From reality to vision—from vision to reality—an essay on vision as medium for fundamental knowledge transfer

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International Business Review Vol. 3, No. 4, pp. 369-394, 1994 Copyright 0 1995 Elsevier Science Ltd Printed in Great Britain. All rights reserved 0969.5931/94 $7.00 + 0.00

From Reality to Vision-From Vision to Reality-An Essay on Vision as Medium for Fundamental Knowledge Transfer Johannes Riiegg-Stiirrn and Peter Gomez University of St. Gallen, Institute of Management, Dufourstrasse CH-9010 St. Gallen, Switzerland

48,

Introduction

Objective and Procedure Today the problem of convincing, solid visions has caught considerable attention. When corporations face unstable situations for internal or external reasons, a vision is expected to encourage entrepreneurial behavior and to cause an increase in flexibility and integration. Visions - the wonder drug for mastering the transition to the next millennium? Taken literally, vision delineates a certain perspective of the world, a perspective of a future desired reality. So visions move in the area of tension between utopia and a continuation of the present track that is devoid of any fantasy. Visions bridge the gap between “the” actual and a future desired reality. But what is reality? How does a “perspective of the world” come into existence within a corporation? If we now try to examine the importance of a vision from the point of view of the management of knowledge, the “cognitive dialectics” between “the” actual and a future desired reality assume decisive importance. A commonly shared vision can be seen from this perspective as a highly condensed medium which transfers the current organizational knowledge* of the corporation into a future one. The epistemological considerations of radical constructivism claim that reality is to be understood as a process. Reality is being continuously constructed within a socially interactive “process of negotiations”. These basic considerations (Berger and Luckmann, 1966; Watzlawick, 1981b; Froschauer and Lueger, 1992) slowly enter the theory of management after having been discussed in the social sciences for some time (Weick, 1979; Daft and Weick, 1984; Probst, 1987; Kirsch, 1992; Kogut and Zander, 1992; *We assume a very broad concept of knowledge. We understand knowledge as everything that decisively influences the specific behavior, but the specific perceptions as well and thus the specific way of thinking. It does not matter whether this influence is conscious and reflected (Strasser, 1993).

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Lyles and Schwenk, 1992; Baitsch, 1993; Osterloh, 1993; von Krogh et al., 1994). In the following text we shall illustrate the consequences of accepting radical constructive ideas for a pragmatic treatment of visions. In the first step we shall summarize a few of the fundamental statements of radical constructivism. In accordance with Watzlawick’s understanding of communication (Watzlawick et al., 1967) in the second step we shall present a categorization of knowledge into expertise knowledge and interaction knowledge. In a third step we shall show that the main challenge of a radical paradigmatic change typically consists in questioning far-reaching simultaneous changes in the expertise knowledge and the interaction knowledge. The fourth step constitutes the main point of our discourse. Starting from observations and deducted hypotheses from our research context in Ciba,* we reflect upon the relationship of vision and reality. If visions as anticipated constructions of a future reality are to become selffulfilling prophecies (Watzlawick, 198 la), this will have solid consequences for the possibilities and limits of visionary management and, above all, for the corporate leadership’s range of tasks. Empirical Basis The empirical basis of this contribution is formed by an extensive case study (Rtiegg-Sttirm et al., 1994). This is the platform for an examination into farreaching processes of transformation in a large-scale corporation (Pettigrew, 1985, 1987, 1990). An interpretation of the results of an analysis of documents on the development process of Ciba’s Vision 2000 belongs to the empirical basis as well. Further on, we have conducted about 50 qualitative interviews and were permitted to attend 10 L+T-workshops.“f The empirical basis for the present paper is formed by the notes taken down during the interviews and the observations of the workshops. A specific interpretation of these interviews is still in progress. In addition to that, in the present considerations numerous impressions and experiences have found entry which have been conveyed to us in many informal conversations and interviews within the Ciba corporation. These we tried to record as faithfully as possible. Reality as Unfolding Process Our considerations base on the presumption

that reality within a corporation

*Ciba is an international leading chemical corporation with its headquarters in Base1 (Switzerland). Ciba operates worldwide in the areas of health care, agriculture, and on industrial markets. In 1993, with approx. 87,500 employees a turnover of Sfr 22.6b and a net profit of Sfr 1.8b was achieved. Tin order to support a lasting implementation of a new “culture” in the areas of leadership and teamwork, a large-scale program aiming at behavioral change (“L+T-program”) was devised, consisting of a number of parts. In the meantime, the program has been carried out in the parent company on a broad level.

371 does not have a more or less “objective”* character, but continuously unfolds as procedural activities and reproduces itself in an autopoetic way.? Through this, Zanguage assumes decisive importance. Reality as a process comprises a cognitive and a manifest dimension which represent the two sides of the same coin. In the following text the cognitive dimension of reality is called knowledge and the manifest dimension world of experience, which becomes apparent in certain capabilities. In case we accept this radical constructivist basic position, then the wish for a “real” change must always be based on an accompanying change within all the heads concerned. How to exert an effective influence - never a domination - on the dialectics of cognitive processes on the one hand and their manifestations, i.e. immediately recognizable interactive corporate processes, on the other hand, becomes a key factor of successful management - in whichever way one likes to define success. Expertise Knowledge and Interaction Knowledge Knowledge can be subdivided, depending on its existential effects on the corporate networkS and on the concrete organization of corresponding relations, into expertise knowledge and interaction knowledge. Firstly, there is a kind of knowledge that has (from a pragmatic perspective) hardly any immediate influence on the form of relations between system and specific environment. This knowledge is to be called expertise knowledge. The totality of expertise knowledge is to be called competence base. Secondly, there exists a kind of knowledge that exactly contains the relationship, i.e. the manifestation and network of relations, between system and specific environment (external differentiation) or between part and totality (internal differentiation). This knowledge is to be called interaction knowledge. The totality of interaction knowledge is to be called organizational attitude. Knowledge represents the cognitive dimension of reality (Sackmann, 1991). The manifest dimension of reality, i.e. the mirror image of knowledge, is to be called world of experience. Capabilities are products of this world of experience. Certain capabilities necessitate a corresponding combination of expertise knowledge and interaction knowledge, i.e. a compatibility of competence base and organizational attitude. So knowledge could be categorized in the following way (see Fig. 1). *Maturana and Varela’s (1980, 1982, 1987) as well as Luhmann’s (1984, 1986) research has shown that social reality cannot be observed without this observation - at least possibly being observed in turn, thus having a feedback effect on the reality under observation. THeintel (1993, p. 129) calls this “process reality”. *Network in this case refers to external integration (systemenvironment relations) as well as to internal integration (part-totality relation).

