Table of Contents
Table of Contents
Teaming is a fresh new concept to organize the best knowledge available for creating and maintaining effective action.”
—Chris Argyris, professor emeritus, Harvard University
“This is the ultimate book on teams and learning. Edmondson combines academic rigor and relevance in a unique way. A must-read for scholars and practitioners.”
—Bertrand Moingeon, professor, directeur général adjoint, and deputy dean, executive education and academic development, HEC Paris
“Amy Edmondson is the best leader teacher I know. Her experience in the classroom and her deep understanding of how leaders lead in the real world rings loud and clear in this book.”
—Charlie Eitel, founding partner, Eitel & Armstrong; and former chairman and CEO, Simmons Bedding
“Edmondson’s insights that teams are verbs rather than nouns, and that leaders who focus on ‘teaming’ animate a more adaptive work environment, are a major advance in our grasp of leading, organizing, and learning. This is the work of a gifted, hands-on scholar at her best!”
—Karl E. Weick, Rensis Likert Distinguished University Professor, organizational behavior and psychology, Stephen M. Ross School of Business, University of Michigan
“Teaming is the book on how to lead and learn from innovative teams and dispersed networks. Amy Edmondson has gathered a wealth of evidence, experience, and illustrations to write the definitive playbook for learning and bringing out the best in collaborative endeavors anywhere.”
—Michael Useem, professor of management, and director of the Leadership Center, Wharton School, University of Pennsylvania
“The always-insightful Amy Edmondson has produced a terrific book. She provides the best insights I have seen on failure and learning in teams. By distinguishing between types of failures across her Knowledge Process Spectrum, she shows how some types of failures should be discouraged and minimized while others are essential for learning and advancement. Easy to read, Teaming provides useful insights from start to finish.”
—Roger Martin, dean, Rotman School of Business, University of Toronto
“Teaming shows how organizations can inspire every employee to voice new ideas, compensate every manager to reward the risk of experimentation, and recognize every leader who empowers the collective quest for learning and innovation. Edmondson has provided an articulate, indispensable guide for organizations to succeed in an age of unprecedented change and competition.”
—Sean Woodroffe, vice president, human resources, Sun Life Financial U.S.
“Many of us have experienced or observed the drama of a hospital emergency room where life-and-death split second decisions are made, and where priorities and staff assignments shift unpredictably, even in the midst of caring for a patient. Teaming describes a new way of working that achieves superior outcomes in this chaotic environment, a setting for which past organizational theory has fallen short.”
—Ray Gilmartin, professor of management practice, Harvard Business School; and former CEO, Merck & Co.
“Edmondson goes to the very heart of the single biggest challenge we face in the 21st century: while our problems are growing ever more complex, the expertise we bring to those problems is growing ever more narrow. Only through teams—or teaming, as Edmondson rightly argues—can we hope to learn across boundaries and tackle the problems we face today. Using captivating stories based on decades of research, this remarkably readable book explains why such learning is hard, shows how it’s possible, and illustrates what it takes. Beautifully written and cogently argued, it’s bound to be a classic.
—Diana McLain Smith, chief executive partner, New Profit Inc.; and author, The Elephant in the Room: How Relationships Make or Break the Success of Leaders and Organizations
“A must-read for managers at all levels who want to learn about cross-boundary teams and how to lead them. Based on her extensive research and consulting experience, Edmondson has written an authoritative, comprehensive, and engaging book that I will recommend to my students and corporate clients.”
—Michael Beer, chairman, TruePoint Partners; and Center for Higher Ambition Leadership Cahners-Rabb Professor Emeritus, Harvard Business School
“No one has done more insightful research than Amy Edmondson on why effective teams are effective. Every team leader needs to know what she knows.”
—Chip Heath, author, Switch: How to Change Things When Change is Hard
“Amy Edmondson has built a wide following for her studies on how organizations learn and grow through cooperative work and enlightened leadership. Her experience provides the rich soil from which this book has grown. It is packed with insight, drawn from cutting-edge research, and is squarely aimed at 21st century leaders seeking to build collaborative, self-reflective teams.”
