Organizational “Weave” – What It Is and Why It Matters

Elizabeth Haas Edersheim, NYCP Founder

In 2002, my client was a large, growing electronics distributor on Long Island. Patrick, the star they had hired from Intel six weeks earlier, was quitting. I sat with Patrick and asked why. His response was simple: “I have lost the bounce in my walk.” He explained: At Intel, he would wake up every morning proud to be going to work. When people asked him what he did, he’d beam, “I work for Intel.” The new job doubled his salary and gave him a shot at being CEO that he’d never have at Intel. But, when he started the day, although he was excited about the work he was doing, he was not excited by the organization.
He ended up calling Intel, taking a slight demotion from his previous job, which had been filled, and returning to the West Coast. I recently spoke with Patrick(not his real name). Intel today probably does not have the magic it had ten years ago. But he doesn’t regret his return. “The bounce has been here for 10 years.”

In 2011, my client was a cutting-edge iPad-based firm with 90 employees, growing fast. When I asked a dozen very talented employees, one-by-one, to discuss their contributing to the organization: What percentage of their talent were they giving?. The answer, again and again, was, “Not what I want to.” Even the founder was frustrated by his ability to contribute.
In 2010, Arron Jiang was graduating from engineering school in Shanghai. He had two job offers –IBM and Haier. Since Haier’s starting  salary was about 20% lower, I asked why he chose the company. He lit up and said, “If I joined IBM, I’d join the systems engineering group and I’d be there for the next ten years growing in my engineering skills, but never learning to be an entrepreneur.” Instead, Haier told him he’d be in the U.S. installing SAP for two years, “with the promise that my next job will be in Marketing somewhere else in the world.” When I spoke with him a few days ago – sure enough – he was happily in Spain – in Marketing.

In the first two situations, both companies were innovative  but the lack of an organizational weave was stymieing the company. In the case of Haier, the company’s agility helped make it an attractive place to work, but the weave, and its very essence were what made it  a hotspot of talent. Some used to talk about organizational “glue” or controls holding a company together through good times and bad, but that image is outdated. Glue connotes a company or non-profit that is inflexible, unable to bend with customers changing needs. These days, I speak of  organizational “weave,” which holds organizations together as they continually reinvent themselves and innovatively connect with other organizations – always learning to adjust and re-apply their  capabilities. Organizational weave can free organizations from holding onto the past, and approach the future with agility and a historical base.  . 
What attracts talent? How do you nurture and retail talent? And what sets talent up to fully grow and contribute to the organizations? Organizational weave.

What helps organizations be agile and adapt to the shifting needs of customers, geography, and technology?  How do the best companies keep reinventing themselves?  Organizational weave.
Over the past, research has touched on this — from Elton Mayo and the Hawthorne Experiments (see our previous Blog) to Henry Mintzberg’s work on Organizations and Society explaining what makes communities effective. This agility, this weave, has never been more vital to organization’s sustainability than it is today.  Consider organizations that demonstrate the most success:  Apple, Haier, Mahindra & Mahindra. They are masters at serial change – innovating from a base with weave.

History Matters: The Hawthorne Experiment’s Legacy for Today

Elizabeth Haas Edersheim, NYCP Founder

Because of the unceasing, 24/7 demands of work, most executives don’t take time to reflect on the lessons from business history.

They should.  The past decades offer insights and guidance for today’s managers, even those in global and high-tech companies.

Consider one of the most-famous but least-understood studies of the 20th century: the Hawthorne Experiments.  The project marked the first time in management history that the power of collaboration was recognized. That was 80 years ago, in 1932, when the first results were reported.

The experiments were resulted from a confluence of factors – a CEO open to outsiders, a team of researchers who knew which questions to ask, and a country searching for answers about productivity.

The power of collaboration has never been as powerful as it is today in the connected world.  In a moment, I will show how a multinational company, Unilever, these days successfully draws from the knowledge gleaned back then. But first a quick recap of those groundbreaking experiments:

Hawthorne Works, a Western Electric plant near Philadelphia, was a studied for eight years staring 1924 and 1932, roughly the time of Franklin Roosevelt’s administration. The President and Congress worked together then to push innovation: The Tennessee Valley Authority built dams and power stations in the South; Social Security started; the Civilian Conservation Corps hired 250,000 young men (at that time, women were not included).

Fortunately, Western Electric – the manufacturing arm of AT&T – had a president, a retired Army colonel, who was persistent in seeking answers. Five teams of engineers had studied the plant and could not find methods for enhancing the productivity or improving attendance on a particularly vexing assembly line. They’d tried financial incentives, but even those failed.

