by Dennis William Hauck



The Transformation of Management

by Mike Davidson  (Butterworth-Heinemann, Boston)

Reviewed by Dennis William Hauck


        Mike Davidson is a management consultant for companies undergoing large-scale transformation. He specializes in situations where major, institution-wide change is the leadership team’s most important concern, and he has guided some of the nation’s largest concerns, including American Airlines, Coca-Cola, Eastman Kodak, Honeywell, and Lockheed. In this book, he brings together his years of top-level experience with compelling insights and illuminating case studies that promise to reveal not just how to stay ahead of the competition but also how to beat global trends and achieve success today and in the future. 

        “Is there any reason,” writes the author in his introduction, “to hope for a renaissance of management that can create a better world? That is a situation where the rule, and not the exception, is successful organizations run by happy people; where the goals of organizations inspire passion and not cynicism; where management is more about exploiting opportunities than solving problems; where leaders coach and counsel rather than command and control; and where we know how to sustain these characteristics in the face of intensive competition and wrenching change, so that future generations do not have to repeat the pain and suffering being experienced throughout the world of organizations today.”

        The thesis of his book is that there are reasons why supervisory staff live in difficult times, that there is hope for a management renaissance, and that there is a discipline, a Grand Strategy, to bring about that renaissance. This Grand Strategy is about the transformation of management philosophy and centers around four main areas. First is the idea of Mission. What is the management team trying to accomplish in the organization? Second is Competition. How can the organization garner more funding or get a competitive edge. Third is Performance. How does management plan to deliver the results? Last is Change. How will individuals and departments, as well as the organization as a whole cope with the changes?

        In answering these four basic questions, the author presents a specific and detailed strategy for changing the organization so that it can survive modern challenges. There are a number of important points made in this book that all levels of management must keep in mind during this process of change. One of the most important is that the doers must be the planners. Strategic planning is a line task to be undertaken by those responsible for the plan’s implementation. The planner’s and consultant’s role is to manage the process, provide expertise on strategic thinking, generate new ideas, and act as devil’s advocate. If there is no inside person who can do all those tasks and survive, outside assistance is necessary.

        Another important idea expressed in this book is that the “soft” issues are more important than the “hard” ones. In the Seventies, managers did not talk about soft issues ¾ mission, vision, purpose, beliefs, values ¾ but focused on hard issues like profit, costs, budgeting, and growth projections. In a world of accelerating change and unprecedented competition for funds, however, issues that once were soft are now hard, that is, erratic and subject to unpredictable change. To create a foundation for planning, managers must make the so-called soft issues hard, that is, predictable and consistent. The solution is to develop a clearly understood, broadly based and qualitatively stated mission that lays out the organization’s shared purposes and values, and the distinctive capabilities that must be developed to fulfill it.

        An excellent strategy with adequate implementation will always lose to an adequate strategy with excellent implementation. However, the adequate plan must have deep personal and organizational commitment if its implementation is to be truly excellent. When a plan has that commitment, minor imperfections in strategy will easily be overcome by the sheer momentum of the organization. In fact, if the overall behavior of the people in an organization, especially that of the middle managers, does not change, then neither will the organization. Indeed, if the way financial resources are allocated changes, but the way human resources operate does not, the organization will most likely be worse off than before.

Strategic change is mostly about managing people, not money. The organization’s people must be shown that there is no gap between the words and actions of management. It is a sad organization in which more people are penalized for adhering strictly to stated values than for not doing so, but most traditional organizations operate that way without knowing it. Only consistency of action and statements, beginning at the highest levels, will result in fundamental change. Surprisingly, consistency is actually more important than content in making an organization run efficiently. The fact is there is no one strategy or set of rules that work automatically, and implementation counts more than the strategy itself.

        Along those lines, the author ends his book with the wry observation that “there is no one, right dogma for anything.” For organizations, that means there is no one, right strategy that works in every application. With the exception of that rule, of course.



THE AGE OF DIMINISHED EXPECTATIONS: U.S. Economic Policy in the 1990s

by Paul Krugman  (MIT Press)

Reviewed by Dennis William Hauck


        In 1967, Fortune magazine predicted that real wages in America would raise 150% by the year 2000. The truth is that real wages, which are a measure of the standard of living, are the same now as they were when the article was written. Back in the 1960's, nearly everyone thought that their children would be better off than they were, and that prosperity would spread to more and more Americans.

        In his preface to this book, economics professor Paul Krugman states: "Relative to what almost everyone expected twenty years ago, our economy has done terribly; surely one should have expected a drastic political reaction. I find the lack of protest over our basically dreary economic record the most remarkable fact about America today. It is astonishing how readily Americans have scaled down their expectations."

        This scaling down is apparent at all levels of our society. From state and local governments to large corporations, America is downsizing in response to decreasing economic expectations. What is causing the change in attitudes? Can anything be done to restore the economy to its previous vigor? The factors that have the greatest impact on our standard of living are productivity, income distribution, and unemployment.

        Steady improvement in a nation's standard of living is directly related to its ability to raise its output per worker. After World War II, productivity nearly doubled in the United States, and Americans enjoyed a standard of living undreamed of by their parents. However, after the Vietnam War, productivity rose less than 10%, and there was no apparent rise in the standard of living. The two decades since 1970 have seen our worst productivity performance of the century.

        Productivity can only be increased by investment.

Investment in education is required to provide workers with the skills necessary to handle new jobs. Investment in manufacturing is necessary to keep up with technological advances. The government can contribute to higher productivity by encouraging higher educational standards and supporting industrial research.

        Income distribution is another area that has changed significantly in the United States in the last ten years. The rich became a great deal richer, and the poor significantly poorer. The real income of the top tenth of the population rose by 21% from 1979 to 1987. In the same period, the bottom tenth of the population saw their real incomes drop by 12%. This trend reversed three decades of growing equality. The fortunes made by investment bankers and huge increases in executive compensation contrast sharply with stagnant middle class incomes and growing homelessness among the lower classes.

        With state and federal governments beset by budget deficits, aid for the poor is not likely to increase. Some relief might come by easing the tax burden on the working poor. On the other hand, increasing taxes on the rich might reduce incentives for investment, which in turn could reduce productivity even further.

        Investment is one proven way to reduce poverty by creating jobs. America has traditionally been very successful at creating new jobs. During the 1970's and 1980's, millions of baby boomers, women, and immigrants entered the work force. During the same period in Europe, virtually no new jobs were created. Even Japan lagged far behind the United States in growth in employment.

        According to the author, creating jobs is no problem for the U.S. economy: "The Federal Reserve can create as much demand as it likes with a phone call. The problem is how to do that without creating inflation. If the government tries to increase demand to drive unemployment below a certain rate (about 5%), it will pay the price of accelerating inflation. If the government wants to reduce inflation, it must reduce demand so as to drive unemployment above this rate."

        The author presents three possible scenarios for the next decade. The first predicts a productivity boom that will cause a significant increase in living standards for all Americans. The second scenario presents the fall of the dollar coupled with an oil crisis and rising inflation that cripples the nation resulting in a major decline in living standards.

        The third sketch shows the American economy drifting along with no major policy differences. The growing gap between the super-rich and those living in intense poverty will widen, but the unemployment rate will stabilize at around 5% and inflation will peak at 7%. Although the middle class will see an increase of about 10% in real wages over the next decade, the standard of living for the majority of people will remain about the same. In the age of diminished expectations, they will be happy for that much.   



THE WEALTHY BARBER: Everyone's Common-Sense Guide to Becoming Financially Independent      

by David Chilton  (Prima Publishing, Rocklin, CA 95677)

Reviewed by Dennis William Hauck


        There are simple ways to guarantee yourself a comfortable financial future without studying a single chart or formula,  pouring over mortgage tables or stock market reports, or risking your money in some complicated scheme.  Financial consultant David Chilton offers some surefire methods for making the most of your money with easy strategies, presented through a wise and funny character by the name of Roy Miller, millionaire barber.

        Roy is one of those barbers with a gift for gab, and if you'll pull up a chair, he'd be glad to tell you how he made his millions.  "When I decided to make barbering my life's work," he says, "I knew my income would be respectable, but it would never make me a rich man.  That bothered me because, frankly, I wanted to be wealthy.  So I developed a budget and decided to save like a madman.  But two years later, I had very little to show for it.  It was pretty depressing."

        The problem, Roy realized, was that no one ever taught him the realities of financial planning.  He decided to make that his number one priority, and before long, he discovered some simple strategies that really worked.  "Budgeting, like dieting," says Roy, "is usually ineffective and only makes us feel deprived.  While a business only has to budget for needs, an individual must budget for both needs and wants.  It's a rare person who can do that successfully because, for too many people, a want becomes a need.  That's why the more people earn, the more they spend."

        That observation rings true: if our salaries were miraculously doubled today, most of us would just end up broke at a higher level.  So how can we save for the future?

        Roy has the answer: "Pay yourself first.  Have the money come right off your paycheck, or right out of your bank -- before you have a chance to spend it.  Automatically invest 10% of what you make for long term growth."

        Few people realize the power of this one simple guideline.  If you started saving a dollar a day at age eighteen and continued until you were sixty-five, you would have a nestegg of $2,679,000.  If today you started putting  $200 a month into a well-managed mutual fund, in thirty years it would amount to over $1,400,000.  This is the magic of compound interest.  By paying yourself 10% of your paycheck,

you not only keep up with inflation, but end up with a very respectable sum of money, no matter what the economic climate.

        According to Roy, the way to insure higher interest rates and faster growth, is easy.  "Be an owner, not a loaner," he says.  "Ownership will always outperform loaning in the long run.  It has to.  If it were more profitable for businesses and individuals to leave their money in the bank than to invest in North American enterprises, our whole economic system would collapse.  Even then it would not do any good to have your money sitting down at the bank, because the banks would all be locked!"

        But Roy has no use for stockbrokers, commodity traders, or real estate agents who earn their money by trading

your possessions.  Nor is it practical for individuals working with 10% of their paychecks to buy land, commodities, or common stock.  The best way, he explains, is to pool your money with that of others in professionally managed, long term, equity-oriented mutual funds.  

        Because the wealthy barber's strategy is based on a fixed dollar amount invested on a monthly basis, it incorporates a powerful financial principle known as dollar cost averaging. 

No matter how stocks or mutual funds perform on a short term basis, your money is tied to long term performance, which has always been steadily upward.  If prices are low one month, you automatically purchase more shares at a lower price.  When prices do go up again, those shares gain equity.

        How to choose the right mutual fund?  Look for solid rates of return, but make sure the financial manager who created them is still with the company.  Buy into a global fund, one that invests across many different industries both in the U.S. and abroad.  Avoid market-timing schemes or sector-fund switching concepts, which attempt to shift money around based on current economic indicators or some expert's opinion.  Such plans defeat dollar cost averaging.


        Long term equity investment is only one of Roy Miller's strategies.  His homespun advice covers retirement plans, wills, education funds, and taxes.  He explains how to plan for emergencies, how much insurance you need, whether to buy or rent your home, and when to pay off debt.  The advice presented here is conservative, realistic, and wise; and there is no easier way to learn it than in these imaginary conversations with the millionaire barber. 



 The Budget-Maximizing Bureaucrat

by Andre Blais and Stephane Dion  (Univ. of Pittsburgh Press)

Reviewed by Dennis William Hauck


        In the 1970's, William Niskanen, a University of California professor and chief economist at the Ford Motor Company, came up with a controversial and much-debated model of bureaucracy known as the budget-maximizing bureaucrat.

His theories were so popular with conservative politicians that Margaret Thatcher made his works required reading for British civil servants, and Ronald Reagan appointed him to his Council of Economic Advisors.

        Niskanen's basic premise is that bureaucrats attempt to maximize their budgets, because it is in their interest to do so, and that the strategies they adopt cause a continuous growth of the state.  The idea became a central tenet of Reaganomics and was used as an excuse to downsize government, while allocating more autonomy to the business sector.

        In his model of excess government, Niskanen stated that  the department supplying a public service tries to satisfy the sectors of government that sponsor it, while the politicians  try to satisfy the goals of the various groups they represent.  Both factors tend to cause growth in government. 

        Niskanen also believed that the personal motivations of government managers tended to cause expansion of their departments.  Niskanen wrote: "Among the several variables that may enter the bureaucrat's utility function are the following: salary, perquisites of the office, public reputation, power, patronage, output of the bureau, ease of making changes, and ease of managing the bureau.  All of these variables, except the last two, I contend, are a positive monotonic function of the total budget of the bureau during the bureaucrat's tenure in office."  This means that the higher the budget, the better off the bureaucrat (or the higher his "utility function").

        Some studies support Niskanen's conclusions.  One study of the Department of Agriculture from 1941 to 1971 showed an average annual increase of 41% in budget requests!  In the last decade, defense expenditures increased 60% without any justification in our vulnerability nor significant increase in the readiness of our armed forces.   

        In the same time period, expenditures per student in primary and secondary schools increased 40% without any increase in the rates of graduation or test scores.  Studies of budget proposals by school superintendents showed that the requests were maximized up to a point where taxes were accessed at their maximum level.  Beyond that, a budget had to be approved by referendum, in which case it was often voted down. 

        Such studies made the budget-maximizing bureaucrat an accepted principle of modern public management.  The question is why was anyone surprised when it was first formulated twenty years ago.  Certainly the idea that bureaus strive to grow was not new, nor was the fact that department officials  were devoted to increasing their appropriations.  The notion that bureaucrats are real people who sometimes follow their own rational self-interests should be no more surprising than the idea that politicians pursue policies that insure their own reelection.   

        In the twenty years since the pronouncement of Niskanen's principles, there are have been many studies and refinements which have led to a general reassessment of his original ideas.  In The Budget-Maximizing Bureaucrat, thirteen distinguished scholars evaluate the latest findings and offer opinions about the validity and relevance of Niskanen's theories, as well as presenting alternative explanations of bureaucratic behavior.

        One problem had to do with the bureaucrat's utility function.  That is, were bureaucrats really any better off by  submitting higher budgets?  The original model assumed that a bureaucrat's utility was directly proportional to the bureaucrat's budget request, but research indicated there was no evidence showing greater salary increases or faster promotion in bureaus that were growing faster.  Another study showed that bureaucrats in the United States do not necessarily support candidates or political parties that favor budgetary expansion.  These facts undermined one of the central pillars of the model, that bureaucrats had selfish motives for submitting higher budgets.

        The model further assumed that all bureaucratic strategies are geared toward maximizing budgets and that sponsors are passive in their response to such requests.  However, research indicated that higher budget requests were really part of a budgetary game in response to restraint-budgeting on the part of politicians.  These fact were finally recognized by Niskanen, who reformulated his theory to state that bureaucrats seek to maximize their "discretionary" budgets, or the amounts they think they can actually receive.  The naive proposition that politicians are at the mercy of bureaucrats has been discarded.

        As it stands today, the Niskanen model correctly predicts that bureaucrats systematically request larger budgets.  It is also clear that bureaucrats do not benefit personally from increased budgets.  In fact, salary improvements for civil servants lag behind wage movements in the whole economy and are generally tied to automatic step increases.  The editors of this book conclude that the primary reason bureaucrats request higher budgets is to improve service to the public. 



BEYOND THE TRUST GAP: Forging a New Partnership Between Managers and Their Employers          

 by Thomas Horton and Peter Reid (Business One Irwin, Homewood, Illinois)

Reviewed by Dennis William Hauck


        In the 1980's American corporations began a systematic downsizing that went unnoticed by the general public.  A new "lean and mean" paradigm spread quietly through America's boardrooms and slowly chopped away at the backbone of the nation's business community: middle management.  Whatever the reason -- global competition, easing of federal trade laws, corporate buyouts, mergers, or just plain greed -- people in middle management positions felt the brunt of the restructuring.  In 1985 alone over 600,000 middle managers lost their jobs, and by the end of the decade millions of their job descriptions were eliminated or changed to include greater responsibilities at lower pay. 

        At the same time, those in top management saw their paychecks grow embarrassingly larger.  During the 1980's upper management salaries rose nearly 18% a year, but middle management pay crept up less than 5% a year.  In 1989 the three top managers at McCaw Communications took in almost $100 million, while the company posted losses of $289 million.  When RJ Reynolds took a nosedive, it paid its Chairman and Vice-Chairman $54 million to leave the company, fulfilling their "golden parachute" contracts.  Typical was the scenario at a major consumer products firm, as described in Beyond the Trust Gap: "The CEO froze wages, doubled individual workload, took away secretarial and administrative help, rescinded the annual bonus, and discontinued the free annual physical.  Meanwhile, he enjoyed a private jet, a million dollar penthouse in Manhattan, and a platinum parachute contract." 

        Today, the average middle manager in a large American corporation earns about $45,000 a year, while the CEO can earn a hundred times that.  The average CEO was paid $625,000 in 1980, but by 1989 his salary had risen to $1,900,000.  In 1960, CEOs made about 40 times the wage of the average factory worker.  By 1989, they were paid nearly 100 times what the average factory worker made.  In contrast, European and Japanese CEOs rarely earn more than 15 times what the lowest paid employee makes.     

