Sep 17, 2003

Edgar Schein on Organizational Innovation

My post on Innovating Challengers egroup:

From the Businessworld article:

MIT's Edgar Schein has very strong views on organisational culture.

He believes business theory has got it all wrong - it is impossible
to transform an innovative company into a business-driven one.

"A culture of innovation doesn't scale up. As a company grows, it
must either find a way to break away small units which continue to
innovate, or abandon innovation as a strategic priority. Also,
different organisations with different cultures are needed at
different stages in the evolution of a market. Current business
theories are too locked in making a mature corporation in a mature
market not only economically effective, but innovative as well. That
may be just as difficult as making an innovative company economically
effective. In a developing market based on new technologies, you may
need more organisations like Digital, many of which will not survive,
but will create an industry. Thus, playing their role as innovators.
I am not sure that companies can avoid getting into such a culture
trap. Business books always have a solution for everything. I am
trying to be a bit more pragmatic. Some problems don't have an easy
resolution. Companies do die. Wang could not make this transition.
Neither could Polaroid. It is not something which you can necessarily
fix unless the entrepreneur is able to see it and chooses to abandon
some of his original values. But you cannot say he should see it -
some do, some don't. It is very easy for us to say what the
entrepreneur should or shouldn't do. But it is very difficult to
predict if they, in fact, will do it.

Business books are written on the premise that the business gene is
there is every company. And that it is just a question of figuring
out how to become economically successful. But, I think, if you want
innovation, you have to consider the possibility that you will create
organisations that will die. They will innovate. They will influence
technology but they will not make that transition. Why do we say DEC
should have survived? Maybe it's the kind of company which should
have died."

"There are two kinds of anxiety associated with learning - learning
anxiety and survival anxiety. Learning anxiety comes from being
afraid to try something new for fear that it will be too difficult,
or that we will look stupid in the attempt. Survival anxiety, on the
other hand, is the realisation that in order to make it, we will have
to change.

Now, change will only happen if the survival anxiety is more than the
learning anxiety. And most managers make the mistake of increasing
the survival anxiety rather than decreasing the learning anxiety. It
is a mistake because that just creates more tension and defensiveness
if I am convinced I cannot learn the new things I have to learn. If
the leadership has convinced me that the vision of the future is non-
negotiable, I already know I have to change. If my leadership also
tells me that they will help me change, that I will be involved in
choosing the mechanisms by which I will learn, that they will give me
the time and resources to facilitate learning, and that they will
provide coaching, all of that will reduce the learning anxiety, and
that work "

What do you think? Do you agree with Prof. Schein? Why or why not?