A breath of fresh air changes the corporate climate

Companies need to change the atmosphere from stultifying to crisp. A new book tells how it's done, writes Roger Trapp

Even more than politicians, companies always claim to be something they are not. They say they are innovative when they are stuffy and old- fashioned; they claim to be flexible when - in spite of years of delayering, downsizing, re-engineering and the rest - they are still too formally structured; and they insist their people are their greatest asset, even as they consign many to the dole.

As Lynda Gratton, a professor at London Business School, said in a presentation last week, there is much rhetoric but little action. Why this is so is suggested by Sumantra Ghoshal, her colleague, who has published a book with his collaborator Christopher Bartlett.

Their thesis, set out in The Individualized Corporation (HarperCollins), is that business is operating by outmoded models. Reliance on strategy, structure and systems was fine early in the century, when Alfred Sloan and other engineers laid the foundations of modern management, but is not enough in an age when knowledge rather than capital is the important resource.

The authors argue that the three Ss should be supplemented, though not replaced, by three Ps - Purpose, Process and People. Heeding such matters as well as traditional fundamentals is, they argue, what sets apart the likes of 3M, Canon and ABB. Such organisations create atmospheres encouraging the initiative, creativity and commitment on which business success seems to depend.

Though Mr Ghoshal, professor of strategic leadership at LBS, uses the traditional armoury of charts and diagrams to make his points, the sense of what he and Mr Bartlett, a professor at Harvard Business School, are saying is best expressed through an analogy.

A true internationalist, Mr Ghoshal is an Indian who formerly worked at Insead, outside Paris. He visits his native Calcutta with his family every July because that is the only time his children have enough holiday. At that time the city is extremely hot and humidity is close to 100 per cent; so stultifying that Mr Ghoshal spends most of the time indoors, much of it in bed.

He contrasts that with spring in the Fontainebleau forest around Insead's base. The atmosphere is so clear and crisp it is, he says, "impossible just to go for a walk in the woods". You want to jog or jump up to touch the branches, so invigorating is it. Most companies, he says, are like "Calcutta in July" when they should aspire to resemble "Fontainebleau in spring".

They should do this by moving beyond strategy, structure and systems to purpose, process and people. Perhaps the most critical is the shift from systems towards people. As Mr Ghoshal and Mr Bartlett point out, the problem with the traditional approach is that, while top managers see systems as their vital link with operations, front-line managers regard them as "shackles" binding them to their desks and keeping them in their place. "In a service-based economy in the midst of a knowledge revolution, the old assumption that top management could define priorities and monitor operations through sophisticated information, planning, and control systems has become an illusion. The old-style corporate emperor has no clothes."

PROMOTED VIDEO
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Reach Volunteering: Trustee – PR& Marketing, Social Care, Commercial skills

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...

Reach Volunteering: Charity Treasurer

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...

SThree: Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...

Ampersand Consulting LLP: Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

Iran is shifting from pariah to possible future policeman of the Gulf

Robert Fisk on our crisis with Iran
The young are the new poor: A third of young people pushed into poverty

The young are the new poor

Sharp increase in the number of under-25s living in poverty
Greens on the march: ‘We could be on the edge of something very big’

Greens on the march

‘We could be on the edge of something very big’
Revealed: the case against Bill Cosby - through the stories of his accusers

Revealed: the case against Bill Cosby

Through the stories of his accusers
Why are words like 'mongol' and 'mongoloid' still bandied about as insults?

The Meaning of Mongol

Why are the words 'mongol' and 'mongoloid' still bandied about as insults?
Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible