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  • Peter Wollmann

Multi-level interaction, resilience and cross-cultural learning

Updated: May 3

Welcome to the Interaction Age - Perspektiven


Helmut Willke and Peter Wollmann



Contents


  1. Introduction

  2. A basic model of interaction - why interaction must be a concern for firms

  3. The relevance of multi-level interaction for strategic decision-making

  4. Resilience: the strengths and weaknesses of multi-level interaction

  5. Intercultural exchange and cross-cultural learning



1. Introduction

Abstract

The paper´s goal is to appreciate the basic role of interaction in forming the patterns and architectures of corporate communication. In order to substantiate this claim, the argumentation proceeds in the following way: In a first step the concept of interaction is delineated in order to validate the idea that the quality and the framing of interaction must be a major concern for organizations interested in optimizing the potential and the talent of their members. The result of this step will be a basic model of interaction which explains the relevance of interaction as the building blocks of communication.

A second step is concerned with the fact that all complex organizations comprise different levels or contexts of interaction internally and at the same time are embedded in extended social environments which today actually extend to the global level. We are dealing, therefore, with concatenated multi-level interactions. They are indispensable for combining, coordinating and confronting different perspectives, interests, resources and fields of expertise. This is the melting pot in which strategic decision-making finds the necessary ingredients and components for a non-trivial, highly integrated understanding of the core problems of the organization.

In a third step the paper addresses the problem of evaluating the merits of highlighting interaction as a core concept for understanding corporate governance. Basically, a short analysis of multi-level interaction is carried out in order to better understand the strengths and weaknesses, the costs and the benefits of multi-level interaction. The main idea guiding this exercise is the presupposition that complex organizations need resilience to prosper in a highly dynamic and volatile environment, and that resilience can be achieved by configuring multi-level interaction intelligently.

The final step of the argument is directed to analyzing the role of interaction in facilitating inter-cultural exchange and cross-cultural learning. Taking for granted that in a globalizing world diversity management and inter-cultural proficiency are crucial for integrating highly diversified complex systems, the paper proposes some ways to improve cross-cultural learning through facilitating multi-level interaction. Reconsidering the role of interaction, therefore, turns out to be a chance to undergird the notion of the modern complex corporation as an (intelligent organization).

As a conclusion the development of interaction or interaction need in linkage with the evolution of organization might be characterized like the following graph (Fig. 1):


Fig. 1: The changing role of interaction in organizations




Interaction, obviously, is happening all the time, as are communications or transfers and exchanges. What, then, is the special role and function of interaction, what is its potential and what is the crucial importance of interaction for corporations and other organizations? What can an organization, its management and its leadership learn from looking closely at the patterns and qualities of interaction?

In order to arrive at answers to these questions it seems helpful to distinguish interaction from other forms of relations between people and organizations and to spell out the constituting ingredients of interaction. The most salient feature of interaction is that it denotes a basic and “simple” form of relating people - interaction presupposes the presence of those interacting. This includes all (persons, symbols, addresses) that can and will be treated as present. This narrows down the option space of interaction and excludes those who are not present from the ongoing interaction. In this sense, interaction challenges one of the most outstanding features of modern and post-modern organizational reality, i.e. the prevalence of distant, remote, anonymous, distributed and globally dispersed communications which function without the actual presence of the people involved.

Interaction, therefore, has the paradoxical quality of an “old-fashioned or pre-modern” way of direct and personal linkages underlying the ongoing communication. This raises the question why organizations would want to pay special attention to this form since it apparently points backward and not forward to an interconnected global future. Framing the lead question in this way, of course points to the implicit answer: Interaction is exactly the necessary counterpart to globally mediated communications which provides the grounding of communication in “real” personal relations. Interaction builds the fundamental anchoring of extended social relations - which today extend all over the globe - in settings of immediate personal relations, mostly in small groups or teams. These interaction systems provide the chance to develop the trust and cohesion (and their counterparts of distrust, intrigue and competition) which are the indispensable basis for all extended, “virtual” relations among non-present, dispersed people.

