R & D spend by organizations

Living in the US it's easy to forget that there is a world beyond its borders. I was reminded of this when I was rebuked (but in a kindly way) about the lack of examples from non-US companies in the stuff I'm currently writing. So I started rummaging around the webisphere for lists of non-US companies and came across a very interesting one on global R & D spend by industry sector compiled by the UK Government

What struck me as I read down the names was how many were US companies and how few from other countries. It was tempting to start a full analysis of the list but I resisted and just did a quick scan. It seemed that Japanese companies were second in R & D spend, followed by Scandinavian countries – but maybe I'm wrong and it was EU countries in the third slot.

What struck me as I read down the names was how many were US companies and how few from other countries. It was tempting to start a full analysis of the list but I resisted and just did a quick scan. It seemed that Japanese companies were second in R & D spend, followed by Scandinavian countries – but maybe I'm wrong and it was EU countries in the third slot.

I didn't see any company listed from Australia or New Zealand but then the wine industry didn't figure as one of the industry sectors. There was a sector "Beverages" which lists three companies PepsiCo (USA), Kirin (Japan), and Asahi Breweries (also Japan).

On PepsiCo, I read today (but in October's print edition) in Fast Company that Coca Cola is doing a much better job right now than PepsiCo on revenue generating, apparently due to slicker marketing. So I began to wonder where to advise a company to invest – R & D or marketing. But then I realized I was on a slippery slope: a sample of one, an interest in making a cause/effect connection, an almost complete lack of data, and so on. I moved on in my research.

Sadly the sector 'Alternative Energy' had the terse remark "No companies with sufficient R & D for inclusion". However, the sectors 'Gas, Water, and Mulitutilities' listed 9 companies 'Electricity' listed 17 (none of these US), and 'Oil and Gas Producers' listed 22. I know that many of those listed in the three sectors are doing alternative energy R & D so maybe the sector headings are misleading.

So was my time investment worth the reward? Yes, I found many non-US companies that would be interesting (and not just from an R & D perspective) to use as examples. I feel intrigued by the notion of R & D and how it translates into organization design and culture manifestations. I wondered how definitions of R & D are changing as there is a trend towards using customers and open source input to 'do' R & D. So a reasonable use of time – but I'd rather have got my day's quota of words written.

Who owns culture?

Someone I know is just starting up his ninth company. I asked him if he made any conscious decisions when he was in these early stages about the company culture and who 'owned' it. "No-one and everyone owns it" he replied. "And I don't really think about it a planful way. It's more that I recruit people that I think will do a good job and get on with each other, and then I let them do both things without interfering unless I see things going wrong. I'm as much a part of the culture as they are. I think it would be a mistake to try and own or control it."

So my next question was, "As company CEO/owner how would you describe your role in relation to the culture?" He came up with a variety of words: mediator, nurturer, shaper, encourager, supporter. None of them were controlling and he rejected the idea that he 'created' the culture of his organizations.

I liked this response. It squares with my observations that culture is far too subtle, complex, dynamic, and pervasive to be 'owned' as a car or a house might be. Similarly it can't be 'created' in a systematic way. People join a company already acculturated, not to that company, but to their national culture, and other local cultures. Culture creation is a community activity which may or may not be conscious. People bring to any organization their own cultural biases, histories, experiences and practices. They both shape and are shaped by the culture of the organization they are joining.

Aspects of the organization design – systems, processes, policies, and control mechanisms can keep the culture on track or take it off track but only assuming that the characteristics and value add of that organization's culture are known and shared across the whole employee base.

The stripling neuroscience of culture

The Summer 2009 RSA Journal has an article I found fascinating when I read it on the plane yesterday. I still found it so this morning – it hadn't dropped from my mind as so many things do. It's called "Cultural Creatures" and is written by Adam Zeman who is Professor of Cognitive and Behavioural Neurology at the Peninsula Medical School in the UK. He states that "we are naturally cultural animals, equipped with brains that have evolved to acquire and create culture".

Clearly this is a very complex area of investigation and I'm skeptical about trying to simplify the complex too much. But David Brooks writing (partly) on the topic The Young and the Neuro in the New York Times about the 3rd Annual Social and Affective Neuroscience Conference reported that:

Jonathan B. Freeman of Tufts and others peered into the reward centers of the brain such as the caudate nucleus. They found that among Americans, that region was likely to be activated by dominant behavior, whereas among Japanese, it was more likely to be activated by subordinate behavior – the same region rewarding different patterns of behavior depending on culture.

All of these studies are baby steps in a long conversation, and young academics are properly circumspect about drawing broad conclusions. But eventually their work could give us a clearer picture of what we mean by fuzzy words like 'culture.'

Steven Pinker (a psychologist who researches and writes extensively on language and cognition) makes the point "there has to be an innate circuitry that does the learning, that creates the culture, that acquires the culture, and that responds to socialization."

