Guidant, Inc., a Silicon Valley and Midwest manufacturer of medical equipment including defibrillators, stents, and pacemakers, was formed from the merger of several entrepreneurial businesses. Its leaders wanted to maintain its entrepreneurial character. The company had grown large enough that bureaucracy threatened to dampen the speed, risk taking, and collegial atmosphere of the original start-ups. Kathy Lundberg, a vice president, described the company's predicament:
We could see some of the entrepreneurial nature of our company fading, and we knew we needed to catch it in time. We were lucky to have a base of entrepreneurial experience still alive in the company; many of the people who started or had been part of the original companies were still here in-house. But we knew we could lose those people and that entrepreneurial nature as we scaled up. And we knew that if we lost those people and that culture, if we didn't stay creative and innovative, then the company itself would not survive. 1
Unlike Steelcase, which was inspired by market demands into multiple experiments as it found its way to meaningful change, Guidant felt that they could take a less pressured and more holistic approach. The firm's leaders decided first to assess the current state of creativity in the organization. So among other efforts, they convened employee focus groups around the company, asking employees to identify what they saw as barriers to entrepreneurial behavior. As Lundberg later recounted, "We heard things like there were too many people involved in every decision, that failure was so risky people didn't want to try anything new, and that company leaders didn't listen and did what they wanted anyway."
Guidant's leaders envision systemic creativity, and the company is on the way to achieving it. |
Jeff Mauzy and Richard A. Harriman |
Guidant also looked to companies with reputations for ongoing creativity. Representatives researched Sony, Motorola, 3M, and Disney, among others, to see which creativity strategies those organizations employed. They took stock of their own company's creative profile and compared it to the company's needs and what they observed in other companies. Guidant leaders also went outside the company and brought in a consultant for help with the tricky questions involved in large-scale change.
The leaders then examined different models of corporate structure that raise the levels of creative behavior, and finally they made a plan for their own company. "Ultimately," Lundberg explained, "we decided on a three-pronged approachtop-down, bottom-up, and 'brushfire teams'all working simultaneously over a two- to three-year period."
The top-down approach involved a series of seminars on entrepreneurship, supportive management, and problem solving. At first the seminars were given to the 280 most senior leaders. Within the first year the training cascaded down to the next 450 managers. Beverly Mehlhoff, a director, explained the focus of the effort: "Our idea of management had to change from one of command and control, which closes down creative thought in the ranks, to one of coaching, which opens it up. Our leaders learned as a body to listen to and appreciate the ideas of the people in this company." 2
The bottom-up approach was orchestrated by Emerson Martlage, a vice president. It included everyone in several functions in one business group. The first training effort was focused on personal transformation and run by an external training organization. "The idea," explained Martlage, "is for everyone to learn to understand that they are responsible people in a changing world, to show them how they can take control of their lives and their work, and how to speak what they believe." 3 The next round of training is planned to focus directly on building skills for creativity and innovation, skills that can be applied for personal growth and the company's benefit by both individuals and groups.
The top-down and bottom-up approaches worked simultaneously to complement each other. As employees learned the skills to think creatively, leaders learned to encourage creative thought and the sharing of ideas.
The third segment of Guidant's approach established "brushfire teams," a name for teams that undertook products or processes that generated immediate valuebut that also served as hands-on laboratories for learning about creativity. The teams identified and monitored factors that appeared to lead to entrepreneurial success and then reported on the factors to the company. One team, for example, was given charge of making a higher-density capacitor, the largest physical component in the company's defibrillators. Luke Cristensen, an engineer and member of the team, elaborated on the process:
We each have more work to do than just this high-density minicapacitor, but we're allowed the freedom to zig and zag daily as we need in order to adapt to this brushfire project. Now, fifteen months into it, we're ahead of the competition in minicapacitors and expect to widen the lead. We all think differently, and I don't think that we have ever come to consensus about anything, but we developed a style of working together that worked for us and will continue to enhance other projects. 4
To reward the team and to encourage others, the team was recognized in promotional videos of the company's creative work.
The effect of this management approach is to reduce the creative power of a 30,000-person organization to the top 100 leaders. |
Jeff Mauzy and Richard A. Harriman |
In 1999 Guidant broke into Fortune's list of the 100 best companies to work for, at number 31. Now the company that Kathy Lundberg worried would lose its best thinkers and most entrepreneurial individuals is instead holding on to those thinkers and entrepreneurs and growing more of them internally, while attracting still more from across the industry.
Systemic creativity is a never-ending quest. Guidant continues to struggle at times to maintain momentum in the quest. No company, certainly not Guidant, claims complete and final creative success. Nonetheless, Guidant's leaders envision systemic creativity, and the company is on the way to achieving it.
Leaders of other companies also aim for systemic creativity. In the following pages of this chapter (not included here,Ed.), we describe a few strong actions that almost any company leader can take to effect a company's change toward creativity. As we explore these disciplines, we revisit familiar creative concepts, but with a focus on effecting change. This requires different and deeper understanding of the material we covered earlier. Although we initially presented the creative dynamics in sequence, the creative process is best understood as a whole. And it is best learned experientially, like riding a bike, rather than academically. Every chance to learn the process from a different angle makes for more complete comprehension. To learn from the perspective of a leader committing a company into systemic creativity is to get a practical feel for creativity.
At the time when the industrial age came into full flower, the management approachdescribed forty years ago by theorist Douglas McGregor as Theory Xwas that employees needed to be controlled to produce good work. 5 Company policies and structures were designed around the assumption that employees responded to extrinsic motivation or even coercion and were not to be trusted or self-directed.
In contrast, corporate leaders emerging from today's business schools have been encouraged to value McGregor's Theory Y management approachemployees want and need to excel and in the right organizational climate will do so. But despite Theory Y, hierarchical, paternalistic attitudes still permeate many businesses of every size today. Management's approach continues to be that position equals knowledge and intelligence and power, that the higher the position the better the ideas, that only someone with formal authority can responsibly handle decisions.
The effect of this management approach is to reduce the creative power of a 30,000-person organization to the top 100 leaders, a power reduction of 300 to 1. To install systemic creativity, leaders must engage the other 29,900 employees. In sum, leaders need to confer the responsibility and capability of creative leadership on every employee. When each employee can engage with the creative process, when each employee feels the need and the chance to perform as a creative leader in the course of his or her work, the company as a whole has begun to reach systemic creativity. It can then concentrate on fine-tuning the system, raising the level of creative ability, and turning creativity into successful innovation.
To foster creativity companywide, companies must: Reduce unnecessary controls; adopt creativity-friendly reward systems; instill new attitudes about efficiency and failure; communicate the value of creative change; provide both the tangible and the intangible resources necessary to creativity; and lead with a guide's attentiveness rather than a manager's command and control.
Footnotes
1. Kathy Lundberg, interview by Jeff Mauzy, tape recording, Palo Alto, CA, 5 March 1999. All subsequent Lundberg quotes are from this interview.
2. Beverly Mehlhoff, interview by Jeff Mauzy, tape recording, Palo Alto, CA, 5 March 1999. All subsequent Mehlhoff quotes are from this interview.
3. Emerson Martlage, interview by Jeff Mauzy, tape recording, Palo Alto, CA, 5 March 1999. All subsequent Martlage quotes are from this interview.
4. Luke Christensen, from videotape provided by Guidant, Inc., Palo Alto, CA, Winter 1998.
5. Douglas McGregor, The Human Side of Enterprise (New York: McGraw-Hill, 1960), 33-57.