2. A basic model of interaction - why interaction must be a concern for firms

The fact that interaction presupposes presence has some important consequences in different dimensions.

In the social dimension, interaction sharply excludes non-present actors and, conversely, highlights the importance of those present. Interaction, therefore, is the cornerstone of in-groups, cliques, informal communities or teams, ranging from peer groups to interlocking directorates. Contrary to modern talking about the prevalence of the global and the virtual, interaction highlights the importance of what is present, local, real and immediate. Obviously, this is not a question of good and bad or right and wrong but instead a question of differential strengths and weaknesses. However, it might be quite healthy to reconsider the value of direct interaction at a personal level under circumstances which have for some time now given prevalence to global concatenation, abstract and anonymous transactions and the technologies of global communication networks. A focus on the social dimension of interaction redirects attention to the meaning of “real people” as opposed to abstract actors or as opposed to the members of a virtual team.

In the temporal dimension, interaction again is sharply restricted to point-to-point “punctionalized” communication which in addition is sequential or serial (and so time consuming) since it is hard to expand to parallel processing. At the same time the type of communication produced by interaction comprises not just language but entails the entire person. It includes non-verbal communication and permits diffuse and emotive signaling in face-to-face relations, thus creating bonds (and dislikes) beyond formal language. This creates an information-rich environment of considerable complexity which cannot be resolved by formal (i.e. language-based) communication. Therefore, interaction leaves many things “unsaid”, open and vague, leaving room for interpretation and manoeuvering if necessary.

The fact that interaction takes time, proceeds sequentially and incrementally, and is prone to double-talk as well as “double-bind”-types of communication (Bateson 1972) opens up a Pandora´s box of opportunities and risks. This should not come as a surprise but it might create surprises when transaction is neglected as part and parcel of corporate concerns.

In a spatial dimension, interaction is confined to “closed quarters” allowing visual contact with all people involved. It means that interaction is embedded in sequences of perceptions and observations, including second-order observations, since people observe that they observe and they observe that they are being observed, knowing the others are knowing etc. This amounts to one further basic feature of transactions, specifying the inter-part of interaction. Interaction is a relational concept, a concept of reflexive relations which feed on each other and, therefore, easily can become very complex. This explains an inherent anarchic quality of interaction in spite of its apparent “simplicity”. Interaction can become anarchic or out of control because it does not proceed in a linear way. Instead it proceeds recursively, creating surprising constellations on the go. This characteristic of interaction is particularly important for tasks which need spontaneity, improvisation, innovative ideas and surprising combinations of existing ingredients. On the other hand, of course, as any family therapist can testify, interaction in closed quarters can also create havoc, becoming obstinate, pathological and destructive.

This leads us to a forth dimension of interaction, its operational dimension. The basic operational element of interaction is, as just mentioned, mutual observing of present actors. Mutual observing is the core of imitation and tacit socialization and thus the foundation of all learning (Nonaka and Takeuchi 1995). Socialization, learning and all variants of professional education depend on specific constellations of interaction, from family and kindergarten to schools, professional schools, university studies or on the job training up to highly selective places at the top levels of professional practices. Interaction is the gist of all “communities of practice” (Wenger 1999), enabling and facilitating the generation and transfer of knowledge in face-to-face practice. It goes without saying that a close look at the constellations and qualities of interaction is called for as soon as higher order learning becomes an integral part of corporate policies.

A final dimension to be considered is the cognitive one. It is closely related to the operative dimension of interaction but its focus is different insofar as it is much broader. It is concerned with the question of how interaction is part of the process by which people reconstruct the world in which they live. From interaction derive the ways and mental models through which we “perceive the world”. Reality, and in particular organizational reality, is not just there, waiting to be discovered. Instead, it is a construct in people´s minds, being formed in endless processes of socialization, education and practice. In short, the way I perceive the world is a consequence of the types and qualities of interaction I am exposed to.

