnearly as similar as they had appeared. Eachone served slightly different markets and had

10

different ways of operating. The completemerging of the two businesses led to a pre-dictable loss of good people. The combinedbusiness never did make an operating profit.In 1972 we were relieved to sell it to ITTCanada.

Early in the game we also acquireda steel distribution operation very similar tothose in our core business. We planned at theoutset that this business would be run by ourown operating managers. In fact the returnswere predicated upon their ability to turn thebusiness around. The first year was expectedto be tough, but the medium- and longer-range view called for the acquisition to be animportant source of new income. The pur-chase appeared to involve little financial riskbecause the major asset being acquired wassteel inventory. The deal proceeded.

A year later only one member of theacquired company s original managementteam was left. It would take five years and agood deal of help from the 1973-1974 eco-nomic boom before the business again be-came profitable. During that time the operat-ing management was so preoccupied withproblems that it missed out on most of theconsiderable growth in the markets served bythe acquisition. The employees who had leftin the first year formed their own business,and with new equipment and financing theybecame very successful. They outstripped thebusiness we had acquired in both size andprofitability —a very perverse outcome.

Our fourth acquisition in this "pro-gram of planned corporate growth" was inhigh technology. The business was "in appli-cations engineering in the field of processcontrol and instrumentation," as the acquisi-tion recommendation put it. Reasons for theacquisition of the business included:

• The high growth rate of the industry.• The presence of an undeveloped niche in

the marketplace.

• Large potential markets, of v>rhich asmall share would generate significant salesvolumes.

• Diffuse and scattered competition.• Technical synergies available to other

businesses.• The parent company's ability to provide

financial management and policy direction.The investment was made by u'ay of

a debenture in March 1968. By August thebusiness was insolvent. We were forced tocall the loan and put in a receiver to wind upthe company's affairs. The problem was thatthis high-tech company had never really beenan organization; rather, it had been a groupof technical experts, all doing whatever in-terested them. There had been no core ofcompetence.

A Reevaluation

Following these inauspicious beginnings se-nior managers in the corporate office tookstock. They again asked themselves whatbusiness they were in and concluded that itwas "industrial distribution." This new defi-nition coincided (unfortunately, as it turnedout) with their first successful acquisition.

This time a family-owned distribu-tor of ballbearings and power transmissionequipment was acquired. The family, keen tosell but concerned that the employees and thebusiness be well looked after, approached usthrough a mutual friend. The business had al-ways been profitable, and several otherbuyers were willing to pay the asking price.However, we were selected as the buyer be-cause of the closer personal rapport the fam-ily felt it had with our company's seniormanagement.

The existing management teamstayed with the business after we acquired it.The business continued to be profitable,growing steadily by branch network expan-

sion, and became a major contributor toour results. Unfortunately, this success wasattributed to the "industrial distribution"strategy. After making two more steel-relatedacquisitions, we set off on what was to be-come a disastrous course, a series of acquisi-tions in the building supplies industry.

The Grand Design

By 1972 we were still earning less than $100million in revenue. Outside of the steel busi-ness, our only successful acquisition was thebearings distribution operation. This indus-try continued to be extremely attractive to us,but in both Canada and the United States fewof the distributors were for sale. Those thatwere for sale were quickly snapped up byBearings Inc. and Genuine Parts, the twolargest operators in the industry.

In its search for new growth opportunities,senior management came upon a hardwaresupply business in eastern Canada. Run bya self-made man, a political figure in theregion, the business had an astonishinggrowth record. This man had parlayed a bankloan and his pohtical contacts into a smallgroup of assorted trading companies. With

11

the sale of his business he became financiallyindependent. In addition, he was given amandate to make the new division grow —and grow it did. Between 1972 and 1976 weinvested more than $50 million (much of itborrowed) in the Building Supplies Group, asit came to be called. Twelve business units,located between Nova Scotia and BritishColumbia, were acquired.

Acquisition was piled on acquisitionwithout any attempt on our corporation'spart to digest what were essentially smallfamily businesses. Unfortunately, the busi-nesses were not particularly profitable; ram-pant inflation and FIFO accounting (which al-lows increases in inventory costs to bereflected in profits) made them appear muchmore profitable than they really were. Theprofit picture for each acquisition developedinto a pattern. The business would generateprofits for the first one or two years after ac-quisition and then slump badly. Economicforecasts for each unit began to show the"hockey stick" effect —losses for the shortterm followed by a steady recovery to hand-some profits in the long term.

Even though senior managementaccepted this outlook, the stock market didnot. Our share price, after many years oftrading at around book value, began to fallbelow that range.

Why did corporate management al-low this acquisition activity to continue? Oneof the chief opponents of this course, a steeloperator, argued that cash was being si-phoned off from his steel operations to fi-nance a reckless acquisition spree. Neverthe-less, dedication to growth undoubtedly madethe corporate office amenable to strategiesthat promised growth. Perhaps even moreimportant, at the root of corporate manage-ment's inability to see reality was a grandstrategic design developed by the manage-

12 ment of the Building Supplies Group.

