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Learning new parenting skills
BRIEF
CASE
Learning New Parenting Skills Michael
I
N
RECENT
Goold
YEARS,
THERE
HAS
BEEN
INCREASING
interest in the subject of organizational learning. Managers have recognized that they operate in a changing environment and that they need to be able to learn new skills and attitudes to deal with it. Academics have written extensively about the socalled ‘learning organization’, and have brought out both the importance and the difficulty of creating organizations that learn rapidly and successfully. Learning is now firmly on the management agendathough how to learn more effectively is a question for which we remain short of answers. In research that the Ashridge Strategic Management Centre have been carrying out on the role of corporate parent companies, we have focused particularly on the learning challenge that parent we have found organizations face. ’ Not surprisingly, that learning new parenting skills is never easy. Many companies stumble when they try to alter the way in which they parent their businesses, or to extend their portfolios into new and unfamiliar businesses. From observing companies that have been successful in learning new parenting skills, we have, however, been able to draw some conclusions about the conditions under which learning does take that is place, and about the extent of learning possible. A precondition for successful learning is a recognition of the need to learn. Parents that assume their existing skills will always be sufficient for new situations and new businesses are not open to possible changes, and, as a result, seldom learn.2 But, for many parents, an inquiring attitude of this sort is hard. Established patterns of parenting are difficult to discard, and can provide filters that prevent the parent from seeing the real differences in new situations and new businesses. What is more, considerations of status and hierarchy make it unnatural for many senior parent managers to admit to their business managers that they lack
understanding or skills in some areas. As a result, the need to acquire new parenting skills is often not perceived. It is only when the company has run into serious performance problems that learning begins, by which time it may already be too late.” As the senior management in IBM would now no doubt that parenting skills must conagree, recognition stantly evolve and change is far preferable to waiting for a crisis before admitting that change is needed. New parenting characteristics are usually built up gradually and refined with experience. A feel for new businesses is slowly acquired by exposure to the issues faced by the businesses. The effectiveness of new corporate strategies and ways of parenting are tested and proved by putting them into practice. Viewed from a learning perspective, almost all parenting initiatives should be regarded as potentially useful experiments, from which much can be learned about how to create more value in future. In practice, it is as difficult to learn from experience as it is to recognize the need to learn, and for similar reasons. Nevertheless, the success of companies such as GE, Canon, and Grand Metropolitan in modifying their corporate strategies has depended upon their ability to try new initiatives, and to be willing to learn both from the successes and the failures. Provided the false starts are used as a basis for learning, and provided that the first steps with new approaches to parenting or new businesses are taken cautiously, with the expectation of learning more as experience is gained, initial setbacks can the ground for eventual successes. If, prepare
Brief Case is a portFolio o-fcommentary, opinion, research and experience. The editors waleome contributians, comments and ideas from readers. These should be sent to Marcus Alexander, Andrew Campbell and Michael Goold at Ashridge StraBgic Management Centre, 17 Portland Place, London WIN 3AF.
Img
P~rgXIKlTl 0024-6301(94)EO030-8
Range
Planning
Vol.
27.
No.
Copyright 0 Printed
in Grent
4, ~1’.
138
1994
Elsevier
Britain.
All
0024~6301/94
to 140.
1994
Science
Ltd
rights reserved $7.00+.00
however, the parent is unwilling, or unable, to modify its parenting in the light of experience, errors can be perpetuated for long periods of time.4 Some sorts of parental learning are relatively easy, while others are hard or even impossible. The learning involved in fine tuning well-established parenting systems and processes, or in understanding the specific critical success factors in a new business that is largely similar to others in the portfolio, is modest. If the parent does not recognize that some learning is needed, it may not happen. But, in principle, the learning task is relatively easy. As the new skills move further away from the established and the familiar, the learning challenge increases. Companies such as Canon and Shell have found that it usually takes several years to acquire a feel for new businesses with substantially different critical success factors from their established core businesses. Indeed, several experienced chief executives believe that it is realistic to allow a decade or more to build the right instincts in situations of this sort, and recognize that there is no guarantee of success at the end of the road.’ Major modifications to management processes and structures can take almost as long to work smoothly, as companies that have introduced basically new approaches to planning or radical changes in reporting relationships will testify. The greatest learning difficulties are presented by situations that require parenting which is incompatible with deeply held beliefs that are ingrained throughout the company’s parenting. Parents, such as BTR or Emerson, that have always believed in clear individual business responsibility and accountability, find it very hard to learn to operate with a matrix structure or with extensive shared resources
at the centre. Parents, such as RTZ or Shell, that naturally see their role in terms of supporting businesses’ long-term investment plans through thick and thin, have great difficulty applying Hanson-type strict short-term budgetary control. There are basic conflicts between these different approaches to parenting, and no programme of learning is likely to succeed in grafting them onto each other. If BTR or Emerson were to find themselves in businesses that needed complex linkage management from the parent, they would have to change their whole corporate strategies to parent the businesses well. If RTZ or Shell were to enter businesses that needed an exclusive focus on shortterm operating profits, they would confront a similarly fundamental need for change. Given the predispositions and skills of the existing parenting teams, and the pervasive influence of their deeply held beliefs about how to exercise their influence, such changes are most unlikely to occur. Rather than believing that they can learn to parent any sort of business, parents should recognize that there are certain sorts of parenting approach that will almost certainly be impossible for them to learn, and, hence, certain sorts of businesses that should always be avoided. Corporate parents therefore need an awareness of their own need to learn new parenting skills, and a willingness to learn from experience, both the successes and the failures. But they also need a realistic appreciation of the extent of change and learning that they are likely to be able to take on board. Corporate strategies must be dynamic, and must incorporate new learning; but they must not call for changes in parenting that are highly unlikely to be satisfactorily accomplished.