        No wonder those in lower management positions felt betrayed.  When they took their jobs with large corporations, they felt an implied agreement existed between the organization and managers.  That unwritten contract promised those who "came aboard" a lifetime of employment and eventual promotion up the corporate ladder, as long as they were honest and performed their duties well.   Millions of middle class Americans took the vows of corporate life and gave their spirit and soul to those self-perpetuating institutions, only to have the carpet pulled out from under their feet in the 1980's.  It seemed the new corporate by-word changed from "one big, happy family" to "put out or get out".   For many who still had jobs in middle management it seemed the only outs were early retirement or "karoshi", what the Japanese call death by work exhaustion. 

        Many economists insist the changes of the last decade were not a betrayal of the American work ethic but a necessary adjustment to an increasingly competitive world market.  They say the prosperous post-war years left American businesses fat and arrogant, unable to react or even recognize the consumer needs of the future.  This view however, does not alleviate the lingering disillusionment in the workplace, the so-called "trust gap".  Companies must face the fact that middle management feels "used and abused, lied to and ignored, dumped on, and then dumped".  They must motivate their employees to become creatively involved with their jobs, or suffer the consequences of stagnation and defeat.

        The authors of Beyond the Trust Gap, Thomas Horton (Chairman of the American Management Association) and Peter Reid (a noted business writer), have proposed a new partnership between middle managers and employers based on the following precepts:

                1) Credibility can be established only by communicating honestly and broadly about all issues that concern the company, then listening to middle managers and seeking their candid input. 

                2) Managers should be compensated in a way that relates pay to performance.  Challenging work should be provided and recognition given for            outstanding accomplishment. 

                3) The work environment should be as free of fear and job stress as possible, and creative dissent should be encouraged not punished.

                4) Middle management should get a piece of the action when business is profitable and be willing make sacrifices when times are hard.

                5) Ethical standards must be followed.  Employees must be treated with fairness, and workers who have to be laid off or terminated must be handled with respect.

        In order to implement the authors suggestions, senior executives must realize that middle managers are motivated by the same things that motivate top managers, and they  want to be treated as intelligent, worthy human beings, who recognize fairness -- and unfairness.  "In the 1980's", say the authors, "the captains of America's corporate ships off-loaded their own precious cargo: their people.   Direction -- and vision -- from the bridge is essential, but not enough.  Someone must work in the engine room; someone must staff the ship; someone must serve the passengers.  Or there won't be any passengers.  Or any voyage."       We can only hope our captains become aware of the discontent brewing in the bowels of their ships, before it erupts into outright mutiny and disaster for all on board. 



Managing for the Future: The 1990s and Beyond

by Peter F. Drucker

Reviewed by Dennis William Hauck


        Peter F. Drucker is one of the best known business writers of our time. His popular Frontiers of Management is considered a classic in the field and has been read by millions of people. In his latest book, Managing for the Future, Drucker expands his views on the emerging management imperatives of our decade and predicts what he thinks the twenty-second century business environment will be like.

        Drucker considers the period from 1965 to 1973 America’s turning point into the realities of the next century. It was a time when our politicians and business leaders abandoned the notion of “salvation through society” — a dominant idea since the early 1900s. Disillusionment in the Democratic Great Society vision, the decline and eventual fall of Marxism, and gradual abandonment of the welfare state policies gave rise to an era of elitist and power-block politics personified by the Ronald Reagan and Margaret Thatcher.

        Of course, the decline of the salvation-through-society belief does not mean the end of government. In spite of deregulation and cut-backs in welfare expenditures, the Reagan administration increased the size of the federal budget more than any of his predecessors. Despite the rise of volunteerism to take up the slack in social programs, the federal government’s power over state government and our personal lives increased. Today, crime fighting measures and drug testing further isolate formerly productive segments of our society, while any new entitlement programs must be justified only on the basis of saving money. The great white heron that the federal government inherited, the Social Security program, was an invention of the nation’s entrepreneurial burst and was designed to cover risks associated with that era. New forms of security for the general population will be required in the next century.

        One of the new types of security will be the redefinition of the job as a property right. Recent court rulings have sharply limited the traditional right of employers to terminate employees at will. It is because just having a decent job has taken on increased significance. As the number of good jobs decrease, the greatest threat to the security of individuals becomes losing their positions. Now jobs are seen not as an individual’s right but as an individual’s property.

        According to Drucker, nothing has had more impact on human history than the redefinition of property rights. The concept has been fundamental to the transformation of social orders. In response to the rising tide of strictly commercial motives in business, keeping one’s job has become the major issue with vast numbers of workers. Job rights, including such concerns as retirement benefits and freedom from harassment, has become a dominant preoccupation with American workers. As the nation becomes more polarized, job status and not job position will become the most important concern. More and more in our society, unemployment means ostracism and even homelessness.

        Management is the sector of the job market most effected by this change. From the end of World War II to 1980, the trend was to produce more specialized layers of management. But today, the restructuring of government and business is centered around information not individuals. There will continue to be cuts in management levels and the numbers of general management jobs. General Motors is reducing the levels of management in its organization from fifteen to five by 1996, and both federal and state government departments are consolidating downwards.

        Many more managerial positions are going to be at the lower levels. More will be in operations and technical work rather than in general functions. There will be fewer staff positions and even fewer openings in upper management, so people will be slotted into their terminal positions at a much earlier age. The so-called promotional track will disappear and middle management will be at a bare minimum. The vast majority of managers will be at the lower levels of the organizational structure.

        “The reversal of the trend toward layers of management and headquarters staff,” the author says, “ — the trend that had propelled the careers of the people who are in management jobs today — would have been upsetting enough. It means a drastic change in their expectations and in their views of both the company and themselves. In many case it means loss of a job when lifetime employment had virtually been taken for granted. And it means the anxiety of a job hunt and a painful relocation. What made all this traumatic, however, was that the restructuring was done largely through financial manipulation. Middle managers and professionals feel, as a result, that their lives and careers are being sacrificed to enrich a few who have never done any productive work.”

        It is not surprising that workers at all levels of American government and industry are insecure in their positions and seek property rights for their jobs. Today, it is not only farmers and union workers who are feeling the pinch of the new information age. They are being joined by the very managers and leaders who made it possible.



Reworking Authority: Leading and Following in the Post-Modern Organization

by Larry Hirschhorn (MIT Press, Cambridge, Massachusetts)

Reviewed by Dennis William Hauck


        The Nineties have been a time of turbulence and redefinition in many governmental departments and corporate entities. The growing role of information technologies and service businesses has prompted organizations to reconsider how they are structured and even what services they should provide. These sweeping changes have also affected how people work, what skills they need, what kind of careers they expect, and how they relate to others in the workplace. In short, in today’s organization, people are expected to bring much more of themselves psychologically to the workplace than in the past. Over the last decade, the vital connection between jobs and people has been more fully recognized.

        The new emphasis on employee attitudes and skills has been facilitated by a new way of looking at authority in an organization. The emerging interactive management culture is one in which supervisors recognize their dependence on subordinates, subordinates can challenge their supervisors, and both can show their vulnerabilities. In the old culture of authority, employees suppressed disruptive feelings such as envy, resentment, and fear. However, by depersonalizing themselves, they became alienated to the work environment and the integrity of the organization suffered. In building a new culture of authority, all employees are encouraged to express their feelings in ways that do not disrupt the workplace. In other words, people are finally learning how to bring their feelings to their tasks.

        That is the basic theme of this book. The first few chapters examine the covert processes by which people caught between the old and new cultures of authority neither suppress nor express their feelings. Those caught in the middle of organizational transformation are willing to experiment with self-expression but are not aware of how to use that new source of energy to motivate or improve their work. Their feelings are activated but are not directed toward useful work.

        The story of General Motors is a case in point. In the first half of the twentieth century, GM became the accepted epitome of modern capitalism: separate car divisions that competed amongst themselves but were linked tightly to a central headquarters where executives exercised strict policy and financial control. Lower management completely identified with upper management and shaped their careers around the hope that they would someday move up into that hallowed “club” and lifestyle. However, when Japanese carmakers started building their cars more efficiently with less annual rework per model, they successfully entered the American market and usurped GM’s position. As GM tried desperately to respond to market pressures, they realized that that the old management culture of unswerving executive loyalty was the single greatest roadblock to implementing new strategies. Then in 1988, GM started transforming their own management from within. They held meetings on all levels that frankly admitted the crisis in which the company found itself and encouraged managers to express their feelings even if they were not in line with upper management. For the first time, small groups were formed to focus on breakthrough issues and report their findings directly to upper management. The top leadership of GM was now seen as being composed of all managers on all levels.

        “The meeting ritual had changed at GM,” notes author Hirshhorn. “The new conference design helped people bring up new or once-taboo ideas, and managers were no longer overwhelmed by the image of an indivisible and inaccessible center of authority. The image of a central and distant power gave way to an image of many centers of power based on whatever personal authority participants mobilized to help answer novel questions. Power, as scholars of post-modernism would say, was deconstructed; it entered into a network of personal authority rather than staying concentrated at the organizational center.”

        In the concluding sections of this book, the author explores how organizations can create a culture of openness in which employees can become more psychologically present. In part, the process entails a broader understanding of the changes taking place in not only how we express our identity at work, but also how others express their identities in society at large. To implement the new culture of authority both in an organization and in our society, the author points out, we must institute policies of forgiveness and second chances that encourage individual creativity. For this author and many others preaching the new paradigm of management, there is no doubt that the hidden “fifth element” of individual creativity  the quintessence of people working together  is the unexpected force that will propel both our organizations and our society safely into the next millennium.     



The Articulate Executive: Orchestrating Effective Communication

by The Harvard Business Review (Harvard Business School Publishing)

Reviewed by Dennis William Hauck


        This book is a collection of seventeen articles culled from the Harvard Business Review. All of the articles address the problems of effective communication among managers. The book’s goals are to promote a management culture that fosters the flow of relevant information, eliminate barriers to essential communication, and orchestrate the flow of communication in order to make the right decisions.

        As a whole, the book offers a comprehensive framework for developing explicit communication skills, such as writing, interviewing, and conducting meetings. It also attempts to understand the more subtle channels of communication, such as attitudes, hierarchical relationships, hidden personal agendas, and other information hidden between the lines in all types of communication.

        Beginning with a look at what is wrong with communication in business, the book suggests that the main problem is with the lack of candor. Barriers to candor are a natural result of hierarchical organization and the natural tendency of people to protect themselves from error or blame. Highly capable professionals are often skilled at avoiding confrontation. They do not realize that by institutionalizing defensive communication behavior patterns they actually increase tension, ambiguity, and distrust in the organization.

        It takes courage and patience for managers to challenge their own defensive routines and achieve more constructive interaction with their coworkers. First, managers must understand the dynamics of game playing in their individual situation and organization. Next, they need to build trust under conditions of limited candor. Only gradually should complete candor become the accepted method of communication.

        Yet candor alone is not enough to present ideas effectively. The presentation of ideas has a significant impact on how they are perceived and acted upon. There is a clear connection between effective writing and sharp thinking, but often this connection is obscured by bad writing skills. There are several chapters in The Articulate Executive designed to hone these skills, including tips on writing effective memos, business plans, reports, and presentations.

        But speaking candidly and writing skillfully are not the only parameters of effective communication. There is another side to the coin and that is, simply put, the art of listening. Perhaps the biggest block between any two people is their inability to listen to each other intelligently, understandably, and skillfully. Most people simply do not understand nor even remember much of what they hear.

        The authors present a series of articles on how to listen effectively, including hints on how to conduct a productive interview and how to handle meetings with media representatives. Managing successful meetings also hinges on how well we listen. The chairperson should encourage the creative exchange of ideas to increase the authority and impact of the entire group, but for all participants, thoughtful preparation and careful listening at meetings are the keys to implementing real change.

        One of the most important communication channels in modern organizations, especially governmental and large corporate operations, is the use of computer networks. The main vehicle of computer communication is electronic mail. E-mail is sent at the convenience of the sender and read at the convenience of the recipient, and supervisors can send thousands of messages as easily as sending one. Scheduling face-to-face meetings is no longer a problem.

        Another advantage of e-mail is that it eliminates an intermediary position that processes it, because receivers usually process their own e-mail. Furthermore, messages can be transmitted in a wide variety of formats: personal e-mail, interoffice memo, bulletin board notice, or organizational newsletter.

        More importantly, because e-mail eliminates the social context and is rarely saved as hard copy, it tends to be more candid than traditional written reports. When communication lacks dynamic personal information, people focus their attention on the message rather than on each other. Communicators feel a greater sense of anonymity and detect less individual interaction than they do speaking face-to-face or on the phone. As a result, they feel less guilt, less concern over how they compare with others, and are less influenced by norms.

        However, computer communicators also feel less empathy for those they communicate with. This can cause problems at the other extreme of the communication spectrum. When social or organizational definitions are weak, communication can become unregulated. People are less bound by convention, less influenced by status, and unconcerned with making a good appearance. Their behavior tends to become more extreme, impulsive, and self-centered.

        If these negative components of electronic communication can be overcome, then the real advantages of the computer age can be realized in the everyday workplace. Instant mail, automatic file sending, distribution lists, bulletin boards, and computer conferencing all promise to allow employees and managers to communicate faster and more effectively. The real payoffs will come as this technology, like the advent of the telephone before it, loosens up communication and introduces more candor into the workplace.



Send This Jerk the Bedbug Letter

by John Bear, Phd. (Ten Speed Press, Berkeley)

Reviewed by Dennis William Hauck


        This book is subtitled “How Companies, Politicians, and the Mass Media Handle Complaints and How to Be a More Effective Complainer” and that about sums up what it is about, but the surprising thing is that this is a very serious work. In fact, this is a veritable bible of complaining, authored by the first man ever to write a doctoral dissertation on the psychology of complaining.

        Of course, its hard to get into this book without first finding out what the title means, so here is the story. A business traveler once found himself on a sleeper train infested with bedbugs. He wrote to the railroad and received a profusely apologetic letter from the president expressing horror and embarrassment, and assuring him that the train had been fumigated, personnel disciplined, a new policy instated, etc. Unfortunately, attached to that letter was the president’s original note to his secretary instructing her to “send this jerk the bedbug letter.”

        That story exposes the automatic and insensitive way most companies handle complaints. The appendix is full of detailed case studies that illustrate that point, yet this entertaining book focuses not only on the devastating effects of ignoring complaint but also how to be an effective complainer and how managers should handle them. There is specific advice to organizations on instituting an effective complaint policy with examples of what happens in organizations that do not respond expediently. Most of this advice is based on a 1992 report issued by the United States Office of Consumer Affairs on how responsible businesses should handle complaints. That report presents seven recommendations.

        The first step is to realize that a complaint strategy is needed. Every public organization needs an effective plan for managing consumer complaints because complaints are actually a valuable resource, an inexpensive form of market research. They reveal how people understand the image and operation of an organization, whether instructions and manuals are well written, and what services need attention. After recognition of the importance of a complaint policy, management needs to establish the capacity, policies, and procedures necessary to provide effective complaint review and resolution. The system should be well publicized, accessible, prompt, personal, simple, objective, and flexible with good record keeping.

        The third recommendation is that there be clear steps to follow for both the consumers and the organization in processing complaints. The basic steps consist of first making it clear to consumers how and where to complain, then having a system of record keeping that is accessible to management and all departments within the organization. Upon receiving a complaint, it should be recorded and categorized, then assigned to one person for handling. The complaint should be promptly acknowledged in a personal manner and investigated fairly. The complaint needs to be resolved promptly by front-line employees empowered to propose solutions. The resolution should be followed up with the consumer and correctly recorded so statistics may be gathered.

        The fourth step is assuring that complaint procedures are well publicized to the public as well as employees. Appropriate information should be included on forms, contracts, mailings, manuals, and brochures. Specific complaint information should be circulated on posters, booklets, and through videos and educational activities. It is also recommended that complaints be analyzed to determine if the publicizing efforts have been effective, that is, clear, fair sounding, and not oversold.

        The sixth recommendation is that all complaints should be resolved at the lowest possible level in the organization. All levels should be kept informed of the progress of receiving and resolving complaints and resolution should be coordinated with others in the department or network so future complaints can be avoided. The final recommendation is to make use of third party resolution mechanisms to supplement internal efforts. Possibilities include a neutral conciliator that brings parties together and encourages solving the conflict, a mediator who becomes actively involved in negotiation between parties, and an arbitrator who hears the facts in the case and reaches a decision that is binding on all parties involved.

        The author also recommends that organizations use experienced people in handling complaints instead of delegating the job to the greenest employees. Sincerity is the hallmark of effective complaint handling and is usually more important than the actual formal resolution. Organizations should apologize for actions in which they are clearly at fault and fully disclose the options of complaint resolution. Of course, over disclosure of organizational policies can may just as bad, especially if it points to hierarchical structures or policies that cannot be changed. The ideal complaint-handling is “widely available, highly visible, client centered, independent, expert within its sphere of competence, and capable of developing general recommendations for the improvement of complaint-producing situations.”



Corporate Information Systems Management

by James Cash Jr., F. Warren McFarlan,  and James McKenney (Business One Irwin)

Reviewed by Dennis William Hauck


        Information systems management is not only a vital part of most government agencies, it is the sole reason many exist. Not only must such agencies deal with ever expanding data bases, but they must prepare for new demands in the way the data is handled and be alert to new technology that can improve efficiency. A good example is California's DMV, whose only function is information management. Had the DMV not implemented an ambitious modernization of the way it handles information, the department might have come to a grinding halt, its internal machinery clogged with reams of needless paperwork and redundant data. Today, the agency is developing one of the most cost efficient and reliable data-bases in the nation.