The grand design culminated in anational chain of supplies stores linked by asophisticated on-line computer system andoperating at several levels of distribution —retail, wholesale, commercial. Numerous ex-amples of this kind of organization werecited, including Lowes and Hechinger (twosuccessful U.S. regional building supplies dis-tributors) and (one trembles to remember it)Wickes (which went into Chapter 11 in 1981,the second largest U.S. company ever to doso). Because of the emphasis on forma!, writ-ten communication and the investor-managerdistinction, these strategies, which lookedgood on paper, were never tested in practice.Corporate management never went into thefield to talk to employees without the filter ofsenior management.

Much later while walking around aparticularly dilapidated Building SuppliesGroup operation in 1979, I was reminded ofLiddel Hart's report of the World War Igeneral visiting the battlefield: 'This highlyplaced officer from general headquarters wason his first visit to the battlefront - at the endof the four months' battle. Growing increas-ingly uneasy as the car approached the swamp-like edges of the battle area, he eventuallyburst into tears, crying, 'Good God, did wereally send men to fight in that?' To which hiscompanion replied that the ground was farworse ahead."

For us, the further we proceededwith the acquisition(s) program, the harder itbecame to get out of it. In theory the investorrole of the corporate office allowed it to divestitself of a business, but in practice this did notwork. There were always objections from thevarious group managements, the inevitable"hockey stick" forecasts, and the argumentsthat one more acquisition would complete thepuzzle and fulfill the grand design. The com-pany had become trapped in its own concep-tual framework.

The pace of acquisitions continued,with profits coming primarily from the steeloperations and the bearing distribution com-panies. The inflationary growth of the late1970s, together with the Canadian govern-ment's reckless investment incentives de-signed to encourage energy self-sufficiency,helped sustain the trend. The steel cyclepeaked in 1979: The company produced a netincome of $14 million on revenues of $535million, with the Building Supplies Groupproducing 7% of the profit on 30% of the rev-enue. The steel cycle faltered in 1980 and re-covered briefly in 1981 before plunging intoits steepest decline since the Great Depression.

After the Fall

The downward plunge in the business cyclecaused problems in all of our businesses, butthe failure of our strategic frameworks wasbrought home to us most forcibly in the col-lapse of the Building Supplies Group. Thisgroup of operations, which had been ac-quired at such great cost over the previous tenyears, collapsed in two senses: financially andconceptually. The severe recession batteredthe entire economy, and many marginal busi-

nesses failed. On the conceptual level, the en-tire grand design, the coast-to-coast networkof distribution operations, was suddenly re-vealed to be a management delusion, a paperplan without substance. In hindsight, everystrategic view taken by the management teamof the Building Supplies Group seemed tohave been a wishful pattern imposed upon thefuture by a small number of managers at thetop.

Now the reader may well feel thatthese corporate disasters are indicative ofmanagement incompetence, faulty analysis,and misdirected strategy. Indeed the propo-nents of strategic planning usually make thisargument. 'There is nothing wrong with themodel," they say. "All you have to do is applyit properly." Well, ehere is something wrongwith the model.

The problem with the strategic par-adigm is the assumptions underlying it. Theparadigm assumes that businesses are likecomplex, mechanical clockworks operatingin an environment that can be objectively de-termined by senior managers of the business.It is supposed that this knowledge, togetherwith the managers' assessment of their or-ganizations' strengths and weaknesses, can be

"The prohlem with the strategic paradigm is theassumptions underlying it. The paradigm assumesthat businesses are like complex, mechanicalclockworks operating in an environment thatcan he ohjectively determined hy senior managersof the husiness.n

13

Exhibit 1

Two ORGANIZATIONAL PROCESSES

Strategy

PlannedAnalysisExternalThingsStatesStrengths / weaknessesReductionFundamentalsDesignedObjectivesPreciseTargetsSetFocusSearchMeansHowMake it happenToday's business

Mission

SpontaneousSynthesisInternalPhenomenaRelationshipsCompetencies/preferencesEmergencePurposeEvolvesValuesVagueDirectionsAppearAwarenessRecognitionEndsWhyLet it happenTomorrow's business

14

used to devise a strategy of objectives, plans,and so forth. These strategies are meant to al-low managers to structure their organizationsand adapt to and/or take control of the envi-ronment.

But these strategic structures arebuilt on retrospective foundations. Theywork for the future only so long as the pat-tern of the future mimics that of the past.Such stability is unusual and does not last forlong. The last such period was the 30 or 35years after World War II. This largely benigneconomic environment caused the strategicview of business to become extremely popu-lar. Like the economists' ability to "fine tune"the economy, the strategic method appearedto work —at least for a while.

