Book Of The Week; The old common sense will not do

The Next Common Sense

By Michael Lissack and Johan Roos (Nicholas Brealey Publishing, pounds 18)

SOUTHWEST AIRLINES, the US regional carrier run by Herb Kelleher, has in recent years become a darling of management writers. It has been praised for its enlightened attitudes towards its staff and, most famously, for thinking "outside the box" - it measures turn-around times against Formula One pit-stop crews, not other airlines.

Now, we are told, it is practising "the next common sense". According to Michael Lissack, an investment banker-turned-strategic adviser, and Johan Roos, professor of strategy and general management at the International Institute for Management Development in Switzerland, this involves stepping back from the details to gain a vantage point on what is really happening.

Their starting point is Alexander the Great and the Gordian knot. "Many before Alexander had tried and failed, thinking that the knot was complicated and needed to be untied," they write. Only Alexander saw that a simple action, cutting through the knot with a single stroke of his sword, would move through the complexity to a higher plane, namely ruling Asia. The authors claim that we all face our own Gordian knots, and untying them simply requires "common sense".

The only problem is that the old common sense will not do. That, they say, was about how to deal with the separate and free-standing units of a complicated world. Now, that complication has been replaced by complexity, where various relationships, alliances and networks create a swirl of interweaving events and situations. The new common sense is about creating coherence.

Which is where Southwest Airlines comes in. According to Lissack and Roos, the company embodies coherence by having each employee "think and act like an owner". They point out how Southwest's elimination of inflexible work rules and rigid job descriptions allows its people to assume ownership for getting the job done, regardless of whose official responsibility it is.

Accordingly, the authors report: "When a flight is running late because of bad weather, it's not uncommon to see pilots helping customers in wheelchairs board the plane, helping the operations agents take boarding passes or the flight attendants clean up the cabin between flights."

But how do other organisations emulate such attitudes? Lissack and Roos offer "10 guiding principles to provide you with the sense of coherence you need, as well as five practical steps for putting the principles into action".

Some of the principles appear a little vague. But many of the others provide powerful insights. This is particularly so of the first - use simple guiding principles, on the basis that "life is complex enough without adding complication to it". Moreover, Lissack and Roos go completely against management consultants' practice by saying that executives should use "landscape metaphors" to describe the business environment and the processes taking place. The five steps are commendably straightforward, if a little repetitive - identify yourself and your goals, use the right language, create the right context, turn people loose and then get out of the way, using communication that works.

So who measures up to this new reality? Hi-tech companies, such as Intel and America On Line, are prominent. But the authors also point to Virgin, and the credit card agency Visa International. Virgin is well known for its ability to develop operations in everything from transatlantic air transport to cola. Less familiar is how Visa raised itself from the mess that was the infant credit card business through, say Lissack and Roos, developing "coherence in action and viewpoint".

Will other financial services organisations follow suit?

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