        How a government agency or corporation handles information is becoming a crucial determinate of its survival in these competitive and cost-conscious times. This book, now in its third edition, is intended to show managers how to use recent advances in information systems technology to support their objectives more efficiently and achieve valuable strategic advantages. Over the last twenty years, the role of computer technology in business and government has evolved from a tool promising increased productivity to a powerful weapon used to exploit knowledge and expertise. Computer data bases are the heart of modern organizations. Today, data is manipulated by innovative software and technology to create dramatically different approaches to the conduct of business.

        According to the authors, managers need to review their current methods of handling information and identify areas of poor execution or omission. They must decide whether they are spending an appropriate portion of their budgets on technological modernization and if they are utilizing existing equipment for maximum productivity. Most general managers have no idea how dependent they are on the smooth performance of their information technology. Many need to re-assess the risks of a major operational disaster and determine what steps need to be taken to back-up and restore service.

        Management action is required on two fronts. These concern the placement and leadership of the information technology (IT) within the organization. Managers should determine if the IT resources are appropriately placed. How is the hardware distributed and developed? To whom does the IT resource report? What IT activities can best be handled outside the department? To what degree are word processing, computing, and telecommunications integrated?

        Often overlooked is whether the leadership of IT activity is appropriate for the role it now plays in the organization and for the special challenges it now faces. The nature and skills required in information systems management tend to evolve over time, while some personnel tend to perpetuate their own outmoded methods. The problem is compounded by a lack of suitable measurement standards for evaluating performance in this area objectively. A review of cost control, ability to meet batch report deadlines, peak-loaded response time, and complaint response time are a few indicators of performance suggested by the authors.

        The authors also provide practical guidelines for controlling day-to-day IT operations and managing special projects, but the most useful chapters of the book deal with the evaluation and risk of implementing of new systems. The authors believe that implementation risk can be measured and a decision reached regarding acceptability long before funds are committed to development. Using actual examples of failed and successful IT projects, the authors present a detailed method of reviewing the parameters involved in implementing new projects and arriving at an assessment based on eight levels of risk. A Project Implementation Risk Assessment Questionnaire allows the reader to assign differing weights to questions about size, structure, and technology risks. Thus the evaluation can be customized to fit a variety of goals and organizations. Such a systematic analysis not only reduces the number of failures, but also opens up a link of communication between managers and senior executives.

        In addition to methods for determining the relative risk of single projects, the authors suggest that organizations develop a profile of aggregate implementation risk for its entire portfolio of systems and programming projects. The portfolio risk assessment provides insight into the degree of risk appropriate for individual organizations. For example, in agencies where IT is of strategic importance (such as banking or insurance), managers should be concerned if there are no high-risk projects underway. However, a portfolio loaded with high-risk projects suggests a vulnerability to operational disruptions if projects are not completed as planned.



Managing Diversity

by Lee Gardenswartz and Anita Rowe (Irwin Publishing 1993)

Reviewed by Dennis William Hauck


        In today’s work force, where change is the only constant and a growing number of cultures have become more demanding, managers must be able to harness the resources of such human diversity. It has been estimated that by the year 2000, seventy percent of new entrants to the work force will be woman and minorities, and only thirty percent will be white, American-born males. Those new workers from different racial and ethnic backgrounds, along with the fierce competition in both the public and private sector, make cultural diversity an undeniable resource and a critical factor in all areas of management.

        This book is a reference and planning guide designed to help managers understand the vast array of values and backgrounds in the work force and incorporate them into the organization. It suggest ways to hire, train, and promote a diverse work force, how to build cohesive multicultural work teams, and how to create a workplace culture that embraces diversity to maximize the potential of your work force.

        The book also describes how to conduct a diversity audit in your organization to create the most effective program for taking advantage of your current culture. There are basically three different methods of assessing the extent of diversity in an organization. The first is the most cost-effective and requires only the creation of a questionnaire to be distributed to employees. Such a method is relatively easy to administer and takes relatively little time from employees. Data should be collected anonymously so employees feel free to be as honest as possible. Three levels of response are designated (such as Very True, Somewhat True, and Not True), and the final information is organized in a comparative form that can be quantified and statistically analyzed.

        Typical statements on the questionnaire include: I am at ease with people of diverse backgrounds; There is diverse staff at all levels; Racial and gender jokes are tolerated; I am afraid to disagree with members of other groups for fear of being called prejudiced. Other questions examine the current role of management in handling diversity. They include: Supervisors hold all people equally accountable; Management has a track record of hiring and promoting minority employees; Managers effectively use problem-solving skills to deal with language differences or other cultural clashes.

        The disadvantages of the questionnaire method of assessing diversity are that it requires literacy and possibly translations into other languages, and the one-way communication offers no hope of clarifying or explaining responses. Also, responses are  limited by the range of questions, and the impersonality of the approach may put off some employees, especially those from other cultures.

        One way around these problems is to conduct personal interviews with employees, although it is the least cost-efficient and most costly method. It also requires a skilled interviewer so data collected from a limited number of people can extrapolated to the work force. Nonetheless, in the interview method, problems and issues can be explored in more depth, and interviewees feel freer to speak openly about issues that really bother them. This more personal approach also allows for the collection of examples and anecdotes that illustrate the issues and put them in human terms.

The richest data about the status of diversity in an organization is provided by the establishment of focus groups. Such groups also serve as a teaching tool, building awareness about the importance of diversity and providing an active channel of two-way communication. Participants hearing each others’ views expand their own understanding of the issues. 

The interaction in focus groups generates more data as comments spark other ideas so new information emerges. It is also more efficient to get information from groups rather than individuals one at a time, and subtle information from nonverbal clues and body language can be picked up.

Still, the focus group method generally provides only a sampling of views, not everyone’s. Peer pressure may influence participants, who may be reluctant to speak up freely for fear of repercussions or because of cultural norms that discourage critical comments about others. Because of these concerns, this method requires skilled facilitation by group leaders.

Usually, it is a combination of all three methods that yield the most reliable data. In examining the results, three areas need to be investigated. First, because the effectiveness of an organization depends on human beings, it is necessary to look at individual attitudes and beliefs and how they are impacting the organization. Second, it is necessary to go beyond the individual level and look at embedded organizational values and norms and how they are affecting the attitudes and behavior of employees. Finally, it is necessary to look at management practices and policies, for it is here where the organization and its employees interact.   



The Rightsizing Remedy: How Managers Can Respond to the Downsizing Dilemma

by Charles F. Hendricks (Business One Irwin)

Reviewed by Dennis William Hauck


          Over the last decade there has been a fundamental change in business conditions which has profoundly effected both government workers and the employees of large corporations. Over six million middle managers and other white collar workers have not only been laid from their jobs but also from their careers. In 1990 alone, one million managers with incomes over $40,000 lost their jobs. The annual rite of headcutting is part of a national downsizing trend, the proclaimed cure for today's turbulent business conditions.

        A less obvious casualty of downsizing is employee loyalty. Studies show that the majority of workers now distrust their employers. Leveraged buyouts and hostile takeovers forced many workers into the unemployment lines and have contributed to workplace tensions, causing many workers to adopt a "Take what you can while you can" attitude. The principle involved is one of loyalty up, loyalty down: managers cannot expect subordinates to be "loyal up" to an organization if they do not receive "loyalty down". Clumsy and insensitive downsizing strategies virtually destroyed employee morale and created a climate of worker fear and insecurity that has seriously eroded management-employee relations. California state employees know only too well the effects of such high-handed downsizing.

        According to author Charles Hendricks, restructuring does not have to be a nightmare. By replacing the "Quick Fix" cure with a more intuitive and humanistic approach to human resource management, many loyalty problems can be eliminated. His concept of "rightsizing" assumes that business conditions in both the public and private sectors are changing fundamentally and permanently. This means that organizations must rethink their entire operational strategies and start seeing their employees as assets, not liabilities. The author suggests ways to eliminate quota cost cutting to rebuild employee loyalty and produce superior products and services. He offers employment strategies designed to correspond with trends occurring in the workplace, while at the same time, taking into account the employee's perspective in order to build a more flexible, human-centered work environment.

        Current solutions to the downsizing dilemma are not working because they are basically defensive. Critics have concentrated on blaming pressures from other countries, the Wall Street elite, and greedy upper management. Others disclaim any responsibility for the actions of their organizations and naively proclaim that the restructuring is over. What is needed now is a clearer understanding of modern trends. In an emerging global economy, the United States must fight to become more competitive not only by becoming leaner and meaner, but by increasing quality and productivity. Changes in American demographics will result in there being three generations in the work force at the same time in the early 21st century. As a result, renewal and downsizing will become permanent features of doing business.

        State and local governments will face increasing responsibility to represent the economic interests of their citizens against international corporations and transnational interests. At the same time, the perspective of the federal government will shift to one of support for our own international business interests. Despite these harsh competitive realities, there is a growing spiritual revival which must also be considered, since it could have a profound effect on the ethical climate of American institutions and employment relations.

        In order to prepare for a tomorrow's world, American government and companies must become rightsized to avoid traumatizing employees by chaotic and insensitive downsizing. This requires recruiting qualified individuals, not just hiring workers by the numbers. Bureaucratic job descriptions must be replaced with team-oriented job proposals. Pay ranks and rates must be scrutinized to eliminate "position paralysis" and automatic raises in pay. New ways of measuring true performance must be initiated to reward employees for quality work. More flexible bonuses and loss-sharing programs should be introduced. Career path advancement can no longer be automatic and must become mission-driven. Termination strategies need to restore human dignity and offer some degree of financial security to dismissed employees. The author of this book even suggests a system of fast-track retirement programs so that certain employees can move on to new careers every ten years.

        Such strategies, while not always the easiest or the most comfortable, are realistic adjustments to our present inhumane system of knee-jerk downsizing. Upper management in both government and the business world must realize that one of their most valuable assets is their working relationship with their employees. This book is about protecting that relationship in a changing world.



The Power of Learning: Fostering Employee Growth

by Klas Mellander (Business One Irwin, Homewood, Illinois)

Reviewed by Dennis William Hauck


        Managers at all levels are responsible for the continuous development and education of their employees and themselves. In these days of changing accountabilities, restructuring, and new operating paradigms, that responsibility has taken on added importance. Whether retraining employees or introducing new equipment or procedures, every manager appreciates the time and effort involved in learning. But learning itself is a skill and this book attempts to train managers in how to master that vital and often-overlooked ability.

        By discovering how people can become more effective learners, supervisors can better focus training efforts to meet the changing needs of organizations. Managers have the prime responsibility for continuing expertise development, so they must know what is expected of them. At the same time, people want and are expected to take greater responsibility for their own development and for the success of their department. The modern view is that training specialists should spend less time drawing up fixed training programs and concentrate more on strategies for developing expertise in specific individuals or situations. This means that more and more people are going to have to gain an understanding of what learning really means.

        The main point of this book is that our spontaneous learning process is much more effective than learning in a classroom or study environment, so we need only look within ourselves to learn how to learn. Sometimes, formal teaching methods destroy the very factors that make learning effective. The author sums up the effective learning process in one word: "Aha!" Attention makes us receptive to information, which we process together with prior knowledge, until we arrive at conclusions and understanding, which we then apply and test for confirmation. The successful learning process often ends with the exclamation "Aha!" Five key terms are included in this description: 1) Attention; 2)Information; 3)Processing; 4)Conclusion; and 5)Application. These are the five parts of the effective learning situation.

        To understand learning, we need to take a closer look at these five terms. Attention is a state of aroused curiosity and increased interest. It is a fleeting phenomenon but the most important ingredient in successful learning. Like a modern alchemist, a manager can only hope to create the proper conditions in which attention can flourish. Meaningful and readily available information increases attention. The critical stage in learning is the processing of information inputted by our attention. This is the brainwork stage, the contrasting of new with old information, the absorption of data. The conclusion is reached when meaningful new relationships among pieces of information are discovered. This is the "Aha!" experience. Most people derive pleasure from this experience and seek to use their new-found knowledge as soon as possible. This is the final, application stage.

        The obstacles to learning are the things that interfere with or stand in the way of the above five stages. If instruction has no discernible or meaningful objective, then attention suffers. If information is inconsistent, too complicated, overly obscure, difficult to access, or presented in the wrong order, then the learning process is disabled before it has even taken hold. Lack of time, distractions, and shortage of relevant information can short-circuit the processing stage. If the gap between the learner's frame of reference and the new knowledge is too great, the conclusion cannot be achieved. Likewise, if the new knowledge conflicts with the subject's previous (intuitive) understanding, or the subject receives no help in turning his previous insights into intellectual concepts, the conclusion will not be reached. Finally, if the new knowledge is not used or applied, then the newly learned skills or insights might be lost.

        Obviously, the way to effective learning is to modify the training process to eliminate these obstacles. However, the traditional, authoritarian relationship between teacher and student is often not flexible enough to allow such improvement. In those cases, there are steps that must be taken by the persons involved in the learning process. A continuous dialogue between learners and instructors must be encouraged so that, working together, they can improve the process and create optimum conditions for learning. Beyond that, teachers can take a few lessons from the authors of great fiction who have an understanding of the intricacies of drama. The attention stage of a drama establishes the main conflict and piques the reader's interest and curiosity. The information stage presents characters and background in an orderly fashion. The basic conflict is "cooked," or escalated, in the processing stage. That conflict is resolved in the conclusion or climax. In the application or fade-out, we find ourselves richer in experience from having been involved in a meaningful drama.



Managers As Facilitators: A Practical Guide to Getting Work Done in a Changing Workplace

by Richard Weaver and John Farrel (Barrett-Koehler Publishers, San Francisco, 1997)

Reviewed by Dennis William Hauck


        Modern supervisors are expected to do new things in new ways with fewer people and fewer dollars. Traditional techniques of management are infeasible in a workplace of overburdened workers. There is now more work than individuals can handle alone, and the trend in organizations is toward teams and group work. This shift requires a new role for supervisors, and the authors of this book have dubbed that role the “facilitator.” The purpose of the facilitator is unlike the traditional manager, who plans and controls, and is also different from the idea of a leader, who sets vision and direction. The modern facilitator helps people get their work done and helps people work together more effectively.

        The authors of this book have worked with scores of organizations adjust to their new role, and in the process, have discovered three critical elements in group-centered work. First, the people in organizations who establish groups ¾ often senior executives ¾ must operate differently from the past. They need to be clear what is expected from each group, hold the groups accountable, and recognize group achievements. Second, individuals need the skills and knowledge that will help them join groups quickly, work more collaboratively, and then leave smoothly. Third, people who act as facilitators have a very different function from those in the traditional manager and leader roles. Facilitators have to understand how individuals and groups operate and know practical skills to help them get their work done.

        This book focuses on that third critical element contributing to the success of groups. The authors discovered that effective facilitation has a much bigger impact on the success of groups that traditional team-building activities. The reason is that facilitators bridge the gap between the members of the group and the executives directing the organization. Effective facilitation helps groups complete real work by creating a practical balance in which progress can be made. In their workshops, the authors developed a model for describing how facilitation works effectively, and this book is full of insightful questionnaires, graphical illustrations, and real life examples. There is a “toolbox” section that provides methods for brainstorming, debriefing, and consensus mapping, and even a “quick fix” chapter that lists fifteen common group problems with the authors’ recommended solutions. This practical guide is definitely aimed at supervisors on the front line of management.

        “Watching groups flounder, disintegrate, and even sabotage the work of others,” say the authors, “has had a powerful impact on us. In these settings, where we were not facilitating, we saw productive opportunities being lost and people being hurt. They were pulling back, no longer offering their full capacity to the organization. In some of these situations, the people responsible were determined to do it their way, oblivious to how badly it was going. In other situations, the people responsible were frustrated with the outcomes and wanted to do it very differently ¾ but they did not know how. We found that as we offered training courses in effective facilitation, people with many different roles in organizations attended. They were excited as they experienced new successes. These results have greatly boosted our commitment to share our approach to facilitation.”

        One example is the case of a manager assigned to a new team in a large corporation. Trained in facilitation, the man was frustrated when he tried to apply his new role. Trying to draw everyone in the group into a conversation proved very difficult. Three of the nine members never said anything and were putting a damper on the whole process. When he tried to force them to participate, he generated animosity that was felt by everyone present. Previously, he had experienced a similar situation in another group. One person in particular refused to participate, so the manager tried to prod the man to speak up more. One day, the man exploded angrily, swore at him, and demanded the manager stop “picking” on him. The confrontation shocked the manager, and he carried the unconscious fear that it might happen again. The new members sensed the manager’s fear and sensed he was keeping something important from them. When the manager himself opened up and related his experience, the group immediately came together. The silent three explained that they were actually very interested in the success of the group, but it was their simply their “style” not to speak up until they had something meaningful to contribute. It was the manager himself who impeded the group, because he could not tell the difference between his intended impact and his actual impact.



5th Generation Management: Co-Creating Through Virtual Enterprising, Dynamic Teaming, and Knowledge Networking

by Charles Savage (Published by Butterworth-Heinemann, Boston)

Reviewed by Dennis William Hauck


This book’s self-professed goal is to “help managers out of the rigid mindsets of the Industrial Era into the vibrant and invigorating possibilities of the co-creation in the Knowledge Era.” But unlike other books dedicated to reengineering America’s entrenched corporations and government departments, this lively tome starts with a deeper understanding of the nature of human work and human time, and because of that, offers solutions that work in the real world.

