orgtheory.net

Brayden

Made to Stick is a book by Chip and Dan Heath that explores why some ideas grab our attention and others quickly fade from memory. The book has received a lot of attention in the consultant-y side of the blogosphere. Bob Sutton has also written a few posts about the book, claiming that it is “one of the most important and useful management books I’ve ever read.” I’ve had my nose in it for the last couple of days and I’ll concur that it’s an interesting, engaging read. Chip and Dan obviously know how to make their ideas stick. Academics who want to improve their ability to write persuasive articles should pick this one up.
One of their main premises is that sticky ideas tend to be simple. By simple they don’t mean simplistic; rather they mean that each idea can be reduced to its essential, most important core. To communicate an idea clearly, you need to strip “an idea down to its most critical essence” (28). You need to “find the core.”

My immediate thought was that I need to do a better job in finding the core of some of my papers.* But “finding the core” also applies to organizations. Most organizations are based on some sort of core idea. They have an irreducable essence upon which the logic of the organizing, decision-making, and strategizing rests. Some organizations, of course, are better at communicating that core to their stakeholders. They’ve figured out how to make that idea central to decisions and to the daily life of the organization.

One example that the Heaths provide in the book is how Southwest Airlines used the idea that “We are THE low-fare airline” to guide important decisions. When Southwest has to decide whether they’re going to offer a new food item to be served on their flights, like chicken salad, they can go back to their core guiding principle to assess whether it would be a beneficial change. The answer is no. Providing chicken salad, as good as it might sound, does not fit with Southwest’s principle of being THE low-fare airline.

In organizational theory terms, this core is defined as the identity of the organization. Albert and Whetten (1985) describe identity as the “central, enduring, and distinctive” attributes of the organization. It is that part of the organization that resists change and distinguishes the organization from its peers. If you could boil the idea behind an organization down to its core, you would get at the identity.

So why does any of this matter and why am I bringing it up? One reason is because I’ve been thinking a lot lately about various kinds of organizational decision-making. I think we need to develop better theories of decision-making in businesses and I think that the identity concept is a good place to start. Some theories of decision-making seem very weak in their ability to actually predict what kinds of decisions would be good for the organization (from the manager’s perspective). For example, the rather simplistic (not simple) idea that managers make decisions based on what they think will maximize shareholder value falls apart once you consider the hundreds of ways that a manager might try to maximize value at any given moment. Using the decision-making criterion of “our company maximizes value” is vacuous. Every business works under this principle, and so it gives the manager no guidance when attempting to make a decision that is unique to its organization. It begs more questions than it provides answers. Managers need more than a motive to maximize value.

The idea that managers just mimic their peers is also weak. Sure, there are times when managers will mimic, but not all decisions are made under conditions where the organization is merely trying to enhance their legitimacy. Some decisions are made under the premise that the organization needs to be different from peers. How do you make a decision where there is uncertainty or ambiguity and the goal of the decision is distinguish one’s organization from the rest of the field? We lack a good way to think about this sort of decision-making.

The point of bringing up Heath and Heath and Whetten’s work on identity is that both readings seem to be saying the same thing. People or organizations need a core idea to motivate decision-making. We need a simple guiding principle. Whetten says that the core idea is the identity of the organization. If you can identify the central and distinctive character of the organization, you have found that which makes the organization unique from its peers. You know what works (the identity has at least gotten you this far), and you know what stakeholders expect (enough customers and employees like your identity to make the organization a worthwhile venture).

Thus, using the identity as a core principle to guide decision-making makes sense. When faced with a decision, managers put themselves in the place of the organization as if it were a real actor – what should an organization like this do? Sure, if you’re a business you assume that the end goal of any decision should be to maximize returns. But how you do it is contingent on the unique, core idea of the organization. As Whetten and Mackey (2002: 396) argue, identity is the “court of last resort.” When you reach that fork in the road, your identity pulls you down the eventual path.

*One paper in particular is driving me crazy and now I realize that the reason is because it is way too slippery (as opposed to sticky). The paper and I are engaged in weekly combat where it slips away faster than I can grab onto it.