At the time, business leaders believed in the rigid Scientific Management of the leading theorist of the time, Frederick Taylor. But Hawthorne had the experts wondering: Why couldn’t human cooperation be exactly determined by the administrative organization?

Consider two parts of the research. One, the Relay Assembly Experiments, identified several variables on the productivity of workers assembling telephone relays. Some of the variables: Changing payment to a group amount, as opposed to individual payments; changing the length of breaks; shortening the work day; introducing sympathetic observer.

Researchers found that changing a variable was almost guaranteed to increase productivity and output; that worked even if the variable simply meant switching back to the standard environment. Elton Mayo, the Harvard professor who oversaw the experiments, realized that human nature can adapt quickly and regain “equilibrium.” More important, when the group returned to what it considered the normal environment, production increased.  The team was now functioning in a way that “gave itself wholeheartedly and spontaneously to cooperation in the experiment,” Mayo noted. The experiments showed the importance of employee attitudes and sentiments, even as pay incentives failed to boost productivity.

In a second phase, called the Interviewing experiments, workers opened up to the interviewer about personal and business matters. Again, productivity increased, bolstering Mayo’s notion that cooperation provides for social needs.

The takeaway for today: An effective supervisor is one who can look at the whole of the human problem, and remain personal while maintaining enough distance to remain impartial.

The major breakthrough from these works was the realization that collaboration cannot be left to chance. As Mayo wrote:

“For at least a century of the most amazing scientific and material progress and by inadvertence we have abandoned the effort of collaboration. Our methods are all pointed at efficiency; none at the maintenance of cooperation… we do not know how to ensure spontaneity of cooperation – that is, teamwork.”

Teamwork, of course, is as vital today as it was then.  Mayo added:

“The desire for continuous and intimate association in work and with others remains a strong, possibly the strongest human capacity.”

Probably the most perceptive synopsis of the Hawthorne effect came from Stuart Chase, writing in 1941 for Reader’s Digest.  He said, “There is an idea here so big that it leaves one gasping – a management man and a union man did not have a difference of opinion. “

Chase went on, “Their whole attitude had changed from that of separate cogs in a machine to that of a congenial group trying to help the company solve a problem.”

That collaboration is especially important these days, when companies face competitors thousands of miles away. The difference today is that the best managers recognize that workers want connections not just in the same company, but with the outside community, the larger world – and even with customers.

That brings me to what is required today:  Innovative connectors or collaborator, rather than  competitors.  This is what Michael Porter means when he discusses clusters.   This is what Unilever CEO Paul Polman is doing to take Unilever from a stodgy company without the “edge” of its rivals, Procter & Gamble and Colgate; now Unilever is a connector of the future. Polman, who cut his teeth at P&G, has emphasized corporate social responsibility. A marathon runner and mountaineer, he’s made sustainability the key phrase at almost every level of Unilever.  He often discusses with Oxfam’s Barbara Stocking – who until very recently opposed multinational companies like Unilever– how together they can use less water in food production.  “At Unilever,” Polman has said, “we believe collaboration will become the only way of doing business in the future.”

While other chief executives deny or ignore scientific findings about climate change, Polman has embraced scientists and asked for their help changing manufacturing, the supply chain, and distribution. The Unilever Sustainable Living Plan, which started in 2010, sets a goal of doubling the size of business by 2020 while reducing environmental impact.  It includes promises to help a billion people worldwide improve their health, and to source all agricultural raw materials sustainably. Science, the plan says, will be “a critical catalyst and enabler of behavior change.”

In Polman’s words:  “In a world where temperatures are rising, energy is costing more, sanitation is worsening and food supply is less secure, companies can no longer sit on the sidelines waiting for governments to take action.”

He continued, “We have to see ourselves as part of the solution to these problems.”

Unilever’s pro-environmental stand has led to unusual alliances.  For example, the company has endorsed the U.N. Global Compact, which calls on companies to join with government and labor for sustainability and transparency.  And this year, the company announced the formation of The Unilever Foundation, “dedicated to improving the quality of life through the provision of hygiene, sanitation, access to clean drinking water, basic nutrition, and enhancing self-esteem.”

Polman’s actions were unheard of in the consumer industry just a few years ago. Yet they’re boosting the bottom line. Even during a worldwide recession, Unilever’s business has increased, and employee retention is up. There’s a buzz inside and outside the company.  Unilever seems to be inspiring other companies, such as Wal-Mart and Deloitte, which have announced that they view sustainability as good for business.

This is the continuing legacy of the Hawthorne Effect.

And now, a challenge:  Identify an important problem at your company, school or non-profit.   Ask two colleagues how a new collaboration could solve that problem. What can your company draw on Hawthorne’s lessons to increase productivity and satisfaction of employees?