A deeper problem with the strategicmodel is the economic framework upon

which it is based. This framework assumesthat capital is the scarce resource to be ra-tioned among many competing investmentopportunities. In fact, the current situation inNorth America is quite the opposite: Oppor-tunities are scarce, while capital is plentiful.1 shall argue that the inability of the strategicmodel to create such opportunities lies at lheheart of its problems.

TOWARD AN ALTERNATIVE MODEL

Alfred North Whitehead once wrote that "un-derstanding has two modes of advance, thegathering of detail within assigned pattern,and the discovery of novel pattern with itsemphasis on novel detail." This is also thecase with the progress of business organiza-tions. On the one hand is the strategic mode,with its gathering of data within an existingconceptual framework. On the other hand isa more naive mode, by which data aregathered apparently without pattern, and inthat process new patterns are formed. In con-trast to the strategic mode, this might becalled the mission mode —a search for mis-sion, purpose, and meaning for both the or-ganization and its employees.

Exhibit 1 shows clearly the contrastbetween the two modes, although the readeris cautioned that the conceptual problem liesless with the nouns and the verbs than it doeswith the conjunctions used to connect them.Western thought is biased toward "either . . .or" rather than toward "both . . . and." Thisbias is largely the result of our failure toreconnect the conceptual categories to whichwe have reduced reality by our exclusive useof rational thought structures. It reflects ourpenchant for linear thought and notions ofcause and effect, as opposed to cyclical, inter-active concepts. The key to understandingstrategy and mission rests primarily on our

ability to grasp the complex dynamic rela-tionship that exists between the two.

The Task of Strategy

The lists in Exhibit 1 can be read both hori-zontally and vertically. The strategic manage-ment mode is a conscious, deliberate activitythat focuses on a particular organization in aparticular environment. The strategic man-ager stands outside of these "objects" and ana-lyzes them, reducing them to some funda-mental categories. This analysis is achieved,of course, by the use of complex conceptualframeworks that allow managers to general-ize and manipulate aspects of reality. Targetsare set to measure the corporation's progresstoward objectives. The focus is on programs —how to "make it happen."

Now this is a very valuable process,but not for the purposes for which manymanagers use it. The strategic mode is helpfulfor looking backward rather than forward,for what il excludes rather than what il con-tains. The strategic mode cannot tell man-agers where they are going, only where theyhave been. It is useful for managing today'sbusiness, the business that already exists. Thestrategic mode requires some content that canbe analyzed. An organization has to exist be-fore the strategic mode can be applied. Other-wise, there is nothing on which to focus andfrom which to generalize.

This requirement of the strategicmode interferes with the strategic manager'sability to discover new business opportuni-ties. Discovery is only partially a problem ofsearch; it is mainly a problem of recognition.The history of product innovation in businessabounds with examples of this. After a com-prehensive study carried out in the early1950s, Arthur D. Little assured IBM thatthere would never be a market for more than5,000 copiers of the kind then being devel-

oped by Haloid (which later became Xerox),and IBM rejected the license to the new pro-cess. In the 1980s both Parker Brothers andMilton Bradley turned down the opportunityto market Trivial Pursuit.

Thus exclusive use of the strategicmode leads to discovery of only what is rec-ognized. A historical pattern is imposed onreality and, unless the world stays very sta-ble, this pattern may not be appropriate in thefuture. This was what our company discov-ered during our acquisition years. Our viewof the future was continually determined byour interpretation of past events.

Even though the strategic mode maynot be very useful for creating new busi-nesses, il is invaluable for getting rid of oldones, for "sloughing off yesterday's business,"as Peter Drucker has put It. Any managerwho has been through a turnaround can tes-tify to the power of formal, strategic analysisapplied to existing businesses. Without itsuse, organizations become complacent andoverweight. To use a farming analogy, strate-gic management is a weeding device that al-lows healthy, productive crops to grow un-harmed by weeds. But in the process itensures that a different crop will never begrown.

The task of strategy is to "make ilhappen," but too often all the emphasis is puton the make and none on the if. To make any-thing happen, a person must first know whatIf is. When dealing with an existing business,managers may know what it is; but whenthey try to bring about change and developnew businesses, they usually don't know. Thequestion "What is itV is crucial. The role ofthe mission mode is to answer that question.

The Role of Mission

The mission mode consists of a process thatis spontaneous rather than planned. It In- 15

Exhibit 2A MODEL OF ORGANIZATION PROCESSES

GENIUS

STRATEGY STRATEGY

16

volves the gradual synthesis of phenomenainternal to the organization, a growingawareness on many levels of relationships,competencies (things a person does well), andpreferences (things a person likes to do). Asthe process proceeds, ideas begin aggregatingin clusters around particular people andgroups. Visions of what could be and a senseof purpose become clearer to the membersof the organization. Values are discussedopenly; as they are spread, refined, andshared, they begin to allow a recognition ofwhat directions to take. The external environ-ment of opportunity begins to crystallize,and these directions appear.

