On excellence: Which way is up in a web?

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The Independent Online
VIRTUAL corporations, modular corporations, intellectual holding companies. Shamrock, horizontal and federal organisations. Intelligent enterprises, spider's web organisations and jazz combos. Each of these new models of organisation (and many more) has meant big money for consultants. Each has been shamelessly hyped. Each has been poorly implemented, time and again. And yet each is important.

Economic recovery grows stronger by the day. None the less, the job layoffs continue apace, as firms grapple with total reconstruction. Outrageous hype (in very respectable places) and rotten implantation do not detract from the desperate need for totally new ways of thinking about organisation.

What does the menu offer?:

1) Flat models. British researcher Charles Handy won a 1993 Harvard Business Review prize for an article about 'federal organisations'. The idea stems from the US Constitution of 1789 when 13 fractious states ceded limited rights to the centre. That, said Handy, will be the way of tomorrow's best organisations. They won't be 'decentralised'. That suggests headquarters doles out bits of authority to the periphery. Instead, aggressive units will set their own pace, yielding but a smidgen of control to a diminished corporate centre.

2) Horizontal models. If you flatten like hell, how do you co- ordinate? In the 'horizontal corporation' (propounded by McKinsey & Co among others), previously separate functional activities are seamlessly linked. A few key processes (eg, product development, service delivery) subsume virtually all the previously independent baronies (operations, engineering, marketing, finance) and define the firm. New horizontal logic supersedes old vertical logic. Re-engineering, today's hottest model, falls under this heading.

3) Network models. The next step beyond the horizontal models addresses entirely new ways of linking everyone from everywhere. Dartmouth professor Brian Quinn called them 'spider's web organisations'. Silicon Valley's Mike Malone and Bill Davidow labelled them 'virtual corporations'. Fortune magazine dubbed them 'modular corporations'.

The basic idea: the group performing a commercial task is not necessarily dominated by employees from one company. The new 'organisation' consists of bits and pieces of various firms, plus an array of independent contractors which the partners gather, like members of a movie company, for a limited time to perform a discrete task. Corporations (the entities that used to own tall headquarters buildings) reconceive themselves, according to Quinn, as 'packages of services' (eg, engineering, logistics). They farm out nearly everything, do a little themselves (areas of true distinction) and are seamlessly embedded in larger hierarchy-free networks that are knitted together electronically.

4) Self-designing models. The organisation cobbled together to do today's work (bits and pieces from hither and thither) is not the one the leader will use to exploit tomorrow's opportunity. (Who is the leader? The chief executive officer? Virtual CEO? Temporary CEO? Systems operator? Movie director? Talk-show host? 'Command' models are changing, too).

Thus the new dynamic approach to product development at Steelcase has been dubbed a rugby scrum (all tangled, all at once). Karl Weick, a researcher at the University of Michigan, likes the improvisational theater metaphor. Charles Savage, management guru from Digital Equipment, cottons to jazz combos. The point is perpetual redesign, not necessarily (or even likely) initiated from above. (Which way is 'above' in a spider's web?)

5) Brainwave models. Behind all these machinations is a new economic reality - the basis for creating value is connected and concerted brain power. Thus Quinn offers us the 'intelligent enterprise' and 'the intellectual holding company' - where ideas are coin of the realm. Handy gives us the shamrock organisation, where part-timers and outside contractors (two leaves of the shamrock) do the drudge work and a permanent core (the third leaf) nurtures the intellectual competence that creates economic value. (Handy, the king of the model builders, also offers an 'I-cubed' model - intelligence, information, ideas. You get the drift.)

This hardly exhausts the management glossary. I've left out clusters, seesaws, kaleidoscopes, collapsibles and more. (Each issue of Fortune is almost guaranteed to raise another.)

Sure, it's easy to laugh at all this. (And a good idea to do so from time to time). But our recent love affair with metaphors and model building is a by- product of a legitimate and frantic quest to deal with the changing economic times. Real change demands more than a good metaphor - but action without compelling imagery is inadequate to the monumental task of corporate revolution.