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Interpretation

Pattern5 for

Figure 1. Dimensions of Reality and their Forms of Processes

Interpretation Competence Base Capabilities Orgmirational Attitude Relational Sv~ctures

Radical Change from a Knowledge-oriented Perspective Radical change is aimed at the alteration of the expertise knowledge and interaction knowledge. In phases of “normal” change, the relations of system and environment hardly change at all. Improved and cheaper products are made, the market share is increased, the customers’ service is improved and the wages and dividends of the respective company are raised as well. One is considered a producer of goods, a provider of service, a payer of wages, etc. The contents of these exchange relations may vary, but the form of these relations remain essentially the same. The same applies to the relationship between parts and the totality, i.e. in times of normal change the structures of business processes do not undergo a basic change. A radical paradigmatic change occurs only if not merely the contents change, but the system-environment relations as well (and, closely linked, the part-totality relations). This is inseparably connected to a change in the interaction knowledge, i.e. the appearance of new self-definitions, new identities and, finally, new interaction patterns. *

*In this sense we regard change as radical, i.e. as a change of paradigm, if within the concerned unit a new self-image, a new identity is being developed. In the field of the history of science, for example, the change from the Ptolemaic world view to that of Copernicus is referred to as a paradigmatic change (Kuhn, 1962). This change, this feeling of loss, caused by not constituting the center of the universe anymore, has decisively influenced the relationship of people to the “world”. Today, one believes to be able to recognize a similar change of paradigm, i.e. the change from a technocratic, linear-analytical, anthropocentric view of the world to a holistic, interrelated, ecological way of thinking - a phenomenon of change that has a deeply relational character (e.g. Capra, 1983; Gomez and Probst, 1987; Ulrich and Probst, 1988; Vester, 1980).

373 Such a process is impossible to plan or to steer, and any attempt to manipulate it mechanically, i.e. to dominate it, mostly leads to pathological consequences.* As mentioned above, it is more an expedition into virgin country, which assigns the possibilities of reflection, communication (dialog) and practical, modern experimenting decisive importance (Hedberg, 1981, p. 20). Organizational expertise knowledge can be altered in a much easier way than the organizational interaction knowledge which might represent a true “intangible asset” or, if it itself becomes the object of a (radical) change, a fundamental burden. Radical change most of all affects the specific self-image. Not only adaptations within the range of performances (product/market concept) may be brought up for discussion, but also the complete process of added value, in the area of innovation as well as within the supply chain. Fundamental process improvements and far-reaching re-configurations of processes are hardly conceivable without the form of the organization and the internal and external corporate networks becoming the focus of change. In such a phase of searching for a new identity, i.e. a new form of knowledge, one has to expect that new offers for interpretation will be developed. Corporate identity, i.e. the genesis of a new self-description that is shared and valid throughout the corporation, cannot be imposed centrally by a leadership team. But, of course, exactly this group can and must contribute considerably. But it cannot determine processes of identity genesis. Thus, it has to be regarded as totally normal that in phases of a paradigmatic change a number of offers for interpretation will be subject of discussions and thus to competition (Gioia and Chittipeddi, 1991). This may be accompanied by a feeling of disorientation and provoke the call for strong, authoritarian leadership decisions of almost repressive character. Whether a strong leadership would be the right choice in a case like this remains debatable. Offers for interpretation must be tested - whenever possible - with respect to their adequacy in practical experiments. This takes scarce resources and a short time which - especially in times of crisis may not be at disposal. A consequent, firm progression - at least as far as time is concerned - in small, manageable steps will offer the best chances for the expertise knowledge and interaction knowledge not to be overstrained. If such a phase has a longer duration, the danger of the occurrence of some subculturally valid and possibly incompatible patterns of orientation may arise, which could lead to considerable symptoms of atomization and through this to corporate breaking tests. As anxieties about the loss of jobs, influence and power might be prevalent

*This is due to the self-referentiality of psychic and social systems, i.e. the operationally closed functioning of such systems. Connectivity (“Anschlussftihigkeit”, Luhmann, 1984, 1986) cannot be forced, but must be achieved and tested by intuitive understanding and strenuous detailed work.

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in such phases, symptoms of atomization like this are results of political processes which could develop dynamics of their own, because of their absorption of urgently needed management capacities. This could lead to a situation immensely dangerous for the company because of its inherent dynamics. From the perspective of leadership and management the question arises of what can be contributed to ensure that a change in paradigms does not lead to an existential breaking test for a corporation. Are solid visions the cure for everything? What is actually meant by vision? Where are the possibilities and limits of visionary management in phases of radical changes? Visionary Management

in Phases of Radical Change

On the Essence of a Vision Visions, defined as creative images of a possible extraordinary future are booming. The 1990s demand courageous visions, and if corporations suffer from crises, the call for visions is heard. Vice versa, crises are explained by a lack of visions. One seems to expect leverage from visions. Within an increasingly complex environment mainly the management of complex corporations believe to be able to cope with a growing loss of control with the help of a firm vision, while putting forth a relatively small effort. It is striking (Kappler, 1993, p. 61) that during congresses, in professional magazines and text books those normative demands are increasingly to be found. Listening to - resp. reading them - one gets the impression that something mythical is linked to visions, the “great idea” of the CEO, the “strategic move at the right moment”, etc. But most interesting of all is the fact that failed visions are never mentioned, “a vision is successful or it is none. . . . Losers never write minutes, they pay for them” (Kappler, 1993, p. 65). “But even in the Far East visions have always been recognized in retrospect when the success had become obvious to everybody” (p. 7 1). The basic questions - about which functions a new vision should assume, how visions should be developed and grow inside the corporation, where the limits and dangers of visionary management might be - those questions are mostly quietly ignored. What seems most important is to “have” a vision. Behind it may lie the simple, if not nai’vely technocratic, attitude that a “charismatic leader” simply needs to have a great idea which then permeates the corporation just because of its genius, as if it were following a kind of natural law. * Considering the term vision, it has to be made clear from the start that vision obviously denotes a highly desired label for something that promises almost mythical effects.