To summarize this section: Interaction is here conceived as a special type of communicative constellation based on the actual presence of the people involved. It is a seemingly atavistic or pre-modern form which, however, on closer inspection exhibits a high degree of built-in complexity. In particular, interaction as a form can be subdivided into five dimensions - the social, temporal, spacial, operative and cognitive dimensions - which in turn reveal some of the specific characteristics, strengths and weaknesses, of this particular kind of communicative constellation.


3. The relevance of multi-level interaction for strategic decision-making

It is almost a commonplace to state that today´s corporate world is multi-layered, complex and interconnected. Taking the financial sector as an example, there is no denying the fact that a multitude of interests, representing different constituencies or “stake holders”, pose different and sometimes opposing challenges to the corporate leadership. There are various regulatory agencies, supervisory bodies, rating agencies, specialized instances of mass communication and public relations, there are global standards and legal provisions (i.e. the Sarbanes-Oxley-Act), accounting models and standards of “good governance”; and internally there is a variety of different factions, interests, subcultures, levels and territorially dispersed locations. Any responsibility to multiple constituencies, not only by top corporate management but certainly also by leaders and decision makers of a multitude of global institutions, non-government organizations (NGOs), charitable foundations, research institutions and public-private-partnerships implies a responsibility for preserving diversity and heterogeneity. It includes a responsibility for refraining from attempting to enforce consensus and unity across viable differences. The twin principles of sound governance of complex systems, delegation and decentralization, encourage to maintain differences and diversity as long as they do not contradict common goals, as expressed by deliberated strategic decisions.

Compared to the management forms of traditional firms modern corporate governance differs markedly in respect to the type of order that is attainable and desirable. To compress a complicated constellation in a simple formula one might say that corporate governance is confronted with a degree of diversity of its elements, with a degree of complexity of the system, and with a degree of multiplicity of its relations that undermine strong forms of order or hierarchy. Although traditional forms of order, as summarized in the term of a “well-ordered system” appear to be out of reach of highly complex global contexts, this is not to suggest that anarchy must prevail. An alternative to aiming at order is to aim at organizing diversity, when diversity is the inevitable and normal state of affairs. This is the case of a system composed of highly autonomous, resourceful and diverse components (Fiol 1994).

A thoughtful framing of interaction systems appears to be a prime precondition for managing diversity successfully. The more large organizations are bound to encompass individual and cultural diversity, the more important interaction is becoming as a means to overcome - or at least counteract - the distance and indifference created by anonymous organizational lines and the impersonal qualities of technically mediated relations. Interaction systems reinforce personal relations as face-to-face interaction and thus they provide the glue that holds together a globally dispersed centrifugal system. In addition to these more general qualities of interaction, multi-level interaction here is seen as the corner-stone of a well organized strategy process.

Strategic decision-making within complex and volatile environments is a two-way process, combining top-down and bottom-up elements. Obviously, this is easier said than done. Setting up appropriate interaction systems which connect the various levels of a multi-level system appears to be a valid way to support a two-way process of strategic decision-making. The point here is not to connect everything with everything - this would constitute hyper-order or strict coupling. Whereas hyper-order denotes a type of order that is characterized by a pervasive strict coupling of the elements of a system, disorder or anarchy means that the elements of a system are coupled in only the most rudimentary way or not at all. Regular order in the sense of order somewhere between hyper-order and anarchy describes a state of loose coupling between the elements of a system. There is no normative implication yet. For some systems near-anarchy may be fine (i.e. highly creative teams, idea factories or design studios) for others hyper-order. It all depends on the operational logic of the system and its strategic positioning, relating its goals to the conditions of its environment. Rather, the point is that interaction systems can be fine-tuned so as to act as gate-keepers and communication channels with very specific tasks within an elaborated architecture of organizing the strategy process.