—David Gergen, senior political analyst, CNN; adviser to four U.S. presidents; professor, public service, and director, Center for Public Leadership, Harvard Kennedy School
“This book is both practical and profound. It takes us from the static organizational models and procedures of the past to the skills and practices of a knowledge economy, in which learning is the mainstay of success. Teaming is an extraordinary concept, filled with inspiration and possibility. My admiration for Amy Edmondson continues to grow with this contribution. This is a must-read for those in pursuit of habitual excellence, joy, and meaning in work, and success in the 21st century.”
—Julianne Morath, chief quality and patient safety officer, Vanderbilt University Medical Center; and associate professor, clinical nursing, Vanderbilt University
Copyright © 2012 by John Wiley & Sons, Inc. All rights reserved.
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Library of Congress Cataloging-in-Publication Data
Edmondson, Amy C.
Teaming: how organizations learn, innovate, and compete in the knowledge economy / Amy C. Edmondson ; foreword by Edgar H. Schein.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-7879-7093-2 (cloth); ISBN 9781118216743 (ebk); ISBN 9781118216767 (ebk); ISBN 9781118216774 (ebk)
1. Teams in the workplace. 2. Organizational learning. I. Title.
HD66.E327 2012
658.4’022—dc23
2011053064
Foreword
It gives me great pleasure to write a foreword for this very important and timely book. I have known Amy’s work for more than a decade and am very pleased that she has now pulled together the main points that have emerged from her seminal research on the processes that underlie teamwork.
Let me comment first on why this work is important and why it is essential for leaders and managers in all kinds of organizations to absorb the lessons provided here. Even though our culture tends to accept groups and teams only when pragmatically necessary to win or to get a job done, teams and teamwork are at the very foundation of society and community. It is a tragedy of our organizational society that we joke about meetings being mostly a waste of time and groups being useless because they diffuse accountability. We have built all our incentive and promotion systems on individual performance to the point that even in team sports such as hockey, soccer, basketball, and football, it is the individual star on the team who gets the press and the big bucks. The result of this cultural bias is that most leaders are shockingly incompetent in running meetings or creating teams. Yet they are dependent on teamwork. This book’s emphasis on “teaming,” the processes that underlie effective collaboration, provides crucial insight and understanding on what is necessary for teamwork to work.
Why is this book timely? Because the world is becoming more complex and multicultural. Complexity is the result of the technological evolution of all the fields of science, engineering, management, and organization development. What this means is that to get anything accomplished in a technologically complex society requires the input of information and process sophistication from many fields. That, in turn, means that managers as individuals no longer know enough to make decisions and get things done. They are de facto increasingly dependent on all kinds of specialists. And that means they have to understand the processes of “teaming,” of bringing these specialists together and enabling them to work. Nowhere is this more evident than in health care, where everything from running a hospital or community health care system to doing a complex cardiac operation requires high levels of teaming.
Along with complexity we see the world becoming multicultural. And I mean this both in the ethnic sense of many more nations contributing to the occupational pools of most organizations and in the occupational sense that the specialization referred to above also leads to strong occupational cultures. Some of these cultures have been around for a long time and bedevil teaming efforts, such as the gulf that exists between doctors and nurses. Other such gulfs have arisen between the culture of information technology that feeds the egalitarianism and openness of the new generations and the traditional management culture of hierarchy and control. How do you get collaboration between a young engineer bred on total transparency and a manager who “knows” that information is power and must, therefore, be tightly controlled?
Add to this the problems of different languages and thought worlds of the many national cultures and you have the need for what this book emphasizes above all—the ability to learn. Teaming in today’s and tomorrow’s world will be about learning. Old formulas for what a group should be, how it should be organized and run, will not work. One of these old formulas emphasizes group composition—find out what everyone’s personal style and competence is and fit the parts together. The most obvious limitation to this formula is that the changing nature of complex tasks makes it difficult to decide ahead of time what personal style and competency set to measure. Secondarily, it will be more and more difficult to find and recruit whatever competence may be needed. What this book emphasizes so well is that the mindset of teaming has to be focused on how to get the job done with the team resources available, and that inevitably is a learning process.
Teaming and learning are here to stay. Enjoy learning about it.
Edgar H. Schein
For Larry Wilson,
who started me on this journey
Introduction
Most people recognize that the knowledge-based, twenty-first-century organization depends on cross-disciplinary collaboration, flattened hierarchies, and continuous innovation. One reason for this is that expertise has narrowed and many fields have splintered into subfields. Unfortunately, the problems that need solving in the world haven’t narrowed accordingly. Instead, they’ve just become more complex. This means that many challenges must be approached by people working together across disciplines. Product design, patient care, strategy development, pharmaceutical research, and rescue operations are just a few of the activities that call for cross-disciplinary teamwork.
To succeed in a changing and competitive global economy, organizations must also be able to learn. Expertise in almost any field is a moving target. To keep up with developments in their field, people must become lifelong learners, and success will belong to those who can master new skills and envision novel possibilities. Employees must absorb, and sometimes create, new knowledge while executing. Because this process typically happens among individuals working together, collective learning—that is, learning in and by smaller groups—is regarded as the primary vehicle for organizational learning. Consequently, to excel in a complex and uncertain business environment, people need to both work and learn together. The implications of this new reality are enormous for leaders, professionals, and anyone working in an organization.
The recognition of this reality, however, doesn’t always produce a new way of working. Many organizations still rely on the top-down, command-and-control approaches that fueled growth and profitability in the industrial era. Some of the most basic tenets of this management style—ensuring control, eliminating variance, and rewarding conformance—inhibit collaboration and organizational learning. The result is that great companies, led by great managers, can fail when they confront overly complex or dynamic contexts. Most business leaders agree that their employees are important and profess the value of hearing their feedback. Such leaders welcome employee opinions and understand the importance of meeting to discuss how to improve production or create more innovative products. Yet these well-intentioned leaders often fail to reshape how work is really done. This book explores why this gap between recognition and practice persists and provides a leadership framework that can close it.
Teaming, coined deliberately to capture the activity of working together, presents a new, more flexible way for organizations to carry out interdependent tasks. Unlike the traditional concept of a team, teaming is an active process, not a static entity. Imagine a fluid network of interconnected individuals working in temporary teams on improvement, problem solving, and innovation. Teaming blends relating to people, listening to other points of view, coordinating actions, and making shared decisions. Effective teaming requires everyone to remain vigilantly aware of others’ needs, roles, and perspectives. This entails learning to relate to others better and learning to make decisions based on the integration of different perspectives. Therefore, teaming calls for developing both affective (feeling) and cognitive (thinking) skills. Enabled by distributed leadership, the purpose of teaming is to expand knowledge and expertise so that organizations and their customers can capture the value.
Teaming: How Organizations Learn, Innovate, and Compete in the Knowledge Economy describes the basic activities and conditions that help organizations succeed through teaming. This includes how work gets done, how leaders help make it happen, and how a safe interpersonal environment frees up people to focus on innovation. The model and guidelines presented throughout the book provide readers with a supportive framework for understanding and responding to the dynamics of collective learning. I examine and describe the mindset required to successfully incorporate teaming within an organizational setting, provide a set of leadership practices that can help develop a team-based learning infrastructure, and supply specific strategies for successfully teaming across the most common boundaries that hinder collaboration. In addition, I examine group processes that systematically improve existing knowledge and explain how to effectively use this new collective knowledge to improve organizational routines.
Over the past twenty years, I’ve conducted a series of in-depth research studies on teaming and organizational learning in hospitals, factories, senior management teams, and on NASA’s Space Shuttle Program. Additionally, I’ve written over a dozen case studies in which the themes of teaming and learning are explored in industries as varied as manufacturing, financial services, product design, telecommunications, government, and construction. Cumulatively, this research shows how organizational cultures inhibit or enable teaming, learning, and innovation. It also supports a new definition of what successful execution looks like in the knowledge economy and shows how the best organizations are able to learn quickly while maintaining high performance standards.
While studying organizational learning, I’ve met some extraordinary leaders who have found ways to make their organizations more responsive and competitive. You’ll meet many of them in the chapters that follow. Not all of the leaders I’ve studied were CEOs or heads of major agencies. Many were what I call leaders in the middle: those individuals who make a difference in their organizations by leading projects, instigating improvement, and helping other employees grow. In the course of these studies, I’ve also met individuals, perhaps no less remarkable, in large and multinational organizations who were stymied in their genuine desire to make a difference. In some cases, these leaders were simply thinking about their roles in the wrong way. They thought they needed to provide answers, when instead they needed to ask the right questions.