The role of the mission process,then, is to open up the organization to newopportunities by relaxing the tight downwardfocus of the existing strategy. The processreleases to the surface deeply, perhaps un-

consciously, held convictions and beliefsabout what the organization means to itsmembers. These values form a soft frame-work in which new opportunities at the pe-riphery of vision may be netted. In otherwords, the role of the mission process is the"let it happen," when "it" is the process lead-ing to the "it" of strategy.

The Interaction BetweenMission and Strategy

The interaction between the mission andstrategy modes is extraordinarily difficult formembers within an organization to see, forthe processes are "nested" inside one another.The processes of the mission mode precipitatestrategic actions which, in turn, trigger mis-sion processes, and the two modes are presentsimultaneously. A somewhat simplified model

Exhibit 3A DYNAMIC MODEL OF ORGANIZATION PROCESSES

NOW NOW

PAST

of the organization (Exhibit 2) shows the twoprocesses connected by spirals. The power forthe spin is provided by the twin processes ofmission and strategy: Mission pulls whilestrategy pushes. Of course strategy can alsobe generated by the lone genius who knowsjust what to do. This method is a more directprocess.

The mission process can be thoughtof as a way to pull the organization into thefuture. It brings opportunities (by ensuringthat they are recognized) into the vortex ofthe organization, where they are transformedfrom ideas into innovations and from innova-

tions into new products, services, or what-ever. This transformation is accomplished bythe strategy process, which cuts out old, un-profitable products and services and reducesinnovations to practical programs. Missionsupplies the form to which strategy can givesubstance.

This part of the process can be com-pared to the precipitation of crystals from asupersaturated solution. A liquid (people inthe organization) is heated and stirred so thatan amorphous powder (potential opportuni-ties) can be dissolved (assimilated). As theliquid stops moving (changes mode) and 17

Exhibit 4

THE LAYERS OF THE CREATIVE MANAGEMENT PROCESS

Future(Polential)

Present(Acttial)

Past(Remembered)

Sensing

ANow

18

cools (becomes rational), large crystals (goodideas) will appear out of the solution, solid-ify, and grow.

The analogy is fine as far as it goes,but it does not reflect the reverse process inwhich the decisions made affect the opportu-nity-recognition process. The organization'sunderstanding of what has happened in thepast will have an important influence over theway it sees the future.

This aspect of the process is best il-lustrated by Exhibit 3, which shows a return-ing outer set of spirals connecting strategy tomission. The inner and outer spirals combineto create a swirling toroidal, or donut, shape(the layers of the donut will be explainedshortly). Thus an organization can be con-ceived of as being dynamic. Like the vortexthat forms in bath water when one pulls outthe plug, the structure of the organization is

sustained only so long as energy is pouredthrough the system. In this model the donutshape of the organization is sustained by mis-sion (supplied either by process or genius)and strategy. Like Janus, the Roman god ofthe threshold, the organization looks forwardto the future and back to the past. Missionprospects while strategy retrospects. The twomeet in the present. The potentially perceiva-ble environment is all around, but the envi-ronment actually perceived is represented bythe "skin" of the donut. Thus the organizationgrows (learns) by expanding its perceivedenvironment —by recognizing and processingopportunities.

A SPECULATION ON THE CREATIVE PROCESS

The donut model of the organization is acomplex one. What follows is an attempt toshow how the model functions and how it il-lustrates the workings of the creative manage-ment process present (at least in part) in allorganizations. The goal is to track the prog-ress of an idea in an organization from itsoriginal conception to its final realization,using the dynamic donut structure as mentalmodel. Before doing this, however, a morecomprehensive view is needed of the mentalprocesses used by members of organizations.Carl Jung identified four primary mentalprocesses:

• Sensing is the perceptual process thatyields concrete facts about the world and ourown physical condition. We see, hear, taste,smell, and feel the world. Sensing tells us thatsomething is, we detect "it."

• Thinking is the intellectual recognitionprocess. Through thinking we learn what "it"is. Thinking is the rational linking together ofideas in concepts.

• Feeling is the evaluation process that al-lows us to value "it" as good or bad, pleasant

or unpleasant. Jung described ihis emotionalaspect that we attach to things as "tone" or"mood."

• Intuition is, Jung said, the "perception ofthe possibilities inherent in a situation." Intu-ition, then, is the awareness of the potentialof "it" both in the future and in the past.

It may be helpful to think aboutthese abstract mental processes in terms ofone's own personality. Sensing is reflected intask skills gained from actual experience ofthe world, while thinking consists of rationalskills usually acquired through language andformal education. The feeling process isreflected in interpersonal skills and individualvalues developed by the family and peergroup. Intuition may be thought of as thoseinnate, creative, imaginative skills.

The four processes are complemen-tary, but different, dimensions of thought.They can be arranged, as Exhibit 4 illustrates,in layers through which the creative manage-ment process must pass.