To set up appropriate interaction systems probably is one of the most difficult tasks in organizing strategic excellence. We cannot elaborate the topic here, instead we only indicate some lines of concern to the interaction setting:

In the social dimension the composition of the interaction system is crucial: It needs to include power brokers as well as informal communication “nodes” (i.e. informal team leaders and problem solvers).

In the temporal dimension communication in interaction systems is serial and “holistic” at the same time. This makes interaction-points within complex processes a valuable asset for untangling and decomplexifying things, for lateral thinking and communicating (De Bono 1976), and for bridging gaps in communication flows. Therefore, the places for interaction-points must be carefully orchestrated.

In the spatial dimension, interaction systems have their most obvious function in bringing together people and decision-makers who would decide and act differently if separated by distance. Proximity makes for sharing responsibilities, and expecting recurrent interaction makes for considering sustainability in personal relations. In contexts of global connectedness, “distant proximities” (Rosenau 2003) abound and need to be brought down to earth in face-to-face interaction. Therefore, corporations need an interaction topology (or more precisely: a topology of interaction systems) to create the necessary close proximities (see the micro-case in chapter 4.1).

In an operational perspective interaction serves as a buffering zone in which conflicts and clashes that inevitably arise in formal relations can be reframed by means of informal communication. Interaction systems create something like “interactional slack”, adding conflict resolution resources to the organization. This, of course, calls for an interaction culture which is open and dialogical instead of formal an directive.

In the cognitive dimension, interaction systems must become seed elements of the knowledge management of “the intelligent organization” (Quinn 1992). In order to fulfil that function, interaction systems should be set up as “communities of practice” and as focal points of organizational learning and intelligence (Argyris and Schön 1996).

Example for the operational dimension:

The Sarbanes-Oxley-Act (SOX) Realization Organization within Zurich Group

Zurich Group has implemented in 2004/2005 worldwide and locally a concept, organization and processes to fully realize SOX under the name Internal Control Framework (ICF).

Within the ICF concept the risks and controls in central business and finance processes are analyzed, described and documented, the impact of the risks and the control measures qualified and the needs of optimization made transparent on a regular basis (quarterly) to reduce negative impacts on the financial statement and the further development of the company.

The German ICF organization is an example for a complex organization based on intensive interaction. It contains a central German ICF team supported by a number of contact persons in local divisions with responsibility for specific ICF processes. Importantly, a strong decentralization has been necessary in order to manage the organizational complexity. In this article the ICF organization and ICF maintenance processes are introduced as of end of 2006. The article provides an overview of key distributor roles with their main tasks and interactions within the ICF maintenance process. The main activities and interactions within the ICF maintenance are summarized in the next graph (Fig. 2):


Fig. 2: Overview of ICF activities


The ICF maintenance organization in Zurich Group Germany is decentralized and consists of the following roles:

  • Regional ICF Coordinator Germany

  • Central ICF Team Zurich Group Germany (incl. Regional ICF Tool Coordinator Germany)

  • Central ICF IT Responsible (in cooperation with central ICF-Team)

  • ICF Process Owner/ICF IT Application Owner

  • ICF Support Teams (incl. Evaluation Responsible)

  • ICF Local Division Coordinators

  • ICF Committee

Outside Zurich Group Germany the following ICF roles exist:

  • ICF Global Core Team (incl. Global ICF tool Team)

  • ICF Coordinator Europe

  • Other Regional ICF Coordinators in Europe (e.g. CH, UK, I, E)

The following graph (Fig. 3) shows an overview of the organization as a whole:



Fig. 3: ICF maintenance organization - overview of network. * The task of the Central ICF Team is to support the Regional ICF Coordinator Germany. The Central ICF Team has corresponding links to the Regional ICF Coordinator.