*For positive examples Sherman (1993).

of more differentiated

views refer to Senge (1990) and Tichy and

375 Deriving from vision we hope to be able to 0 0 0 0

make humans move, encourage people, teams and complete corporations to look for rzew and abandon old solutions, break up the day-to-day routine of - especially large - corporations, help people to more creativity and to motivate them to more commitment, more cooperation, simply to peak performances.

Visions should create “a verbal space which makes affiliations possible, focuses energies and emotions, and ‘aligns’ motivations” (Heintel, 1993, p. 121). The following considerations want to examine the usage of the term vision and to show possibilities and limits of visionary management, all with regard to the process of the transformation of knowledge in periods of radical change. Reasons for the Popularity of Visions. Visions - initially understood as catchy verbal declarations of intent - are listed today under the central “soft instruments of leadership”. The subject “vision” has become a focal point of corporate efforts trailing the discussions about corporate culture. Probably caused by the realization that planning documents created by the best consultants and planning departments may not have the desired effect in a company, at the beginning of the 1980s a certain rediscovery of the psychological, sociological, and anthropological bases of human thoughts and behavior took place. This does not mean that - at least in the sciences - the phenomenon “corporate culture” was discovered as late as the 1980s. Indeed, as Scheuss (1985) shows convincingly, in the American theory of management cognitive and sociological foundations and processes of corporate leadership have long been under discussion.* For the applied practice, i.e. for the perception and mastering of the problems confronting the corporate leaderships in the 1960s and 1970s these considerations were obviously not relevant. Only when clever consultants (re)discovered the term corporate culture while looking for new ways to gain in profile and offered the “management of corporate culture” (Scholz, 1988) as the wonder drug of the 1980s and 1990s science and practice started an increasing discussion about the normative and cognitive bases of management. This, though, was already from the start much more culturally and technocratically instrumentalized, serving the purpose of increasing the success, measured by classical criteria as increase of turnover or profits, etc. (Peters and Waterman, 1982). The term “corporate culture” has thus become the catch word and container for all the soft factors believed to influence the corporate development decisively somehow, but

*March and Simon, 1958; Weick, 1969.

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which could not be grasped that easily. In this sense, the discussion on corporate culture arising at the beginning of the 1980s can be seen as a reaction to the then escalating “technocracy of leadership and management” (Ulrich, P. 1984). However, there are not many indicators hinting at a “cultural change”* within the individual considerations. In the center of the popular 7S-model, developed by McKinsey and efficiently marketed, are the terms “superordinate goals” (Pascale and Athos, 198 1, p. 11) “shared values” (Peters and Waterman, 1982) translated as “Selbstverstandnis” in the German version (Peters and Waterman, 1983). How can the “corporate core” be influenced? Exactly this purpose to - so the consequent expectations - we have visions. Visions are supposed to function as a “genetic code” pre-determining all possible ways of behavior (Collins and Porras, 1992, p. 34). As verbal concepts they assume a more or less narrowly defined range of meaning assigned to them by the inventors and addressees. From such a perspective, vision can be categorized as organizational knowledge if it is understood by the majority of staff as a “shared vision”. It condenses experiences and is regarded to be of major importance for the mastering of the future (Schein, 1992). Vision as Folded Implicit Order. To create visions, to become enthusiastic, to reach consistent and verbally convincing “images of the future”, is a first step of visionary management. But to be aware of the necessary steps to transform this vision into reality means a considerable quantum leap in quality. Out of a colourf~~l chaos, from associative thought must come order. A serial sequence of steps has to be constructed (Looss, 1993, p. 11).

Verbal concepts, i.e. concepts based on knowledge, integrate processes to a synopsis. They make it possible to abstract from the course of time resp. from those causative or final effects appearing in due course, and view a process as an objective entity, as an image, as a “vision” at a certain point in time. Following the terminology of the physician David Bohm, verbal concepts could be understood as folded (implicit) orders, while processes of interaction and business, corporate procedures as a whole, constitute an unfolded (explicit) order. From this perspective, visions may be seen as areas of the highest condensation of future process configurations,?_ no matter whether leadership, innovation, or supply chain processes are concerned. This results in a dialectics of unfolded and folded orders in which the new vision must capture and modify the whole of the process intelligence$ of existing business *The mounting time pressure may be one reason why it is increasingly more difficult to engage in “reflection-in-action” (Schon, 1983). i_The path is the aim! $This is to be understood as capabilities embedded in certain processes, e.g. speed, originality, flexibility, precision, quality, cooperation etc.

377 processes in order to express the improving ideas of new processes in a new way using the simplest words. This leads to a new process intelligence conveying new process experiences which could manifest within the following cycle as new visions, and so on. A vision, therefore, offers the most abstract integace between the contents of corporate leadership and the business processes which are being organized, led, and developed by these. This has far reaching consequences on what could be understood as a vision or as visionary management. In order to fulfil its effect as a “genetic code”, a vision must be expected to offer the following functions, i.e. selection performances. Focus Function (Relation Economic Competitive EnvironmentCorporation). Economic behavior is marked by an optimum employment of scarce resources within a more or less open competition of different competitors. Long-term survival within a competitive environment demands a profiling by means of top performances. Top performances can only be delivered by a consequent observation, concentration and focusing of corporate capabilities, powers and resources and by optimizing certain business processes (innovation, supply chain). Thus the focusing function contains a selection of the “economic meaning”. Legitimizing Function (Relation Society- Corporation). Visions are to bridge the gap between environment and corporation. This is why a vision must, explicitly or implicitly, express positive arguments for the inner meaning of the exchange processes aimed at by the corporation and the environment. What matters on the one hand, are the contents of these exchange processes (goods and services, emissions) and, on the other hand, the outer form in which the exchange is taking place (e.g. general behavior in business and communication, dealing with societal issues as pollution, risk acceptance of modern technologies etc.). * Thus with a vision a “social meaning” is selected. The vision offers information about how far the targeted business processes not only constitute an individual but also a social “added value”. So in each vision resound certain (explicit or implicit) premises (values) helping to deduct what is regarded as socially desirable and meaningful. The vision, resp. the “good arguments” expressed in it, are to show the highest degree of evidence to be able to convince all essential stakeholders of the aim (mission) of the enterprise. Identification and Motivative Function (Relation Staff-Corporation).