Teach for America – Tomorrow’s Effective Leaders

Make more noise, be louder, push harder.

That’s the advice from feminist leader Gloria Steinman and civil rights leader John Lewis at this weekend’s Teach for America Alumni Summit, which drew 11,000 people.

The results Teach for America, their alumni, the enterprises they have launched, and their friends have accomplished is mind-boggling.  Thanks to Teach for America , students  who had been ignored  are  living dreams – completing college and breaking out of poverty.  Schools built by alumni are breaking levels of performance that were assumed impossible.  For example, Julie Jackson, the principle, at NorthStar Academy in Newark, has taken one of the worst performing schools in the state and is delivering results comparable to the best school in New Jersey.

Communities that had the poorest education standards in the country – New Orleans and Washington DC – are starting to rise from the dust, and even offering some lessons in what can be done right.   In Baltimore, a new generation of public officials is emerging – people who have lived in a classroom.   Colorado is passing promising legislation focused on teacher excellence after senators are visiting the TFA classrooms.

I would speculate that if we check out Facebook in 2020, TFA alumni will dominate the list of the most admired leaders, just as Peace Corps alumni did 30 years ago.

Across the country, teaching is getting renewed respect.  Teaching jobs are now some of the most sought after positions by the best performing college students.  TFA is the only institution that can consistently compete against Goldman Sachs and McKinsey for candidates and win.   Parents who demand excellence of their sons and daughters are no longer questioning their children’s decision to go into teaching.  President Obama and Secretary Arne Duncan recognize the new standards of possible.   And for me, a business-person, the number and scope of entrepreneurial ventures that have been launched on efforts as diverse as training principals to providing one-on-one mathematical teaching with computers is nothing short of Silicon Valley.

It is the synergy and focus within this group that is making these leaders, leaders extraordinaire.  As part of Teach for America, groups in a school meet and collectively learn from each other and mistakes, not unlike the Japanese education system.   At this conference, the number of formal and informal meetings trading ideas and helping each other was a community collectively solving problems and creating new possibilities for education in America.

TFA believes that good leadership will lead to good teaching –- if you know how to lead and manage your classroom, it will lead to achievement gains with your students, regardless of their race or socioeconomic status.  Effective leadership is creating a culture so that the impossible is possible.  That is what this group is doing individually and collectively in and out of the classroom.  The optimism, caring, commitment, and energy of the 11,000 people is contagious.

Teach for America’s challenge now is to scale fast without losing the  focus on putting their core members in the high-need and hard-to-staff places.   America’s challenge is that we can not afford not to. It is this community of 11,000 that have convinced me we will.


Accelerating Medical Progress Through A More Collaborative Research

by Elizabeth Haas Edersheim

April 30, 2009

In 2005, as we were working together on his biography, The Definitive Drucker, Peter told me to keep an eye on a most innovative collaboration that we both admired—The Myelin Repair Foundation.

Despair: MS Research in 2005

MS was no closer to a cure than in 1975; the conventional academic research model had stalled completely. To push for more effective research with substantive near-term results, businessman Scott Johnson—head of a start-up, a former senior executive at FMC, and a Multiple Sclerosis (MS) sufferer himself—spearheaded a new, more collaborative research model targeted at myelin repair. Does he think MRF will provide him with a cure? “I don’t think so, but it will help other, more recently diagnosed individuals and next-generation sufferers.” Noting that MS often runs in families, Scott continued, “I don’t want anyone to have to experience what I have for the last 30 years; that is why it matters to me.”


The Launch of The Myelin Repair Foundation

The Myelin Repair Foundation’s (MRF) research program was launched in late 2004 with the goal of licensing its first target for commercial development in 2009—10 to 15 years sooner than most thought possible. With an organizational design modeled on the Manhattan Project, MRF seeks to break down the traditional barriers of secrecy in academic research and to expedite breakthroughs in drug discovery.   Their objective is to accelerate medical research dramatically and potentially stop this heretofore “incurable” degenerative disease that runs in families. The underlying idea was that the best scientists could make more and better progress if they worked together in collaboration rather than separately in competition, and if they focused on a very clear and specific research objective.

The shocking story of medical research including publicly funded efforts, is that the very labs that are supposed to work for the common good are often more interested in doing their own thing. They don’t want to cooperate with others, whom they may perceive as competitors, because they fear losing their exclusivity, their competitive edge, and ultimately their funding. Maddened by this inefficiency, Scott Johnson created MRF to pioneer a new model for medical research. In essence, MRF is a virtual research lab that links together institutions with diverse specialized expertise and focuses the world’s greatest MS researchers on solving a very well-defined problem: to find a way to repair myelin and thus reverse the progress of the disease. The foundation simply ignored counterproductive research practices and conventions, abandoning the notion that a research institution has to do everything itself, echoing ideas Drucker wrote about in The Post-Capitalist Society.