In the following there are summaries of the main task and responsibilities of selected key persons or key roles respectively with the focus on interaction needs:

Main tasks and responsibilities of the Regional ICF Coordinator Germany (selection):

  • Ensure and manage the ICF maintenance process

  • Act as interface between ICF Germany and ICF Global/Europe

  • Ensure integration of ICF into the risk and control landscape of Zurich Group Germany

  • Lead the ICF Committee

  • Report to Board/ICF Committee

  • Coordinate/communicate with Group Audit and external audit

  • Communicate with ICF Coordinator Europe

  • Communicate with ICF Process Owner/ICF IT Application Owner, ICF Support Teams, ICF Local Division Coordinators and staff

Main tasks of the Central IT Responsible (selection):

  • Act as interface between ICF and IT organization and as contact person for IT matters in ICF

  • Ensure communication and know-how transfer from ICF to IT Application Owners

  • Be contact person for ICF IT activities in Germany and interface to the Global IT Team

Main tasks of the Process Owner/ICF IT Application Owner (selection):

  • Ensure an updated and certificated documentation of their processes/IT applications (incl. End User applications) on a regular basis (min. quarterly)

  • Provide proactive and timely assistance with issue tracking (e. g. enquiries from the ICF Local Division Coordinators)

  • Develop and ensure transfer of ICF know-how - also for Support Teams - with support from the Central ICF Team

Main tasks of the ICF Support Teams for the process owners (incl. the Evaluation Responsibles) (selection):

Ensure the update and sign-off phases for each ICF Process/IT Application (incl. End User application) in order to enable Process Owners/IT Application Owners to complete the update sign-off on schedule

  • Plan the update phase and sign-off phase for each Process /IT Application (incl. End User applications)

  • Ensure the review of the documentations

  • Update the documentation if necessary (incl. add and upload attachments in ICF tool)

  • Evaluate control activities and complete in ICF tool

  • Coordinate changes and Sign-off deadlines with Process Owners/IT Application Owners

Develop and ensure ICF know-how

Main tasks of the ICF Local Division Coordinators (selection):

  • Ensure the quarterly update sign-off of local division processes

  • Be proactive contact person/multiplier for the Central ICF Team regarding exchange of ICF subjects with the local division (especially with the Board)

  • Act as contact person for local division ICF questions and be available on request to update process documentation

  • Develop and ensure ICF know-how with support of the Central ICF Team

  • Act as a local division contact person regarding risks & controls (e.g. ICF, Risk Management, Business Continuity Management, Compliance etc.)



4. Resilience: the strengths and weaknesses of multi-level interaction

The notion of resilience denotes the idea of using the strengths of a tried and tested tradition in order to embark on a trajectory of reconstruction or re-invention. “Strategic resilience is not about responding to a one-time crisis. It´s not about rebounding from a setback. It´s about continuously anticipating and adjusting to deep, secular trends … . It´s about the capacity to change before the case for change becomes desperately obvious” (Hamel and Välikangas 2003: 53 p.).

As the above micro-case of ICF-process organization has illustrated, the implementation of a seemingly abstract legal obligation – the SOX-act – in a transnational corporation calls for a complex interplay of diverse and distributed actors in a coherent form of interaction. The corporation as a multi-layered and multi-level system has to adapt to new circumstances and obligations and, at the same time, maintain its proficiency and the core elements of its organizational culture. Adequate processes of multi-level interaction serve to sustain this difficult transition process and stabilize the system during a phase of intense change and uncertainty.

In this sense the quest for extended models of management or corporate governance is connected to a different approach of coping with uncertainty. Although the future in general and future challenges to management in particular remain uncertain, actors and organizations have choices about how to prepare for the unexpected. Fostering resilience then means leaving the comfort zone of incremental adaptation and incipient crisis management. In fact, resilience calls for a more strategic inspiration to build corporate governance regimes that go beyond the mere correction of malfunctions and mistakes: “The quest for resilience can’t start with an inventory of best practices. Today’s best practices are manifestly inadequate. Instead, it must begin with an aspiration: zero trauma” (Hamel and Välikangas 2003: 54). The traumas of mismanagement have been many, and they contain bitter historical experiences of waste and destruction of resources. Even if corporate governance today seems manifestly inadequate for many issue arenas, it contains all the elements that are necessary to reconstruct “smart management” as a mode of governing the globally dispersed corporation.

