Contours of the Clever Organisation

19 October 2009 Gareth Jones

Rob Goffee and Gareth Jones address why the smart people in an organisation need to be handled with care. CEO presents an extract from their new business title CLEVER: leading your smartest, most creative people.

Take an organisation like Cisco Systems, for example. It is brimming with clever yet highly diverse people. No two are the same – or want exactly the same relationship with the organisation. Consider the following three Cisco employees.

Andreas Dohmen

Andreas Dohmen is a German nuclear physicist who also has a degree in economics. In his spare time he plays soccer and reads philosophy. "One day, I will study philosophy. That's my personal dream," he told us. His first job after university was as a system engineer and product manager at the German electronics giant Siemens. "I wanted to learn how a company works. I was fascinated by a company like Siemens, with 400,000 employees doing hundreds of millions of things and needing to make a lot of money every day. I wondered how this works in such a large organisation. I wanted to learn."

It is typical of the way Dohmen thinks. "I like to solve problems," he says. "It sounds a bit odd but I like to solve problems with people. It's my physics background. I like to stand in front of complex things and solve them. I strongly believe that the future lies in being cross-functional. Leadership has to do with how we develop more and more leaders who are capable of looking horizontally rather than just vertically."

"most of the clever people at work in the clever economy work within (or are linked to) organisations."

Andreas Dohmen joined Cisco in 2001. "A lot of people mix it up and they say, we are Cisco, we are a start-up. I say, no, hold on, hundreds of millions of products every year don't ship with a start-up mentality. Forget it. You would screw up our partners and customers big-time if you thought like that. But at the same time that should not make you an old economy company where processes beat innovation. The art is to keep both sides going at the same time. Be rigid, stick to it, but on the other side still have out-of-the-box thinking."

Christina Kite

Then there is Christina Kite. When we met her she was in Bangalore, India, overseeing a 45-day assignment as part of her responsibility for Cisco's real estate. She says:

"I think what's very good about Cisco is, they are willing to take risks and to bet on the person, not necessarily whether the person has all the skills and the subject matter expertise or the technical knowledge. So I now have a background in risk and one in real estate.

"Just when I feel that I'm getting bored or going on autopilot, they throw another challenge in my direction. I've never had to go to them and say, I want this or I think I should have that. It's almost like magically they seem to read my mind or are very observant. They've always challenged me. I'm not sure I can say I'm successful because I always feel there's that higher bar."

Mark de Simone

Cisco is also the organisational home of Mark de Simone. "I've been in technology and management all my life," he told us. "I was fascinated with technology to begin with 30 years ago." Italian-born de Simone is vice-president for Cisco's operations in the Middle East and Africa. He is responsible for Cisco's business in 84 countries and Cisco operations and offices in more than 15 countries. He says:

"We are all unhappy with the status quo because we all know that there is a place, a thing, that the company, that we, that our teams, and individual contributors can do better. And this goes all the way down and, more importantly across, the organisation. There is no one place where new great ideas come from. They come from everywhere. And if you allow people to experiment and to make mistakes and to learn, and to push the boundaries, you're going to have a true learning organisation."

Andreas Dohmen. Christina Kite. Mark de Simone. Three very different people; all clever; all part of Cisco. Their stories are engagingly authentic. Andreas Dohmen, a philosophical soccer player (like Camus, one of his heroes); Christina Kite, a peripatetic real estate executive; and Mark de Simone, a visionary for a new kind of organisation. Very different people with decidedly different experiences and views of life, linked by finding their organisation – one with 63,000 other employees – a rewarding place to work.

This is the great challenge for modern organisations such as Cisco. And it isn't just high-tech companies that have to accommodate a diversity of intellects and interests; it is all organisations. How every person within them relates to the organisation is likely to be different. But, some how, they hold together.

How does Cisco do this? How can it offer a psychologically rewarding experience for three such different individuals? Part of the answer is that it recognises and values just such diversity. It is large, but feels small. It still smells like a start-up. It's been around but still feels new. It's exciting and edgy.

Large organisations have received a bad press over recent years. The fashionable wisdom is that life is more fulfilling outside of an organisation, somewhere where the individual has control of their destiny. The reality, however, is that the free-agent nation described by Dan Pink and others is the preserve of a minority – undoubtedly a substantial and important number, but a minority nevertheless.

"Tension is intrinsic to the clever organisation."

And even for this minority, it is not entirely clear that the benefits of liberation from organisational employment outweigh the costs. Stephen Barley and Gideon Kunda's ethnography of 'itinerant experts' in the knowledge economy concludes: "During their more optimistic moments, contractors thought they had come close to achieving the American dream. They no longer had to conform to the whims of managers who once controlled their fate, and within reason they could speak their minds while focusing more exclusively on the technical aspects of their work."

But there were caveats to this rosy picture of free-agent nirvana. Although they were no longer imprisoned in an 'iron cage of bureaucracy' they found themselves suspended in webs of dependency that were no less constraining. Free agency and self-reliance did not mean freedom from social constraints or absence of reliance on others; it simply meant that the contractors' social dependencies had changed context.

So for better or for worse, most of the clever people at work in the clever economy work within (or are linked to) organisations, often extremely large organisations.

Remember that clever people really need organisations – to fund their dreams, to provide them with resources and a platform, and often, in a more basic way, to complement their skills and knowledge. As one of our interviewees bluntly put it: "There are all these clever people, but they're not quite as clever as they think they are, and while they would like to think that they're Nobel laureates and all the rest of it, some of them couldn't boil an egg."

As we have seen, there are tensions within this arrangement. Clever people have a history of uneasy relationships with organisations.

The individual craves independence. But the leader craves interdependence. This creates tension – tension that is intrinsic to the clever organisation.

Reprinted by permission of Harvard Business School Publishing. Excerpt from Clever. Copyright 2009 Rob Goffee and Gareth Jones. All rights reserved.

Readers of CEO can order Clever (RRP £19.99) at the special discounted price of £15 (including p&p). To order, telephone McGraw-Hill on: 01628 502720 with your credit card details and quote special offer code CEO2009C. The offer ends January 2010.