Back to Adam Zeman. He poses the question "Can we learn anything from the stripling neuroscience of culture?" I'm hoping that we can – and it seems that it's already growing to be a field of intense inquiry. It might help with the question I get asked a lot "How can we change the culture of this organization?"

Organic organization design

Yesterday, I was looking for Dave Urich's list of HR Competences (which I found) but in the process came across an article published this month in OD Practitioner, Vol 41, No. 4. Author, Gina Hinrichs in her article Organic Organization Design makes the point that traditional systems models and methods of organization design are based in industrial age concepts and thus are ill-suited for information or knowledge age concepts. This isn't a newly minted point but it does contribute to the adding stream of commentary on it. What I find interesting about it and similar articles is although there's a recognition that the information age ushers in a different paradigm the writing about it is still predominantly North American/western centric – maybe because the information age was ushered in by North American companies

I do wonder whether organization design models are limited by western thinking. Does anyone know of any organization design models coming out of a completely different way of thinking about organizations?

The other thought the article sparked for me – maybe because I'd just read another article, this one on boundary spanning – was that organization design even the organic version is still rooted in thinking of an organization as being an entity – which, of course, it is in legal terms. But I wonder if that has to be the case in design terms. Supposing we thought about organizations in relation to their other stakeholder organizations and designed across the whole network – either in whole or in part? That would achieve both the benefits of boundary spanning and, possibly, the organic-ness aspects of morphing and change in relation to the dynamic interactions. Additionally, involving other stakeholders in one's own organization's design might spark a complementary redesign in their organization leading to more effective processes, clearer understanding on each organization's part to play, and so on.

A new design

Looking around other people's blogs I find that those with a personal touch that tell a story seem, to me to be more inviting. So I've decided to experiment with that format for a month or so. (I know I need to take another look at the page layout but that is in hand).

So today began with reading the first part of Chapter 7 Dynamics in Organizational Culture, of the Handbook of Organizational Change and Innovation. Mary Jo Hatch, the author of that chapter, is someone whose work I've been interested in for a while. She writes clearly and has ideas which are almost actionable in the corporate world – at any rate they spark off ideas that are. This time her argument is around the tension beween dynamic and stable organization culture. I didn't finish the whole chapter because my tolerance for academic writing, however good, has dwindled to the length of time it takes me to drink a (large) cup of tea. I'll continue reading it tomorrow morning.

With the spark of an idea from the chapter in mind I finished off a proposal to a client on redesigning the leadership succession and pipeline process in (more or less) the absence of any potential leaders. It seems that every corporate is chasing an ever-dwindling supply of people they would consider to be leadership material. Thinking differently about leaders – who they are, where they come from, and what constitutes a leader might make all the difference and radically extend the pool of possibilities. So, that is what I suggested (with actions on how to do this).

I then added to my Amazon wish list the Handbook mentioned above and noted that the list is now at 206 items which will take a lot of tea drinking to get through. Unnervingly Amazon's algorithms seem to have me down pat as their recommendation for me today was The Character of a Corporation: How Your Company's Culture Can Make or Break Your Business which was also recommended to me a week or so ago (not by Amazon but by someone who knows I'm writing a book on organization culture). What I found fascinating though was why "People who bought this book" also bought Mindless Eating: Why We Eat More Than We Think by Brian Wansink. I couldn't see the connection but then I'm not a mindless eater – to avoid becoming one my fridge contains nothing but some milk and half a lemon (back to the tea motif).

Business language

Within global/multinational companies the generally used language for communication is English. Thus in any meeting several mother tongues may be represented, but all are speaking (with more or less facility) English. This, as all the "Doing Business … books" instruct, is often a recipe for mis-communication, misunderstanding, and general lack of success. The way organisational members manage the connections between languages, a diversity of perspectives, and the national cultures they represent are partly contributory both to an organisation's culture and its business success.

Beyond the 'real' language that people speak is the more or less endemic cloak of the 'language of business' that has been well lampooned by Scott Adams, Lucy Kellaway, Ricky Gervais and Stephen Merchant (the last two wrote the UK TV series 'The Office') among others. Lucy Kellaway, for, example, wrote a fictional column in the Financial Times about a senior manager who spoke almost entirely in business cliches.

Martin Lukes talked the talk. Or rather, he added value by reaching out and sharing his blue sky thinking. At the end of the day he stepped up to the plate and delivered world class jargon that really pushed the envelope. After eight years of being him I came to accept the nouns pretending to be verbs. To task and to impact. Even the new verb to architect I almost took in my stride. I didn't even really mind the impenetrable sentences full of leveraging value and paradigm shifts. But what still rankled after so long were the little things: that he said myself instead of me and that he would never talk about a problem, when he could dialogue around an issue instead.

Although it may sound bizarre to people who do not speak 'business' it is a social construct that serves as a common language running parallel to all the varieties of English that are spoken (both by people who have English as a mother tongue and people who have learned it as a second language). Learning the language of the organization is part of any newcomer's onboarding process, and language is an implicit and under examined part of any organization design.

