Insecurity => creativity?? LO10638

DHurst1046@aol.com
Mon, 21 Oct 1996 23:01:04 -0400

Replying to LO10504 --

Hi Rol et al.

This is a somewhat lengthy response to several of the items on this topic
as it is close to my heart. My book "Crisis & Renewal: Meeting the
Challenge of Organizational Change" (Harvard Business School Press 1995)
argues that unless managers continually create crises (from the Greek
"krinein" meaning to sift i.e challenge) for their organizations in acts
of what I call "ethical anarchy" they run the risk of exposing them to
catastrophes which they cannot control.

The practical roots for this advice came from my own experience as a
manager and those of other managers, organizations and communities,
including evidence from the first industrial revolution and the role
played by the Quakers. The theoretical support came from complexity/chaos
theory, ecology and the study of ecosystems, such as forests, which seem
to require a process of creative destruction in order to renew themselves.
The emphasis is on "creative" destruction: actions and events which remove
systemic constraints to change. I argue that while much "how to" advice to
managers is sound, it ignores the contextual constraints which prevent
managers from taking effective action. In established organizations many
managers know what needs to be done, but they are systemically constrained
from taking that action.

The central dynamic to understanding when and how organizations become
constrained and why crisis is necessary is the organizational "ecocycle".
Here is a diagram to illustrate my points:

This is the conventional lifecycle with the addition of a "backloop" cycle
of renewal. The two combine to form an "infinity loop". The cycle was
developed by C.S. Holling from the study of ecosystems and, together with
a colleague, Brenda Zimmerman at York University, we adapted it to human
systems. The ecocycle identifies 8 phases in the evolution of an
organization. Organizations start off their lives with managers as
emergent actors - learners (1). As entrepreneurs they are free to act, but
ignorant as to exactly what to do: their problems are unanalyzable. They
learn through a process of trial and error. Once a recipe is discovered,
it is named (retrospectively) "strategy" and managers become rational
actors (2) - they know what to do and are still free to act. Their success
at implementing the strategy of necessity involves building constraints
into the organization. Elements of the organization become
tightly-connected and freedom of action is diminished. These "strengths"
become weaknesses as the environment changes: the managers become
constrained actors (3) - they know what to do but are not free to act. And
so the seeds of failure are systemically embedded in the fruits of
success. Hence the need for crisis to set the system free (4). This throws
the organization into a state of confusion (5), escape from which requires
another kind of rational action (6) - leadership which is behaviour
undertaken, not for instrumental reasons, but because it is intrinsically
valuable. That is, it accords with our basic values. People gather
together around these shared values in open dialogue to form creative
networks (7) or entrepreneurial communities. In a loosely-connected
network there are many possibilities. Options are generated which
entrepreneurs will then choose and pursue (8). They are now free to act
again and to learn from their actions.

Visualize Diagram Here

This perspective raises a number of issues, some of which have been
mentioned in the dialogue so far:

Julie Beedon's comments on polarities: this perspective suggests that
organizational life (and perhaps our personal lives too) is some kind of
dialectic between stability and change. Indeed the ecocycle itself can be
seen as a western version of the Taoist tai-chi symbol of the ongoing
struggle between the forces of yin and yang, which together generate the
harmony of the "Way".

Kent Myers writes that "Insecurity is a byproduct of creativity and tends
to dampen it" There is extensive psychological evidence that individuals
function best under some optimal level of stress. It's an inverted "u"
shape relationship: at very low and very high levels of stress creativity
disappears.

Robert Lucadello's comment that "the essential element (is) drawing
strength from an internal mission vs. drawing strength from external
validation." really sums up the key element of what I mean by "ethical
anarchy": crisis must allow the people in the organization to revisit
their core values and their vision of what their contribution is to
society. It is this internal mission which will sustain the organization
during the external turbulence. I think that this is the central message
from the Collins and Porras book "Built to Last": the organizations that
survive are characterized by their strong ideologies when compared with
those that don't.

Clyde Howell writes that "The idea of an organization using instability
and insecurity to foment creativity and increase productivity seems to be
blatantly manipulative" I think that this is absolutely correct and needs
to be addressed explicitly. One of the reasons that this topic has been so
difficult to discuss is because of its manipulative connotations. The only
attribute that can redeem such deliberate action is if it is taken with
integrity - to preserve a valuable system - an organization that creates
value for the community.. That is the managers, in the aftermath of
crisis, must become part of the change process, sharing the fate of
others. This is the fatal flaw in much reengineering/downsizing: managers
are seen to be outside the process of change and immune to its
consequences. The message they often send is that "you" have to change,
"we" don't.

Michael McMaster "is strongly opposed to the idea" although he seems to
agree that disequilibrium is necessary for creativity. There is evidence
that entrepreneurial communities like Silicon Valley do get significantly
more innovative when times are tough. And who would argue that Detroit
would never have changed without the oil crisis and the threat from
Japanese lean manufacturing? Could GE have done without Jack Welchs
challenge to their businesses to be #1 or #2 in their markets? What about
Intels Andy Grove and his belief that "Only the paranoid survive?" Even
in our own personal lives I think that there is abundant evidence that
major change usually takes place in response to some kind of challenge.

He continues "Change is a constant in our environmentwe dont have to
make it. Our power emerges when we are present to it, awake, aware." But
how do we become "awake, aware"? The rate of change in the environment is
not constant: steady growth seemed like stability and the norm in the
1960s. Detroit was lulled to sleep by fifty years of unbroken success. GM
denied until 1982 that it had a problem: "Its only the business cycle"
many of them argued. The warning signs were everywhere, but only if you
could read them. And even then there were many possible interpretations.
There was no one inside the firm who could amplify the signals
sufficiently and coherently enough to overcome the institutional filters.
Only when disaster struck could they begin to change - by increasing
connections through alliances, joint ventures, internal experiments like
Saturn etc. as Michael suggests they should. But the systemic constraints
had to be broken first - by crisis.

In my experience many managers do know that organizational change demands
continual challenge and I think that many management techniques are used
an ongoing effort to "shake things up". Many reengineering and downsizing
projects are initiated for the same reason. I think that it lies at the
base of much management by "fear and intimidation". By openly discussing
the role of crisis in organizational change I think it makes many of these
irresponsible and manipulative uses of power less likely to happen. A
stratagem described and foreseen is a stratagem disarmed! Incidentally, I
think that this is one of the reasons why the Dilbert cartoons cause
discomfort to some readers, but thats another thread.

Best wishes,
David Hurst (dhurst1046@aol.com)
Speaker, Consultant and Writer on Management
McGraw-Hill Ryerson - Cri sis & Renewal

-- 

DHurst1046@aol.com

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