*This distinction between form and contents is decisive for the functions of focusing, identification, and motivation. It reflects the difference between interaction knowledge (form) and expertise knowledge.

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The identification and motivative function concerns the process of interaction between the corporation and its own staff, one of the most important stakeholders within the corporation.* Here the selection of a “personal meaning” is concerned. Staff should be motivated intrinsically through positive experiences with the corporation. In addition to that, they are to be stimulated by the (social) contents of meaning and value of their own activities, aiming at peak performances for the benefit of the corporation. All this, together with the awareness that their performance, i.e. the corporate interaction and business processes, does not only ensure economic success and contribute to the development of society as a whole, but also leads towards a development of their own personality. A Vision’s Dimensions of Influence. Within this sketch of possible functions the question arises of where the vision differs from earlier efforts towards a clear alignment of corporations. Do not corporate policy, corporate strategy, mission statements fulfil exactly the same functions as listed above?? From this point of view a central difference between the purpose of a vision and, for example, the purpose of a model image might lie in its considerations of the afective dimension. Exactly originating from the experience that very intelligent model images and corporate principles might never actually reach the addressees by not being understood or confronting a lack of interest, the intention to overcome these barriers has grown. These experiences from corporate day-to-day business are supported by results from psychology which show that the basic drives of human activities are to be found in anxieties, love, recognition, meaning, formulations of values and their realization, etc.* These are elements not only related to reason but much more to emotions. Of course, fear and suffering may block powers and love can be blind. Despite this, we must not ignore the fact that only from the interplay of reason and emotions a certain dynamics arises together with the wish for a departure to new frontiers. A dynamization of processes which involves a multitude of persons (mass appeal) requires an emotional basis. Without doubt, the vision of the first man on the moon (J. F. Kennedy) was based on an emotional wish shared by many Americans. Martin Luther King’s “I have a dream!“, i.e. his vision of people with black and white skins living together peacefully, was probably deeply linked to fundamental emotions. So it is hardly surprising that his wish found such a large echo but also triggered *Refer to Senge, 1990, p. 208. tWe distinctly differentiate between our terminology and the one used by Collins and Porras (1992). They employ vision as a term for the integrated frame of the guiding philosophy (with core beliefs, values and purpose) as well as a tangible image (with mission and its vivid description). $“I’m convinced that the most effective competitors in the twenty-first century will be the organizations that learn how to use shared values to harness the emotional energy of employees. . That calls for emotional commitment” (Tichy and Sherman, 1993, p. 161).

379 strong destructive resistance mechanisms. Saint-Exupery’s idea that the yearning for the endless reaches of the sea constituted the decisive momentum for the building of an exceptional ship shows as well that solid visions need an affective foundation apart from a cognitive one. Our previous research activities permit the impression that the “effectivity” of visions depends mainly on the question whether they are able to make the emotions of the addressees vibrate. Before we reach a further problem area concerning the addressees of a vision, we want to have a look at the empirical world. Observations on Origins and Transfer of Ciba S Corporate Vision 2000 Ciba is a corporation active all over the world in the field of pharmaceutical, biological and chemical-technological specialities and today comprises broadly based fields of activity with often leading market positions. Ciba offers products in more than 120 countries for the public health services, for agriculture, and for customers in the industry. In a small team under the guidance of CEO Heini Lippuner at the beginning of 1989 “Vision 2000” was developed. Before its actual authorization and “publication” at the beginning of 199 1, it had been intensively commented on during the Group Management Meeting (GMM 89 with 40 top managers) in 1989 and in several “Senior Management Seminars” (SMS 90 with 500 top managers) in the summer of 1990. The core team that developed the vision consisted of a small circle around Heini Lippuner, but not all of the agents of essential decisions who, at least in the first phase, would have had to be responsible for the implementation of the Vision 2000 mainly throughout the divisions. The Vision 2000 contains the following core statement: By striking a balance between our economic, social, and environmental want to ensure the prosperity of our enterprise beyond the year 2000.

responsibilities,

we

In Ciba, the development of the new Vision 2000 is interpreted as the initiation of a “process of dynamization with modern forms of leadership and teamwork. Through directed autonomy, encouragement of self-initiative* and willingness to take risks as well as through a more levelled hierarchy, the flexibility of divisions is to be increased in times of an accelerated change.“? Within the scope of our research into the change of management of processes of innovation, supply chain and those of leadership and teamwork, we were interested in the following questions: (1) How in general did the vision reach members of the organization on all hierarchical levels?

*One tries to follow this principle with the term empowerment. a situative constellation of direction, autonomy, and support. tCiba-Geigy-Magazine, 1, 1991, p. 1.

Empowerment

is understood

as

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(2) Which framework of thoughts is linked to the vision? How far is the vision cognitively implemented? - How far is it “alive” in the day-to-day problems of the concerned? - How far does it “liven up” the daily life of the concerned? (3) Which emotions are linked to the vision? How far is the vision emotionally embedded? Concerning these questions we have been able to make the following observations: 0

In general, the diffusion process was strictly top-down. Most of the staff (beyond the 500 executives attending the GMM 89 and the SMS 90) have come into contact with Vision 2000 through documents and explanations delivered in monologue. Where committed leaders have been looking for - or at least have not prevented - informal dialogs with their staff about the Vision 2000, the personal identification is considerably higher than in areas where this did not happen. Vision 2000 seems to be strikingly present with those members of the corporation who have actually joined the company because of the Vision 2000. Vision 2000 has considerably increased the awareness of ecological problems. Vision 2000 has caused leadership decisions to be critically questioned concerning their ecological implications. A cognitive presence of Vision 2000 can be seen most strongly in those areas in which jiimdamental or everyday conflicts between economical and ecological challenges have to be dealt with. Or, vice versa: where there are no such problems or controversial situations prevalent which characterize the daily life, and this seems to be the case with a great number of staff, a certain indifference and through this a greater or smaller lack of “sense of urgency” can be observed. Vision 2000 seems above all to be cognitively and emotionally embedded where it has been used as a starting point for a shared communicative development of an area-specific individual vision. Linked to the expressions “striking for balance”, responsibility (economic, social and ecological) or empowerment are, on the one hand, widely different and, on the other hand, greatly simplified concepts. Social responsibility is mainly interpreted as guaranteeing job security. There are statements which give rise to the impression that already in the environment of the “generators” (cf. Ottaway, 1983) of Vision 2000 considerable fights for definitions are being waged whose outcomes are difficult to estimate. The more the staff is being pressurized by everyday problems (pressure of time) the more negative their general attitude is towards the vision.