After it was first published in 1991, many executives adopted 5th Generation Management as their manifesto of change for 1990s. This edition appears with a new subtitle, which tries to capture the shift in focus over the last five years. Previously, the goal of management was to try to perfect the organization so it could be put on automatic pilot and cruise along all by itself, with management reacting to emergency situations as need be. Those efforts concentrated on integrating an organization from within.

 However, the current trend is to participate actively in the drama of co-creation with our colleagues both within and outside the organization. The goal of this open-ended collaboration is to test the reality of our concepts while creating true synergy between people and organizations. Such an approach may seem messy, unprofessional, or just plain self-indulgent, but it builds truly alive organizations that can react and grow with genuine intuitive insight ¾ which is a priceless commodity in management.

Tom Peters, in his forward to this edition, describes this experience as “dancing the dialogue.” “Work is dialogue,” he explains, “a creative dialogue where we not only create products and services, but co-create one another. This only makes sense if we realize that it is meaning and not just satisfaction that really matters. In human time, the underlying patterns and resources of the past and future provide the canvas upon which to discover the meaning that inspires innovation and co-creativity. Strategic dialogue is what we need in executive suites around the globe. Rather than just looking at numbers for strategic planning purposes, we need to reflect on the infrastructure of meaning, models, and metaphors that undergrid our organizations and turn them into vibrant communities. It is confusing, it is messy, but in the swirl of possibilities, dancing the dialogue is incredibly exciting and revitalizing.”

Teaching some managers to “dance the dialogue” might seem as hopeless as task as trying to teach them how to “dance the limbo,” but fortunately, this book takes a very down-to-earth approach. In fact, the first half of the book is devoted entirely to anecdotes and scenarios involving real-life managers who give up their cozy empires for the living, breathing creatures that result from new networked organizations of their own design. Through their fears, mistakes, and calamities, the reader assimilates the facts and pitfalls of reengineering ¾ and reanimating ¾ their own organizations.      

The second half of the book is devoted to a more technical discussion of the co-creating process. Dynamic training, virtual (computer) management, and knowledge networking are presented as key accomplishments in a systematic process which seek to increase and organization’s “intellectual capital” and “knowledge assets.” The author goes beyond typical reengineering ideas and emphasizes newer techniques which incorporate the ideas of 5th Generation Management.

One such method, based on the ideas of consciousness researcher Arthur Koestler, is known as the Holonic Management. A holon is an identifiable part of a system that has a unique identity, yet is made up of subordinate parts and is in turn part of a larger whole. By inventing a hierarchy in which each facet or person in the organization is self-reliant and controlled only by higher-level holons, the effective operation of the larger whole is ensured. The important features of this system, which must be balanced, are autonomy and coordination.

Another new management philosophy is the Fractal Enterprises concept, introduced by Hans-Juergen Warnecke in 1992. He calls for more horizontal communication as opposed to the traditional vertical scheme found in most organizations. The worker in a fractal organization is not only a co-worker, but also a co-knower, co-thinker, co-envisioner, co-decider, and co-responsible. 

There are a half dozen other new systems, all with intriguing names such as Agile Enterprises, Virtual Enterprising, and Hypertext Organizations, but each of them is centered around the basic concept of co-creating. That crucial idea is best summed-up in the words of the author.

“The confusing complexity of the industrial era’s steep hierarchy,” writes Charles Savage, “is due primarily to its superficial appreciation of human creativity. It is an artificial construct, useful in its time but fast becoming a lumbering dinosaur in an era where lean, agile, action-oriented enterprises are a necessity. The transition to the elegantly simple idea of the knowledge era requires an understanding of human time and work as dialogue. We must release the pent-up human energy in our enterprises.” 



Fusion Leadership: Unlocking the Subtle Forces that Change People and Organizations

by Richard Daft and Robert Lengel  (Berrett-Koehler, San Francisco)

Reviewed by Dennis William Hauck


        For most of the last century, managers have followed the "fission" approach to management by separating employees and the workplace into preset roles and tasks, establishing boundaries for information sharing and communication, assigning responsibilities, and imposing specific goals, targets, and standards. While this approach creates a stable environment, it also creates organizations that are slow to adapt and sluggish to support. According to the authors of this book, that is because fission management engages peoples' bodies and minds but not their hearts and souls. The fission organization soon becomes hollow and lifeless.

         Traditional American organizations in both the public and private sectors are patterned on fission. They do not allow individuals to express their whole beings: mind, heart, and spirit. The result is the extended fission process taking place in the general business world today. Organizations are literally coming apart at the seams, whether it is blamed on divergent departmental goals, downsizing, increased workload, buyouts, or shrinking budgets. Traditional hierarchies have suppressed individual ingenuity and brought many workplaces to the verge of crisis. However, organizations that practice fusion leadership create an expressive and living environment, and see dramatic increases in energy, productivity, and employee motivation.

        How do we make the transition from the splitting and separating environment of fission leadership to the joining and synergistic environment of fusion leadership? According to the authors, within each of us are the subtle forces that when cultivated and harnessed in unison can release the enormous power of fusion throughout the organization. Therefore, much of the work of fusion leadership takes place within the individual manager, who must learn how to mine, release, and apply six crucial forces: mindfulness, vision, heart, communication, courage, and integrity.

        Mindfulness represents independent thinking, personal creativity, and an open mind. Becoming more mindful is an ever-deepening process that involves the development of a "beginner's mind" that is open to new worlds of ideas and people. It results in independent thought and the encouragement of such thought in others. When cultivated and honored, it can help us open ourselves to new possibilities for solving complex problems, forging important relationships, resolving conflict, and engaging in work on new levels. By becoming more aware, we appreciate the often subtle forces at work in people and events. We start to understand what you are really capable of and how to use our talents within the organization.

        Vision is not just the purview of leaders, it is a power that we all can draw on to perceive the higher purpose toward which we and others work. Vision is the focus that releases subtle forces in people and awakens their desire to serve. In many ways, vision defines both the destination and the journey. So having vision is a real skill we can learn to use to inform and inspire our daily work. Personal enthusiasm and energy skyrocket, thus allowing individuals to find meaning at work and enabling organizations to reap huge rewards too.

        Heart is an often ignored but critical force in management. It permits us to cultivate caring and compassionate workplace relationships that result in trust and mutual support; true leadership grows from an emotional attachment to others. Heart embodies what the authors call the "Fusion Paradox" _ that leaders can achieve meaningful growth and identity by acting more in relationship with others.

        Communication is not just a skill but a genuine force within organizations that can influence vision, values, and emotions. Its power is released through listening and discernment. The goal of successful communication is simple: first understand and then be understood.

        Courage is a necessary attribute of the fusion leader. We may doubt sometimes that we have it or that we need it in our daily work environment, but it is available to all of us and when tapped can motivate us to take necessary risks, experiment, and innovate. But courage is more than fighting for what we believe. It is nonconformity, protecting useful boundaries, and responding to a higher purpose.

        Integrity, then, goes along with courage and is another necessary attribute of the fusion leader. It means exemplifying values, maintaining dedication, and being true to ourselves. Without personal integrity and the honesty and openness it can foster, we will never truly learn how to get beyond self-interest and really contribute something to others and the organization.

        These six qualities of fusion leadership are what attract people into fusion with others. These qualities include the intellectual, emotional, and spiritual dimensions of true leadership. On the basis of facing reality together and empowering each other through the cultivation of the qualities of mindfulness, vision, heart, courage, communication, and integrity, people in traditional organizations can create a shared future together and discover that everyone on every level benefits from fusion.



Beyond Bureaucracy: A Blueprint and Vision for Government That Works

by Kenneth Johnson

Reviewed by Dennis William Hauck


        This book is based on the premise that the primary organizing model that we use for our government agencies is fundamentally flawed. Citizens perceive many government agencies as inflexible, unresponsive, disorganized, and top-heavy with layers of excess management, while being too lean at the bottom to adequately meet constituent needs. Many people are pessimistic that the various government agencies will succeed in handling the critical issues entrusted to them. According to the author, blame for the loss of confidence in government systems, whether at the federal, state, or local level, has erroneously been placed on the politicians and workers in government, when the real cause is the form of bureaucratic organization itself. Even government employees blame their agency's suffocating and immobilizing bureaucracy on top officials. They assume higher management must want it, or it would not be tolerated. But top management does not want or like bureaucracy any more than the rest of the agency's employees, and the effects of bureaucracy victimize everyone, regardless of level.

        The root cause of bureaucracy is the organizing model, what the author calls "the bureaucratic form." This bureaucratic form is so pervasive in an organization that its destructive potential is rarely realized. The insidious bureaucracy is marked by rigid policies and procedures, with a diffuse decision-making process that makes responsibility easily deniable. Red tape and inaccessibility are used as an invisible shield that dehumanizes the agency's contact with its "customers." Information is hoarded and sometimes distorted in a bureaucracy but rarely communicated openly. But perhaps the most obvious indicator of bureaucracy is that it is quantitative rather than qualitative. That is, regulations, operating procedures, and structuring encourage workers to concentrate on quantity of output rather than quality.

        How does one cure the causes of unresponsive bureaucracy? The author offers a plan to reorganize government to make it work better. New agencies can avoid the pitfalls of bureaucracy by using a new mission-driven model of government. Existing agencies can reduce the amount of bureaucracy by changing one or more of the basic organizing principles, either temporarily or permanently.

        New government agencies should attempt to implement a mission-driven model. Such a model combines the process improvement methods of the Total Quality Management paradigm with a customer-focused approach. In such a model, upper management defines the mission of the agency, procures the necessary funding, sets specific goals, and communicates with other government agencies. Middle management defines the work teams, allocates resources, removes identified obstacles, and generally supports the achievement of the mission established by upper management. The remainder of the work force is organized into cross-functional teams to achieve the mission in the most efficient manner. The mission-driven model has a customer-focused mission, accomplished through extraordinary service and innovative techniques.

        Existing agencies should attempt to convert from management by inflexible rules to empowering its employees with guidelines for the accomplishment of specific goals. A combination of old and new methods can be implemented on a trial basis, with guidelines being abandoned in certain critical situations. In any case, post-action review of decisions may be required for a period of time to allow for management guidance. Another possibility is to reorganize away from specialized departmental functions toward multi-disciplinary teams organized by customer segment or type of service. Existing agencies should attempt to abandon their purposely impersonal approach and increase emphasis on the human component. This may require not treating everyone on an equal basis and striving instead for equal satisfaction.

        Beyond Bureaucracy provides a number of further suggestions and detailed outlines for avoiding the stifling effects of the bureaucratic approach to government. He includes sections on feedback, both from employees and customers, and forming a "shadow organization" superimposed on an agency to get work done that is difficult to accomplish under a pre-existing format. The author has done a good job in identifying the root causes of bureaucratic failure, and makes it painfully obvious that the future success of our government may depend more on its organizational structure than on the amount of funding it receives.



Real Time Strategic Change: How to Involve an Entire Organization in Fast and Far-Reaching Change

by Robert Jacobs (Berrett-Koehler, San Francisco)

Reviewed by Dennis William Hauck


        The organizations that survive into the new millennium will be those that are capable of rapidly and effectively bringing about fundamental, lasting, system-wide changes in response to new challenges. This practical book provides a framework for developing just such an organization through a clear, step-by-step process. The author demonstrates the flexibility and power of his approach by citing examples of its implementation in such diverse organizations as state and city governments, industry, education, health care, and non-profit agencies. Examples include Kaiser Permanente, Ford Motor Company, Mariott Hotels, First Nationwide Bank, Seattle’s transit agency, and even a group of eighteen school districts.

        The foundation for the strategy presented in this book is interactive large group meetings. Such meetings enable hundreds and even thousands of people to collaborate in crafting their collective future. Change happens faster because the total organization itself is the “in group” or “power center” that decides which changes are needed and the specific actions employees can take on a daily basis to implement the changes. In other words, all levels of management and workers are aligned behind an overall strategic direction they helped create.

        Real time strategic change is a way of redesigning how organizations react to ensure that change occurs at a fast pace and in real time throughout the entire organization. Planning and implementation become a unified process in which change occurs simultaneously in the whole organization. People feel responsible for the organization’s total change effort because commitment to and ownership of the change effort is the by-product of involving all employees in the process of change. Broad views of reality form the basis of information everyone uses to plan and implement changes across the entire organization; change is viewed not as a threat to the status quo but as an integral component of a person’s real work.

        Generally, there are nine phases that organizations go through in implementing a real time strategic change process. The first phase is the establishment of a clear contract between the leaders of the change effort and the consulting team that supports the effort. This fifty-fifty collaboration is characterized by honesty and objectivity about the needs of the organization. The next phase usually involves creating an alignment and commitment to the overall process in the management team itself. The top leaders in the organization must be educated so they can make informed decisions about the overall change process and their respective roles in ensuring its success.

        The third phase is the development of an overall organizational strategy for the change effort. This stage focuses on the substance of the change with respect to current issues and opportunities. It examines whether the supervisory team is really capable of providing the direction required to focus the organization’s energy on the right things at the right time. If both upper management and the consulting team agree that change is possible, the following phase is actually designing the real time strategic event. The goal is to create a specific event that is responsive to the issues at hand and can get the organization from its current position to where it should be. This involves refining the proposal developed previously and applying that new perspective to the design of the real time strategic event.

        The fifth phase is planning meetings for the change event that encompass all the people who will be directly involved in managing the event’s logistics. This means finding a facility and preparing materials so that the largest practical number of employees can participate in the event. Next comes planning follow-up initiatives in advance of the real time strategic event. Once the groundwork is laid for follow-up that will help build the necessary momentum to continue to implement the changes at all levels of the organization, planning the Staging Day for the change event to take place can begin. This Staging Day is the focus of all the efforts so far, and all levels of management and consulting teams come together to create an event that immediately implements the desired change.

        The eighth phase is holding the actual real time strategic change event and analyzing the success or failure of its implementation. Throughout the day, the entire organization must be focused on a successful changeover. The logistics team must be prepared to follow the changes closely and provide the necessary back-up so all participants can find the support necessary to make the change. Hopefully, minor snags can be ironed out, so everyone in the organization feels that the change is positive and productive. The last phase of real time strategic change is the final implementation of the change initiatives themselves. All the bugs have been worked out and all the necessary changes have been accomplished. At this point, the energy and motivation for the change spreads through the entire organization. The changes are well supported and planned targets are met or exceeded in all departments.



The Intelligence Advantage: Organizing for Complexity

By Michael McMaster (Butterworth-Heinemann)

Reviewed by Dennis William Hauck


        Feel confused about all the new trends in management? This book is an excellent resource for sorting through all the hubbub to the basic advances in business philosophy, psychology, science, technology, and communication that are responsible for the new paradigms of how human beings create organizations. This book shows that no matter how different all these new approaches seem, they all have one thing in common: they foster insight into ways of organizing productive activity that are consistent with the real nature of human beings and society.

        The driving force behind the soaring demand for new paradigms in management is the increasing complexity of modern organizations. Traditional approaches to management have proved too inflexible and restrictive because today’s organizations must become “living” enterprises to cope with increasingly competitive and technology-dependent marketplaces or service sectors.

        Management consultant Michael McMaster aptly describes the contemporary challenge in the introduction to his book: “Between 1970 and 2000, there will be approximately a 500-million-fold increase in our ability to access, move, create and process information. Yet, compared to the increase in our capacity to move, process and store information, our way of organizing and working together has not been transformed to meet that increase. The source of any marketplace advantage may be seen as the organizational capacity to develop and apply knowledge in ways consistent with the power of available technology. Developing this capacity will enable the organization to deliver on the promise of both the knowledge and the technology. However, the superficial activities that the various management fads provide will not accomplish the depth of transformation that is required. What is required is a level of organizational intelligence and learning that goes far beyond that which any mechanistic or engineered approach can provide. This new level of organizational intelligence and learning must totally transform the way in which we organize for work and organize work itself.”

        Management consultants and savvy executives all agree that what is needed in today’s organizations is transformation. However the level of transformation required is beyond anything envisioned in the past. In modern management theory, the term refers to a change beyond simple predictive ability, a change that builds on what really exists in the world in unpredictable ways. The process of organizational transformation is not revolution or evolution, but it is tapping into something already in existence within the organization to transform it from within. It is becoming what is possible, a higher level of functioning born from what already exists. The pathway to this transformation is one of development and growth, rather than intervention. The result will be a realization of what was always possible but not previously expressed. For a transformation to take place, acceleration in the process of becoming and increase in the space of possibility are necessary. In other words, the organization must change from a dead, fixed entity into a living, responsive one.

        The author has identified a process of organizational transformation that is consistent with the development of complex systems or “life forms.” The process begins with a phase of awakening, which is the awareness that something is needed, wanted and possible beyond what can be seen as just an extension of past circumstances and current thinking. The intention to pursue what is possible is awakened. The next phase is one of formulation in which there is a development of possibility for a particular organization through an iterative process of internal dialogue. The dialogue moves from tentative propositions to the recognition of rich and compelling possibilities.

