Book Review: The Boundaryless Organization

The Boundaryless Organization: Breaking the Chains of Organization Structure, Revised and Updated
Ron Ashkenas, Dave Ulrich, Todd Jick, and Steve Kerr
Jossey-Bass (2002)

The title is a misnomer: Although the authors do indeed suggest how to “break through the chains of organizational structure”, they provide an enlightening explanation of four different types of boundaries (vertical, horizontal, external, and geographic) which give definition to any organization. They do not advocate the total elimination of these boundaries (which is impossible, anyway); rather, they suggest how to rearrange them so that an organization can thrive. For the authors, there is what they call “A New World Order”:

“In living organisms, membranes exist to give the organization shape and definition. They have sufficient structural strength to prevent the organism from dissolving into an amorphous mess…Like a living organism, the boundaryless organization also evolves and grows, and the placement of boundaries may shift…Because the boundaryless organization is a living continuum, not a fixed state, the ongoing management challenge is to find the right balance of boundaryless behavior, to determine how permeable to make boundaries, and where to place them.”

This brief excerpt from the first chapter correctly suggests the purpose of this remarkable book: To explain HOW to meet that challenge.

The material is presented within four parts plus a conclusion. The first explains how to achieve “free movement up and down” by crossing vertical boundaries; the second explains how to achieve “free movement side to side” by crossing horizontal boundaries; the third explains how to achieve “free movement along the value chain” by crossing external boundaries; and in the fourth part, they explain how to achieve “free global movement” by crossing geographic boundaries.” Then in the Conclusion, the authors discuss “Making It Happen: Leading Toward the Boundaryless Organization.”

The authors also include a series of six questionnaires. By completing each in sequence, the reader is able to determine (a) where her or his organization is now located relative to “the boundaryless paradigm”, and (b), what is needed to eliminate the “gap” between where it is now and where it should be. Those who share my high regard for this book are urged to read The Boundaryless Organization Field Guide. It contains a hands-on set of diagnostic instruments as well as exercises and tools, and a disk with presentation slides in Powerpoint format.

I agree with the authors: The most restrictive organizational boundaries are in the minds of those within an organization. Organizational as well as personal limits are usually self-inflicted.

You Really Can’t out-Apple Apple: wisdom from the ReWork guys

News item:  Microsoft will not be building their “it was going to be amazing” Courier tablet.  Read about it in this article, Microsoft Kills ‘Courier’ Tablet (with Update: New reports from Hewlett Packard suggest that HP has scrapped the HP Slate, a tablet unveiled by Microsoft CEO Steve Ballmer earlier this year).

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ReWork has a very simple piece of advice.  Don’t try to out-Apple Apple.  Here’s the quote:

Focus on competitors too much and you wind up diluting your own vision…  You becomes reactionary instead of visionary.  You wind up offering your competitor’s products with a different coat of paint.

If you’re planning to build “the iPod killer” or “the next Pokeman,” you’re already dead…  You’re not going to out-Apple Apple.  They’re defining the rules of the game.  And you can’t beat someone who’s making the rules.  You need to redefine the rules, not just build something better.

If you’re just going to be like everybody else, why are you even doing this?  If you merely replicate competitors, there’s no point to your existence.

When You Have Fewer Resources — Part 2

I’m preparing my synopsis of ReWork by Fried and Hansson.  And I’m thinking about the people who bemoan the lack of resources.  Here are some words from Rework for such people:

Maybe eventually you’ll need to go the bigger, more expensive route, but not right now.
There’s nothing wrong with being frugal.

I was on a conference call today.  The person in charge of the computer screen was using Basecamp, one of the four products put out by 37Signals — the company founded by the authors of ReWork.  They started small.  They still have relatively few employees, and they are definitely still frugal.  And yet, here is their product, changing the way people manage their information, and plan and implement projects.

You can succeed with less.  Ask the 37Signals guys.

The Four Bases of Organizational DNA

Here is an excerpt from article written by Gary Neilson, Bruce A. Pasternack, and Decio Mendes for strategy business magazine. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to strategy+business, please visit http://www.strategy-business.com/article/03406.