References (1)
See Michael Goold, Andrew Campbell and Marcus Alexander, Corporate-Level Strategy: Creating Value in the Multibusiness Company, John Wiley (1994). Especially chapters 10 and 15 where we refer to the activities of the corporate parent as ‘parenting’, and we pay particular attention to the ‘parenting skills’ of corporate parents.
(2)
Many academics have written about the difficulty managers have in recognizing the need to learn. They find it hard to ‘unfreeze’ from existing attitudes, to free themselves from their prevailing mental maps, and to admit openly the need for new skills and ways of working. See, for example, Kurt Lewin, Group Decision and Social Change, in T. M. Newcombe and E. L. Hartley (Eds), Readings in Social Psychology, Holt, Rinehart and Winston (1958); Bo Hedberg, ‘How Organizations Learn and Unlearn, in Paul C. Nystrom and William H. Starbuck (Eds), Handbook of Organizational Design, Volume 1, Oxford University Press (1981); Chris Argyris, Strategy, Change and Defensive Routines, Pitman (1985); Peter Senge, The Fifth Discipline, Doubleday (1990); Arie de Geus, Planning as Learning, Harvard Business Review, March/April (1988); Edgar H. Schein, How Can Organizations Learn Faster? The Challenge of Entering the Green Room, Sloan Management Review, Winter, (1993).
Long Range Planning Vol. 27
August
1994
have shown that manifest crises are the most powerful, and sometimes the only, way (3) Academics to bring about organizational learning. See, for example, T. K. Lant, F. J. Milliken and B. Batra, The Role of Managerial Learning and Interpretation in Strategic Persistence and Reorientation: An Empirical Exploration, Straregic Management Journal 13, (1992); D. Miller and P. t-l. Friesen, Momentum and Revolution in Organization Adaptation, Academy of Mangement Joumal23, (4) 591-614 (1980); D. Miller, The lcarus Paradox, Harper Business (1990). gained to test and refine managers’ mental maps and strategies has (4) The need to use experience been brought out by many writers who have concerned themselves with the so-called ‘learning organization’. See, for example, Peter Senge, The Fifth Discipline, Doubleday (1990): Garvin, Building a Learning Organization, Harvard Business Review, July-August (1993); C. F. Fiol and M. A. Lyles, Organizational Learning, Academy of Management Review (1985); R. K. Kazanjian and R. Drazin, Implementing Internal Diversification: Contingency Factors for Organization Design Choices, Academy of Management Review (1987), 12 (2), 342-354 (1987); C. Argyris and D. A. Schon, Organizational Learning: A Theory ofAction Perspective, Addison Wesley (1978); Charles Handy, The Age of Unreason, Business Books Limited (1989). Rosabeth Moss Kanter, The Change Masters: Corporate Entrepreneurs at Work, Unwin Hyman (1985). encountered in diversifying into new businesses have been particularly (5) The difficulties well-documented for companies in the tobacco, oil, and financial services industries. See, for example, Robert H. Miles, Coffin Nails and Corporate Strategies, Prentice Hall (1982); Robert Grant, Diversification in the Financial Services Industry, in Andrew Campbell and Kathleen Sommers Luchs (Eds), Strategic Synergy, Butterworth-Heinemann (1992); Robert Grant, The Oil Companies in Transifion 7970-87, Franc0 Angeli, Milan (1991).