At first glance this diagram, with itsbroken arrow, may seem to bear little rela-tionship to the donut model. To understandthe link one needs to turn the donut verticallyand imagine the modes of thought as concen-tric layers within it. (See Exhibit 5).

Each of the layers forms a Figure 8pattern within the donut. When the layers aresnipped at the bottom and laid flat like thelayers of a cake, the broken arrow becomesthe two-dimensional projection of the spiralpath of the creative management process.The process can curve back on itself withineach mental mode. This is reflected by thedotted arrows on the right hand side of thebroken arrow (and by the plethora of spiralsin the first donut diagram in Exhibit 2).

This rather complex manipulationof the model reduces the spiral, recursive pathtaken by the creative process to a linear, se-quential affair that is more easily understood. 19

Exhibit 5

THE DYNAMIC NATURE OF CREATIVE MANAGEMENT

Direction of theProcess

Future Present Past

20

Using intuition as the (arbitrary) startingpoint, the creative process can be tracedthrough seven stages, which are outlined inExhibit 6.

The classical strategic managementmodel deals explicitly only with Stages 3through 5, the "plan-act-evaluate" cycletaught in most business schools. However, byignoring the other stages in the process andoveremphasizing the linear, the strategic par-adigm misses three key aspects of the creativeprocess. First, strategic thinking (Stage 3)does not appear out of thin air. It is basedheavily upon earlier expectations and past ex-

periences (Stages 4 through 7), modified bywhatever happens in Stages 1 and 2. In addi-tion, rationality and logic depend on concep-tual structures developed after action. Peopleunderstand (Stage 5) after they act (Stage 4),not before. Experience is always somethingthat is gained about ten minutes after it isneeded!

Finally, genuine innovation (Stage1) usually represents a break with thethought structures of the past. Initially an in-novation will not be based on rationality andlogic because the supporting conceptualstructures are not yet there. They will become

Exhibit 6

THE SEVEN STAGES OF THE CREATIVE PROCESS

Stage Mode

Intuition

Feeling

Thinking

Sensing

Thinking

Feeling

Time Orientation

Distant future buttimeless in manyaspects

Future

Immediate future

Now

Immediate past

Past

Description

Intuition Distant past buttimeless in manyaspects

Imagination: Inspiration, creativity, andvision of potentials. Starts with vague, un-framed questions: "What am I?" "What are we?""Whafs 'it'?"

Motivation through the evocation of values andcommunication of purpose. Beliefs stirface:'Could this be us?" "Could this be 'it'?"

Planning: Conceptualization and concentration.Analysis of probabilities, development of objec-tives and strategies: *How to get 'it.'"

Action: Commitment to programs and the stra-tegic choice, the implementation of the plan.T)o 'it."

Evaluation: the collection and review of results,recycling to Stage 3 if necessary, and then theconstruction of routines and standards. Under-standing and recognition: "This is 'it.'"

Satisfaction: The coordination and organizationof competencies and the achievement of mean-ing. The organization becomes the embodimentand expression oi the essence of "What we are."Competencies and achievements are oftencelebrated in festivals, stories, and legends.

Realization of the vision: "Ah ha! So that's it."Growth by learning sets up long-term memoryand creates a new way of seeing the world. Italso creates a set of largely unarticulated expec-tations. Often enshrined in tradition and com-memorated in ritual, these expectations willhave a decisive influence over how the world isseen in future.

available only after the fact —that is, after

action.

Oinversely highly structured thought,

as well as tradition, will interfere with and in-

hibit innovation. Managers may become psy-

chic prisoners, trapped in their own mental

cages. It is no coincidence thai many en-

trepreneurs and innovators either have little

formal education or performed poorly in the

traditional educational system.

Four Kinds of Managers

Attached to each of the dimensions of 21

thought through which the creative processpasses is one of Four managerial designations:leader, champion, administrator, and im-plementer. The leader can see the v hole pro-cess through from imagination to realization,from vision to reality. The champion, tied tothe feeling dimension, is the principal motiva-tor. Champions make people aware of thevalues and common purpose that they share.In Stage 6 of the creative process, the cham-pion may become the symbol of all that hasbeen achieved, an embodiment of the organi-zation's abilities.

The administrator is the classicalmanager, the rational profit maximizer be-loved by economists and managementstrategists alike. Administrators perform thethinking function, concentrating objectivesinto strategies and seeing the process throughto the evaluation of results and the collectionof routines, which help the company formstandards. Lastly, the implementers are theactors, those who do "it."

Although these managerial designa-tions and their characteristics have been sepa-rated for analytical purposes, tbey are part ofone process. Everybody is capable of per-forming all of the managerial roles in thatprocess, although different people may prefersome parts of the process to others.

Our company's problem between1964 and 1980 was our overemphasis on therational-thinking function. We forgot aboutthe visions and values that must lie behind theobjectives and strategies. Instead of express-ing the shared values of the organization as awhole, our corporate objectives reflected thenarrower purposes of a small group of execu-tives.

