CHANGING THE ROLE OF TOP MANAGEMENT - BEYOND STRATEGY TO PURPOSE

Structure follows strategy. And systems support structure. In the high-growth environment of post-World War II, a whole management doctrine rose up around these two aphorisms. But today the business environment has changed. Overcapacity is the norm, markets are global, lines separating businesses are fuzzy, and, with equal access to technology, early-market-entry advantages are minimal. A change in management doctrine is needed to match this new landscape. After five years researching 20 leading European, U.S., and Japanese companies, the authors concluded that the role of top management must change. Using these companies as examples, they prescribe the necessary transformation. First, senior managers must change their own priorities and ways of thinking. Beyond designing corporate strategy, they must shape a shared institutional purpose. They must expand their focus from devising formal structures to developing organizational processes. And more than just managing systems, they must develop people. Top management's role in the companies researched already reflects the changes the authors prescribe. Consequently, 3M has managed to retain an innovative capability and an entrepreneurial spirit despite its $14 billion bulk. ABB transformed two ''also-ran'' companies into the leading competitors in the global power-equipment industry at a time when world markets were in recession. And big, complex companies like AT&T, Royal Dutch/Shell, Intel, Andersen Consulting, Kao, and Corning are doing well despite what some people predicted as the inevitable decline of large corporations.