While contemplating flattened hierarchies and distributed leadership, readers might wonder if the need for strong leadership is fading. In fact, as the book argues throughout, the opposite is true. The activities of teaming—taking risks, confronting failure, and crossing boundaries—are anything but natural acts in large organizations. This means that leadership is now more needed than ever before in today’s complex, constantly changing landscape. This leadership can take two forms: the first is formal leadership, which I call leadership with a large L. Large-L leadership generally includes high-level executives and involves decisions and activities that influence everyone in the organization. This role is critical to effective teaming and usually includes developing organizational culture, direction setting, and the creation of goals.
But much of the time, what’s needed is what I call leadership with a small l. This type of leadership is exercised by people throughout the organization, not just at the top, and especially by those at the front lines where crucial work affecting customer experiences is carried out. This kind of leadership is about developing others’ skills and shaping effective processes. In small-l leadership, those in the thick of collaborative activity help ensure that teaming occurs effectively. Sometimes these leaders have formal responsibility for a project or a department; at other times, they’re simply the ones who see an opportunity to lead and act upon it. With teaming, the concept of leadership then becomes an activity that takes place both at the top ranks of the organization and at the front lines of operations.
As both a practical and research-based resource, Teaming: How Organizations Learn, Innovate, and Compete in the Knowledge Economy is tailored to a wide audience that includes leaders of all types and levels, as well as future leaders. Practitioners need approaches that they can readily apply to their work environment. To this end, I provide ideas, solutions, and strategies appropriate for all types of private and public organizations. These are intended to help leaders who wish to study or promote teaming in support of performance improvement. Leaders include executives, managers, team and project leaders, and supervisors searching for ways to create an environment that encourages and supports teaming. The book also is intended to help human resource professionals in aiding collaboration, training people to team, and implementing organizational learning.
In addition, academics and students of business administration and organizational behavior will find the book to be a useful resource for course curricula and research. In conceptualizing teaming, I incorporate relevant scholarly material and empirical evidence. I synthesize many of the findings from my research, previously found only in academic journals, so as to bring this work to the attention of a broader audience. I also draw heavily on the pedagogical tools I’ve developed over the years to deepen students’ comprehension of business issues and to energize classroom discussion. In particular, students will find the three case studies presented in Chapter Eight useful in bridging the gap between theory and practical application.
The idea that an organization should be able to anticipate and respond to changes in its environment is as difficult to put into action as it is compelling. Many adults have to relearn how to learn, and everyone could use help learning how to team. For most individuals, truly engaging with others in a goal-oriented, open-minded, collaborative process requires letting go of some old habits. The human behaviors that make these valuable attributes possible must be painstakingly cultivated. This book explores these issues in three parts.
Part One focuses on teaming, describing the core activities that fuel teaming efforts and answering these questions: How does it work? What does it take for people to learn how to team? What do people do when teaming? How does teaming produce organizational learning? This section describes the challenges to teaming and shows what teaming looks like when it’s done well. Chapter One opens by defining teaming and examining why it’s so crucial in today’s complex organizations, and then presents a new framework for understanding learning and knowledge. In Chapter Two, I describe the step-by-step teaming process in more detail, reveal how easily teaming breaks down, and establish four leadership actions that enable teaming and learning.
Part Two examines these four leadership actions in much greater detail. The emphasis here is on the human side of teaming, with an up-close look at how people work together in a wide variety of organizational contexts. More specifically, Chapter Three explores the power of framing and what leaders can do through framing to promote effective collaboration and learning. In Chapter Four, I look at how psychological safety promotes the attitudes, skills, and behaviors necessary for successful teaming. I detail just how much fear there is in today’s workplace, despite rhetoric to the contrary, and how crippling this fear is for problem solving. Chapter Five shows why failure is an essential part of organizational learning and presents specific practices for overcoming the challenges that failure presents. Chapter Six follows with an examination of the importance, and challenge, of spanning boundaries between disciplines, departments, companies, or even countries—and shows what is possible when we do, starting with the story of the “impossible” rescue of 33 miners trapped under 2,000 feet of rock in the San Jose copper mine in Chile in 2010.