Furthermore, neglect of the creativestages of the process ensured that this execu-tive group never tried anything new. Our cor-porate strategies reflected repeated applica-tions of the same conceptual formula. Thecorporation's seasoned operating managersknew this was the case, but they could never

22

'Our companys problem between 1964 and 1980was our overemphasis on the rational-thinkingfunction. We forgot about the visions andvalues that must lie behind the objectives andstrategies. Instead of expressing the sharedvalues of the organization as a whole, ourcorporate objectives reflected the narrowerpurposes of a small group of executives.''

explain it to their bosses. It's an old problem:Intuition can't speak and logic won't listen.The executives' obsession with rationalitywas readily apparent in their preoccupationwith written plans at the expense of the plan-ning process. It was also evident, as thereader will see in the next section, in their ina-bility to implement effectively the plans ar-rived at rationally.

Planning and Plans

The mode] of the creative process makes clearthe distinction between the planning processand the plans. The planning process describesthe continuous swirling of ideas within theorganization, the condensation of perceivedopportunities, their placement within pro-grams, and their reduction to action. Ideallythis process is accompanied by the emergenceof committed individuals who become cham-pions of particular programs. If a visionarygenius heads the organization, then the plan-ning process and the emergence of a cham-pion take place at the same time and withinone individual. In other words. Stages 1 and2 are combined.

In the absence of genius, the plan-ning process should allow groups of individu-als to function as coherent wholes. The team"mind" so produced can, under the right con-ditions, substitute for the lone genius andtake the organization through all the stages ofthe process. Members of the team will comeup with ideas, reach a consensus on the ap-propriate ones, and commit to their realiza-tion of these opportunities with the obsessivepassion characteristic of genius. They will be-gin to find a purpose and a meaning in theirwork and in their lives that they did notrecognize before. This is the process of self-actualization. It might even be said that effec-tive strategy consists of telling people whatthey know already.

Effective strategies, then, depend onpeople's commitment to them. Strategiesshould capture ideas released by the planningprocess. These ideas, reduced to strategies,should be implemented only by people com-mitted to them. And people will be com-mitted to them so long as they recognize themas their own.

The planning process as describedhere never stops. The ideas swirl continu-ously. The formal planning process (and theprinted plans it produces) is a procedure im-posed upon the organization (at Stage 3) tohelp the crystallization process. To pursuethis analogy, a crystal (a formal planningstructure) dropped into a supersaturated so-lution (a group of people brimming withideas) will trigger the crystallization process.The formal planning procedure then is a cata-lyst, not a cause. It encourages the down-ward, reductive process by which bright ideasheld by highly motivated people are turnedinto practical programs.

Of course, if the solution is not su-persaturated (if there are no ideas), the onlycrystals coming out of the solution will be theones put in it in the first place. When this hap-pens, the creative process collapses into stra-tegic management. It no longer creates thefuture but incessantly repeats the past,tracking the same path over and over again.The organization becomes a clockwork,capable of endless elaboration but incapableof evolution, a mechanism that always selectsbefore the organism can mutate.

Stability and Change

Alfred D. Chandler's model of the stages ofgrowth in North American business suggeststhat North American business tends to alter-nate between periods of growth and changeand periods of stability and consolidation.Much of big business in North America now 23

is in a state of stagnation. Perhaps the hugecreative surge generated as a by-product ofWorld War II has spent itself, and subsequentwars and events (the space race, the Great So-ciety, the arms race) have not been able to sus-tain the pace.

In any event the present challenge tomanagement is to innovate —to find tomor-row's business. In the absence of genius thismeans that rigid organizations must becomemore flexible. Given the well-established pat-terns of thought in large organizations, suchchange usually requires a crisis, somethingthat will break the mold of the past.

Although crises and surprises areanathema to managers trying to keep organi-zations stable, they seem to be essential to thecreation of change. Many courses increativity stress the importance of brain-storming, lateral thinking, and other tech-niques designed to shock thinkers out ofhabitual thought structures. Unfortunately,these techniques are rarely helpful in dealingwith the problems managers face. Creativitycourses deal with "tame" problems —problems that can be clearly formulated andthat have an answer that can be proved cor-rect. In contrast, the most important issuesmanagers face are usually "wicked" problems.Such problems are affected by their formula-tion. Often the first step is to find the ques-tion; the answer to this question will never beright or wrong, only better or worse than an-other answer.

As we found out in our organiza-tion, wicked problems engulf the familiarquestions "What business are we in7" and"What business should we be in?" Because an-swers to such questions depend upon concep-tual frameworks developed retrospectively,managers may be able to answer the firstquestion but they will struggle with the sec-ond. They may be able to conceive of new

24 businesses only after they have done some-

thing new-and they won't be able to givevery good reasons for doing something newbefore they have done it! To answer the sec-ond question most successfully, establishedcompanies must both permit and encouragemanagers to do something new. Usually thisrequires a change in the behavior of the CEOand senior management, which may occuronly in the face of a business crisis. But some-thing has to happen, either revelation, revo-lution, or — perhaps best of all — both. Even anew CEO needs a mandate.