Achieving resilience then translates into broadening the base of management forms and structures (architectures) of corporate governance and providing the management of complex organizations with mechanisms for fast learning and strategic reconfiguration. Introducing and fostering interaction systems at crucial junctions of the organizational structure is seen as one core aspect of achieving resilience in this sense (see the micro-case in the following chapter). The aspiration of resilience starts with the assumption that a model of strategic management that remains unchanged in conditions of rapid and profound contextual changes necessarily must lose its proficiency and with it its power to convince. Any proposition to rely on a stationary model of formal governance must consider the costs of systemic crises and the consequences of hasty and clumsy crisis management: “A turnaround is transformation tragically delayed“ (Hamel and Välikangas 2003: 54).

The contribution of resilience is to make governance “ultra-stable” in Ashby’s sense, i.e. in the sense of providing different modes of internal setup according to different qualities of external demands and external dynamics (Ashby 1956). Indeed, in contrast to formal structures, interaction systems appear to be able to rapidly adapt to changing environments and switch from a “normal” mode of operation into an emergence or crisis mode easily. Or in other words, the task of resilience is to enable complex systems to build forms of management that are compatible with the challenge of “high reliability systems” (meaning that systems characterized by high levels of complexity, uncertainty and hazard create instances of collective intelligence in order to shift from adaptation to “a proactive, preventive decisionmaking strategy” (LaPorte and Consolini 1991: 29).

Micro-case

Fostering interaction systems at crucial junctions in a matrix organization:

The Multi Project Management Concept at Zurich Germany

Companies that want to stay competitive in today’s globalized and turbulent environment are increasingly bound to focus on coping with (worldwide and local) projects and complex project clusters. In order to manage these projects successfully, a specific project portfolio management system provides a tool which combines organized processes and necessary room for multi-level interaction. The interaction part of the management system quite often has to assume the role of detecting and solving inherent conflicts.

It seems to make sense to start with some examples of typical situations and to analyze the key questions and challenges:


Example 1

A Global Function (like Risk Management, Compliance, Legal) decides to develop and roll out a new technical concept and according processes worldwide. A project is started from head­quarters and all business units are asked to participate by sending at least two people with 50 % capacity each into the project for 6 months.

At the same time the board of a business unit decides to intensify the application of the local staff of the Global Function in the five local key projects of the business unit. A plan is created how the staff of the Global Function in the business unit will work for the next 7 months in the selected projects in order to support them and bring them to the success which the business unit really needs.

It becomes quickly obvious that the decisions are contradictionary in terms of resources availability, a decision is needed. If the business unit cannot take the resources for its key projects, the current year’s growth and profit will be “in danger”. If the Global Function does not get the resources for its important project from the business unit one of the key stakeholders of the project would not be represented in the project team with the danger that the result of the project might not be rolled out in the missing business unit suitably afterwards which means that a rollout in a similar way everywhere would perhaps be impossible.


Example 2

During the annual strategic & operative planning workshop in a key business unit it gets obvious that there is no overview about all projects which are run by the business unit or by which the business unit will be affected next year. A lot of projects were created and decided in the international matrix organization and committed with the local managers belonging to the relevant part of the matrix. But quite often these projects also need support by other parts of the organization. Underwriting projects also need finance, process management and IT departments etc. – so the whole business unit is affected by decisions within a selected part of the international matrix organization. On the other hand, there is a similar situation within the business unit regarding local projects. The customer service process optimization project in a selected business which was decided by the responsible managers also needs internal resources from other parts of the business unit etc.