Against the background following hypotheses:

of our total research project we have formulated

the

381 Ciba has been able to collect a variety of experiences concerning the technological and communicative mastering of ecological problems and has achieved a considerable success. This is attractive to young members of the organization who like to work in an economically successful and demanding sector. of Vision 2000 is quite demanding. A deeper 0 The contents understanding seems to require an extremely high degree of mental rejlective capacities. On the emotional level, Vision 2000 does not seem to initiate much 0 with the staff. This seems to have been recognized, as at present through aiming at a more open communication of greater variety, through a new logo and through more colorful buildings, it is intended to make it easier for the staff to experience the change emotionally. l The vaguer a vision is formulated (in the sense of a fuzzy vision), the more important it is to have a direct argumentation (argument for interpretation) and communication, so that, based on a verbal construction like Vision 2000, a shared vision can actually be built. Our observations show that shared visions can only grow through an immediate communicative confrontation with the problems of the business ’ everyday life. An aim for these confrontations may not only be the selection of solid measures for the transfer of such a vision, but the identification of persons as well, who do not seriously intend to be included in the process of the shared construction of such a vision. 0 The lack of positive or, more important, authorized negative examples leads to the fact that terms like “striking for balance”, social responsibility or empowerment remain open concepts, so that the intended integrative effect is in danger. From our perspective, this danger manifests itself strongest in those areas (organizational units) which have previously shown “atomization” (fragmentation) phenomena. 0 Because of the openness of Vision 2000, almost all decisions can be justified. This contains the inherent danger of blocking any change and of atomizing a complex organization. 0 The contents of Vision 2000 increase the complexity of decisions in a phase in which coping with an accelerated dynamics forms the central challenge. The vision increases the demands for time in a phase in which time becomes more and more scarce. This could become a strategic trap.*

0

In the following, fundamental possibilities and limits of “visionary management” against the back-ground of these observations and hypotheses shall be considered more deeply. *The focus of the system’s self-reflection is channelled in a direction (three-dimensional responsibility) that has possibly little to do with the immediate urgent strategic challenges which characterize day-to-day business, the conscious dealing with time’s becoming more and more scarce.

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Addressees and Approaches

of Visionary Management

Leadership and Management as “Mediators” of Visions. Leadership and management are understood as functions (not as institutions). In this sense leadership and management are regarded as the totality of all personal initiatives aiming at achieving a coherent, ideally long-term behavior ensuring the survival of the concerned social unit. Leadership differs from management in the way that initiatives of leadership levels necessitate the communicative presence of all participants and concerned (staff leadership). It is the problem of management that management initiatives concern in their totality much bigger organizations and so must tolerate or overcome longer communicative distances (Malik, 1984,51ff; Ulrich, 1984, p. 87,93ff). Within our area of research, interestingly there is no distinction between leadership and management in the sense illustrated above - at least asfar as we can see at the moment. It will be exciting to see which consequences this lack of differentiation* will finally have on the mastering of the change in the areas of leadership and teamwork. Vision, Leadership and Management. In the following a few consequences for the understanding, the development and the realization of visions will be illustrated, which result from the different characteristics of leadership and management. We distinguish three dimensions: 0 0 0

form of conveyance; addressee/stakeholder (team vs. large-scale institution); image of a vision (vision as contents vs. vision as process).

From our perspective 0

0

0

it makes a great difference

whether the CEO of a large corporation wants to establish a contentsrelated vision within the framework of a leadership process for himself and his team (approach l), whether he wants to offer the corporate totality a contents-related vision that is generally shared within the framework of a “charismatic” leadership process (approach 2), or whether he wants to initiate a process of visionary management for the corporate totality within the complex framework of already running management process (approach 3).

Contents-related visions can be developed and realised most easily in a team.? Here within the framework of an intensive process of communication all concerned can be turned into participants (approach 1). But as soon as the addressee of a vision is a large-scale corporation with several ten thousands of staff, the problem arises of how the enormous *“Information is a difference that makes a difference” (Bateson, 1972). tFor example, top leadership team, business sector heads, project teams, etc.

383

Addressee (Stakeholders)

Team (e.g. Executive committee)

Corporate

totaliity

Approach

2

Fundamental Knowledge Transfer

Form of conveyance Leadership

Approach

+

Vision

Immediate Communication Availability

I

as Contents

Vision as Contents . “Charismatic leadership” . “Craftsmanship approach” l “Utopist-approach”

Management

Approach

3

-Overcoming Communicative Distance

Visionary

management

l l l l

as Proc

Figure 2.

Coaching Facilitating Networking Time-management

communicative distance between top management and concerned sensibly be covered (see Fig. 2). This leads to two possibilities:

Vision,

and Management

staff can

(1) The top leadership team resp. the CEO trust in their own charismatic personalities and business expertise to such a degree that they risk developing the “correct” corporate vision and, because of its evidence and importance as well as the personal charisma, to communicate it into the farthest corners of the corporation (approach 2). team formulates a vision for the complete (2) The top leadership corporation as well. With this “intermediate input” for the remainder of the organization they try to initiate a vision developing and determining process. This is adequate more or less to a multiplication of the specific process. The management has to provide for the appropriate conditions, in which such a vision development process can start throughout the whole corporation, based on the individual contents of the respective visions, which progresses in a tight mutual network,* but always has the area-specific challenges and problems as its subject matter (approach 3). The aim would be a set of area-specific, custom-made visions, harmonized to their optimum. Approaches

2 and 3 will be commented

Vision as a “Charismatic It is Ciba’s fundamental institutions to develop in it is believed that sooner

on in the next section.

Leader S” Contents-rela.ted Initiative assumption that it is possible even for large-scale the top committee a contents-related vision of which or later it will be shared by everybody, because of

*This network is of central importance because within business processes suppliers, and adjacent sectors belong to the most important reference groups.