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Execution is woven deeply into the warp and woof of organizations. It is embedded in the management processes, relationships, measurements, incentives, and beliefs that collectively define the “rules of the game” for each company. Although we often think of companies as monolithic entities, they’re not. They’re collections of individuals who typically act in their own self-interest. Superior and consistent corporate execution occurs only when the actions of individuals within it are aligned with one another, and with the overall strategic interests and values of the company. Performance is the sum total of the tens of thousands of actions and decisions that, at large companies, thousands of people, at every level, make every day.

Because individual behaviors determine an organization’s success over time, the first step in resolving dysfunctions is to understand how the traits of an organization influence each individual’s behavior and affect his or her performance. We like to use the familiar metaphor of DNA to attempt to codify the idiosyncratic characteristics of a company. Just as the double-stranded DNA molecule is held together by bonds between base pairs of four nucleotides, whose sequence spells out the exact instructions required to create a unique organism, we describe the DNA of a living organization as having four bases that, combined in myriad ways, define an organization’s unique traits. These bases are:

Structure. What does the organizational hierarchy look like? How are the lines and boxes in the organization chart connected? How many layers are in the hierarchy, and how many direct reports does each layer have?

Decision Rights. Who decides what? How many people are involved in a decision process? Where does one person’s decision-making authority end and another’s begin?

Motivators. What objectives, incentives, and career alternatives do people have? How are people rewarded, financially and nonfinancially, for what they achieve? What are they encouraged to care about, by whatever means, explicit or implicit?

Information. What metrics are used to measure performance? How are activities coordinated, and how is knowledge transferred? How are expectations and progress communicated? Who knows what? Who needs to know what? How is information transferred from the people who have it to the people who require it?

Any metaphor can be pushed too far, of course. Although the basic comparison of corporate and human DNA is often invoked in general discussions of institutional culture and conduct, we think it provides a practical framework senior executives can use to diagnose problems, discover hidden strengths, and modify company behavior. With a framework that examines all aspects of a company’s architecture, resources, and relationships, it is much easier to see what is working and what isn’t deep inside a highly complex organization, to understand how it got that way, and to determine how to change it.

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To read the complete article, check out other articles and resources, and/or sign up for a free subscription to strategy+business, please visit http://www.strategy-business.com/article/03406.

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Gary Neilson (neilson_gary@bah.com) is a senior vice president with Booz Allen Hamilton in Chicago. He works on the development of new organizational models and designs, restructuring, and the leadership of major change initiatives for Fortune 500 companies across industries.

Bruce A. Pasternack (pasternack_bruce@bah.com) is a senior vice president with Booz Allen Hamilton in San Francisco. He counsels companies in building strategic agendas, developing organizations, and transforming business models. He has published widely on leadership and organizational issues.

Decio Mendes (mendes_decio@bah.com) is a senior associate with Booz Allen Hamilton based in New York. He works with clients to improve organizational effectiveness and operations efficiency.

Ellen Langer’s call for Mindful Leadership

Here is an excerpt from article written by Ellen Langer for the Harvard Business Review blog. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Review‘s Daily Alerts, please visit dailyalert@email.harvardbusiness.org.

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(Editor’s note: This post is part of a six-week blog series on how leadership might look in the future.)

Mindlessness — not a good quality for any organization — has led to some questionable assumptions about the need for leaders; namely that 1) those who lead have privileged and reliable abilities and knowledge — what are often described as “leadership competencies”; and 2) people need to be led to achieve their goals.

If organizations were mindful — referring to the simple act of noticing new things — leadership would be quite a different matter. They would not only be mindful themselves; their most important responsibility would be to enable their followers to be mindful as well. One might argue that in an increasingly complex world — where work cuts across all types of institutional boundaries — the leader’s only task may be to promote and harness “distributed” mindfulness.

Noticing puts us in the present, makes us sensitive to context, and aware of change and uncertainty. When we are mindless we hold our perspective still, allowing us to confuse the stability of our mindsets with the stability of the underlying phenomena. Hold it still if you want but it’s changing nonetheless.

However visionary we consider our leaders, they cannot predict the future any more than anyone else. They may be able to predict what might happen much of the time if the situation stays constant — which of course is questionable — but can never predict individual occurrences, which is where we should be most concerned. If, most of the time, when someone does “x” the result is “y” it doesn’t guarantee that the next time you do “x,” “y” will follow. (Do you believe Mercedes makes a great car? Would you bet all of your money that any particular Mercedes will start with one try?)