The crucial third phase is one of experimentation in which pilot projects and isolated experiments are created that demonstrate the new approaches in action and test new theories of organizing work against the realities of circumstances and environment. The fourth phase is integration, in which projects that have been isolated from the full challenges of existing production processes are transferred into those processes. This integration alters the organizational structures of support within the organization. This integrating process unfolds in the development phase, in which continuous improvements are made in the processes that have been implemented. Structures for challenging the new, as well as the old, are built into the main organizational structures.

        The final phase is mastery, in which understanding and excellence are pursued by a corporation that is teaching and learning continuously, so that knowledge is always being questioned and expanded upon. From the modern management viewpoint, becoming is more important than arriving. The organization is transformed into a living, intelligent presence always learning and always growing.



The End of Bureaucracy and the Rise of the Intelligent Organization

by Gifford and Elizabeth Pinchot (Barrett-Koehler Publishers, San Francisco)

Reviewed by Dennis William Hauck


        “Bureaucracy,” say the authors of this book, “is no more appropriate to the information age than serfdom was to the industrial age. Only freedom and community will work.”

        Almost everyone agrees that the tangled webs of bureaucracy in organizations represent management’s biggest challenge today. Managers in the last decade of the twentieth century have inherited a nineteenth-century artifact and are charged with transforming it into a system capable of thriving in the face of whatever the twenty-first century might bring. Gifford and Elizabeth Pinchot, authors of the influential business book Intrapreneuring, now offer there own solution to the quandary faced by the modern manager.

        Their answer is simple, in theory at least. They propose replacing existing bureaucratic structures with fundamentally different principles for organizing and coordinating activities at the workplace. Their goal is to transform bureaucracies into “intelligent organizations” that make full use of the intelligence of all employees, instead of relying on only those at the top of the chain of command.

        The authors envision a management style that develops and engages the intelligence, business judgment, and wide-system responsibility of all employees. They believe that by tapping into the intelligence of every worker, an organization can respond more effectively to customers, partners, other departments, and competitors. In today’s changing world, the amount of clear thinking required to deal with the multitude of different customer demands, different ethnic cultures, different technological advances, and different possible future scenarios means that everyone in the organization must be involved.

        What does it take to build an intelligent organization? The first requirement is simply to decentralize control and minimize corporate government. The role of higher management in the new organization is not to control everything that happens within the enterprise but to create conditions that empower others to build effective “intraprises.”

        Of course, higher management is still responsible for making necessary rules of operation, such as setting standards, operating a disciplinary system, evaluating performance, and monitoring financial guidelines. They are also responsible for seeing that effective systems are in place to ensure quality response to clients and other departments, as well as compliance to outside laws such as environmental guidelines.

        The other primary function of management in the intelligent organization is to balance the necessary freedom of choice in the workgroup with the individual employee’s responsibility to the whole. But the first step is for managers to realize that they cannot expect individuals to use their freedom effectively if they are kept in the dark. Bureaucratic organizations, not trusting the intelligence and goodwill of employees, withhold information from them. This creates a self-fulfilling prophecy: Employees denied information become indifferent to organizational success because they lack the information to make intelligent decisions.

        In other words, there must also be freedom of enterprise within the intelligent organization. Without this freedom of action, individuals cannot use the full power of their intuition, their judgment, or their experience. Managers protect every employee’s freedom of enterprise by creating systems in which people can see what needs to be done and can find a way to do it.

        In practical terms, creating an intelligent organization means shifting the day-to-day control and feedback from the hierarchy of management to collaboration among and within teams. Project teams, process analysis teams, “intrapreneurial” product teams, quality action teams, market focus teams, automation implementation teams, and so forth succeed where bureaucratic systems fail. Such liberated teams are proving to be such a powerful force for integration and productivity that they are now accepted as the basic building block of any intelligent organization.

        But empowered individuals and teams still need to be connected to the rest of the organization. Managers must create conditions for productive collaboration between organizational members and others they work with and serve. That means making equality within diversity a part of management philosophy. For liberated members of the organization to choose actions that enhance the whole, everyone must trust in the fairness of the system and be secure in a certain safety that is not derived from dependence on those in power.

        To have flexible and responsive organizations, intelligence must be distributed throughout, with all individuals interacting to create a current knowledge that can be rapidly disseminated and applied. Unfortunately, no management design a network of this complexity. It has to be created on the fly by the choices of people seeking the connections they need to get their work done. The intelligent organization is a living, breathing, changing group of people that cannot be chained to the static dictates of the bureaucratic mind.



The Faster Learning Organization

By Bob Guns (Pfeiffer & Co., San Diego)

Reviewed by Dennis William Hauck


        Managers, supervisors, and front-line workers regularly face overwhelming amounts of information. In today’s competitive world, absorbing information, sifting through it, and using it to spur creativity is a major responsibility. Of course, the process of absorbing information is known as learning, and the faster learning organization is the one that has the advantage.

        What are the characteristics of a faster learning organization? A quicker learning curve enhances any organization’s strategic capabilities. The organization acts more realistically in a climate of openness. Employees give truthful feedback, react nondefensively to change, and exhibit a fervent desire to improve. The faster learning organization focuses on its vision and becomes very sensitive to its competitive position. Such an organization responds quickly to industrial or legislative changes and figures out how to operate effectively within those rules.

        A faster learning organization strengthens its ability to change in light of new developments. It acquires knowledge that customers and higher management value, uses new technology to its advantage, and reduces “cycle time,” which is how long before new processes are fully implemented within the group. It may not actually think faster, but it engages in deeper, more thorough, and more focused thinking that in turn leads to more effective action. The faster learning organization focuses on improvement and runs its teams like small businesses that deliver to specific goals or bottom lines.

        Government and business consultant Bob Guns has created a model of such a faster learning organization that links the concept of organizational learning to achieving organizational success. One important attribute of his model is its wide applicability. Virtually any public or private organization of any size, in any circumstances, can implement it. Even more importantly, the methods he recommends are easy to work with and won’t break the bank.

         The goal of Guns’ FLO model is to assist every employee or team move up at least rung on the learning ladder. This is motivated by strong dedication and the vision to gain and sustain the competitive edge through faster learning. There are three strategies designed to implement the model, and each strategy is led by a different team. The executive team handles the so-called Surge Strategy, which is designed around a few key leverage points in order to surge ahead in the organizational environment.

        Two crucial factors determine the success of the Surge Strategy. First is the executive group’s commitment to faster learning as the primary route to improved performance. Second is the development of a structure for clearly identifying strategic leverage points and for accelerating learning around those points. High strategic leverage is what propels an organization to a sustainable competitive advantage.

        The Cultivate Strategy is led by human resource personnel and is designed to develop and hire faster learners. The cross-hierarchical team creates a plan based on open discussions about the traits of a fast learner. Based on the profile, a rating system is developed to assess fast learning skills. Next, the profile is implemented and an action plan started for locating people with those skills.

        The final strategy is led by the supervisors and members of entrepreneurial teams. It is called the Transform Strategy and is designed to create a dynamic for continuing growth and renewal within the organization. Among the duties of the Transform group is to benchmark how the organization compares to other departments or companies, spin off other teams as new areas of growth are identified, and generally reconfiguring the organization’s structure to meet new demands.

        Implementation of the three FLO strategies requires the development of new skills for executives, supervisors, team members, and the individual learner. Once these skills are mastered, they can be applied to implement the strategies and accelerate the organization’s learning curve. The FLO model needs to be continuously monitored, measured, and reinforced. Otherwise, motivation, commitment, and improvement will not survive.

        It must also be recognized that the FLO model relies heavily on technology to support its access to, capture of, and transfer of learning to the organization. Still, though technology is an adjunct to faster learning, it is never the driving force behind it.

        Obviously, the transformation of an enterprise into a faster learning organization is a journey that represents a new way of growing not just the business at hand, but also people’s careers. It is a dynamic viewpoint that proves problems can become opportunities when the right people come together.



Managing By Values

By Ken Blanchard and Michael O’Connor (Berrett-Koehler, San Francisco)

Reviewed by Dennis William Hauck


        Everyone agrees that today’s business environment is characterized by technological, cultural, economic, and personal change. The overall effect is more pressure than ever before on managers and employees alike. But how do you provide a framework for stability, continuity, and growth in the midst of these chaotic challenges?

        Numerous books written over the last decade have stated the need for a new organization culture whose strategies, processes, and people are managed by a common vision, purpose, and set of values. This new book by Ken Blanchard, coauthor of The One Minute Manager, and Michael O’Connor, coauthor of The Platinum Rule, goes beyond merely lobbying for such a new management approach to provide a step-by-step method for implementing a values-based approach in your organization. For author O’Connor, this book represents the culmination of over twenty-five years of research. With doctorates in both management and behavioral science, O’Connor is recognized as one of the world’s leading authorities in the areas of business strategy, employee behavior, and process-driven performance. Managing By Values is built on his mass of diverse research, true-life experiences, and the growing literature on group and individual performance and satisfaction. Ken Blanchard adds his skills in storytelling to capture the essences of O’Connor’s academic approach and apply them to the real world. Their combined efforts make this a powerful book that is entertaining as well.

        What is the authors’ practical approach for how to give your organization the gift of a promising future while also discovering a way for all of its stakeholders _ management, employees, clients _ to be satisfied in the process? The management by values approach is based on de-emphasizing  materialistic “Fortune 500” goals and replacing them with more relativistic “Fortunate 500” goals. Like the traditional model, the new way of management begins with the CEOs, but in this case “CEOs” does not stand for Chief Executive Officers. The acronym “CEOs” used here refers to a holistic base of management that takes all levels of the organization into account. Let’s look at the authors’ own definitions of their new approach:

        The letter “C” stands for Customers. The first thing that makes a Fortunate 500 organization different is the quality of service available to its customers or clients. If you want to be competitive today, satisfying your customers isn’t enough. You want customers who will brag about you _ customers who will become part of your marketing and sales force, who would never make disparaging remarks about your level of service. In fact, you have to treat customers in such a way that they become raving fans of your service.

         The letter “E” stands for Employees. The second thing that makes a Fortunate 500 organization outstanding is the quality of life available to its employees. Such a company creates a motivating environment for its people _ one in which employees can see that working toward the organization’s goals is in their best interest. In this environment, employees begin to think like company owners. To the extent that the employees in a Fortunate 500 organization are truly treated like it most precious resource, they become more committed to its goals than are employees in other organizations where people perceive themselves as being used like expendable commodities.

        The letter “O” stands for Owners or the company’s stockholders or budget funding authority. No company can be called truly fortunate unless it’s profitable or holds to its budget, but truly profitable for all stakeholder groups in today’s management climate means being ethical. In surveys from all levels of organizations, the trait most cited as required for effective leadership is integrity. A key point that distinguishes a Fortunate 500 organization from its competitors is the integrity of how it handles its budget or profits and the related resource allocation practices by management. So when the authors refer to owners or funding bodies, they’re not talking about speculators but people who are looking for growth and performance in an organization of which they can be proud.

        The remaining pillar of the authors’ model stands for the fourth and final key constituency group to which a Fortunate 500 organization is committed. The letter “S” stands for what the others class as the Significant Other groups. These may include the community, creditors, suppliers, vendors, distributors, other departments, or even competitors. If you’re a Fortunate 500 organization, you’re consciously building a spirit of shared responsibility and mutual trust between your organization an its “significant others.”

        So, the basis for a Fortunate 500 organization is managing by values through the four pillars of C-E-O-S. This model is an accepted and growing business practice for motivating customers and clients to keep coming back without complaint, for inspiring employees to be their best every day, for enabling vested owners of the organization to be profitable and proud, and for encouraging the organization’s significant others to support their business commitments to you.   



Developing Competency to Manage Diversity

by Taylor Cox and Ruby Beale (Berrett-Koehler, San Francisco, 1998)

Reviewed by Dennis William Hauck


        One of the most critical skills of a California state supervisor is the ability to successfully manage the wide cultural and racial diversity found in today's workforce. In this new book, the authors have captured the realities of the learning process necessary for supervisors and departments to truly achieve the competency to make lasting changes and improvements in the area of managing diversity. Its practical approach integrates ideas from the academic realms of psychology and business management with everyday experiences in the real world.

        Taylor Cox is a professor of organizational behavior and human resource management at the University of Michigan Business School. Ruby Beale is a faculty member of the psychology department and the school of business administration at the University of Michigan. Both authors have tempered their academic lifestyles with real life experience with some of America's largest corporations. Cox runs a private human resources research and consulting firm, and Beale is a principal in a human resources management firm. Together, they have created a practical guide that organizes learning and skill-building for diversity around thirty-one activities that can change behavior, as well as addressing the wide range of diversity issues through twenty-three timely readings by experts in the field. 

        Furthermore, the authors focus attention on personal issues by providing essays from the perspective of various cultures and races. For example, the section on cultural differences offers a short essay by a Japanese MBA student, who was participating in a dialogue group organized by one of the authors. "During these sessions," he wrote, "I had the opportunity to ponder my cultural, ethnic, and racial identity. Because I had no previous work experience in the United States, the classroom discussions and opinions were of great help to me in understanding the current situation of diversity in the workplace. I will comment on two issues that I faced while still in school.

        "The first issue is the difference in communication style between Asian culture and Anglo culture. Asians generally have 'speech anxiety' or verbal reserve. Most Asians are hesitant to speak out in public or in front of a large audience, even when they are familiar with the subject. People are often considered to have more manners and etiquette if they do not speak out, especially in front of people who are older than they are. Keeping silent in certain situations is regarded as a positive attitude. I was brought up this way, and education and my country's social norms reinforced my behavior and beliefs throughout my adolescent period. This led to much difficulty and anxiety when I first arrived in American classes.

        "I found out for the first time that most of the classes in the graduate program at the university in which I enrolled were conducted by the case method and relied heavily on discussions and debates. This was a culture shock to me that was very difficult to adapt to and overcome. I would have to admit that there were many times when I didn't talk out in class even though I knew the answers to the questions my professors were asking. Such an atmosphere was very uncomfortable and strange to me at first, though now I have adjusted more to the environment.

        "The second issue that came up for me was the fact that some of my classmates began to develop negative judgments about Asian's not being able to present their own ideas in front of people. Part of the problem may have come from the language barrier, but this is by no means the sole reason; rather, behind this lies a deep cultural difference in communication behavior and style."

         After reading the essay, the authors ask you to put yourself in the position of an instructor of a class containing a number of Asian students who shared the same experience of this Japanese student, and to respond to a few questions such as: What advice would you have for the Asian students? What changes, if any, would be warranted in your own behavior as instructor? What, if anything, should be done about the standard pedagogical techniques used in the class?

        The authors follow up the personal essay with another essay from the academic or management perspective. Then, in an attempt to balance these perspectives, they have designed various group activities. In the case sited above, the activities include creating a list of ways in which cultural differences may have an effect on the performance of various task areas of particular departments or organizations. Another suggested activity in this section is to identify three actions a supervisor can take to reduce the possibility that cultural differences will be a barrier in the performance of an employee's responsibilities.

        As can be seen from this single example, this book provides a practical program of managing cultural diversity that integrates all perspectives on the problem. The goal of the authors is to find one holistic solution to each of the problems presented by cultural diversity that works on all levels _ the employee's, the supervisor's, and the organization's.



THE SECRET EMPIRE: How Twenty-Five Multinationals Rule the World

by Janet Lowe (Business One Irwin, Homewood, IL 60430)       

Reviewed by Dennis William Hauck


        One of the most disturbing trends of the last decade is the loss of government powers to multinational corporations. A torrent of mergers and acquisitions has created global giants that are more powerful and influential than the countries in which they operate.  International corporate agendas supersede government policies, and individual countries scramble to survive in a growing world economy.

        We need look no farther than the State of California to find examples.  A few years ago, a group of foreign companies,

led by several large Japanese corporations, pressured California authorities to abandon the unitary tax policy.  The law prevented companies from transferring profits to another state or country with lower tax rates.  The Japanese-led consortium informed California that no new factories would be built in the state, unless the law was changed.  Even after the unitary tax policy was rescinded, some of the foreign manufacturers moved to other states that offered free land, tax incentives, and other "benefits".  

        The tentacles of the multinationals also reach into California's powerful entertainment industry.  In 1991, Matsushita Industrial bought MCA (Universal Pictures) for a staggering $6.6 billion.  General Electric, who had already purchased NBC and RCA, added the Financial News Network that same year.  Earlier, Sony Corporation absorbed Columbia Pictures.  Other multinationals have purchased dozens of smaller film production and publishing companies in California in recent years.   

        Even our state's significant presence in the Gulf War was the result of pressures from international business cartels.  Kuwait is the largest shareholder of British Petroleum, which   owns Standard Oil.  Royal Dutch Petroleum, which owns Shell Oil, had significant interests in the Middle East, as did Exxon and Du Pont (which owns Conoco Oil).  The restoration of oil flow out of the region was the immediate goal of Desert Storm.  That these meganationals did not care about emblems of state or political morality was demonstrated by the fact that Saddam Hussein went unpunished for his pilferage and is still in power.  The protection of international petroleum interests was all that was required to maintain the world economic structure.

        The overnight collapse of the Communist system was a result of unrelenting global economic pressures, rather than any sudden enlightenment on the part of Soviet rulers.  By manipulating the flow of currency, setting prices, and influencing political policy, the World Corporate Order is slowly taking control away from national governments.  

