ASQ - Team and Workplace Excellence Forum

October 1997


1996 Baldrige Winner Continues To Grow
Information Sharing, Dispersing Control and High Quality Standards Keys to CRI Success

Kaizen Events: Two Weeks To Dramatic Process Improvement
USBI's 'Kaizen Events' Working to Keep NASA Flying

Electronic Monitoring: There's No Place Like Home

When Cultures Collide...
Keep The Best-Lose The Rest


by Peter Block

We...They...Them...And Us
by Cathy Kramer


Brief Cases
Business News Briefs

Views for a Change

Book Review

Letters to the Editor


Book Reviews With A Twist

The Living Company
by Arie de Gues

If your organization checked in for a physical exam, what would the tests show? Irregular heart beat (or none at all)? Clogged arteries? Cancer? Would your workplace be given a clean bill of health or immediately checked into Intensive Care?
Many believe the idea that organizations are like machines no longer works and probably never did. Instead we should look to nature for clues to purpose and form. Arie de Geus was one of the first in this rapidly growing group, and his book deepens the inquiry. He offers an alternative metaphor: that organizations have a life of their own, and that when they stop learning they start dying.
De Geus spent the first 38 years of his working life on the line at Royal Dutch/Shell. As coordinator of worldwide planning, he studied corporate longevity. He found that the average life of Fortune 500 firms was 40 to 50 years, and focused on 30 companies that were over 100 years old to attempt to determine how they beat these odds. He sees four characteristics of long-lived companies:

1. Learning: The ability to learn & adapt to changes in the environment.
2. Persona (Identity): The ability to build internal community around shared purpose.
3. Ecology: The ability to build constructive relationships, within and outside itself, primarily through tolerating diversity and decentralizing power.
4. Evolution: The ability to govern its own growth and evolution, in part through conservative financing and a sense of stewardship.

Things my primary care physician didn't know: The Ecology section includes a chapter entitled "The Corporate Immune System." A risk of tolerance and openness is the stress that can result when the corporate immune system fails to cope with "intruders" which inevitably will come. Acquisitions and mergers are often like infections, causing the corporate body to go into resistance mode. Temperatures rise, much like a fever. He cites a study of 2700 U.S. corporate mergers and acquisitions which found a failure rate of between 50 and 75 percent ("failure" means "disposal.")

And I didn't even know I was sick: This book is worth the price if just for the Foreword, written by Peter Senge. He begins by crediting de Geus with introducing him to the concepts of organizational learning. Then he commences to dismantle the machine metaphor, suggesting that we tend to adopt it without thought and become what we think we are. He provides a sobering opinion: "... most large, apparently successful corporations are profoundly unhealthy. (The members experience it) as work stress, endless struggles for power and control, and the cynicism and resignation that result from a work environment that stifles rather than releases human imagination, energy and commitment. The day-to-day climate of most organizations is probably more toxic than we care to admit."
Senge then shows us the two ancient Chinese characters for "business," which translate to "life" and "meaning" (which I have carefully transcribed onto a post-it and filed on the side of my bookcase).

Lasting Impression: This book is for anyone who senses that the machine metaphor doesn't serve us. Through personal and other stories de Geus helps us move from a general and academic concept toward a more pragmatic approach to building a living company - not because it is a nice thing to do but because knowledge has displaced capital as the scarce production factor. Knowledge is the new key to corporate success, and we must create environments that attract, develop and retain the people in whom the knowledge or potential for knowledge resides.

The Living Company by Arie de Geus, 1997, Harvard Business School Press, Boston, ISBN 0-87584-782-X (alk.paper), $24.95, 215 pages.
Reviewed by Paul Anderson, Leadership Center West, San Carlos, Calif.

Oct. '97 News for a Change | Email Editor

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