Leadership

customers,

384 International Business Review 324

extensive communicative efforts and measures, involving a more or less greater number of persons. Of course, here theoretical objections can be raised, e.g. whether it is feasible to believe that a contents-related vision can be conveyed to addressees over such immense communicative distances.* Our approach is based on the following considerations: (1) A vision

must be connectable (“anschlussfahig”) to the addressees’ existing knowledge (Winterscheid, 1993). It must relate to challenges and problematic affairs which have a high and urgent relevance in dayto-day business. to the addressees’ current emotional (2) A vision must be connectable world. It must relate to such a (contents-related) mind set and such (procedural) forms of activities which are characterized by highly positive emotions. Here the question arises whether the knowledge and emotions of a large-scale corporation’s staff are homogeneous enough to be reached by one vision.7 The approach of a charismatic leadership does only then have a chance if the top management is successful in discovering appearing strategic patterns in Mintzberg’s sense, to articulate these, to give them form and authorize them, due to their grasp of and access to the factually relevant interaction knowledge and expertise knowledge (Mintzberg, 1987, p. 74; Mintzberg and Waters, 1985).$ To give strategic patterns a form means undertaking structural changes, starting or changing processes. Most important is the management process itself. What takes place during the interactive processes within the top management groups and in the interplay with the first stakeholders of the established leadership initiative is handed on like a “melody” (Boos, 1991, p. 120) and will possibly decide whether the initiatives are immediately accepted or fall flat. The form (the respective interaction knowledge) decides whether anything relating to the new expertise knowledge is actually getting through to the addressee. In short, this approach has to be treated with great care.8 *In this sense Peter Senge (1990, p. 206), “When you look carefully you find that most ‘visions’ are one person’s (or one group’s) vision imposed on an organization. Such visions, at best, command compliance - not commitment. A shared vision is a vision that many people are truly committed to, because it reflects their own personal vision.” Y‘To try to make them (the visions) uniform would mean to follow the illusion of the existence of a group feeling for anonymous structures. This could be ‘created’, but then very often shows violent features. Group feelings are therefore linked to distinct group formations because of our limited sensuality, at least in the emotional aspect” (Heintel, 1993, p. 139; comment in brackets by the authors). $Very similar is the quotation of a CEO in Senge (1990, p. 218), “My job, fundamentally, is listening to what the organization is trying to say, and then making sure that it is forcefully articulated.” *Senge (1990, p. 214) arguments similarly sceptically, “Visions cannot emanate from the top.” “Visions that are truly shared take time to emerge. They grow as a by-product of interactions of individual visions” (p. 217; italics by the authors).

385 (1) There is a danger that such a vision does not base on the personal vision of those concerned (Senge, 1990, 213ff). A “shared vision” requires strong “personal visions”. (2) Something that is intended to move people and institutions, to help them towards a greater dynamics, must have a dynamic, developing, and open character itself. Especially the fixation of visions within a “vision statement” may be dangerous, as the implicit impression might be evoked “that the problem has been solved”. If we follow Senge (1990) in the assumption that visionary management contains an active and reflective way of dealing with the creative tension between “current reality and vision”, then there is the danger that a top-down approach of pre-fabricating a vision may be misunderstood technocratically. (3) The approach within the “charismatic leadership” of a contents-related vision to be conferred by the top leadership team does not pay enough attention to the problem that a new start change in which just the interaction knowledge people into an atmosphere

mutual relationship.

around the top leadership

(4)

teams,

1957). Leadership

teams,

easily in of constructing realities, and of reproducing them through operationally closed processes, differ strongly result in processes groups and the rest of the organization vision is heralded “great it may only prove to be decontextualized verbal continuously

stocks of organizational show a high homogeneity.

*Our empirical observations extant -

seem to indicate

expertise

are taboo and thus

within strategic

without actually linked to persona1 changes,

knowledge

seems to

effective.

the expertise

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relations, important aspects of the interaction knowledge. An adequate leader can easily connect his visions to such concepts, expectations, emotional wishes, etc. There may be sectors and local cultures in which such an approach may bear fruit. But from the point of western concepts of humanity, the danger of a questionable manipulation becomes apparent. These considerations try to show which dangers are connected to the attempt to convey contents-related visions to large-scale institutions by a process of “charismatic leadership” (Neumann, 1991). This attempt contradicts our concept of knowledge as the cognitive expression of a self-organizing process in the creation of reality as something that cannot be “imposed” centrally and directly be influenced. In the next chapter, therefore, considerations will be discussed as to how, from the perspective of the management of knowledge, the central problem of visionary management does not need to be the conference of inspired contentsrelated “standard visions” but the encouragement of conditions which increase the probability of the development of solid visions even in large-scale corporations. Visionary Management Willing to Learn

as Procedural

Initiative of a Corporate

Leadership

Visions as Self-reflexive Intermediary Between the World of Language and the World of Experience. Refusing the concept of “equipping” a large-scale corporation centrally with a uniform contents-related vision, does not necessarily

mean a negation of the effectiveness of solid visions. But it constitutes a fundamental difference if the initiatives of top leadership are aimed at the conference of contents-related concepts or rather at the encouragement of processes of a creation of visions spread over the whole corporation. Our considerations of the processes of radical change tried to show that a large part of organizational knowledge is of a latent character. Proven “self-evident truths” and a more or less conscious “self-image” influence organizational day-today activities. We base our further ideas on the thesis that the appearance of “tensions” or even of suffering has its causes within the valid knowledge of a social unit most of all in the interactions of tacit and explicit knowledge (Nonaka, 1994; Polyani, 1966). This results from the assumption that explicit knowledge, the explicit verbal world (according to Maturana and Varela, 1987; another form of behavior), has the tendency to become eventually independent and to detach itself from the manifest experiences of corporate daily life. * The self-evident truths of the *We have interpreted reality as a process, showing a cognitive and a manifest dimension. The cognitive dimension corresponds with the verbal world, the manifest dimensions with the world of experiences. If these two dimensions of reality were to move apart in the sense of a contradictory paradoxical reality, that would result in areas of tension which could manifest themselves in both dimensions, i.e. in a cognitive as well as in a behavior-related sense, as latent or manifest conflicts.