        According to author Janet Lowe, present types of government, including Democracy, will give way to Oligopoly -- in which a small group of companies control the entire world.  The aesthetic, intellectual, and moral issues of both Communism and Democracy disrupt the operation of big business.  As she points out: "Free enterprise focuses only on functions that earn money for the company.  Public services are neglected because they are notoriously unprofitable.  Roads will be built and sewer lines laid to the factory, for example, and to the home of the factory owner who can afford the cost.  But the rest of the region may not get paved streets or a sanitation system.  Public transportation may be ignored entirely, since there is no financial reward for these activities.  Therefore, states must provide essential public services on behalf of all members of a society."

        The meganational corporations dominate not only the politics but also the culture of the countries in which they are based.  While the motive of meganational expansion is often to exploit the resources of developing countries, there can be positive effects to their efforts.  They spread technology, medical advances, and social improvements throughout the world.  They promote friendly trade relations and attempt to link all nations economically, thereby enhancing the prospects for world peace.

        Who are the members of the Secret Empire?  The four largest are Japanese investment banks with budgets of over $400 billion.  Only eight nations in the world have larger budgets.  Most prominent in California are Sumitomo Bank and Mitsubishi Bank (which owns the Bank of California).  Citicorp, Deutsche Bank, and Kobe are other banks on the list.  Manufacturers include General Motors, Fiat, Daimler-Benz (Mercedes), Kobe (Toyota), GE, Siemens, Hitachi (Maxell), IBM, ATT, and Matsuchita (JVC, Quasar, Panasonic).  Chemical and oil giants include Exxon, BP, Royal Dutch, and Du Pont.  Food and pharmaceutical firms have such familiar names as Coca-Cola, Bristol-Myers (Squibb, Clairol, Bufferin, Windex, etc.), Merck (Calgon, Mylanta, etc.), Nestle (Carnation, Hills Bros., Stouffer, etc.), Phillip Morris (Marlboro, Kraft, Miller Beer, Oscar Meyer, etc.), and Unilever (Lever Bros., Lipton, Cutex, Pepsodent, etc.).  These twenty-five corporations have nearly five million employees throughout the world.

        The trend towards a stateless reshaping of the world is the result of the natural evolution of business.  No organized conspiracy is necessary to explain the collapse of national interests.  The meganationals seek only the cheapest labor and highest profit anywhere they can find it.  They owe loyalty to no one.



Connections: New Ways of Working in the Networked Organization

by Lee Sproull and Sara Kiesler (MIT Press)

Reviewed by Dennis William Hauck


        The latest phase of the computer revolution is networking, the connecting of computer operators with other operators within the same organization and beyond. But what is a network — really? A network is not just computers tied together. It is the living, active exchange of ideas through electronic mail, bulletin boards, data bases, distribution lists, and on-line conferences. Teams that use a computer network to communicate and access data have fewer time-consuming meetings and induce greater contributions from their members. This is despite the fact that team members are often physically dispersed and have different responsibilities.

        Networks not only cross space and time; they also can cross hierarchical and departmental barriers. A network literally "brings people together" in a way much more efficient and less costly than traditional gab-fests, conferences, and meetings, because the topic is the only thing that matters when you are on-line. No one cares about how you are dressed, how much money you are making, the color of your skin, or even whether you have a cold or hangover. All they care about is your input. That focusing of time and energy is the real advantage of computer networking over more traditional operating procedures.

        Both the authors of this book are management professors who have spent the last eight years studying the impact of computers on organizations. Connections is a popular distillation of their work, which has been published in academic journals. They discovered that computer-based communication is proving more significant than the main-frame revolution of thirty years ago and the personal-computer revolution of ten years ago. This is because networking is impacting the most critical aspect of any organization: whether and how people communicate. Computer-based communication is alleviating barriers, stimulating new ways of thinking, and creating new connections among people in all types of organizations.

        The book reviews the early history of networking and then focuses on several contemporary high-tech corporations, universities, and financial institutions, all of which were forerunners in computer-based communication. The authors also discuss the social effects people are likely to see as a result of these new technologies, as social and physical barriers come down and new forms of "electronic etiquette" come into being. They examine the dynamics of electronic conferences as opposed to face-to-face meetings and show how the isolation of physically and socially disadvantaged groups can be reduced by networking. Finally, the authors foresee the long-range changes that we can expect to see in organizational structures as networking grows.

        The authors introduce a two-tier framework for thinking about technology changes in organizations which helps keep things in perspective. The effects of a new technology on any organization take place on two levels. The first level is efficiency. It is the reason most modern organizations are implementing computer communication networks. The second level is the social system. That is, the effects on how people spend their time and what they know and care about. Historically, organizations emphasize the efficiency effects and underestimate the effects on the social system. Managers deploy network applications to realize efficiency gains, such as reduced time for completed transactions or to eliminate duplication of paperwork. These were the motives behind the extensive networking of California's Department of Motor Vehicles.

        However, before long, changes are felt on the level of the organization's social system. People, as well as programs and databases, become resources on a network. The real payoffs and dilemmas of networking surface only after managers begin to look at how the technology affects the way people think and work together. The phenomena of electronic mail alone has profound effects on patterns of attention, social contact, and interdependencies. In many modern organizations, whoever networks best becomes the most successful. In tomorrow's world the old cliché, "It's not what you know but who you know," will read: "It's not what you know but how you know."

        Managers should be able to use this book to help shape their vision of a new communication environment and make the policy decisions necessary to carry out that vision. The book also alerts managers to some of the problems of networking, especially the less obvious impact on the organization's social systems. Increased information exchange can pose serious problems of authority, control, and influence, and without appropriate measures, the goals of management can suffer. The potential for what the author's call "deviation-amplifying change," the unnoticed crack that can split the boulder, is a real danger with any new technology, especially if we focus on only one level of change. This book will help those managers implementing computer communication to watch out for those tiny cracks in the system.



The New Management: Democracy and Enterprise Are Transforming Organizations

By William Halal ( Berrett-Koehler, San Francisco)

Reviewed by Dennis William Hauck


        In an attempt to simplify the bewildering changes taking place in management philosophy in the last twenty years, the author of this book has identified two general forces that seem responsible. According William Halal, professor of management at George Washington University, the two recurrent themes of democracy and enterprise are transforming management. Organizations are becoming changing clusters of entrepreneurial units working together to form “internal markets,” while this diversity is being integrated into a “corporate community” that unites the interests of workers, clients, investors, business partners, and the public.

        Halal argues that this transition to the New Management style is inevitable because it is being driven not by altruism or even good leadership but by the relentless advances of global competition and the Information Revolution. Only small entrepreneurial teams operating from the bottom-up can master today’s exploding complexity, and unlike previous views of battle-to-the death competition, the knowledge-based economy has made cooperation a competitive advantage. Unlike other books which focus on quick fixes, this book takes the long view toward more fundamental solutions to the massive changes that will confront all types of institutions as the transition to a knowledge-based society continues into the next century.

        California State supervisors are very much part of this transition. The emerging role of state government is to provide a cooperative infrastructure that supports sound economic growth. As a global economy enables firms to locate anywhere, local governments are under increasing pressure to attract responsible business formation by providing appropriate taxation, information superhighways, minimal regulations, access to advanced technology, educated workers, product markets, and a social amenities. The need for both enterprise and state support is encouraging a new relationship between these pivotal institutions, which is just the crest of the wave of business-government partnerships. Governments are eager to help business rejuvenate their economies, and business can only thrive in healthy societies. This emerging form of economic cooperation is not altruism but mutual self-interest that benefits all parties. Of course, state and local governments cannot just give away the store to businesses because they represent the interests of all citizens. “The government can’t do it by itself,” noted Ohio governor George Voinovich. “The private sector has to get involved too.”

        The most likely scenario for maintaining social order in a complex, changing, decentralized global economy is through cultivating community among local businesses and institutions. This new paradigm is difficult for many managers to accept because they have traditionally view corporations as adversaries in the fight to regulate competition, levy taxes, and save the environment. Only a leading edge of progressive managers is adopting these innovations, especially the idea of a corporate-state community. Yet this is the coming wave of change. The revolutionary economic forces at work in the world and today’s technological tidal wave are causing a global upheaval. Information technology exerts a force as revolutionary as that of industrial technology two hundred years ago. So, the current Information Revolution requires free enterprise to manage a rising tide of complexity, while economic cooperation is also necessary to unite this complexity into productive communities. Driven by those two demands, managers around the globe are transforming corporations and governments into the same form of entrepreneurial, collaborative institutions needed to maintain a civilized though turbulent world.

        How can managers handle the coming changes and power shifts? The way is not through traditional methods of using authority but by drawing out the talents and participation of others. However, the new demands for sharing power are likely to prove emotionally volatile to many managers. The author likens this problem of the “formal” versus the “informal” organization to the “conscious” and “unconscious” levels of human thought. From a systems perspective, both organizations and individuals manifest outward behavior that seems rational. For most of us, the conscious level of thought seems fairly coherent, but beneath the surface of the comfortable assumptions of both systems lies a sea of chaotic energy. This unconscious level of thought comprises a hidden domain of turbulent, primal forces. 

        In the words of the author: “The informal organization is the unofficial, hidden, and somewhat zany way organizations actually behave below the surface: the bootlegged jobs and “skunk works,” unofficial leaders, the grapevine and all the other natural, raw behavior that emerges spontaneously within any social system. Although managers know that informal activity goes on underground, today’s power shift is causing the informal level to surface. As authoritarian control yields to participation, the informal organization rises to challenge the formal system. The saving feature is that this rise of the informal organization also presents a vast new source of creative energy. In fact, this union of formal and informal organizations is what makes the New Management ‘organic.’ The new paradigm puts people at the center of the universe.”



They Shoot Managers Don’t They? ¾ Managing Yourself and Leading Others in a Changing World

by Terry Paulson (Ten Speed Press)

Reviewed by Dennis William Hauck


        In this insightful little book, psychologist and management specialist Terry Paulson presents some down-to-earth and people-oriented techniques any manager can use to improve morale and create an empowered team of employees by finding “that elusive middle ground ¾ somewhere between doormat and steamroller.” Most managers would agree that in today’s tough economic climate, supervisory personnel need to do more than just control operations and avert criticism. They need to introduce significant changes in the workplace while trying to minimize conflict. It is a modern day juggling act which leaves many managers wishing they had taken that early retirement.

        “In this time of rapid change,” says the author in his introduction to the book, “conflict is built into the very fabric of most of our companies and civic institutions. Rarely do you hear any talk these days about conflict resolution; it’s conflict management now. If you’ve ever felt that some people in your organization were put there for the express purpose of frustrating you, it’s probably true. Do they really shoot managers? Not legally, but it sure feels that way for managers caught in the middle of change. Checks and balances are built in to maintain the tensions between change and the status quo, between cost containment and revenue expansion, between being creative and losing focus. Conflict can sap the morale of an organization, or it can be an asset. Properly managed, it can help set the stage for challenge and change. It can inspire creativity, raise alternative solutions, redirect efforts, clarify goals and expectations, and eliminate unnecessary work. It can energize people, provide them with a more positive group identity, and increase trust within an organization. In short, positively directed conflict can work for you in a changing world.”

        Unless you can manage conflict successfully you will quickly find yourself in a no-win situation in today’s organization. Surprisingly, the place to start conflict management is within yourself. The first step is to see through the myth of the perfect manager. There is no such animal. No one gives one-hundred percent perfect performance every time. The only place such perfection exists is in management texts and training videos.

        Another myth that must be overcome by today’s manager is the idea that there are always winners and losers in every situation. We tend to think of winners as someone who never loses and a loser as someone who never wins. In fact, winners win and lose more frequently because stay in the game and ride out the ups and downs of eventual victory. Everyone has bad days; everyone makes mistakes. The trick is to learn from them and carry on, rather than labeling yourself or an employee a “loser.” 

        Such a perspective allows us to create genuine confidence in ourselves and our abilities, rather than being crushed when things go wrong. Unfortunately, most managers are ineffective in maintaining self-confidence, yet nowhere is self-confidence more important than in leading others. If we doubt ourselves, everyday conflict becomes a never-ending cycle of avoidance, retreat, and doubt. We establish “comfort zones” from which we emerge to confront problems only if we are dragged out kicking and screaming. Obviously, there is little chance that we can establish an environment in which others can motivate themselves if we are not effective in motivating ourselves.

        The biggest test of any manager’s confidence usually comes from a problem employee. Often such employees feel trapped in their jobs; for one reason or another they cannot afford to quit. Perhaps a lateral placement in the organization would give him or her a new perspective. If the problem is motivation and not simply incompetence, counseling through the human resources department might be the solution. Another alternative to termination is a “decision-making leave,” in which the employee is given a specific number of days off to reflect on his situation and decide if he or she really wants to leave or stay. If he opts to stay, then he must agree to own up to the expectations of the organization.

        The author has some good advice for managers who find themselves in such situations. Never forget that the caring manager who confronts and challenges employees is not always liked. The manager who tries to balance understanding and accountability must expect frustration and disappointment as necessary, though temporary, by-products. A problem faced by most “nice” managers is that they need to be liked, and persistent complainers can shake their administrative resolve. Managers with a high need for the constant approval of their workers, seldom make good bosses. They tend to make exceptions for the negative and vocal few at the expense of the hard-working many. Bending the rules for difficult people sends the message that what pays off is not work, but complaints. 



Developing Policies That Work

by Jonathan Adams III (Business One Irwin)

Reviewed by Dennis William Hauck


        Everyone agrees that today’s organizations need policies that are both efficient and flexible, but the eternal conflict between efficiency and control versus flexibility and responsiveness often creates management deadlock and stops all progress.

        Policies are designed to transform management’s vision into reality, and this book is a complete guide to developing, maintaining, enforcing, and changing policy. It even contains outlines of hundreds of policies that every organization should consider implementing in such areas as public opinion, accounting, and human resources. The reader evaluates the policy outlines by determining if his organization needs new policies addressing specific issues. For instance, under Human Resources Conduct are suggestions for policies about employee-initiated collections and use of organizational property, as well as the standard policies on drug use and sexual harassment.

        The point is that organizations should not arrange policies around things that are subject to change, such as the structure of the organization or the prevailing importance of certain issues. In order to work in the long run, policies must be based on objective principles and established cycles. 

This book also attempts to show the reader how to answer questions about existing policies and procedures, ensure that they meet the needs of management, and make policies more effective if they are not accomplishing goals. In order to evaluate the relevance and effectiveness of existing policies, the author provides a Policy Checklist of questions designed to stimulate insight and identify areas that need to be corrected.

Determining the place of policies in the organization is the first step of this evaluation. Does the policy-making process help identify and solve the issues that are critical to the organization’s success? Do policies focus on what is really important? Why do current policies ask for what they ask for? Are the goals of policies there because there is an external requirement such as legal statutes or are they there because they represent the goals of higher management? Do the policies cover issues where lack of standards creates the greatest amount of risk? Do the policies consistently lead to reasonable answers that make sense to everyone involved?

Finding the constituencies of policies is the second part of the Policy Checklist. Are the issues addressed those most important to management? Has the need for each policy been validated by someone who is not a direct beneficiary? Do the current policies lead to customer satisfaction with the organization? Is it clear to whom the policies are attempting to communicate? How do policy implementors feel about the policies they enforce?

The third part is examining the policy process itself. Is the process for developing and changing policies clearly defined? How does management become aware of when it is necessary to make an exception of policy? How are ineffective policies identified? How easily and at what cost does the organization implement policies? Are the roles of policy sponsors, developers, and supervisors clearly defined and understood?

        The final phase of the Policy Checklist is identifying the attributes of present policies. How clearly do the policies communicate their goals? How responsive are the policies to the organizational environment? What is the balance between centralization (specific policies) and decentralization (general policies) of authority? Is the degree of control proportional to the importance of the issue? How closely or loosely are the policies to be followed? Is conformance to policies measurable?

        Of course, the Policy Checklist is only as effective as the honesty with which it is implemented. In following up answers to the questions, it is necessary to examine the basis for the answers and determine whether they are supported by objective evidence. The crucial question is whether top management and the policy implementors agree on the assessments. If not, it is time to take a hard look at the policy structure of the organization.

        A major principle of policy administration is that the policy implementors are critical to the success of the policies. Policy implementors, as much as policy sponsors and reviewers, are the real audience for policies. In fact, policies should exist which make the job of implementation easier.

        The difference between policies that make an organization more effective and those that only serve the interests of those who develop them is the attitude of those directly responsible for the policies. If policy administrators follow the principles of policy administration and have a strong orientation toward service to the organization’s constituencies and customers, it is likely that the policies support the needs of the entire department or organization. Policy administrators must view policy implementors as their customers, just as they should also view policy sponsors as customers.   



The Reengineering Alternative: A Plan for Making Your Current Culture Work

by William Schneider (Irwin Publishing, Burr Ridge, Illinois)

Reviewed by Dennis William Hauck


        Many managers are intimidated by the reengineering alternative, and for them, this book is good news. According to business consultant William Schneider, the reengineering of government and corporations to prepare for the harsh realities of the 21st century does not necessarily mean that managers must completely overhaul their operations or blindly imitate other organizations. In many cases, stubborn implementation of reengineering principles have lead to disaster.

        Based on the idea that no organization is the same, the author defines four basic types of organizational “cultures” and the management behavior associated with each of them. He then challenges managers to use the basic models as guides for looking within their own organizations, to seek their own unique inherent strengths and weaknesses.