Brief
Case-Learning
New Parenting
Skills
CASE
Learning New Parenting Skills Michael
I
N
RECENT
Goold
YEARS,
THERE
HAS
BEEN
INCREASING
interest in the subject of organizational learning. Managers have recognized that they operate in a changing environment and that they need to be able to learn new skills and attitudes to deal with it. Academics have written extensively about the socalled ‘learning organization’, and have brought out both the importance and the difficulty of creating organizations that learn rapidly and successfully. Learning is now firmly on the management agendathough how to learn more effectively is a question for which we remain short of answers. In research that the Ashridge Strategic Management Centre have been carrying out on the role of corporate parent companies, we have focused particularly on the learning challenge that parent we have found organizations face. ’ Not surprisingly, that learning new parenting skills is never easy. Many companies stumble when they try to alter the way in which they parent their businesses, or to extend their portfolios into new and unfamiliar businesses. From observing companies that have been successful in learning new parenting skills, we have, however, been able to draw some conclusions about the conditions under which learning does take that is place, and about the extent of learning possible. A precondition for successful learning is a recognition of the need to learn. Parents that assume their existing skills will always be sufficient for new situations and new businesses are not open to possible changes, and, as a result, seldom learn.2 But, for many parents, an inquiring attitude of this sort is hard. Established patterns of parenting are difficult to discard, and can provide filters that prevent the parent from seeing the real differences in new situations and new businesses. What is more, considerations of status and hierarchy make it unnatural for many senior parent managers to admit to their business managers that they lack
understanding or skills in some areas. As a result, the need to acquire new parenting skills is often not perceived. It is only when the company has run into serious performance problems that learning begins, by which time it may already be too late.” As the senior management in IBM would now no doubt that parenting skills must conagree, recognition stantly evolve and change is far preferable to waiting for a crisis before admitting that change is needed. New parenting characteristics are usually built up gradually and refined with experience. A feel for new businesses is slowly acquired by exposure to the issues faced by the businesses. The effectiveness of new corporate strategies and ways of parenting are tested and proved by putting them into practice. Viewed from a learning perspective, almost all parenting initiatives should be regarded as potentially useful experiments, from which much can be learned about how to create more value in future. In practice, it is as difficult to learn from experience as it is to recognize the need to learn, and for similar reasons. Nevertheless, the success of companies such as GE, Canon, and Grand Metropolitan in modifying their corporate strategies has depended upon their ability to try new initiatives, and to be willing to learn both from the successes and the failures. Provided the false starts are used as a basis for learning, and provided that the first steps with new approaches to parenting or new businesses are taken cautiously, with the expectation of learning more as experience is gained, initial setbacks can the ground for eventual successes. If, prepare
Brief Case is a portFolio o-fcommentary, opinion, research and experience. The editors waleome contributians, comments and ideas from readers. These should be sent to Marcus Alexander, Andrew Campbell and Michael Goold at Ashridge StraBgic Management Centre, 17 Portland Place, London WIN 3AF.
Img
P~rgXIKlTl 0024-6301(94)EO030-8
Range
Planning
Vol.
27.
No.
Copyright 0 Printed
in Grent
4, ~1’.
138
1994
Elsevier
Britain.
All
0024~6301/94
to 140.
1994
Science
Ltd
rights reserved $7.00+.00
however, the parent is unwilling, or unable, to modify its parenting in the light of experience, errors can be perpetuated for long periods of time.4 Some sorts of parental learning are relatively easy, while others are hard or even impossible. The learning involved in fine tuning well-established parenting systems and processes, or in understanding the specific critical success factors in a new business that is largely similar to others in the portfolio, is modest. If the parent does not recognize that some learning is needed, it may not happen. But, in principle, the learning task is relatively easy. As the new skills move further away from the established and the familiar, the learning challenge increases. Companies such as Canon and Shell have found that it usually takes several years to acquire a feel for new businesses with substantially different critical success factors from their established core businesses. Indeed, several experienced chief executives believe that it is realistic to allow a decade or more to build the right instincts in situations of this sort, and recognize that there is no guarantee of success at the end of the road.’ Major modifications to management processes and structures can take almost as long to work smoothly, as companies that have introduced basically new approaches to planning or radical changes in reporting relationships will testify. The greatest learning difficulties are presented by situations that require parenting which is incompatible with deeply held beliefs that are ingrained throughout the company’s parenting. Parents, such as BTR or Emerson, that have always believed in clear individual business responsibility and accountability, find it very hard to learn to operate with a matrix structure or with extensive shared resources
at the centre. Parents, such as RTZ or Shell, that naturally see their role in terms of supporting businesses’ long-term investment plans through thick and thin, have great difficulty applying Hanson-type strict short-term budgetary control. There are basic conflicts between these different approaches to parenting, and no programme of learning is likely to succeed in grafting them onto each other. If BTR or Emerson were to find themselves in businesses that needed complex linkage management from the parent, they would have to change their whole corporate strategies to parent the businesses well. If RTZ or Shell were to enter businesses that needed an exclusive focus on shortterm operating profits, they would confront a similarly fundamental need for change. Given the predispositions and skills of the existing parenting teams, and the pervasive influence of their deeply held beliefs about how to exercise their influence, such changes are most unlikely to occur. Rather than believing that they can learn to parent any sort of business, parents should recognize that there are certain sorts of parenting approach that will almost certainly be impossible for them to learn, and, hence, certain sorts of businesses that should always be avoided. Corporate parents therefore need an awareness of their own need to learn new parenting skills, and a willingness to learn from experience, both the successes and the failures. But they also need a realistic appreciation of the extent of change and learning that they are likely to be able to take on board. Corporate strategies must be dynamic, and must incorporate new learning; but they must not call for changes in parenting that are highly unlikely to be satisfactorily accomplished.