In Part Three, the emphasis shifts from individual and interpersonal behaviors to organizational implementation. Chapter Seven pulls together many of the lessons and strategies from the previous chapters to provide a new model for execution, which includes specific steps for diagnosing, designing, and implementing an iterative process that ensures continuous learning and improvement. I develop the characteristics and attributes of different contexts, based on the level of process knowledge, in more detail. A detailed case study reveals the risk of misdiagnosing process knowledge and the importance of experimentation. Chapter Eight offers three case studies that examine different potential learning outcomes, including process improvement, problem solving, and innovation. The first case study looks at leadership that inspires and empowers dramatic performance turnarounds in existing companies that have fallen behind. In the second case study, I describe leadership that engages people throughout an organization in working together to solve tough problems in complex operations. The third case study focuses on leadership that supports innovation, allowing the kind of teaming that gives rise to pioneering products and processes.
To help readers understand and use the ideas and frameworks, I’ve incorporated a number of special features throughout the book, including the following:
Teaming: How Organizations Learn, Innovate, and Compete in the Knowledge Economy is intended as an accessible resource for anyone trying to increase collaboration and promote long-term success. It is designed so practitioners can easily navigate each chapter and locate specific topics or strategies. This means readers can shift from chapter to chapter and pull out what they need, when they need it. But there’s also an advantage to reading the chapters in order: each chapter is clearly linked and the concepts presented build on each other to help readers develop a deeper understanding of the relationship between teaming, learning, and performance.
Regardless of how a reader chooses to use the book, however, my primary hope is that it will help improve organizational actions through the creation of a more optimistic, collective spirit. When leaders empower, rather than control; when they ask the right questions, rather than provide the right answers; and when they focus on flexibility, rather than insist on adherence, they move to a higher form of execution. When people know their ideas are welcome, they will offer innovative ways to lower costs and improve quality, thus laying a more solid foundation for meaningful work and organizational success.
Part One: Teaming
Chapter One
A New Way of Working
Say the word team and the first image that comes to mind is probably a sports team: football players huddled in the mud, basketball players swarming in a full-court press, or baseball players turning a game-saving double play. In sports, great teams consist of individuals who have learned to trust one another. Over time, they have discovered each other’s strengths and weaknesses, enabling them to play as a coordinated whole. Similarly, musicians form bands, chamber groups, and orchestras that rely on interdependent talents. A symphony falls apart unless the string section coordinates with the woodwinds, brass, and percussionists. Even when a soloist is featured on stage, the orchestral score has a part for every musician. A successful performance is one in which the musicians complement one another and play in harmony. Like all good teams, they display synergy. The whole is greater than the sum of its parts. The players understand that they succeed or fail together—they win or lose as a team.
In today’s complex and volatile business environment, corporations and organizations also win or lose by creating wholes that are greater than the sum of their parts. Intense competition, rampant unpredictability, and a constant need for innovation are giving rise to even greater interdependence and thus demand even greater levels of collaboration and communication than ever before. Teaming is essential to an organization’s ability to respond to opportunities and to improve internal processes. This chapter aims to deepen your understanding of why teaming and the behaviors it requires are so crucial for organizational success in today’s environment. To help illuminate the teaming process and its benefits, this chapter defines teaming, places it within a historical context, and presents a new framework for understanding organizational learning and process knowledge, and explains why these are important concepts for today’s leaders.
Sports teams and musical groups are both bounded, static collections of individuals. Like most work teams in the past, they are physically located in the same place while practicing or performing together. Members of these teams learn how to interact. They’ve developed trust and know each other’s roles. Advocating stable boundaries, well-designed tasks, and thoughtfully composed membership, many seminal theories of organizational effectiveness explained how to design and manage just these types of static performance teams.
Harvard psychologist Richard Hackman, a preeminent scholar of team effectiveness, established the power of team structures in enabling team performance. According to this influential perspective, well-designed teams are those with clear goals, well-thought-out tasks that are conducive to teamwork, team members with the right skills and experiences for the task, adequate resources, and access to coaching and support. Get the design right, the theory says, and the performance will take care of itself. This model focused on the team as an entity, looking largely within the well-defined bounds of a team to explain its performance. Other research, notably conducted by MIT professor Deborah Ancona, showed that how much a team’s members interact with people outside the team boundaries was also an important factor in team performance. Both perspectives worked well in guiding the design and management of effective teams, at least in contexts where managers had the lead time and the run time to invest in composing stable, well-designed teams.