An organizational culture is that special blend of tradition, leadership goals, and politics that define each corporate and governmental entity. The foundation of each core culture rests on what each organization focuses on and how each makes decisions. Each culture is uniquely defined from what it pays attention to and how it makes decisions. Understanding the culture of the organization is the first, crucial step in successfully transforming it.

The first type of organizational culture is the Control Culture. The author describes it as a “actuality-impersonal” culture which devotes the most attention to concrete, tangible reality, actual experience, and matters of practicality. Its decision-making process is analytically detached, formula-oriented, and prescriptive. The driving force behind this type of culture is a simple management process that emphasizes setting targets, planning carefully, and following up closely. The author likens it to the impersonal work ethic of a surgeon.

The second type of core culture is the Collaboration Culture, which the author describes as “actuality-personal.” Like the Control Culture, this type of culture pays a great deal of attention to the hard facts of tangible reality, emphasizing experience and matters of utility. However, its decision-making process is people-driven, organic, and informal. It relies on the synergy created between employees to handle the demands on the organization. It is most like the cooperative work ethic of nurses.

The third type of culture is the Competence Culture, which is a “possibility-impersonal” culture. This type of organization pays most attention to potentiality, imagined alternatives, theoretical considerations, and creative options. Its decision-making process is analytically detached, formula-oriented, and prescriptive. Anticipated outcomes or hypotheses drive this type of organization. The best example of this kind of work ethic is the research scientist. 

 The final type of organizational culture is the Cultivation Culture. The author describes it as “possibility-personal.” It pays attention to potentiality, aspirations, inspirations, and creative options. Its decision-making process is people-driven, organic, open-minded, and essentially subjective. An example of this type of work ethic is the minister or priest.

The concepts of the four basic cultures lead directly to a set of implications for organizational development, leadership  structuring, individual change, and numerous other facets of management. After determining the core identity of your organization (the author provides a questionnaire to aid in this regard), the idea is to try to capture the strengths of your culture and use them as the essential building blocks of change. This statement of cultural strengths serves as a guide for moving your organization into the future.

The next step is to determine your culture’s level of integration, which is the degree of coherence between the organizational elements. Those elements might be a department, a team, or just individuals. The goal is to find the extent to which the elements of your organization are aligned with each other. This is a measure of the degree of focus in your culture, a measure of its relative “wholeness.”

   The final step in the pursuit of increased organizational effectiveness is to work on the degree of balance within your organization. Balance is the extent to which your culture is operating in a state of equilibrium. An out-of-balance culture is doomed to failure and must be imbued with elements from opposite cultures to survive. For instance, a Cultivation Culture can rely too heavily on subjective decision-making, but it can be brought back to a reality-based culture by adding some of the elements of the Control Culture. 

The author’s goal in taking this new perspective is to help managers develop a realistic strategy based on each organization’s inherent strengths and weaknesses and tailored to individual needs and culture. This means identifying the roots of organizational conflict, so managers can treat and minimize problems, not just address the symptoms. It means anticipating and countering bureaucratic and human resistance to change by successfully building, maintaining, or merging diverse organizational cultures. 

        This book shifts the reengineering emphasis from mere implementation of new managerial structures to reaching an understanding of each organization’s uniqueness before attempting change. Only true insight, not imitation, will sustain an organization in today’s increasingly competitive economic environment.



The 21st Century Organization: Reinventing Through Reengineering

by Warren Bennis and Michael Mische (Pfeiffer & Co.)

Reviewed by Dennis William Hauck


        It is becoming more and more obvious that most organizations that evolved during the 1980s and 1990s will not survive into the next century unless they reinvent themselves. Whether giant corporations, private companies, or government entities, they must become leaner, more competitive, more responsive, and more aware of their clients’ needs to survive in the next century. With that reality in sight, the authors of this book have attempted to create a reengineering resource that can be quickly and easily adapted to industrial giants, government branches, and small service providers alike.

Dr. Warren Bennis, a distinguished professor at the University of Southern California, was one of the pioneers of the reinvention doctrine. In 1966, his seminal essay, “The Coming Death of Bureaucracy,” insisted that old organizational structures were doomed and that “adaptive, rapidly changing temporary systems” would be required to do tomorrow’s work. Those few words describe the essence of reengineering better than whole volumes that have been written since. Likewise, Michael Mische, with more than sixteen years of consulting experience, including leading many successful reengineering efforts, has mastered the intricacies of transformation and information systems management and their critical role in the century to come.

By examining how such corporate giants as Hewlett-Packard, Ford Motor Company, and General Electric have successfully reinvented themselves, the authors developed sound models for other organizations striving to duplicate their achievements. The 21st Century Organization examines why reengineering is necessary, when is the right time to begin the process, who is best equipped to fill leadership roles, what impact reengineering has on the organization as a whole, where common pitfalls are found, and how employees will react.

The author’s model is divided into five phases, the first of which is called “Visioning and Setting Goals.” This involves creating a vision for the future by ascertaining the capabilities of competing organizations and identifying the environmental influences and drivers. It requires an honest assessment of the organization’s needs, constraints, and capabilities, while determining the level of risk and complexity associated with the reengineering effort. In simplest terms, vision is the articulation of the image, values, direction, and goals that will guide the future of the organization.

Phase Two is called “Benchmarking and Defining Success” and involves intensive work in acquiring information about  practices within and outside the organization. The goal is to develop an understanding of the processes to be reengineered and to establish performance targets for each of those processes. At the same time, the reengineering team selects and improves on the best existing practices, determines what is and is not possible, and sets meaningful parameters for the new processes.

Benchmarking includes an activity known as “baselining,” which measuring and documenting the flow of activity in a process as that process is currently performed within the organization during reengineering. Baselining allows the charting of progress and identifies goals for improvement. It is not uncommon for successful reengineering to achieve improvements of two, three, or five times the baseline level of a process.

Phase Three, “Innovating Processes,” is the essence of organizational reinvention. The members of the reengineering team create new processes, each of which reduces the time needed to complete the existing process, eliminates low-value work, increases productivity, and achieves the results planned during Phase Two. This involves conceptualizing, mapping, testing, and refining the prototype process and eventually substituting the new process for the old one.

In Phase Four, “Transforming the Organization,” the old organization is transformed into the reengineered enterprise. The reengineering team must ensure that all organizational operations are consistent with the processes that have been reengineered. The team must also foster empowerment so that employees are able to function effectively in the new organization and make sure that all employees are prepared and willing to carry out the reengineered processes. This involves sharing information about the transformation, writing transition schedules, establishing new training programs, and establishing a method for conveying information and feedback about the reengineering effort throughout the organization.

“Monitoring the Reengineered Processes” is the catch phrase for Phase Five. The reengineered processes are evaluated and adjusted as necessary, and what has been learned is extended to other organizational areas and practices. Hopefully, by this time, the organization has acquired the skills necessary to set up and run an ongoing program for improving on reengineered processes, monitoring success, and acting on new opportunities for improvement. 



A Little Bit At A Time: Secrets of Productive Quality

by Russell O. Wright (Ten Speed Press, Berkeley, CA.)

Reviewed by Dennis William Hauck


        With the everyday work world revolving around cost and scheduling, it’s difficult for managers to remember that it is the players and not the system that makes an organization soar to excellence. But with government and corporate downsizing now a mainstay of American management philosophy, these new trends may actually be detrimental to your departmental or organizational health.

        This new book stresses a simple way to achieve results and success in quality and productivity without sacrificing people. Russell Wright’s philosophy, based on his many years as an engineering executive, manager, and consultant, is grounded on the idea that managers can reach their ultimate goals through consistent small improvements over time. Of course, good management principles still apply. Workers must learn they are expected to create ways to continually improve the system. People must feel permitted to contribute as well as expected to contribute. Managers must hire the right people regardless of cost, review their department’s progress regularly by asking the right questions, and regard constructive complaining as a valuable tool. Given those basic principles, this book will teach you as a manager to start thinking in terms of function not program, process not product.

        The key to Russell’s program is that doing things a little bit at a time will eventually make large inroads. Getting and keeping only the best people, making clear to them what needs to be done, letting them do it and creating the environment for it will eventually get you there. Working on difficult tasks, “checking in” with workers — even 15 minutes a day — has the highest probability of success. However difficult it is to create personal trust, making the effort is the cornerstone of management success. According to the author: “Trust is the only elixir that works.” And trust can be built only one brick at a time.

        While the framework for action in this book is the idea of “a little bit at a time,” the guideline is much harder to put into practice than to say. This approach works only if pursued all the time and takes the self-control to persist at something every day, the courage to plan for results over a long period of time, and the knowledge and intelligence to work steadily at defining everyone’s job in terms of what they control. It is a cumulative process in which each small step makes it easier to go to the next. The courage and foresight to plan for changes over the long term is embodied into the author’s simple, five point program.

        First: Spend fifteen minutes a day doing something on a project. Any amount of effort is worthwhile if it is done all the time. Spending only fifteen minutes a day doing something toward a goal translates into substantial results over time. Not doing anything today because there’s not enough time often results in not doing anything for months — one day at a time.

        Second: Learn by doing. Find the key issues by getting started and doing something — the key issues often turn our to be much different from what was thought before beginning. No amount of practice or planning can teach as much as actually doing something.

        Third: Do now what can be done now. Start simple. Waiting to discover the “grand design” prevents you from starting and learning.

        Fourth: Implement all improvements no matter how small. It is the cumulative effect of many small increments of compound interest that makes an IRA grow. You never know which incremental improvements in a system may lead to solutions to other problems thought to be unrelated.

        Fifth: Persist and you will win. The process has no end. All the time means all the time. That is what makes everything else work. The person who persists will win.

        The manager’s job is to lead, although sometimes, through whatever circumstances, he can only lead in small steps. Only through persistence can he achieve his goals. In the long run, that means focusing on getting and keeping only the best people, because people are the most important variable in determining which organizations succeed and which fail. Furthermore, he must make clear to them what needs to be done — defining individual jobs in terms of good performance and expected results. Finally, the manager must make it possible for his employees to do their jobs and create conditions in which they can do what needs to be done.

        These are simple ideas and many managers have come to the same conclusions over the years, stated in a variety of ways. The consistency with which these conslcusions have been reached suggests strongly that they are the right conclusions. It is not necessary to know the “grand design” or even see the “big picture” because often there just isn’t any. As a manager all you can do is define what you are trying to do and focus on how to do it.



Common Sense Supervision: A Handbook for Success as a Supervisor

by Roger Fulton (Ten Speed Press)

Reviewed by Dennis William Hauck


        Common Sense Supervision is intended as a practical manual for both new and experienced supervisors. Written in a clear, no-nonsense style, this little book is a collection of short anecdotes and quotations outlining the responsibilities of a supervisor and showing how to make the workday work.

        The material is organized into chapters that serve to orient the supervisor in the work environment by showing what is expected of him and what he can expect from the organization. There are also sections on how to win respect, confidence, and loyalty, as well as how to handle problems with both subordinates and higher-ups. Appendices outline the twenty-five traits of excellent supervisors and poor supervisors, and list the twenty-five most common mistakes made by new supervisors.   

        The first entry in the first chapter “You and the Organization” gives a good idea of what being a supervisor means. As a supervisor, you are responsible for the activities and performance of others, not just for your own performance. Your job is now less defined with more gray areas. Your time will be at a premium. Initially, you feel that there are barely enough hours in the day to get everything done. You will tend to take the job home with you more ¾ not just paperwork, but the problems of the day as well. You must learn to be a buffer between your own supervisors and you employees. Both sides have their own goals, desires and needs. Your job is to keep them both reasonably happy and satisfied while keeping yourself happy and satisfied as well.

        Advice on how to handle and avoid the everyday problems of supervision is given later in the book. The basic message is to ensure that goals are understood by everyone. Tell your employees what you want, then have them tell you what you want. Follow up with written orders, then check to see that everyone understands the written orders. Check the progress being made on the project periodically to be sure it is being done according to the intent of your directives. Communication is an inexact art. However, making the communication as clear as possible will enhance performance and minimize errors.

        At the same time, it is just as important to keep your  supervisor informed! Nothing could be more embarrassing than your supervisor’s supervisor asking for the status of a particular job or problem when your supervisor has no idea what is going on. Periodically keep your supervisor informed of the status of your work or investigation into a problem area and your preliminary findings even if he or she never asks for them. When you have completed the project or your investigation has corrected the problem and you have formulated recommendations for preventing future occurrences, contact your supervisor immediately. He or she will appreciate your follow-up work and will know when there is no longer need for action on their part.

        The last entry in the book tackles a problem faced by all managers in all organizations. With increased responsibility, we should get increased time to carry out those responsibilities ¾ but we don’t! You only have three options. First, use what time you do have to its maximum efficiency, carefully balancing between administration, supervision and time for your people. A difficult task, but then it goes with the title you’ve earned. The second option is to constantly be behind, late with deadlines, always behind on paperwork and not knowing what is going on. Of course if you choose this option, you will be a constant nervous wreck and probably not have a job very long.

        The third option in carrying out your increased responsibilities as a supervisor is to significantly expand your workday. Work twelve to fourteen hours every day ¾ six days a week and take work home every night ¾ and some for Sunday, too. With this option, you’ll keep your job, but probably lose your spouse, family, personal identity and have a heart attack at a young age.

        Obviously you prefer Option One ¾ becoming more efficient. But even with this option, there will be times when you have to put in long days or take work home, but if you plan your time efficiently, they will be few and far between.



The Team Trainer: Winning Tools and Tactics for Successful Workouts

By William Gordon, et al. (Irwin Publishing)

Reviewed by Dennis William Hauck


        It took a team of authors to write this workbook on teams. William Gordon is a Purdue University professor who specializes in quality improvement in government agencies; Erica Nagel has her master’s degree in organizational communication and her focus is resistance to change in organizations. Scott Myers got his doctorate from Kent State and researches mentor-protégé relationships and communication climates in businesses. Carole Barbato is an assistant professor at Kent State and has had a long-time interest in the study of small group behavior and decision making.

        All these experts have helped make this book an important contribution to practical team training. With the continuing popularity of work force teams, many organizations and departments have implemented the concept of teams without much forethought and are discovering that team skills do not come naturally. Managers are finding that transforming work groups into high-performance teams takes more than wishful rhetoric. This book is a down-to-earth handbook for team leaders and members seeking to build a successful team. It is the authors’ expressed goal to keep “team” from becoming a dirty four-letter word in the workplace.

        The Team Trainer has sections on the do’s and don’ts of team-based quality improvement, gaining knowledge from early on-site team experiments, and how to have fun in workout skill sessions and drills. It also provides guidelines for team-shared leadership, while forewarning of the frustrations teams encounter. Clear-cut examples show how grass-roots democracy functions in an organization, allowing the reader to acquire at new appreciation for the role of voice in the workplace. The reader can even personalize the book by adding his or her own observations and thoughts.

        One example of the workouts included in this book is a 45-minute exercise called “What Is a System?” The goal is to acquaint participants with the elements of a system operating within their own organization. The only materials needed are paper and pencils. The trainer gives each participant a piece of paper and instructs them to fold the paper in half twice, so that there are four squares. The four square sections are labeled “Objects,” “Attributes,” “Relationships,” and “Environment.”

        Objects are the units of a system, namely, the employees who make up the organization. The focus is on the  actual people who hold positions in the organization. Attributes are the qualities or characteristics of these “objects.” These include the employee’s personality and physical traits, as well as their job descriptions and responsibilities. The idea is that we need to know everything we can about our “teammates.” Relationships are the essential part of any system. These are the practical and personal relationships between employees that result as a function of the organization’s internal structure. Our interpersonal relationships at work are not a result of our own choice but are usually based on a rigid hierarchy imposed by the organization. Environment is that hierarchy as it applies to the everyday performance of our jobs. Environment also includes interactions with other departments and organizations, clients, vendors, and, of course, other teams. 

The trainer then asks the group to fill in the sections with responses that are reflective of their own department or division, generating as many responses as possible. After ten minutes, three participants are asked to share their answers, and the rest of the participants are allowed to comment on the material.

        The meeting is then divided into groups of four members each, and the same exercise is repeated on a team basis. One sheet of paper is provided for each team, which is folded and labeled as above. The team members work together to fill in the four sections.

After fifteen minutes, the trainer asks everyone to stop the task and reflect on the question, “How can our organization engage in team building based on the various elements of already established systems?” Each team is told to work out a consensus response to this question within a ten-minute time limit. After the time limit expires, each team presents its answer, and the trainer opens up the floor for any comments or questions.

        If everything goes well, the exercise will generate interest and practical insight into the organization’s underlying systems and overall potential for team building. Debriefing consists of posing questions designed to bring out new viewpoints and basic information about existing systems. What characteristics on the lists contribute to teamness? What characteristics on the lists inhibit teamness? What characteristics do you share in common with other group members regarding the system elements? What changes need to occur in order for us to work as a team in our individual departments and the organization as a whole?    



The Professional Thinker: America's New Management Priority

by Ben Heirs (Dodd, Mead & Co.)

Reviewed by Dennis William Hauck


          Manager's are professional thinkers. While most people look at scientists or mathematicians as professional thinkers and would not consider a manager in the same category, the truth is that most managers spend their time concentrating on complex problems, trying to deal with uncertainty and sudden change. But the thought processes followed by managers are not the same as those used by scientists. The kind of thinking that a professional manager must use and perfect is decision-thinking. This book attempts to define this unique human thinking method and help managers improve their own decision-thinking skills.