WHY STRATEGIC MANAGEMENT IS BANKRUPT

The test of business solvency is not the size ofassets but the relative balance of assets andliabilities. Strategic management has enor-mous assets, but often the claims against it ex-ceed those assets. Instead of recognizing it asa rational tool for managing stability —forelaborating on success and culling failure —too many advocates view strategic manage-ment as a way to create innovation and leadchange. Our experience suggests that this isnot the case. The strategic managementmodel is essential for managing today's busi-ness, but it cannot create tomorrow's becausethe strategic paradigm is sterile.

The strategic model also runs intotrouble when it is used as an instrument tomanage managers by objectives. By startingwith the concept of objectives, the paradigmignores the critical roles of imaginative visionand shared values. As a result, instead ofgrowing from within the organization, visionand values turn into extensions of the person-ality of senior managers. The prevalence ofthe "tool" or "instrument" metaphor in strate-gic management is illustrative of this ten-dency. The manager is seen as a rational tooluser who stands outside the situation. Ob-jects are changed by the tool user but do not

affect either the tool or its user. Thus the stra-tegic management of people can easily be-come manipulative and elitist. In the absenceof genius, purpose and meaning will be lost.So will the organization's ability toinnovate —that is, to evolve.

Strategic management is a fine meth-odology with which to pursue given ends. Butit functions poorly as a philosophy for reach-ing an agreement within an organization as towhat those ends should be.

LEADERSHIP

In the past many writers on management havedescribed leadership in terms of the qualitiesa single individual may possess. These quali-ties bear a striking resemblance to the variousstages of the creative management process.Leaders, they say, have vision and values,conceptualize rapidly, and act decisively. Wecan now see that leadership is really aprocess, an ongoing dynamic relationshipamong a number of individuals in search ofmeaning. If leadership is effective, then theseindividuals will develop a shared vision, asense of common purpose, and the ability to

make their own unique contributions. Theirwork will satisfy their need for both identityand community, their striving both to be-come what they are and, at the same time, tobelong to something larger than themselves.

Leadership is the process by whicheach individual is allowed to play his or herbest role at the appropriate stage. We call theeffective mingling of strengths a team. Theachievement of teams within an organizationis the result of true leadership. "When thegreat leader has done his work, the peoplewill say 'We did it ourselves,'" wrote Lao Tzuin the fifth century B.C.

Too few business leaders today areinnovators and developers of new industries.Most of our heroes are either paper en-trepreneurs, assisted mightily by our taxlaws, or technicians. (Keep in mind Maslow'sdefinition: "A technician is a man who under-stands everything about his job except its ulti-mate purpose and its place in the order of theuniverse.") The result has been a profoundloss of meaning for both the managers andthe managed.

This loss of meaning is not re-stricted to business organizations. It pervadesour social institutions, churches, govern-

'Too few business leaders today are innovatorsand developers of new industries. Most of ourheroes are either paper entrepreneurs, assistedmightily hy our tax laws, or technicians. . . .The result has been a profound loss of meaningfor both the managers and the managed!' 25

ments, universities, and families. We have theanswers but we have forgotten the importantquestions. This "freedom" from the importanthas made us slaves to the urgent. Too manymanagers have lost the vision of what theycan become, of their sense of purpose.

The search for and the recognitionof purpose and meaning are the mainspringsof all motivation. In this way, the processesdiscussed here are at the heart of both themost glorious and the most infamous periodsin human history. When great leadersreleased these processes within their people,philosophy and art flourished and societieshad their golden age. When great tyrantsused the same processes for their own pur-poses, they led their people into darkness anddisaster.

In business, the point at whicheverything starts to go wrong is also the pointat which management believes that it canstand outside the system and manipulate theprocesses for its own benefit. Such actionsgenerate perverse reactions because manage-ment is not outside the system looking in; itis inside the system looking at itself. The per-verse outcomes of many acquisitions andmergers have been documented repeatedly.Following acquisitions, hundreds of majorcorporations have attempted to restructuretheir operations, usually by shedding the ac-quired businesses and returning to their coreoperations. Many acquisitions, especiallythose carried out by the large integrated oilcompanies, were based on the most rationaland logical of reasons. Yet the results have of-ten been the opposite of those intended.

Perverse outcomes are also endemicto government at all levels. Governmenthousing programs have usually achievedresults opposite those intended. Energy self-sufficiency programs lead to line-ups andshortages. Efforts to prop up foreign govern-ments often succeed in alienating them from

26 the people that they govern.

We persist with our efforts toachieve unilateral control and dominationover complex systems. But we are part ofthese systems, and the systems are alive. Theyreact and respond to our efforts to changethem. In the short term we may get the logicalresults of our actions. In the longer run theseresults may be overwhelmed by natural con-sequences.

