Charles Handy is widely recognised as Europe’s best-known and most influential management thinker. He is noted for his studies of organisations and his far-reaching ideas on the future of work and business structures. He is the author of several highly acclaimed books “Understanding Organizations”, “The Age of Unreason” and “The Empty Raincoat.”
This article is adapted from Handy’s book THE ELEPHANT AND THE FLEA (Looking Backwards to the Future)
Leaders are not naturally inclined to reinvent their organisations to survive in a changing world. If they are, reinvention is easier to call for than to accomplish. For one thing, it is subject to the dilemmas of the Sigmoid Curves. The first of these curves describes the normal life cycle of almost anything, anybody, or any organism: a period of learning, in which inputs exceed outputs, followed by steady growth that inevitably one day peaks and turns into decline. The only variable is the length of the curve, the time it takes to reach the various points on the curve.
The only way to prolong the life of an organisation is to start a second curve. But to allow time and resources for the initial period of learning, that second curve has to start before the first one peaks. You then encounter the paradox of success – when things are going well, there seems to be no reason to change. “We know how to do it now,” so “don’t rock the boat or change the formula”. That very reluctance to change ultimately turns success into failure. “Why cannot the status quo be the way forward?“ one leader asked. Organisations that last a long time have to find ways to start second curves before the first curves peak. That’s hard to do. It is easier to do that when the need for change is obvious, when the curve is heading downhill. But that is just when morale is low and resources are depleted – the worst conditions for any radical thinking. There are earlier, often unnoticed signs that perceptive leaders can use as triggers for starting a second curve. Young people or new volunteers can often see possibilities to which familiarity has blinded those in positions of leadership.
This prescription, however, requires leaders to blend continuity, the first curve, with invention, the second curve. That, in turn, means finding ways for two very different cultures to live together and to value each other, because each needs the other if either is to survive. The second curve needs the resources of the first to support its experiments, and the first curve needs the second if it is to have any future at all. Sadly, this commonality of interests is not always perceived by either party. “Those Young People are all energy but no experience,” says one party, while the young people mutter about the entrenched attitudes of the Old Guard. Both are right and both are needed.
By elephants I mean the established organisations that have a settled way of doing things; they have formalised systems and routines. They deliver predictability, which they see as the key to success. To increase, elephants are currently making allies of other elephants, swallowing them, marrying them, or organising friendships, believing that size is safest in a turbulent world. All these matings of elephants increase scale and pool resources, but they do not of themselves guarantee a different future, only more of the same if, perhaps sometimes, a little better. To grow into a different future, the elephants need some fleas.
Fleas are the creative individuals. Handy has studied a number of typical flea individuals, who had started their own new ventures. He was interested to discover what circumstances shaped them, what influenced them and what they were, and how others could mirror their capacity for innovation.
- The first important thing to note is that these innovators, or fleas, see themselves as different from other people and destined, in their own eyes, to make a difference. All the people interviewed were, in their own view, able to work in any organisation. In other words, independence was a key element in their personality profiles. Fleas, it seems, prefer to live on top of elephants rather than in their bloodstreams. Swallowed by elephants, they die.
- The New fleas were also dedicated. Passion was what drove them. They had to believe in what they were doing, not simply use their talents as a means to an end. It was the desire to make a difference that they believed had inspired them. What they wanted was a cause to commit to, space for independence, and the opportunity to make a difference.
Elephants and Fleas
Elephants need fleas to keep them innovating, but fleas cannot easily live in elephants.
- Some organisations put their fleas in separate pens, in what used to be called skunk works, only to find that the fleas’ innovative ideas are then rejected by the core leaders.
- In a variation of this tactic, some elephant organisations set out to buy successful fleas and then incorporate their innovations into their own workings, meanwhile spitting out the original flea creator.
- Others have turned a part of themselves into something new, encouraging would-be fleas to implement their own innovative ideas with the elephant organisation’s backing, thereby keeping a degree of ownership in any successful innovations.
- Other organisations look for a more all-embracing cultural approach, trying to create an environment that is more friendly to fleas by, for instance, rewarding creative ideas from any source.
None of these ideas are wrong. They all make it more legitimate to think and act like a flea but, unless the whole culture of the organisation is biased toward constant reinvention, these devices are only lip salve, soon to be obliterated by the need for efficiency and the controls that inevitably follow in efficiency’s wake.
In a perfect organisational world, importing fleas should not be necessary. The only way around it is to build an organisation that sees itself as a natural home for fleas. Could elephants be, in effect, federations of fleas, cellular honeycombs of groups of fleas, united only by a common passion for a cause and therefore by a willingness to compromise some of their independence for the mutual advantage of everyone? Such a design principle would invert the traditional logic of organisations, which typically starts from the top and works down. Federalism builds from the individual parts to the centre, delegating to the centre those things that can only or best be done there, and nothing more.
Can Federalism Work Inside Organisations?
Federalism was originally conceived as a way of combining the independent and the collective, of being both big and small, the same but different. Americans and Germans, Australians and Canadians, Spaniards and Swiss, all have federal constitutions, designed to allow independence within a union, but even these do not always see the sense in applying the same principles to their organisation.
This is not the place for a detailed discussion of federalism. Suffice to say that federalism is a mixture of both centralisation and decentralisation, centralising only those things that everyone agrees it would be crazy not to centralise and leaving as much autonomy as possible to the various flea areas.
Federalism offers a way forward, but it is neither easy nor tidy. Small wonder, perhaps, that many leaders of elephants shrink from it – but without it they have to rely on the farsightedness of those in the centre to spot the new trends. It would be easier and less risky to regard their organisation as a collection of potential proving grounds, where new ideas could be tried and discarded if found wanting but pursued if thought promising. It is a learning organisation in the sense that the constituent parts tend to learn from one another as they compete to make a difference to the whole. Federalism, in other words, provides the structure for growing second curves without betting the whole organisation on one view of the future. For all its difficulties, it is, in the end, a safer bet than any of the alternatives to leading change.