387 cognitive verbal world do not correspond anymore to those of the manifest, everyday life-oriented world of experiences. The cause for this may be found in a lack of a capacity for self-reflection which in turn could be caused by an increasing pressure of time, tendencies towards lean management, etc. (Staehle, 1991, p. 315). Our empirical work has shown that differences between the verbal world andthe world of experiences can have most destructive consequences. Within a framework of complex, innovative projects, analytical results and conceptual fundamental concepts are not only not understood if they prove unconnectable to the experiences of the concerned addressees, but they provoke resistances which may lead to massive losses of credibility and to personal and area-related animosities. Any attempt to clear this will take an exhaustive long-term effort. Now, visionary management could have the purpose to buffer such a moving apart of explicit and tacit knowledge, of verbal world and the world of experience and to rebuild a minimum of congruence between tacit and explicit self-evident truths. If now visions, i.e. self-images of one’s own future, need “self-reflection”, can such a confrontation be done centrally in the top management on behalf of the whole corporation? To what degree is the result surprising that especially hierarchically organised corporations have difficulties when dealing with visions? May this result from the fact that hierarchical organizations are “structurally anti self-reflexive” (Heintel, 1993, p. 123)? The assumption that the overall control of a corporation can be delegated to a central institution must necessarily lead to expectations which none of the concerned groups can meet. The center may be frustrated by resistances and unintended consequences of its own initiatives, the remaining organization by prescriptions of measures that do not in the least correspond to the factual problems on the front. How can such structural dysfunctionalities be overcome? Visions may serve as a medium of assistance, but only if they are understood as comprehensive processes of a contents-related consideration of images, concepts, faint presentiments of possible aims, all in the sense of a “collective organization of self-reflection” (Heintel, 1993, p. 124). Self-reflexive distance causes “interruption”, distinction, and a new “awareness of time”. Common images of the future are created through dijkrence. . we need them (images of the future): first as “signs”, as active spaces for possible contents, second as terms of a “construction of social spaces”, in which membership and common obligations are created (Heintel, 1993, p. 122; comment in brackets and italics by the authors).

Structural Possibilities of the Implementation of Processes Through Visionary Management. Collective self-reflections do not mean optional leisure activities. Collective self-reflection must be encouraged structurally. Jack Welch’s procedures seem to form a prominent example of this approach: . (Welch) had to help his organization find a new guiding purpose, a new set of rules - a new vision. This is not something a leader can impose by fiat (Tichy and Sherman, 1993, p. 150).

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To support this process of an “organized finding of a new vision”, Welch invested considerable time and money in the establishment of the educational center Crotonville (p. 150) despite many massive protests within a climate of a tough costing management. In this center, actual challenges of daily life have to be dealt with in guided team-work (p. 133). For the projects to be worked on, a vision had to be outlined (p. 141). So that here could be no “informational closure”, no isolation tendencies, strong feedback loops were included - first through a systematic questioning of course participants, second through a forced communicative confrontation of the participants’ superiors with the compiled suggestions of their staff (p. 142). The three-monthly Corporate Executive Council can be regarded in this context, for example, first as a “high-level think tank” (p. 158), second as an “architecture of social relationships” (p. 159). From the experiences gained within General Electrics, two things can be mentioned. First, such a procedure permits the development of expertise knowledge. The shared confrontation with central strategic challenges increases the probability that experiences can permeate through the corporation more easily. Problems of individual areas become problems of the whole corporation (p. 165) by appealing to those not directly concerned to contribute something to the solution of problems. Secondly, in this way the interaction knowledge, the design of networks and the forms of relationship can be improved. The trouble is that few companies have yet recognized the value of their executives’ interpersonal skills, and so have not made them a primary basis for promotion (p. 162).

On the “Commonization ” of Visions. The procedural approach of visionary management has further consequences. It makes possible a linkage of the development of personality* to that of the corporation. Human beings are situated in a permanent area of tension, between individuation, leading towards social isolation, and commonization, which could result in a collective submission - especially in such large social units as corporations. Within the process of mastering such areas of tension, visions, in the sense of verbal media, can assume an important regulative function if structural conditions are created which encourage working on a living dialectics between a “personal vision” and a “shared vision”. Large-scale institutions are constructions which cannot be penetrated and understood by individual “members” (Daft and Weick, 1984). This results in a “structurally based deficit of information” (Heintel, 1993, p. 126) which is complemented by the members by adding “complementary images” and emotions, linked to these complementary images. So in a way a cognitive and emotional hologram is created within the corporation. Reality (as process) is formed from the interplay of these mental images spread all over the corporation.

*In the sense of a “personal mastery” (Senge, 1990, 139ff).

389 These images and emotions - part of the tacit knowledge - therefore influence behavior. So it can be in the interest of a corporation not to suppress such images and emotions by “imposing” a standard vision through a “collective ritual numbing of individual reason”, but to make them part of a collective and rational process of self-reflection (Heintel, p. 129). Visionary management then works towards a “selfclarification of individualized images and visions” (p. 134), a “self-enlightenment of the collective unconscious” (p. 135) of corporations.* Of course, Ciba’s Vision 2000 may have aimed at an initiation of such a process of self-reflection. But on the other hand, the Vision itself seems to be in a way taboo. (One simply cannot say anything against it.) So up to the present moment, we have not been able to observe many enthusiastic attempts at true dialog which were dedicated towards a vision in general, and towards an adequacy of the Vision 2000 for Ciba in particular. Especially educational centers like Crotonville or corresponding educational and leadership seminars, etc. can contribute to an intensive “training of selforganized ‘visionary management”’ (Heintel, p. 138). Though there must be a common overall vision, this consists in a permanent confrontation of the organization with itself if procedurally put into practice. This confrontation does not only aim at a reflection of an optimum degree of functioning, but at the question of why we function so well at all? Procedurally understood, the vision dissolves to “nothing”, i.e. to organizational measures allowing self-reflection and self-confrontation! (Heintel, p. 145).

On the Part of Top Management within the Process of Commonization of Visions. The previous considerations may give the impression of a strongly qualifying attitude towards the position and possibilities of influence the top leadership can exercise in visionary management. Its tasks, though, do not decrease but become more difficult and numerous. Two main areas of tasks have crystallized themselves during our considerations so far. 0 0

First, the top management, too, is prompted to offer a contents-related contribution to the collective and rational process of self-reflection. Second, it is responsible for taking part in the formation of structures which serve as a basis for this collective and rational process of selfreflection within the corporation.

These areas of tasks shall be sketched in the next section. On the Contents-related and probably foremost -

Contributions of Top Management. The first task of the top leadership consists in helping

*Senge argues in a similar way (1990, 217ff), “Experience suggests that visions that are genuinely shared require ongoing conversation where individuals not only feel free to express their dreams, but learn how to listen to each other’s dreams. Out of this listening, new insights into what is possible gradually emerge”.