        Careful and creative thought is a prerequisite for effective action in every organization. Managers are thinkers first, doers second — although they must be equally competent at both. Taking action is really only the final stage of a long process of decision-thinking. The author, a senior management consultant to several of the world's largest corporations, formulated a model of the decision-thinking process to help executives analyze and better their performance. His model consists of four distinct stages, which are combined in a single process that can be used to solve an immediate problem or achieve long-term goals.

        The first stage of the process involves formulating a question that addresses the issue in the clearest possible way, without sacrificing any of its subtlety or complexity, and then gathering relevant information. It is the manager's first thinking responsibility to make certain that his organization is asking and seeking to answer the right questions. That responsibility includes being aware of oversimplification and avoid looking at a problem from only one perspective before formulating a question. At this stage it is important to spell-out assumptions, not leave them implicit. Short-term priorities often cause long-term problems, and managers are often blinded by concentrating on just one bottom line.

        The second stage requires creating alternative answers to that question, trying to find the most effective range solutions. Alternatives are the raw material of decisions, but good alternatives can only emerge where diversity of thought, free debate, a lot of thinking out loud and lateral thinking are all encouraged. Impatience and lack of tolerance at this stage is the most frequent cause of bad decisions. People need to be motivated to be creative and put forward their ideas. Few people are willing to expose their "brainchildren" to a hostile environment.

        The third stage is evaluating the alternatives that emerge from the previous stage by thinking through the implications and predicting the likely, as well as the possible, consequences. This is not only to provide the basis for making a choice in the next stage, but also to allow for hedging and contingency plans to be created in case the final choice proves to be wholly or partially wrong. This stage is the difficult, imprecise, and mentally exhausting. But it must not be neglected. Managers must invest real time and energy to simulating the effects of each alternative. Simulation not only allows managers to evaluate the alternatives, one against the other, it identifies possible dangers and gives the opportunity to devise contingencies.

        The fourth stage is making the decision. Here, finally, the manager comes to the traditional decision-making skills of weighing up the probabilities of succeeding with each alternative, measuring the balance between risk and reward offered by each of them, then using his judgment to decide upon which alternative to act. At this stage the manager must be sure that the right question has been asked in the most complete and richest way. He must be certain that all credible alternatives have been considered and that the possible consequences of each alternative has been imagined and thought through. He must foresee what contingencies are required and provide for them. Before taking any course of action, the manger must estimate the possibility that it will be successful and balance between the risk involved and the expected reward.

        No one stage is more important or more worthy of the manager's attention than any of the others, nor is the process a simple linear progression. The entire process may have to be repeated several times before a satisfactory conclusion can be reached. Properly managed, the decision-thinking process not only helps create the best decision, but also helps secure the support needed for effective implementation. Before a decision is reached, open-mindedness is vital; once it has been taken, the time for debate is over. As the author puts it: "When you think, think. When you act, act."



Tyranny of the Bottom Line

by Ralph Estes (Berrett-Koehler, San Francisco)

Reviewed by Dennis William Hauck


        Most California state supervisors are all too aware of the situation of which the title of this book speaks. Managers, at all levels of government and corporate organizations, are being held hostage to the tyranny of the bottom line. Massive layoffs can shatter careers and devastate lives, while those still employed live in constant fear. Planned attrition has reduced the workforce to its minimum, and those who do have jobs have seen their workload doubled. In this new business environment, managers are required to subordinate personal morality to an impersonal organizational culture. According to Ralph Estes, professor of business administration at the American University and cofounder of the Center for the Advancement of Public Policy in Washington, D.C., the original purpose of management has been subverted systematically perverted through an unbalanced focus on profit-and-loss in both the public and private sectors. 

        "I began to research this book," professor Estes explains, "because I saw too many people needlessly hurt by corporations, and I wondered if business had to be that way. Once I was testifying as an expert witness (in the Dalkon Shield lawsuit) involving a young woman who had died from toxic shock syndrome. Her husband's description of the unspeakable pain she suffered in her last days and hours was almost unbearable, for me and the jury. But what bothered me the most was the discovery that this woman suffered such agony because of an impersonal corporate decision, a decision that favored its bottom line over her life.

        "I saw honest, productive people turned out of their jobs in a spasm of corporate downsizing, many at an age when they would never again have a decent job, never earn a livable wage. And I asked again: are higher profits reason enough to produce human misery, broken families, even suicide? Is this the only way to run our businesses? Doing business ought to make us feel good. We ought to have a feeling of accomplishment ¾ providing goods and services that people need and seeing employees become friends and sharing in their success as they advance in the organization. There ought to be opportunities for everyone in the organization, from top to bottom, to experience self-satisfaction. Doing business ought to be fun. Today it is usually the opposite."

        Ironically, managers are not responsible for this situation. But when their every action, every decision is driven by the tyranny of the bottom line, harm is often the result. In the final analysis, those who are responsible are the CEOs, shareholders, and legislators who have created our bottom-line mentality. Originally, government bureaus and corporations were chartered to do public good, to serve the public purpose. Not so anymore. That view was replaced in recent decades with a monomanical focus on profitability and budgetary constraint.

How can we change this situation? According to the author, change must come at the source of the problem, in the mechanism by which organizations are operated. Most management decisions are made with the performance measurement system, the "scorecard," in mind. Today, this scorecard reflects only bottom-line profit or expenses. The measure of "profit" now in use does not reflect profit to employees and clients, nor does it reflect profit to the organization as a whole. How does an organization profit? An organizations greatest intangible asset is its integrity and trueness to purpose. Organizations become stronger in the eyes of employees and the public when they do the public good. This is a genuine plus that does not turn up on the balance sheet. There are many other benefits to stakeholders ¾ such as wages and benefits for workers, pollution-control measures, safety devices, warranties and service, interest payments to lenders and taxes to communities ¾ that appear only as "bad" expenses in the curious accounting of today's organizations.

        To restore organizations to their original, public interest function, the yardstick by which they are measured must be made to include the effects on all stakeholders ¾ not just capital shareholders or legislators. With an appropriate yardstick managers will become accountable to everyone with a stake in their decisions. Change the organizational performance evaluation system and you change organizational behavior. Introduce a valid, relevant system and your bring about actions and decisions more in line with the overall goals of the enterprise. These goals are often forcefully presented by managers but are generally ignored because they are not reflected in the profit and loss statement.



Redesigning Government in a Weightless World

by Diane Coyle (MIT Press)

Reviewed by Dennis William Hauck


        In her new book, The Weightless World, management consultant Diane Coyle maps a business environment that has been turned upside down by digital technology and global interests. How will our careers, businesses, and governments change in a world where "bytes" are the only currency and where the "goods" that shape our lives _ computer code, cyberspace commerce, and electronic communication _ literally have no weight?

        The author's answer to this perplexing state of affairs is the development of a new "politics of weightlessness" so that the electronic influence and economic benefits can be shared fairly. In an increasingly weightless world, with a dramatic increase in the scale and scope of uncertainty, markets play the primary role. In such a constantly changing economy, the role of government as a central regulator is no longer possible. When we cannot measure or monitor what is happening in the overall economy, or even where it is happening, the function of government as a regulator of markets is no longer relevant. The ancient opposition between state and market has to come to an end. In other words, the government's attitude must change from one of babysitting to one of teaching and facilitating. To the individual manager working within the government infrastructure, this new role means redefining attitudes about everyday supervision and approaches to responsibilities.    

          "In the economic sphere," the author summarizes, "the course of development has taken us down a path of increasingly weightless and dematerialized production. This means that for the first time there is no economy 'out there' either, no fixed framework of activity within which people have a finite set of choices to make. For, economic growth is no longer about growing more food or making more things, or about processing physical resources. It is becoming more about people performing a growing variety of services, having more ideas, being more creative or entertaining, designing goods to be more beautiful and useful. What is increasingly being produced are not material objects but signs and symbols. Growth is more or less what we imagine it to be."

        That this makes the world more unpredictable can be seen from the fact that we are not yet able to really measure or perhaps even define the weightless economy. The clear distinction between work and home, work and play, is vanishing. The uncertainty that results from the fact that the economy is increasingly the product of our skill and imagination, and cannot be defined in the familiar ways, is linked to another concept the author calls reflexivity. Reflexivity is the idea that the way we react to reality in turn alters the reality we are reacting to. Economists would call this "general equilibrium," the economic outcome where all the possible feedbacks and reactions between one person and another, one department and another, one company and another, have all been worked through. Unfortunately, it is impossible to say when this state of general equilibrium exists, never mind establish what it is like. That is why the concept of general equilibrium is not very widely invoked by economists.

        Weightless economies are above all reflexive economies. Consumers' choices between the services and goods immediately changes the range of choices available. Small, everyday decisions (such as what to watch on TV, what kind of savings account to open, what toy to buy a child) are swiftly analyzed (by the broadcaster or bank or manufacturer) and alter programming decisions or the design of new products. So, the economic value of production lies increasingly in the parts that are most about matching consumers' dreams and desires, that is, the "weightless" design or creative content. In this kind of economy, conventional economic management by state and national governments is irrelevant. The inherited welfare state, designed for an economy dominated by industrial jobs, is equally irrelevant.

        The clear conclusion is that in a weightless world, economic and even political decisions are bound to be widely dispersed. Government cannot control this kind of economy from a central authority. We must realize that government cannot remove the extensive economic uncertainties we face, and does not know any better than the rest of us what is really happening in the economy. It is time for both the public and government representatives to realize that the center, the government, does not have all the answers. In a world of constant change, we are lucky enough just to know the right questions. 



A Few Good Women: Breaking the Barriers to Top Management

by Jane White (Prentice Hall)

Reviewed by Dennis William Hauck


        This book tells the story of a dozen female executives who shattered the “glass ceiling” at their places of employment and ascended into the ranks of upper management. Among these women are: Martin Marietta’s Shirley Prutch, who had to resign and be hired back to win the respect and the position she deserved; Nancy Faunce of Eastman Kodak who went above her boss’ head to the company’s upper echelon; Loraine Binion of Levi Strauss who dealt with both racism and sexism on her way to the top; and Hewlett-Packard’s Sara Westendorf who counted on her sense of humor and insightful sarcasm to shame her male colleagues into accepting her as an equal.

        The “glass ceiling” is an invisible wall of assumption and prejudice that keeps women from moving into higher management positions in government and business. Only one-half of one-percent of today’s highest paid officers are women. In fact, there are currently only three female CEOs in the top one-thousand American companies. Although women make up more than half the workforce, they hold less than five-percent of the top management positions. A recent survey by Fortune Magazine found only nineteen women out of 4,012 people listed as the highest paid officers in American business.

        One of the main reasons that women are relegated to lesser positions is the assumption that they do not possess the necessary management skills. It is almost as if some men assume such skills can only be learned from competitive sports like football, or male-bonding rituals like fraternity initiations. Those same men explain the rise of a few women in organizations to their grasping of male leadership principles, or just the fact that they “work twice as hard as a man,” or that some women know how to stroke the egos of their bosses. The author calls this class of teacher’s pet employees “eraser-clappers.”

        But the “eraser-clappers” are also the group of female employees who do the greatest disservice to their sex. Often such employees are the ones that rise the fastest in organizations that believe creating quotas will solve the problem of too few women in top management. The “eraser-clappers” end up in higher positions but usually lack the skills required and thereby perpetuate the myth that women do not possess the right skills to survive at the top.

        On the other hand, some bosses tend to treat any women employees as surrogate wives. They still believe that a woman’s place is in the home and that women should feel some sort or guilt about working at all. But these management dinosaurs are slowly giving way to a new breed of boss who recognizes women as equals. The new breed of male manager also displays the exceptional courage required to change existing attitudes.

        Luckily, there is now a federal edict which mandates a change in those existing attitudes. In May 1990, the Supreme Court laid down its landmark Price Waterhouse Decision. The suit was brought against the accounting firm by management consultant Ann Hopkins. She showed that although she was doing her work at the company better than any man, she was bypassed when it came time for Price Waterhouse to add a new partner. The court ruled that the firm could no longer behave like a private club when it came time to select candidates for the elite inner circle of partners.

        The ruling gave confidence to millions of female workers across the country who faced similar attitude problems at their place of employment. Just a few weeks after the court decision, a female professor of medicine at Stanford University charged “gender insensitivity” on the part of her fellow surgeons at the university hospital. Her male colleagues called her “honey” in the operating room or made snide remarks about her “being on the rag.” In September 1991, also here in California, a female employee of Texaco was awarded $6.3 million in a sex discrimination suit. In October, a female partner sued the Baker & McKensie tax consulting firm with giving male partners more of the lucrative work assignments. She said her income fell sixty-four-percent in three years due to the sexist attitudes at her company. Dozens of similar lawsuits have been filed in the last four years.

        Within weeks of the landmark Supreme Court decision, federal Labor Secretary Elizabeth Dole declared that she intended to create and Equal Employment Opportunity enforcement mechanism for dealing with companies that were not promoting women to the top jobs. She called the action her “Glass Ceiling Initiative.” The Department of Labor began an active investigation into the hiring, training, rotational assignments, development programs, and reward structures in American companies to determine how senior management positions are filled and if women are being included in such opportunities.

        In her introduction to this book, the former Secretary of Labor warns: “In the next decade, fully two-thirds of new entrants into the workforce will be women. The bottom line is simple. If employers want to compete in today’s complex global market, then they can’t afford to discriminate. They can’t afford to ignore the needs of working women. Employers who do will simply lose out to those who don’t. And, in the final analysis, America will lose out.”



Working Women for the 21st Century

by Nelda LaTreef  (Williamson Publishing, Charlotte, Vermont)

Reviewed by Dennis William Hauck


        In this book, fifty women with successful careers in government, business, media, and the sciences talk about their lifestyles and the hurdles they had to overcome to achieve success. Forty of the women she interviewed for this book are married, and thirty-four of those have children. Only seven did not complete college, and most of those who did hold advanced degrees. But what is noteworthy about this remarkable group of women is that all of them have overcome gender discrimination to get where they are at.

        “There was discrimination even when I ran for national office,” admitted Geraldine Ferraro, who became the first female vice-presidential candidate on a major party ticket. “I mean, you tell me why people said genetically I wasn’t able to understand throw weights. Evidently, they thought genetically I wouldn’t be able to be the commander in chief if I were called upon to do so. I was constantly tested: I was tested on my knowledge, tested on my strength, tested on my roughness, tested on my emotional stability, tested on my psychology — that permeated the 1984 campaign. I hope that I did show people that women can grasp the issues that face this country.”

        Ferraro credits her success to two role models. One was her mother and the other was Eleanor Roosevelt.

        “I met Eleanor Roosevelt in 1961,” she recalled. “I was a new lawyer, new bride, and was so impressed by the woman. I had followed everything she had ever done. She could have sat down — because financially she was secure — and said to the rest of the world, ‘Let my husband do his thing, and let me relax and do nothing.’ She didn’t do that. From the time she was very young, she really participated. She continued caring about important issues in the world long after her husband was dead. She was a public figure — a public leader — in her own right, and I admired her tremendously.

        “My mother, my second role model, worked for everything she ever had. She came from a family that was very poor. She was unable to get a formal education that would have made her life  easier, but she took what life gave her, made the best of it, and made sure that her children had better. She gave us confidence and instilled in us the feeling that we could make a difference, not just for ourselves, but for others.”

        “There are times I still experience discrimination,” noted Senator Nancy Kassebaum, “but I never felt that should dwell on it because that takes up a lot of energy in a destructive sort of way. The important thing is to just go on and prove that you do understand the issues.”

        Kassebaum’s father was Kansas governor Alf Landon, who challenged Franklin D. Roosevelt’s bid for a second term and lost. One of her role models is also her mother, who supported her decision to run for the Senate in 1978. Kassebaum had just gone through a nasty divorce and wanted to take a new direction in her life, and both her mother and her mother-in-law supported her choices. But she met her other role models in books.

        “I’ve always enjoyed biographies,” she said, “and have been tremendously impressed with various people through history. Abigail Adams was one such person. Another person I think has shown extraordinary intellect, ability, and conviction is Helen Suzman, who was a member of Parliament and a leader of her party in South Africa for many years. She retired in 1990 and was an early leader against apartheid. I always greatly admired General George C. Marshall also. He was someone who I thought showed extraordinary devotion, dedication, and integrity in the service of his country.”

        Gail Wilensky, Administrator for the Department of Health and Human Services, does a remarkable job of juggling her career with her responsibilities to her husband and two children. Her greatest role model has always been her mother.

        “My mother was a very influential force in my life,” she said, “because she imparted a sense of demands: the demands that I place on myself, the expectations I have of myself, and the confidence to achieve what I want. She had a lot of impact on what I have been able to achieve. As a result I have tried very hard to serve, if not as a role model, at least as somebody whom younger women could come and talk to.”

        In fact, almost all the other women interviewed in the book mentioned their roles models as being their mothers. In most instances, their mothers were not in any position to act as mentors or assist in any material way in a business or professional setting. But still, they inspired their daughters to fulfill their highest aspirations. As an ever-growing number of women enter careers, it is their effect on their own daughters — and sons for that matter — which will probably have the greatest influence on future advancement opportunities for women.