References (1)
See Michael Goold, Andrew Campbell and Marcus Alexander, Corporate-Level Strategy: Creating Value in the Multibusiness Company, John Wiley (1994). Especially chapters 10 and 15 where we refer to the activities of the corporate parent as ‘parenting’, and we pay particular attention to the ‘parenting skills’ of corporate parents.
(2)
Many academics have written about the difficulty managers have in recognizing the need to learn. They find it hard to ‘unfreeze’ from existing attitudes, to free themselves from their prevailing mental maps, and to admit openly the need for new skills and ways of working. See, for example, Kurt Lewin, Group Decision and Social Change, in T. M. Newcombe and E. L. Hartley (Eds), Readings in Social Psychology, Holt, Rinehart and Winston (1958); Bo Hedberg, ‘How Organizations Learn and Unlearn, in Paul C. Nystrom and William H. Starbuck (Eds), Handbook of Organizational Design, Volume 1, Oxford University Press (1981); Chris Argyris, Strategy, Change and Defensive Routines, Pitman (1985); Peter Senge, The Fifth Discipline, Doubleday (1990); Arie de Geus, Planning as Learning, Harvard Business Review, March/April (1988); Edgar H. Schein, How Can Organizations Learn Faster? The Challenge of Entering the Green Room, Sloan Management Review, Winter, (1993).
Long Range Planning Vol. 27
August
1994
have shown that manifest crises are the most powerful, and sometimes the only, way (3) Academics to bring about organizational learning. See, for example, T. K. Lant, F. J. Milliken and B. Batra, The Role of Managerial Learning and Interpretation in Strategic Persistence and Reorientation: An Empirical Exploration, Straregic Management Journal 13, (1992); D. Miller and P. t-l. Friesen, Momentum and Revolution in Organization Adaptation, Academy of Mangement Joumal23, (4) 591-614 (1980); D. Miller, The lcarus Paradox, Harper Business (1990). gained to test and refine managers’ mental maps and strategies has (4) The need to use experience been brought out by many writers who have concerned themselves with the so-called ‘learning organization’. See, for example, Peter Senge, The Fifth Discipline, Doubleday (1990): Garvin, Building a Learning Organization, Harvard Business Review, July-August (1993); C. F. Fiol and M. A. Lyles, Organizational Learning, Academy of Management Review (1985); R. K. Kazanjian and R. Drazin, Implementing Internal Diversification: Contingency Factors for Organization Design Choices, Academy of Management Review (1987), 12 (2), 342-354 (1987); C. Argyris and D. A. Schon, Organizational Learning: A Theory ofAction Perspective, Addison Wesley (1978); Charles Handy, The Age of Unreason, Business Books Limited (1989). Rosabeth Moss Kanter, The Change Masters: Corporate Entrepreneurs at Work, Unwin Hyman (1985). encountered in diversifying into new businesses have been particularly (5) The difficulties well-documented for companies in the tobacco, oil, and financial services industries. See, for example, Robert H. Miles, Coffin Nails and Corporate Strategies, Prentice Hall (1982); Robert Grant, Diversification in the Financial Services Industry, in Andrew Campbell and Kathleen Sommers Luchs (Eds), Strategic Synergy, Butterworth-Heinemann (1992); Robert Grant, The Oil Companies in Transifion 7970-87, Franc0 Angeli, Milan (1991).
Brief
Case-Learning
New Parenting
Skills