A stakeholder world

All organizations have multiple external stakeholders: NGOs, the 'unvoiced' (think Amazon rainforest), customers, suppliers, governments, shareholders and so on. Rather that designing organizations from the perspective of the organization itself – how about designing it from the perspective of one of its stakeholder groups. What would an organization do differently or organize differently if it were thinking from a supplier perspective for example?

Shareholders are increasingly only one part of an organization's consideration. Financial value is important but so are other expressions of value. The "customer experience" is one, "care of the environment" is another. All organizations have the ability to create stakeholder value beyond financial. What stops them doing it?

One reason is that they do not typically get the external stakeholders involved in the design or redesign of an organization. But having conversations and discussions on an 'outsider's' experiences of your organization and then enabling them to participate designing an organization that would work for them would yield good results.

Co-operatives are a partial example of stakeholder involvement. Although participants in a co-operative could be thought of as 'employees' they do have a voice in how the organization is run and share a stake in its success. Usually based on seven principles

1. Open membership – no gender, social, racial, political or religious discrimination
2. Democratic control – one member, one vote
3. Equitable economic participation among members and distribution of profits based on patronage
4. Autonomy and independence – controlled by members
5. Education and training
6. Cooperation among cooperatives
7. Concern for community

There are many financially and socially successful co-operatives. US ones include Organic Valley and Isthmus Engineering is another. European ones include the John Lewis Partnership – the largest example of worker co-ownership in the UK, and Mondragon in Spain. India based Amul is another example of a profitable co-operative.

Governments and businesses

Designing business to work with governments is something that Richard Haass talks about in a McKinsey Quarterly interview. Haass is president of the US Council on Foreign Relations and has written several books on the connections between government and business, including The Bureaucratic Entrepreneur: how to be effective in any unruly organization which is packed with ideas, references, and insights on getting things done in any organization where that seems an impossible dream.

The McKinsey interview with Haass focuses on the point that
"around the world they (governments and business) will be partners as well, because increasingly governments will negotiate the context in which businesses will operate-whether it deals with climate change, trade, investment, health. Plus government will also be for the most part providing security.
Increasingly CEOs, when they get up in the morning and look out through their window or across their desk, they are dealing with a range of constituencies that looks an awful lot like what a cabinet member might look at.

You've got independent media. You've got independent workers or unionized workers. You've got all these NGOs who are pushing you to do X, Y, or Z. Well, this is very much a political environment. The idea that you reach these decisions in some sort of splendid profit-and-loss isolation, those days are over-if they ever really existed to begin with. So I actually think each has something to learn from the other."

His viewpoint is one that, if shared by business people, would require differently designed organizations – ones that included a range of stakeholders in the design process, and recognized that their interests needed to be valued, invested in, and included as much as those of the direct employees of the organization.

Compendium for collaborative organization design

Organization designs or redesigns are usually initiated by a leader or manager. Few are 'grass roots' or 'bottom up' led. Lots of reasons account for this: lack of decision making authority is one, a focus on that part of the work flow rather than a sense of the whole organization as a system is another – although it's often easy to see where blocks and duplications occur in relation to a specific job.

Compendium is a software tool providing a

"flexible visual interface for managing the connections between information and ideas.
It places few constraints on how you organise material, though many have found that it provides support for structured working for instance, following a methodology or modelling technique. Our own particular interest is in visualizing the connections between people, ideas and information at multiple levels, in mapping discussions and debates, and what skills are needed to do so in a participatory manner that engages all stakeholders".

It is available as a free download and makes discussing issues and questions fun, visually accessible and comprehensively connected by the pattern formation and sensemaking that the mapping technique involves.

Tribes

In the RSA Journal, Summer 2009, Seth Godin talks about Tribes – not too surprising since his new book is Tribes: We Need You to Lead Us. But what is surprising is his contention that "The reason that every newspaper is going out of business is because the friction and barriers they used to rely on (trucks, printing plants, paper, etc) have switched from assets to enemies overnight. Because they relied on these physical entities, they never bothered to build a tribe, and they are being rapidly replaced by organizations that didn't have that luxury."

Assuming Godin means the luxury of physical assets – though that is not totally clear. Surely the demise of the newspaper industry is much more complex than not building a tribe? It is as much to do with an outdated business model, an unwillingness or inability to adopt new technologies, a lack of swift adaptation to new events, a sudden switch of consumer interest to other ways of getting information, a collapse in advertising revenue, to name some of the other factors.

The article is a quick read, and makes some points that a Wired interview with Seth Godin develops. But to a line manager trying to make his or her part of an organization work better – what does Godin offer? The assertion from him, for example, that "Leaders no longer have the power to yell or bully", does not ring true for people working in a call center, neither is there a whole lot of evidence for his opinion that "there's a new partnership here, one in which the enthusiastic participation of the tribe is at least as important as your goals or your profits". But it would be wonderful to believe that he's right and the world is a place where tribal leaders work in for the greater good of all and organizations are designed as 'movements for change'.