Eclectic Curiosity

Posted on November 21st, 2002, by Steve Hardy in Archives, Uncategorized. No Comments

Some of my thoughts on Tuesday’s topic (see Gary Hamel Fast Company post below):

In times of economic downturn, layoffs and budget cuts become more prevalent. It is a natural cycle. It would seem, however, that the first cuts made are regularly made in non-specialized areas. Often R&D and marketing are areas that executives and managers feel they can do without until the economy picks up. Generalists (or idea people with no “formalized” position), then, are cut before specialists. They are considered extraneous because they have less of a direct, attributable impact on revenues. It is the specialists, they reason, that can carry us through the short-term storms.

Naturally, companies seek competitive advantages and thus become more specialized and complex. In rougher economic times, however, this “back-to-the-basics” specialization is accentuated, thus forcing companies to “do what they do best” and to focus even more on their core areas; their core competencies. And while this is not a bad thing in itself, it can be severely damaging. In this context, specialization becomes ingrained as a self-defense mechanism against sour economic times – a cyclical certainty. It is fundamentally unreliable to invest in ideation this way. This would be like a bird destroying its wings in order to survive – there would be little for the bird to live for, as well as a compromised chance of survival anyway.

Slicing away the generalist capabilities hurts companies that rely on progress and innovation as competitive tools because, of course, a major component of the innovation process, divergent thinking, is removed from the organization along with them. What they gain in focus and short-term savings is lost with vision and long-term development. Furthermore, as Peter Senge wrote in The Fifth Discipline, the company gets put at risk of losing its internal comprehension:

Traditionally, organizations attempt to surmount the difficulty of coping with the breadth of impact from decisions by breaking themselves up into components. They institute functional hierarchies that are easier for people to “get their hands around”. But, functional divisions grow into fiefdoms, and what was once a convenient division of labor mutates into the “stovepipes” that all but cut off contact between functions. The result: analysis of the most important problems in a company, the complex issues that cross functional lines, becomes a perilous or nonexistent exercise.

Smart firms recognize that ideation carried on during tough economic spells helps them to surge back to success faster and stronger than their flat-footed competitors. Waiting it out is a death sentence. It is in calmer, slower times that people often have more time to think. This is primetime for generalists and a major reason why they should be kept around in recessions and economic downturns. The best companies use down-cycles as opportunities to change the game. They figure out where they want to go when they come out of a turbulent time, and then they lay the groundwork necessary to move toward the goal. As Nissan Design’s Jerry Hirshberg once said, “Since it is not possible to effect a plan without an idea, or an idea without a plan, they must be very much in sync with each other.” If you know where you want to be when the economy comes back you can make the smart moves proactively to get there. Specialists need generalists, but in slow times specialists need generalists even more. _S

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