In these prior treatments, team is a noun. A team is an established, fixed group of people cooperating in pursuit of a common goal. But what if a team disbands almost as quickly as it was assembled? For example, what if you work in an emergency services facility where the staffing changes every shift, and the team changes completely for every case or client? What if you’re a member of a temporary project team formed to solve a unique production problem? Or you’re part of a group of managers with a mix of individual and shared responsibilities? How do you create synergy when you lack the advantages offered by the frequent drilling and practice sessions of static performance teams like those in sports and music?
The answer lies in teaming.
Teaming is a verb. It is a dynamic activity, not a bounded, static entity. It is largely determined by the mindset and practices of teamwork, not by the design and structures of effective teams. Teaming is teamwork on the fly. It involves coordinating and collaborating without the benefit of stable team structures, because many operations, such as hospitals, power plants, and military installations, require a level of staffing flexibility that makes stable team composition rare. In a growing number of organizations, the constantly shifting nature of work means that many teams disband almost as soon as they’ve formed. You could be working on one team right now, but in a few days, or even a few minutes, you may be on another team.
Fast-moving work environments need people who know how to team, people who have the skills and the flexibility to act in moments of potential collaboration when and where they appear. They must have the ability to move on, ready for the next such moments. Teaming still relies on old-fashioned teamwork skills such as recognizing and clarifying interdependence, establishing trust, and figuring out how to coordinate. But there usually isn’t time to build a foundation of familiarity through the careful sharing of personal history and prior experience, nor is there time for developing shared experiences through practice working together. Instead, people need to develop and use new capabilities for sharing crucial knowledge quickly. They must learn to ask questions clearly and frequently. They must make the small adjustments through which different skills and knowledge are woven together into timely products and services.
Why should managers care about teaming? The answer is simple. Teaming is the engine of organizational learning. By now, everyone knows that organizations need to learn—to thrive in a world of continuous change. But how organizations learn is not as well understood. As discussed later in this chapter, organizations are complex entities; many are globally distributed, most encompass multiple areas of expertise, and nearly all engage in a variety of activities. What does it mean for such a complex entity to “learn”? An organization cannot engage in a learning process in any meaningful sense—not in the way an individual can. Yet, when individuals learn, this does not always create change in the ways the organization delivers products and services to customers. This is a conundrum that has long fascinated academics.
This book offers a practical answer to the question of how organizational learning really happens: through teaming. Products and services are provided to customers by interdependent people and processes. Crucial learning activities must take place, within those smaller, focused units of action, for organizations to improve and innovate. In spite of the obvious need for change, most large enterprises are still managed according to a powerful mindset I call “organizing to execute.”
If you stood on a main street in Detroit around 1900, you would have seen electric trolleys sharing the streets with horse-drawn carriages. A mere decade later, cars had arrived in force. Though inefficient and unreliable, these increasingly popular cars brought with them the promise of a new, exciting world. For a short time, however, both literal horse and mechanical horsepower tried to share the streets, sometimes with devastating consequences. Many people found the collision of old and new worlds difficult, especially when those streets became even more crowded with young men from the countryside drawn to the city by the promise of manufacturing jobs.
In this transitional period, it was not obvious to the average worker how much the new industrial era would disrupt the social order by calling for new forms of obedience, unprecedented conformity to routine, and a new mindset that revered systems of control. Self-sufficient farmers and shopkeepers, who had for generations confronted vicissitudes of weather and illness and found ways to survive, would subtly but inexorably be transformed into order-followers collecting paychecks from impersonal enterprises.
Organizing to execute found its seminal momentum in Henry Ford’s invention of the assembly line: workers focused on fitting cog to component and component to cog. Emphasizing routine procedures, Ford’s approach made the working life of employees menial and tedious. Reliable and predictable, Ford’s assembly-line process was as much a novelty as its product. With the new century, age-old structures for self-reliance were being replaced with the small, repetitive steps that made mass production possible and brought about the modern world of products and services we know today. Ford’s success was contingent upon a high level of managerial control over employee practices known today as command-and-control management, or top-down management. The practice of top-down management is one component of a broader organizational methodology known as scientific management.