To change complex systems we needto start by changing ourselves. We do nothave to change to anything different. We needonly to stop trying to be things that we arenot.

The change begins with the recogni-tion that reality is not a given that is accessi-ble to clear-eyed, rational perception. To besure, parts of the world are accessible in thisway, but reality is mostly multidimensional,and we as individuals are intimately involvedin its construction. The business environ-ments that strategists scan are as much anoutput of our culture as they are an inputfrom reality. The recognition of this musthave profound effects on our understandingof the meaning of objectivity. C. WestChurchman has put it well: "Instead of thesilly and empty claim that an observation isobjective if it resides in the brain of an unbi-ased observer, one should say that an obser-vation is objective if it is the creation of manyinquirers with many different points of view."

These different points of view cor-respond to the different stages of the creativeprocess. We need to abandon our notions ofthe lone manager as hero, who rationallysolves the problems of the world. We must as-semble teams to handle the total process. Weneed to combine the two great human gifts,reason and passion, the head and the heart,and we need to stand at the threshold of thepresent, looking at both the past and the fu-ture. Now is the only time. In that processour organizations may realize their potential.We may become what we are.

SELECTED BIBLIOGRAPHY

A good selection of writings during the earlystages in the development of the strategic modelcan be found in iong-Range Planning for Manage-ment edited by David W. Ewing (Harper and Row,1958). A dialectic soon ensued between the "granddesigners" such as Igor Ansoff and George Steineron the one hand and "incrementalists" such asPhilip Selznick and C. E. Lindblom on the other.See Leadership in Administration by Philip Selz-nick (Harper and Row, 1957) and T h e Science of"Muddling Through'" by C. E. Lindblom {PublicAdministration Review, Spring 1959). The "hard"side of the debate, which has been by far the mostpopular among teachers of management, is exem-plified today in Michael Porter's CompetitiveStrategy (The Free Press, 1980) and CompetitiveAdvantage (The Free Press, 1985).

Well-known critiques of early strategicviews are The Human Side of Enterprise by Doug-las McGregor (McGraw-Hill, 1960) and The Hu-man Side of Planning by David W. Ewing (Mac-Millan, 1969). The latter book presents a sharplycontrasting view from that expressed in his earliercollection of articles on planning cited above. Twomore recent books on the "soft" process view ofplanning are James G. March's (coauthored withMichael D. Cohen) Leadership and Ambiguity(McGraw-Hill, 1974) and James Brian Quinn'sStrategies for Change: Logical Incrementalism(Dow Jones-Irwin, 1980). A good perspective ofthe recent state of play can be found in Strate-gic Management edited by Dan E. Schendel andCharles VV. Hofer (Little, Brown and Company,1979).

One of the best discussions of innovationin organizations is The Management of Innovationby Tom Bums and G. M. Stalker (Tavistock Publi-cations Limited, 1961). The firsthand experience ofa "hard" organization changing to a more innova-tive structure is described in my article "Of Boxes,Bubbles and Effective Management" {HarvardBusiness Review, May-June 1984).

Questions of how we perceive reality

have long been the preserve of philosophy buthave received little attention from scientists andeven less from management theorists. Two helpfulphilosophical books are The Design of InquiringSystems by C. W. Churchman (Basic Books, 1971)and Objective Knowledge by Karl R. Popper (Ox-ford University Press, 1972). Popper's book can betough reading for those not trained in philosophy;his two essays "Of Clouds and Clocks" and "TheBucket and the Searchlight" are the most accessiblepieces. Two books on the problem from the per-spective of science are Thomas S. Kuhn's landmarkThe Structure of Scientific Revolutions (Universityof Chicago Press, 1962) and Order out of Chaosby Ilya Prigogine and Isabelle Stengers (BantamBooks, 1984). In the field of management, KarlWeick's The Social Psychology of Organizing(Addison-Wesley, 1970) is a major contribution.

Diagrams and geometric figures can beextremely helpful in illustrating the metaphorsthat are used to describe mental processes. Mapsof the Mind by Charles Hampden-Turner (MacMil-lan, 1981) gives an excellent overview, mappingmany of the models that have been proposed.

The use of multiple perspectives in man-agement is a growing topic for managementwriters. Two examples are Managing StrategicChange by Noel M. Tichy (John Wiley & Sons,Inc., 1983) and Multiple Perspectives for DecisionMaking by Harold A. Linstone (Elsevier SciencePublishing Co., Inc., 1984).

Given the North American preoccupa-tion with the manager as a lone individual, it is notsurprising that there is little written about howmanagement teams work in practice. Pioneerwork has been done by Meredith Belbin in En-gland. See his excellent book Management Teams(John Wiley and Sons, 1981).

If you wish to make photocopies or obtain reprints

of this or other articles in ORGANIZATIONAL DYNAMICS,

please refer to the special reprint service

instructions on page 80.

27