William O'brien, formerly the Chief Executive Officer of the Hanover Insurance Company, is mow a member of the board of governors of the Center for Organizational Learning at MIT.
Most people I talk to in business today agree that extraordinary changes are taking place in the business universe. These changes go beyond an imbalance between supply and demand, or the advance of new technology. They represent an adjustment to far-reaching forces, including an evolution of the global work force that is unprecedented in history.
Now, I believe, a new wave is forming: the beginning of a twenty-first-century era which is yet unnamed. It is difficult to see the potential of that era, because right now, we are at the bottom of the trough. No one knows what their industry is going to look like at the top of next wave.
The only prudent thing one can do in this position is to ask oneself, "What are the preconditions to cope with this change?" Personally, I bet that four abilities will be necessary.
The first is learning how to disperse power on an orderly, non-chaotic basis. The word "empowerment" is a very powerful buzzword. It's also very dangerous. We have to learn how to disperse power so self-discipline can largely replace imposed discipline. That immerses us in the area of culture: replacing the bureaucracy with aspirations, values, and visions.
The second attribute of winning companies will be systemic understanding. In the insurance industry, we have extensive information, large computers, and smart actuaries spreading risk; but when we put them all together, nobody's satisfied with the way the automobile insurance system is working. We're good at the type of problem which lends itself to a scientific solution and reductionistic thinking. We are absolutely illiterate in subjects that require us to understand systems and interrelationships.
The third that twenty-first-century companies will need is conversation. As a society, we know the art of small talk. But when we face contentious issues, we have so many defense mechanisms that impede communications that we are absolutely terrible. To navigate this enormous change we're going through, a corporation must become good at conversation that isn't polite.
Finally, under our old system of governance, one could lead by mandate. But the forthcoming kind of company is going to require voluntary followership. Most of our leaders don't think in terms of getting voluntary followers; they think in terms of control.
Ingredients for Success
- 1920-1990
- Efficient manufacturing
- Effective mass marketing
- Rapid adoption of technology
- Financial acumen
- "Theory Y"
- 1990-the Future
The abilities of 1920-1990 will continue to be important. But I don't think the new attributes will be a fad. If you try to walk down one road without the other, you will not build a great organization. What do I want to do with the rest of my life? Do I want to spend it coping with politics and other organizational diseases - or do I want to spend it working on building a great organization?
- Distributing power while increasing self-discipline
- Systemic thinking skills as well developed as reductionist skills
- Improved conversation
- Voluntary followership
Senge, P.M. et.al., (1994) The Fifth Discipline Fieldbook., Doubleday, NY. P13~15.
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