Ford’s intellectual partner as a pioneer in mass production was management expert Frederick Winslow Taylor, who complemented Ford’s assembly line with his efficiency methods and scientific measurement. Taylor and his followers devised ways to transform unpredictable and expensive customized work into efficient, economical systems of mass production. Long product life cycles allowed ample payback for the time invested in designing near-foolproof execution systems like the machine-paced assembly line. Periods of stability could be counted on. Products, processes, and even customers were mercifully uniform, minimizing the need for real-time improvisation to respond to unexpected problems, technological changes, or customer needs. Promoting the use of empirical methods, Taylor advocated his model of management and production in two influential monographs, Shop Management and The Principles of Scientific Management.
As managers today well know, an advantage of these new small, repetitive tasks was their transparency. Small, repetitive tasks are easy to monitor. They make the performance of the individual worker easy to measure. The assumption that firm performance was the cumulative result of thousands and thousands of well-designed and well-executed individual tasks dominated managerial theory and matched the economic reality. Even today, when it comes to issues like efficiency and productivity, most managers and corporate leaders are driven by taken-for-granted beliefs that were first promulgated by Ford and Taylor. For example, many consider the ability to measure and reward the specific, differentiated performance of individuals crucial to good management—a belief that is inaccurate and unhelpful in certain settings.
Devotion to efficiency and productivity resulted in two major workplace changes. First, it spurred a demand for professional managers who could oversee a vast complex of work activity. Second, it instilled a basic distrust of the worker. To ensure that workers did their jobs according to specified procedures, objective measurements of individual performance were relatively easy for managers to develop and implement. And, for the most part, workers who tried harder performed better. In mass-production settings like the one designed by Ford, opportunities for worker decision making or creativity were nonexistent. With this transparency, fear worked reasonably well to motivate employees. Whether through a fear of supervisor sanction or loss of material rewards, managers were able to coerce and intimidate workers to ensure high productivity. If there were costs to this approach for the enterprise or corporation, they were not in plain view.
The primary problem this legacy creates for managers today is that these systems produced an overreliance on fear in management practice. As Taylorism gained a foothold in factories across the country, the corporate mood became dour. Taylorism was ruthless. The individual’s worth was measured by his or her contribution to enterprise gains. A history of the United Auto Workers union described factory life in these early days as follows: “Every Ford worker is perfectly aware that he is under constant observation—that he will be admonished if he falls below the fast pace of the department.” Even in 1940, decades after the early days of the Ford miracle, a worker could be fired for smiling.
For managers and owners, there were reasons to smile. The record time for assembling a car in 1908 was 12 hours and 28 minutes. After the process was Taylorized, the first moving assembly line in 1913 cut the time to 93 minutes. While it is true that workers felt fear during the day and resentment at night, it is equally true that Taylorism prepared the industrial world for new efficiencies and wealth creation that had never been experienced before.
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Fear and routine have never been limited to blue-collar work. Ford’s factory worker can be seen as the precursor to the 1950s “organization man,” a term coined by sociologist William Whyte. Deindividuating labor was not all that different from deindividuating white-collar work. Much like the assembly-line worker, the office-bound “organization man” was bound by rules, processes, hierarchical structures, and fear. Moreover, the image of the organization man wasn’t just promulgated by sociologists. Novelists and writers have portrayed work in large organizations as replete with both monotony and anxiety. American literature has long presented bankers and other managers as organization men, experiencing the same cog-in-the-machine dehumanization as their blue-collar counterparts. Notably, the works of John P. Marquand, Sinclair Lewis, and John Cheever depict men for whom the daily grind results in alienation from family and friends and requires release through fantasy or self-medication. The “man in the gray flannel suit” (the title of a 1955 novel by Sloan Wilson) was as bound by rules, processes, hierarchical structures, and fear as was his counterpart on the assembly line. The organization man is alive and well in contemporary culture—as the butt of satire, for example, in the hit TV series The Office, and in the somber portrait of skewed priorities in the 1950s business world, personified in Madmen advertising wunderkind Don Draper.
As a society, we are still largely inured to a fear-based work environment. We believe (most of the time, erroneously) that fear increases control. Control reinforces certainty and predictability. We don’t immediately see the costs of fear, as explored in detail in Chapter Four. In fact, many managers believe that without fear people will not work hard enough.
Traditional models of organizing emphasize plans, details, roles, budgets, and schedules—tools of certainty and predictability. When we know a lot about what it will take to achieve the results we seek, these traditional models are superbly useful. And though this environment worked well for the assembly-line worker and the organization man, it is no longer a competitive advantage in today’s knowledge-based economy. Just as people one hundred years ago underwent a profound change in how they thought about the way work gets done, today’s turbulent work environment once again requires a new mindset—not just new slogans. It requires a new way of thinking and being.
By nearly every measurement, General Motors (GM) has been one of the world’s most successful enterprises. Founded in Flint, Michigan, in 1908, GM acquired more than twenty other fledgling automobile companies in its first decade of operation. During its remarkable ascension in the 1920s, GM passed Ford as the largest automaker in the United States. By 1931, GM had become the largest producer and seller of automobiles in the world. The company held this position for seventy-six consecutive years, throughout an era of remarkable economic growth and one in which both predictability and control dominated management thinking. GM’s growth continued throughout the 1940s, as the practice of sharing components across different brands created incredible economies of scale. By the 1950s, GM had captured nearly 60 percent of the automotive market in the United States and produced the number-one selling brand in the world, Chevrolet. In 1955, GM topped the first of twenty consecutive Fortune 500 lists as the largest, most profitable company in the world. In 1970, GM was nearly twice the size of the next largest company, Exxon Mobil, and nearly three times the size of General Electric. By the 1980s, GM had 350,000 employees, operated 150 automobile assembly plants, and sold over 9.5 million cars per year.
GM succeeded and grew to its dominant position in the automotive industry through successful execution. Along the way, it became a much-heralded model of how to organize and a venerated example of professional management. Confident of the wisdom of its approach, GM remained wedded to a well-developed competency in centralized control and high-volume execution for years. But as the world around the GM empire changed in dramatic ways, despite the firm’s well-honed systems of execution, GM steadily lost ground at the turn of the twenty-first century. Sales deteriorated throughout the early 2000s, with GM finally losing its crown as “King of the Carmakers” to Toyota Motor Company in 2008. After years of decline, a stunned nation looked on in 2009 when the company filed for bankruptcy.
Like many dominant companies in the industrial era, GM was slow to shift its routines and practices in ways that reflected the changing market. In any industry, success can be difficult to sustain. This difficulty is not due to the fact that people get tired of working hard. It is because the managerial mindset that enables efficient execution actually inhibits an organization’s ability to learn and innovate. The narrow focus on getting things done inhibits the experimentation and reflection that are vital to sustainable success in an unpredictable and evolving business environment. A similar fate befell other industrial giants like U.S. Steel, Polaroid, RCA, Uniroyal, and Union Carbide.
Despite this history of failed giants, most executives still believe that consistent execution is a surefire path to customer satisfaction and financial results. Managers who let up on execution even briefly, the assumption goes, do so at their peril. Productivity must be maintained at all costs! This belief remains oddly alive in the popular management literature, as well as in business schools and MBA programs across the country. The penchant for execution manifests itself in the almost reverent focus on metrics and bottom lines inside and outside organizations. A belief that performance is a simple function of native ability plus effort expended—and can be easily measured as output—is often drilled into senior management, whose careers have spanned decades.
This mindset trickles down from the top into the ranks of most large organizations and works adequately when knowledge about how to produce the products and services customers want is well developed and unambiguous. But even the most exquisite plans and disciplined execution cannot guarantee success when knowledge about how to produce a desired result is either still developing or is in a state of dramatic flux. Under these circumstances, traditional models of organizing that stress execution falter. This has prompted a need to find new ways to organize that take into account dramatic changes in technology, globalization, expert knowledge of all kinds, and customer expectations.
As customer expectations continue to shift and competition becomes increasingly global, many companies struggle to succeed in a drastically changing landscape. Rapid developments in technology and changes in the legal environment greatly reduce the barriers to entry in a variety of industries, thus introducing new, nimble competitors. Now you see supermarkets, department stores, and funeral homes offering financial services formerly the exclusive purview of banks and banking institutions. Likewise, telephone companies offer television service, while television companies offer phone service. Heightened competitive pressure means that even in previously stable industries unexpected changes are occurring in a compressed period of time and creating new, unprecedented challenges.