Those in positions of power often keep quiet about what they don’t know. Instead of making a personal attribution for not knowing — “I don’t know but it’s knowable and I probably should know,” which sounds defensive — leaders should make universal attributions for uncertainty — “I don’t know and you don’t know because it is unknowable.” When we acknowledge these universal limits, we can be less distracted by the need to appear to know, which would allow us to get on to the problem at hand. Being awake in the moment allows us learn better what we need to know now.

(Editor’s note: This post is part of a six-week blog series on how leadership might look in the future. The conversations generated by these posts will help shape the agenda of a symposium on the topic in June 2010, hosted by HBS’s Nitin Nohria, Rakesh Kharana, and Scott Snook.)

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To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Daily Alerts, please visit dailyalert@email.harvardbusiness.org.

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Langer is a professor in the Psychology Department at Harvard University. Her books written for general and academic readers include Mindfulness and The Power of Mindful Learning, and the forthcoming Mindful Creativity.

A Quote for the Day – from Twyla Tharp

Twyla Tharp at work

I’m a big fan of Twyla Tharp — choreographer, Kennedy Center honoree, best-selling author.  I’m reading her new book The Collaborative Habit.  Here’s a quote worth pondering:

People are people.  And people are problems.  But — and this is a very big but — people who are practiced in collaboration will do better than those who insist on their individuality.

In the book, Tharp argues that collaboration — the ability to work collaboratively; “practiced in collaboration” — is a habit, a habit that each person can develop and master.  Just like creativity is a habit (her earlier book).  I think she believes in discipline; ritual; habit.  Not a bad approach to life.

When You Have Fewer Resources — Improvise, Get Very, Very Creative!

The real Gene Kranz

We never lost an American in space. We’re sure as hell not gonna lose one on my watch.
Failure is not an option.
Gene Kranz, in the midst of the Apollo 13 Crisis (from the script of the movie)

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I’m hearing it everywhere.  People in companies, organizations, nonprofits, government agencies are all having to make do with fewer resources.

There are only so many approaches available.

One approach — whine.  And there is more than a little whining going on.

Another approach – quit.  Give up.

These first two approaches do not seem to be very productive.  And neither will increase the resources available.

In fact, it really does look like an extended time of fewer resources.  Nothing that anyone can do will bring us more resources anytime soon.  So – what do we do?

A third approach is to get really, really creative, and do what you can with what you’ve got.

So – here is a scene to remind us that there are times when we really have no choice but to get really creative.  It is based on a very true piece of our history.  There was no time to whine.  It was definitely not a time to quit.  There were lives to save.

And they did it.

Take a look.

Gordon Brown’s Morality Tale – What You Say, What You Do, Will Be Known

It was in every paper in Great Britain

Well, I think we all learned a pretty big lesson about the world we live in this week.  In case you missed it – and it would have been hard to miss – here is the story about what Gordon Brown said (to an aide – in private – in his car!)

Here is the lesson:

There is no private communication (not much private anything) any longer.

You may think you are safe, but…, whatever you say, wherever you say it, whatever you do, wherever you do it, you need to assume that it will be seen, heard, and judged.

Someone has a microphone, someone has an iPhone with a video camera – even in what you think are situations of privacy.

So – the old advice is truer than ever –

“if you can’t say something nice, don’t say anything at all.”

Walter Kiechel III on C.K. Prahalad and Strategy as Boundaryless Aspiration

Walter Kiechel III

Here is an excerpt from article written by Walter Kiechel III for the Harvard Business Review blog. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Daily Alerts, please visit dailyalert@email.harvardbusiness.org.

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C.K. Prahalad manifestly qualified as a High Lord of Strategy, Second Generation. News of his death saddened me, and set me to reflecting on the themes running through his work over four decades.

This isn’t as easy an exercise as it is with many other management thinkers, including some great ones. Does it strike you, as it does me, that many a business author writes the same book over and over? Not Prahalad. As he told Adi Ignatius, he liked to move on to the next project, leaving it to a collaborator or someone else to further develop their latest idea.

And his range of subjects was wide. Until I read his C.V. on the University of Michigan site, I’d forgotten that his first two books, back in 1974, were on healthcare management.

Others have, I’m sure, done a more thorough study of his work. But as a student of his contributions to strategy, I keep hearing a few recurrent notes in his writing. The dominant theme is what I’d call “boundaryless aspiration,” or, more precisely, a summons to think beyond conventional boundaries, geographical or intellectual. (Funny, the klutzy title of this post was running around in my head even before I read the blog by Ron Ashkenas recalling how Prahalad had graciously written the introduction to The Boundaryless Organization.)