The first and certainly incomplete inventory of the planned, partly already decided projects for the next year shows that the mass of projects will not be realizable. But who will decide which local and which international project has to be cancelled or newly tailored ?


Example 3

A running worldwide program which contains a high number of local projects under a common set of objectives gets under pressure and needs more resources. Three key business units are asked to send resources to another key business unit which does not perform well. The business units had a lot of problems to already commit the current resources for their projects. If they have to send even more resources they will would have to stop other local or international projects. Who will decide and select projects to be stopped ?


Example 4

A local project with a large volume of technical and IT resources was started after getting all approvals of the international matrix organization. Now the proceeding within the project has to be changed indirectly influenced by a decision on group level to another topic. Has the project to go newly in another approval process in the international matrix organization – even though the change request was not forced by the project itself?


Conclusion

There is a bundle of fundamental questions to be answered and proceedings to be clarified in a complex organization which develops in direction of a project organization, for example:

How can decisions be made in an effective and efficient way in the international matrix concerning projects? How might international and local interests be balanced? How might be dealt with volatility and uncertainty in strict approval concepts without getting ineffective and inefficient? How can all the stakeholders for projects – the number of which increased because of the international matrix – be suitably involved from the beginning on? In which way is it possible to get and keep an overview of the project portfolio of the group and every business unit on a regular base? How might it be updated? How can resources be allocated effectively and efficiently – so that the most important projects are sufficiently supported? etc.

Overall it seams to be quite clear that a suitable organization and suitable processes are necessary for managing project portfolios in the described complex environment.


Solutions/the idea behind

In a complex situation – complex matrix organization, many different stakeholder with different interests, complex processes, high degree of dynamic and therefore volatility and uncertainty – the solution needs to balance between regarding all the complexity and building up a certain simplicity where possible. So a network organization based on interaction with some suitable central processes and with committed principles got in the focus.

The following graph gives an overview of the implemented network organization:


Fig. 4: German MPM Organization


The network organization – as shown in the graph - has to contain from the German point of view all relevant stakeholders in project portfolio management:

  • the worldwide responsible people (project portfolio managers on group level/group function level

  • the business division project portfolio managers

  • the German central function heads with a stake in project portfolio management (risk management, organizational development, group audit, finance/controlling, personal development etc.)

  • the local division project portfolio managers/PMOs

  • the PMOs of central programs or project bundles

The key processes contain planning (incl. resources and finance planning, strategic alignment, budget planning and approvals), prioritization and monitoring/reporting of the project portfolio. They have to set a common framework and ensure that the results may to consolidated to an overview with analysis of steering/decision needs for the project portfolio as a total.

The key principles are:

  • The (German) Project Portfolio Management Concept and especially the underlying network organization and its processes are to be further developed on a regular base – explorative and in parts experimental approach (nearly nothing is fixed to eternity)

  • The concepts which include organization and processes have to be developed and decided together with key stakeholders – balancing interests and getting buy in from the beginning on. The result is an iterative process with high commitment

  • As much responsibility as possible locally/decentral. Each local division and each program/project bundle is responsible for its projects (incl. planning, approvals, local priorities, resourcing, reporting etc. Clear responsibilities have to be implemented (local division PMOs, program PMOs etc.)

  • The central PPM processes have to be run in a way that respects the core standards to make sure that consolidation is possible. Key is transparency.

  • The network bases on interaction, not on formal communication. It acts in an open, transparent way

The organization and the network were started at the end of the first quarter 2007. The progress is obvious three months later; the final realization of the concept will take at least another 1-2 years, however, because it means an severe cultural change in the whole company.



