Introduction
The "Titanic syndrome"
How organizations change over time
Succumbing to the "Titanic syndrome"
The roots of the evolutionary organization
>>Principles of the evolutionary organization
The evolutionary organization-- an operational perspective
The evolutionary organization-- a management perspective
The evolutionary organization-- a new science perspective
A practical experience in building an evolutionary organization
Summary

(continued from The roots of the evolutionary organization)

Principles of the evolutionary organization

According to Kotter and Heskett [24], "Only cultures that can help an organization anticipate and adapt to environmental change will be associated with superior performance over long periods of time". This is illustrated in Figure 1 where catastrophic re-invention of the KRO will almost inevitably be required. Lessem [45] suggests that an adaptive organization is the only effective answer; unfortunately such an organization is not necessarily free of fixed mindsets and other KRO debits.

When we considered the newly founded organization at point A1 in Figure 1, we suggested that it seemed to display all the entrepreneurial features espoused for success in today’s turbulent markets. For example, it exhibits an open, inquiring culture; it freely explores mental models; it has the intention to "create its own future"; its tacit-explicit adaptive/generative knowledge is continuously refreshed; and, its intellectual capital is fully valued.

If the KRO could be converted to, and/or continuously balanced in a near-formative mode over an extended period of its life, as shown in Figure 2 starting at point A1, its many desirable features would be preserved e.g. its entrepreneurial structural fabric [46]; superior performance over long periods of time would then eventuate. Suppose such properties could be melded with desirable features of the normative mode, such as care not to jeopardize the business unnecessarily, and maintenance of critical standard routines. Then, if melding could be achieved with the organization overbalancing into the normative phase, we would have the "best of both worlds". We call such an organization an evolutionary organization (EVO).

Figure 2

The intention here is not so much to distance the EVO from the learning organization, but to describe a learning organization developed in a specific, very practical fashion, displaying specific, practical, entrepreneurial attributes. For example, as shown at the right of Figure 2, the EVO is designed such that there is a very rapid and continuous exchange between explicit and tacit adaptive-generative knowledge, with the result that mindsets have little opportunity to become frozen. The accumulation of attractive standard elements from the normative phase must then be carefully monitored to maintain the formative-normative balance, since standardized elements can quickly propagate themselves to engulf the EVO.

The learning organization attempts to encourage development of the self-renewing, reflective practices critical for business success [47], by explicitly focusing on learning. Learning techniques rather than business techniques are introduced at the first step. As noted previously, learning does not come easily to everyone. The EVO accomplishes the same goals by reversing this process. In this regard we take Drucker [48] quite literally when he asserts that "There is a need to change deeply ingrained habits to deal with the turbulent change upon us. What these needs require are changes in behaviour. But ‘changing culture’ is not going to product them", and "If you have to change habits, don’t change culture, change habits. And we know how to do that…" (emphasis added).

We deliberately design the systemic structure, processes and tools to develop specifically an environment where learning will be essential to carrying out the roles of all employees. By changing the rules, all employees, including managers, are forced to change their habits of thinking and learning without necessarily being made aware that this is happening. In this way 75 per cent of the community will be learning rather than just the 15 per cent natural learners. Indeed, since the emphasis is placed on performance, driven by business outcomes, the whole organization is concentrating its energies towards its own continuing business viability. Re-engineering [35] and informating [39] are other examples where the structure is addressed first, so that performance is facilitated naturally.

As we know, culture evolves as individual workers perform everyday activities. The EVO culture is "pulled" into being by mandating the new structure, processes and tools. The learning organization approach is based on first changing the organization’s culture; however, trying to change the way an organizations goes about its work by first changing its culture is like pushing on a rope.

A key concept with regard to the feasibility of forming and/or maintaining an EVO is that limits to competitive development are internally imposed [6]. If KRO mindsets are changed, the EVO is possible. Bardwick [49] supports, with examples, the idea that an organization can develop and maintain a start-up style of operation. A particularly relevant example of the introduction of EVO philosophy has been published recently [50]. Two managers from Hewlett-Packard were given responsibility for re-engineering a complicated product distribution process. First they explained the ground rules to their 35-person team, then gave them some training, and then refused answer any more questions, or to tell team members what to do. In addition, much of the typical task-force framework was removed; there were no supervisors, no hierarchies, no titles, no plans, no job descriptions and no milestones. The initial result was chaos. The team members began to do simple things which they built into more complex arrangements, as Kelly [51] has recommended. The motto becomes "Don’t tackle complexity with complex solutions; deal with bite sized problems one by one". In this way, the team learned by doing. Projects of this size and complexity almost invariably come in over budget and behind schedule, or simply fail. In this case, the team attained its goals, and the new system was introduced on time and within the budget. HP calls the approach "Managing by getting out of the way." Team members in feedback to a Fortune magazine reporter expressed pride in their achievement, and enthusiasm for the approach.

In spite of its successful ending, the Hewlett-Packard story is consistent with other work indicating that such growth never occurs smoothly [52]. Likewise, the EVO will not be an easy organization to work in, with its constantly shifting processes and structure. Paradoxically, this confers the long-term stability that is so craved by everyone [6]. This has certainly been the Japanese experience; as Koji Kobayashi, CEO Nippon Electric, says "Companies that look unstable are the most stable in the long run; companies that look stable, the most unstable" [53].

The essence of innovation is to recreate the world according to a particular ideal…

We have said that the start-up organization and the EVO create organizational knowledge through tacit-explicit knowledge interconversion, as do the Japanese companies described by Nonaka and Takeuchi [22]. These authors contend that such Japanese companies are especially good at bringing about innovation continuously, incrementally and spirally. We agree with these authors that the most powerful learning comes from direct experience; this is in contrast to systems thinking and other cognitive approaches which are limited to the mind. However, it is our contention that adaptive-generative knowledge is the most critically important element in the tacit-explicit conversion process, since it relates directly to survival.

In the EVO, the essence of innovation is to recreate the world according to a particular ideal or vision. The knowledge involved has to be built, and requires frequent and laborious interaction among members of the organization. Checkland [54] notes that knowledge is only a snapshot or trend; however, the disorder and interaction in the EVO give rise to true learning. Nonaka and Takeuchi [22] assert that "The major job of managers is to direct this confusion toward purposeful knowledge creation. Both senior and middle managers do this by providing employees with a conceptual framework that helps them make sense of their own experience". Drucker [55] has suggested "one of the most important challenges for any organization is to build systematic practices for managing a self-transformation"; in the EVO this second-order learning [14] is an everyday task. The EVO develops "dynamic capabilities" which are the organizational abilities to learn, adapt, change and renew over time, based on search, problem solving and problem finding at the organizational level. These dynamic capabilities are exercised in the tension which exists between the need to operate from sound business foundations and the need for fundamental business transformation over time.

In the EVO, as in the start-up organization, intellectual capital is given its full worth. That is, intellectual capital is valued for its intrinsic financial value and for its potential to build the business. Intellectual capital, together with financial capital and tangible capital, form the organizational capital system. The power and harmony in the organizational capital system govern an organization’s business capability and potential. Intellectual capital is itself a subsystem containing the elements human capital, structural capital and customer capital [56]. These often invisible assets are enhanced in the EVO, forming a critical source of competitive power and adaptability.

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The Saint-Onge Toolkit www.saint-ongetoolkit.com was released on November 1, 2001. It is an online learning platform containing rich media Powerpoint Presentations, a monthly seminar and Discussion Group that focuses on the core ideas of Hubert Saint-Onge's Knowledge Assets Strategy. $200US for a three-month subscription. It can be customized for a CKO's corporate knowledge strategy implementation.