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themselves to a commonly established and shared vision and to form a real team while doing so - in case this did not previously happened. As far as the subject matter is concerned, this vision should deal with the question of where the respective corporation actually stands, which images and emotions, but which “objective” data as well, can be connected with the actual position of the corporation. The next step, of course, deals with the question of the respective corporation’s future. Which chances, hopes, fears, interests, capabilities are connected to the corporate future? Closely oriented to the juxtaposition of future vision (corporate vision) and “current reality” (Senge, 1990), the next task would have to be to deduct a vision (leadership vision), which strictly adheres to the top leadership team’s self-image and their function and contribution to the total corporation, which in the sense of an organizational body constitutes the most important stakeholders for the top leadership team.* For example, the following question could serve as a guideline, “What is our ‘added value’ to the actual and future development of the total corporation?” So what matters here is not only a clear alignment of the top leadership team’s work and motivation in mastering of the present and future challenges of the complete organization (corporate vision), but also mastering the interface between top leadership and the remainder of the corporation (leadership vision). It does not matter so much to convey the corporate vision with a great media spectacle to the last worker, but to model the team’s life at the top according to such a coherent pattern of behavior, i.e. to a leadership vision, that it will be implicitly recognizable for all the interactive participants (e.g. divisional heads) and further observers in any new contact and, most of all, in any new leadership initiative.? A corporate vision is therefore mainly expressed within a process, in the way the top leadership and the remaining body of the organization interact. Therefore, in this sense the top leadership must be a “model of interaction knowledge and expertise knowledge” in all its activities.$

*Thus the leadership vision is based on a much narrower system definition. It can be thoroughly designed within the frame of the leadership processes by the respective group. This exactly is impossible in case of a corporate vision, i.e. a vision for the whole of the corporation. The top leadership group should enter their corporate vision permanently into confrontations and discussions without “imposing” it officially. Whereas unmistakenly activities of the management are asked for if widely spread processes of the creation of visions are to be encouraged and coordinated. tin this context of processes of change one will encounter the paradox that on the one hand communicative efforts are necessary to explain change. But on the other hand the danger of a loss of credibility is increased, as soon as the slightest contradictions between words and actions are believed to be discovered. “They don’t walk as they talk!” *It does not matter whether it is attempted to propagate this vision through a package of measures and strategic programs or through verbally fixed formulations. All this just represents a collection of data that has still to be interpreted.

391 On the Procedural Contribution of Top Management. One possibility to institutionalize the process of visionary management has already been mentioned. Crotonville offers a platform on which presumably a great number of relevant decision makers can introduce their visions in one form or the other and offer them for discussion to a larger public. Based on Tichy’s and Sherman’s report (1993), we believe to be able to recognize the following functions of top leadership in the process of “envisioning”: Coaching of projects important for the whole corporation. We understand coaching as the support and encouragement of the concerned leading executive in the shared development of expertise knowledge. Facilitating of processes concerning the leadership and teamwork. Because of projects of importance for the whole corporation, very often area-relevant and personal interests will be touched upon. Facilitating in this sense means most of all a support in the areas of moderating conflict resolutions, i.e. support for the shared development of interaction knowledge. Networking. While facilitating mainly deals with the form of the relationship between leadership and teamwork, networking touches the problem of inter-connectivity. This, for example, consists not only of the implementation of feedback-loops, but of the mediation of contacts to experts and specialized sectors. This function as well is considered a support of the shared development of interaction knowledge. Time management through moderating the rhythm “open-closed”. Reflective processes take time. Today time belongs to the corporation’s critical resources. Phases of critical collective self-reflection must be followed by those in which the results of these self-reflections definitely assume binding authority. This may express itself as a determined and consequent initiative towards an evolutionary experimental transfer of the considered problems. So the process of time management is one of prominent importance if a company is not to overtax itself - depending on the currently confronted challenges and the available resources. Early identification and overcoming of barriers. Diseases often linger unnoticed for a long time until they spread. If it is possible to create a kind of public forum in which central and controversial challenges can be articulated in time, the danger of those diseases having a life of their own can be limited. Breaking up (unveiling) of political processes. Owing to their nature, large-scale hierarchical institutions tend to “politicize factual problems”. Through dealing with factual questions, possibilities of influence and the distribution of powers are negotiated tacitly by individual persons and groups. As soon as such hidden

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processes acquire a dynamics of their own, they will cause considerable consequences. The top management should insist on the clarification of positions within the processes of “collective self-reflection” and so increase the importance of definitive commitments. This leads to a further transparency of relationship networks. Finally, the top leadership should exert a soft, but insistent pressure by setting limits in time (politics take time!). Summary The present considerations try to show that a fundamental change does not only require a shared “re-building” of new contents of knowledge, but that the process of re-building factual knowledge itself is subject to change. Because of this, it does not seem sufficient for a management simply to try to let a new vision “infiltrate” the company through the old channels in the traditional ways. If the top leadership diagnoses a fundamental demand for a change whose mastering they wish to influence and support lastingly through a vision, then the interaction knowledge itself is concerned. From such a perspective, it is the task of the top management as ogle of many parties to formulate for themselves, i.e. for the perception of their own sphere of activities, as well as the whole corporation, ooze vision. While doing so, top management must initiate a multiplicative, interrelated process of vision genesis in which the expertise of all members of the company must be included in an adequate form. Only through a radical, communicative inclusion of the members a shared vision can grow. Communicative inclusion, though, does in no way mean an endless dialog, but ideally a shared (evolutionary) and persistent experimenting and reflecting of new solutions to problems in the smallest possible, solid and controllable steps. Acknowledgements-The empirical observations and conclusions presented in this article are part of the “New Winners?’ research project. This international project was initiated in 1992 by Professor Alessandro Sinatra at Bocconi University in Milano/Italy and today combines the joint efforts of research teams in Belgium, Germany, Italy, Japan, Norway, Switzerland, the United Kingdom, and the United States. We would like to thank all participants of our research partner Ciba as well as the members of our Local Area Group Switzerland, Felix Buschor, Gieri Carigiet, and Andre Haffner for their initiative, efforts, and their valuable contributions to our empirical research.

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