5. Intercultural exchange and cross-cultural learning

Different cultures usually face each other with great apprehension and even distrust. This appears to be a tragic state of affairs because it is across the seeming barriers of divergent cultures that the most can be learned and innovation can be set in motion. Of, course, for each culture or sub-culture, at first sight, other cultures come as heresies. One should keep in mind, however, that heresy, not knowledge, is the prime mover of innovation. With the ascendance of innovation into a pole position in the global race for competitiveness (not just in economic affairs but across the board, including regulatory competition and competition between regulatory regimes) the creation of new knowledge becomes paramount. New knowledge, however, has two dark sides. On the one hand even if it is existent, it does not simply replace existing entrenched knowledge. It has to fight for acceptance against resistance and a host of difficulties because knowledge is part of and embedded in social relationships. Resistance is particularly relevant between sub-cultures of a complex entity because culture always implies identity and, therefore, is of paramount importance for the actors involved. This brings in interaction systems as the places of choice to scrutinize and replace outdated knowledge with state of the art expertise. Since interaction systems are configured differently, some forms of social organization or governance are better equipped to adopt and encourage innovation than others.

On the other hand, and may be more important, all new knowledge produces new ignorance. Since knowledge - at least outside of paradise - does not fall from trees as finished product and eternal truth, but is constructed by intentional and artificial operations, these operations concomitantly produce non-knowledge or ignorance in adjacent fields. Each question answered raises more questions that remain unanswered, creating an inexorable volatility of knowledge. Therefore, the old dream remains unfulfilled that more and deeper research and analysis eventually can lead us to a final truth and true knowledge. The implication of a modern constructivist world view is just the contrary: The more knowledge, the more ignorance. This, again, emphasizes the role of interaction and face-to-face relations. Interaction systems are proficient in processing knowledge/non-knowledge in an open, discursive way, precluding or at least slowing down dogmatic closure of (personal and organizational) minds.

The challenge then is to cope with uncertainty and ignorance in managing complex systems. For most global institutions and firms this is daily business and they would not even think about solid truths and immoveable expectations as guidelines for their operations. Some of them are quite proficient in handling risks and coping with uncertainty as inescapable parts of their world. From the vantage point of management theory, the disturbing part of the knowledge paradox is not an inability or unwillingness of global actors to confront and manage uncertainty. Rather it concerns a deficient appreciation of the levels and consequences of ignorance and uncertainty. There is an abundance of knowledge about non-knowledge and pertinent coping strategies for uncertainty at the level of persons. In stark contrast, analysis and practice are just beginning to look at the same phenomena at the level of social systems, and in particular interaction systems. Collective intelligence and systemic risks are just emerging as serious topics of management theory and practice. The situation resembles the desperate struggles of individual inhabitants at New Orleans to barricade their individual houses against the hurricane with a few strings and shutters while the entire city is drowning in a sea of water.

Some of the most crucial and important areas of organizational learning are the “border zones”between different cultures or sub-cultures of a complex organization, i.e. between divisions, subsidiaries, centers, different parts of a merged firm etc. At the same time, cross-cultural learning probably has the highest pay-off since it promises a “melting pot” type of mutual enrichment, combining different perspectives and world-views and trying to expose the “big lies” of one´s own unit or sub-culture. Cross-cultural learning activates “the strength of weak ties” (Granovetter 1973). These strengths result from the peculiar advantages of personal interaction between “distant” people, that is, between people who are on speaking terms but not too close to each other, so that they still consider their points of view as sufficiently different to engage in learning processes - not creating unity but sustainable coalitions.

The benefit of cross-cultural heresies and schisms is to break the orthodoxy of a single truth and instead insist on a multiplicity of different belief systems. As soon as there is no avoiding the fact that there are multiple belief systems, multiple truths, and multiple definitions of the good and the bad, right or wrong (for example of managing) a fundamental insight seems to be equally unavoidable: There is no way to get back to unity. Any search for an encompassing, more abstract or more general supreme management model, any search for a universally “best way” of management or leadership necessarily leads into an infinite regress. Any rule or model can be contested and challenged by a different interpretation. At this point, a cross-cultural outlook helps to avoid orthodoxy and single-mindedness, and instead promotes heterogeneity and diversity.





Bibliography


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