management "coherent viewpoint" business Internet production instructions customers context efficiency

In March 1999 Hewlett Packard announced a major restructuring.

The old scientific instrument part of HP was recreated as the "measurement" company, leaving the computers and imaging businesses coupled together.

Certainly, because the two businesses were operating in vastly different worlds.

Clearly the marketplace for measuring instruments does not change at the tumultuous rate that marks the computer and imaging markets.

But, there is a more straightforward explanation: Coherence, or rather the lack of it.

Though sometimes hidden in the guise of such words as "alignment," "synchronicity," or "fit," coherence is critical for day-to-day productivity and effectiveness of both individuals and organizations.

"Coherent actions are those that make sense to all relevant people in organizations."

Coherent actions are those that make sense to all relevant people in organizations.

HP decided to break itself apart so that its managers could act coherently and in the absence of coercion from above.

If the key actors in a business all have vastly different understandings about these issues, no actions will have coherence.

For people to take actions that make sense to them and others, both the actions themselves -- and the underlying viewpoint from which they stem -- must be aligned with the basic values and purpose of the individuals and of the organization.

Corporate culture serves as the base on which coherence and coherent viewpoints are constructed.

What the old HP lacked was a coherent viewpoint from which to contemplate strategy and tactics.

By 1998 the company had been losing contracts from established customers to rivals, operating margins had shrunk drastically, as had revenues.

And huge production problems had resulted in the closure of two assembly lines.

Boeing is embedded in an intertwined mesh of hundreds of contracting firms, subsidiaries, etc., all dependent on one another.

The company itself admits that it needs to be dragged out of the dark ages of management and into the (post-) modern, dynamic and rapidly changing world.

"Coherence is a characteristic that is necessary across the whole spectrum of activities, from development and production to marketing and sales."

In the past, business markets were less complex -- for managers to view all the different entities as separate and independent was a false but acceptable way of managing.

However, nowadays, given the dynamic and evolving natur e of a complex industry such as aerospace, this approximation is entirely inadequate.

"When a system is coherent, virtually no energy is wasted on achieving internal synchronization."

Coherent organizations thrive in attainment of their goals.

Power is maximized -- the power to adapt, flex, and innovate, resulting in a major leap in efficiency and effectiveness.

To this end, a few, simple guiding principles matter.

Every action is interpreted through our mental model and our actions are based on that interpretation.

Building canals for these flows means locking them into a reality that will be outdated before the canal even opens.

Consider the space created by ad campaigns such as "cool Britannia", "Intel inside", or the current "AOL: we make the Internet easy."

Southwest Airlines does the same with its consistent image of "family", which it applies to employees, customers and suppliers.

By contrast, the many-paged rulebook at the old IBM or the present mega-merger company does little to create space.

"Stories allow others to relate to facts, contexts and emotions, and to bring their own interpretation to what they hear or read."

5.Tell stories to give others the benefit of shared experiences.

Conclusions and instructions provide no thinking room for the person hearing the conclusion or receiving the instruction.

Coherent actions demand a context, which is itself coherent.

Mastering Corporate Complexity through Coherence" (Nicholas Brealey Publishing, London, April 1999).