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Prahalad’s book The Fortune at the Bottom of the Pyramid may be the biggest boundary buster of them all. In it this son of south India called on large multinational companies to see beyond their historical notions of geography, market attractiveness, and corporate purpose. This not out of some pallid do-gooder motive, but because huge, inspiring opportunities awaited them in the dusty villages and crowded cities of the developing world.

Through most of its intellectual history, strategy has been a pretty cold-blooded discipline — the pursuit of often disillusioning realities born of ruthless empiricism, a matter of devising microeconomic models to understand what was going on, then level-headedly calculating how competitive advantage was to be achieved. Truth to tell, sometimes as I read C.K.’s work it seemed to me he rather stinted on the analytic and quantitative, sacrificing this to the hortatory and inspirational. (In our conversations, which I remember fondly, the hortatory, sometimes bordering on the didactic, had a way of winning out.) But then, he was calling on us to look up and through such high windows, past our usual sense of limitations, beyond the tired dualities that keep us mired down here, well short of what he could see.

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To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Daily Alerts, please visit dailyalert@email.harvardbusiness.org.

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Walter Kiechel III is the former Editorial Director of Harvard Business Publishing, former Managing Editor at Fortune magazine, and author of The Lords of Strategy: The Secret Intellectual History of the New Corporate World. He is based in New York City and Boston.

Book Review: The Fortune at the Bottom of the Pyramid

The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits, Revised and Updated 5th Anniversary Edition
C.K. Prahalad
Wharton School Publishing (2009)

As Prahalad explains in his Preface, he wrote this book to suggest and explain a new approach by which to solve the social and economic problems of 80% of humanity. His approach would mobilize the resources, scale, and scope of multinational corporations (MNCs) — their investment capacity — in a co-creative partnership with localized nongovernmental organizations (NGOs) in order to formulate and then implement “unique” solutions to the problems of 4 billion people who live on less than $2 a day at the bottom of the “pyramid” to which the book’s title refers. “The process must start with respect for Bottom of Pyramid consumers as individuals. The process of co-creation assumes that consumers are equally important joint problem-solvers….New and creative approaches are needed to convert poverty into an opportunity for all concerned. That is a challenge.”

Prahalad carefully organizes his material within three Parts. First, he provides a framework for the active engagement of the private sector and suggests a basis for a profitable win-win engagement. He identifies all manner of adjustments, accommodations, and (yes) sacrifices each of the “players” – MNCs, NGOs, and the poor themselves — must be willing to make to ensure the success of the process. Next, he carefully and eloquently examines 12 case studies that involve a wide variety of businesses, each an exemplar of innovative practices, “where the BOP [bottom of the pyramid] is becoming an active market and bringing benefits far beyond just products to consumers.” All of the companies share the same concern: “They want to change the face of poverty by bringing to bear a combination of high-technology solutions, private enterprise, market-based solutions, and involvement of multiple organizations.” As for Part III, it is provided as a CD which consists of 35 minutes of video success stories filmed on location in the BOP in India, Peru, Mexico, Brazil, and Venezuela.

Of special note is the fact that the various stories are told almost entirely from the perspective of BOP consumers, the so-called poor. As Prahalad points out, they get products and services at an affordable price, “but more important, they get recognition, respect, and fair treatment. Building self-esteem and entrepreneurial drive at the BOP is probably the most enduring contribution that the private sector can make.” As this book’s subtitle correctly suggests, the ultimate objective is to eradicate poverty through profits…initiating and then sustaining what will be in fact, a win-win-win engagement of MNCs, NGOs, and the poor themselves.

Although Prahalad has a compelling vision, he has neither illusions nor delusions about the difficulty of fulfilling that vision when undertaking the “new approach” he recommends in this book. His vision is bold, indeed of global proportions. However, his feet are planted firmly on the ground at the bottom of an enormous pyramid, one whose complexities are exceeded only by the unprecedented entrepreneurial opportunities it offers to help solve the social and economic problems of 80% of humanity. Given the importance and the urgency of the various issues that Prahalad explores so brilliantly in this book, there seem to be no acceptable alternatives to the approach he proposes.