Plenary Discussion 1

Breaking the Code of Change II, Rotman School of Management, August 2-3, 2000

These participant's notes were created in real-time during the meeting, based on the speaker's presentation(s) and comments from the audience. These should not be viewed as official transcripts of the meeting, but only as an interpretation by a single individual. Lapses, grammatical errors, and typing mistakes may not have been corrected. Questions about content should be directed to the originator. These notes have been contributed by David Ing ( at the IBM Advanced Business Institute (

Roger Martin

Across the three talks:

Comment: Need more robust strategy models in the organization.

Comment: People are already responding to the scary parts, maybe need to get something scarier.

Gerry: Even when managers are in the less scary world, they are still scared, but have more of a locus of control.

Amy: Can this happen in groups instead, so that the fear and solution happen in a group.

Mike Jensen: In groups (like markets), fears either aggregate with negative or positive feedback. Can also have individuals rational, and aggregate not (e.g. rent controls). Herd phenomenon, easier to do if someone else to do it, but this leads to convergence.

Mike Beer: Some people are scared of making the strategy choice, because they aspire to something, that they might lose. May also get conditioned, e.g. see the CEO taking a lot of personal risk, or see society valuing risk.

Allen: In business schools, teach students to get them away from the scary. There are many things that can be done to educate them, e.g. simulations.

Russ: Role of consultants to help people reframe.

Geoffrey: When students ask about jobs, he suggests going to a growing company. Things are scarier in declining companies.

Mike Jensen: Growth doesn't mean survive, need to create value.

Mike Beer: Growth for career expansion may cause problems. Maybe should have a program so that people interview for another job, once per year.

David Miron: We're going down a track to fix the scary issue. Does Daniel Goleman's work on EQ fit in this box?

Mike M.: Goleman studies on tribes, four systems of organizational interaction.

Michael Jensen: Friedrich Heyer says simultaneous organization of families and markets. Can't coordinate effort at large scale in family or authority structures. Many workgroups are like families, which works at small scale. Problem is that people grow up in families, and think everything should scale up that way, which is a total failure.

Roger Martin: There's a change in the stock market. Previously, paid for results after the fact. Now, paying for potential up front, creating chaos in organizations. Markets taking over, and internal organization hasn't kept up. People say that should regulate the market, but this isn't where the problem is.

Cliff: Turbulence

Tom Keiser: We were discussing scary, and now we're discussing power. We haven't discussed this in the bigger context of this conference.

Mike M.: Now we have access to a well-functioning labour markets.

Larry: Economies run on the family model? Environment under the family model? This original work were done by Karl Polanyi. The market model came later, and they're not natural.

Allen: Learning theory: people are ready to learn with they are moderately comfortable. Thus, want to find the optimal state of scariness / comfort. How to balance individual and community; growth and stability; change and continuity? It's tensions that make up the world.

Mike Jensen: Intrusion of markets, into what was previously corporations. Will have smaller companies.

Chris Argyris: Have both market and humane approaches, need a tension between the two. Some informal systems can be very destructive.

Larry: Like democracy, it's the worse thing, but what's the alternative? Families are natural, was reacting to market utopianism.

Chris: Let human beings be themselves, and they'll screw them up. At first, were scared of markets, and was threatened. Now, have come to conclusions that there is some humanity in markets.

Chris: Went to Europe to study why the CGT (union) became so powerful. Leader said it wasn't the Marshall Plan. They worked in small family groups. (Selznick). They become an organization, and took on properties that they were accusing the government with.

Michael Jensen: Difference in families between espoused theory, and theory-in-practice. Families represent the single biggest source of problems in any human's life. But every human will say families are wonderful.

David Ing: Systems of survival, commercial syndrome and governance syndrome.

Cliff: Does nature solve what we want to do? Are we ready to redefine the goal question that we started with, today? (Double-loop learning).


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