To establish this unprecedented “horizontal” collaboration, Scott Johnson brought together five leading neuroscientists from high-powered research universities—McGill, Stanford, Case, Northwestern, and the University of Chicago—former competitors in the race for new myelin discoveries. He provided robust financial incentives and communications infrastructure for these five universities to break from conventional practices and collaboratively participate in the effort. Johnson also committed funding for the principal investigators and created a working culture that facilitated the collaboration of the scientists.

Johnson’s new model, the Accelerated Research Concept (ARC), goes beyond the virtual research lab, with a multitude of formal and informal connections among the scientists which include quarterly meetings, collective planning, and cross-university telephone conferences and e-mails, sometimes daily.

MRF manages for results and bridges the academic and the commercial, working across organizations, institutions, and disciplines to create a powerful focus and success rate. The process has built trust between the former competitors and a shared emotional commitment to the results. They have vastly accelerated the progress of MS research.

For more information on the MRF organizational model, see The Definitive Drucker (New York: McGraw-Hill, 2007) and visit their website

What is Myelin?

Multiple Sclerosis (MS) attacks myelin, a fat and protein compound wrapped around axons, the fibers that sprout out of nerve cells and carry nerve signals. Think of myelin as a form of insulation. As the myelin insulation is eaten away, scar tissue forms in its place, and nerve signals are slowed, distorted, or halted. These splutters and failures create the symptoms of MS.  Johnson believes that repairing myelin will address these symptoms, much as insulin does for diabetes.


What the Myelin Repair Foundation Accomplished in 4-1/2 Years

Nothing illustrates the power of collaboration like results. As of April 2009, The Myelin Repair Foundation, and its scientists and partners, have:

  • Been awarded one patent, with eight more patent applications pending—at approximately one-quarter the cost per patent of academic institutions
  • Published more than 50 articles in scientific publications, with an unprecedented number of them co-authored by scientists from multiple institutions
  • Identified more than 40 discoveries—targets, pathways, and tools, including a battery of measuring tags to assess precisely the state of a patient’s myelin and the progress of re-myelination.  This tool should greatly accelerate the validation of clinical testing
  • Remained ahead of schedule in achieving the goal of having a myelin repair target licensed by a pharmaceutical company within the foundation’s first 5 years
  • Defined the next round of targets and launched the research to achieve them
  • Set up a Drug Discovery Advisory Group to spearhead the foundation’s collaboration with the commercial world. This group helps outline the strategy for the next set of milestones, e.g., determining whether the academic myelin repair solution can be converted into a therapeutic for patients, devising a systematic flow stream to validate that targets are reproducible with industrial rigor
  • Initiated a target validation process with Contract Research Organization partners. MRF’s goal is to complete this validation process for two of its programs by late summer this year.

If you want to assist an organization that is curing disease, relieving human suffering, and changing the conduct of medical research in the process, consider supporting the Myelin Repair Foundation.


The Challenges Facing the Myelin Repair Foundation in 2009

Having achieved so much, MRF must build on its success and push its research results through the pharmaceutical development pipeline and out to MS patients. In so doing, MRF expects to benefit financially from the commercialization of new therapies. By reaping these rewards, MRF can become a sustainable social business (to use the term coined by Peter Drucker). Meeting the goal of sustainability could take 3 to 5 more years and poses two substantial challenges for MRF today:

Challenge #1: Motivate pharmaceutical companies to work on drug discovery based on MRF’s research—to spur them to invest in targets for MS that did not exist 5 years ago. By intensifying its collaboration with pharmaceutical companies, MRF is bridging “the valley of death.”  There is an enormous gap that prevents discoveries made in academic labs from being commercialized by private pharmaceutical companies. MRF and its academic labs are in conversation with multiple players regarding drug development and are seeking to establish at least two sound research partnerships with pharmaceutical companies this year. These partnerships will bring pharmaceutical investment into MRF and get the foundation’s scientists in touch with the industry’s drug development infrastructure. If their joint research proves successful, MRF’s efforts will have a real therapeutic impact on patients, and will be the foundation will gain an ongoing revenue stream. Commercial success is by no means guaranteed, and the time required to achieve it is not predictable. MRF is bringing the academic and commercial worlds together in a way that nobody else has.

Challenge #2: Attract the short-term funding needed to complete the journey to a commercial solution and fund a second round of MRF research. Although MRF will become self-sustaining as its research solutions are commercialized, the foundation faces an immediate need to raise funds to continue its efforts in the interim. These are challenging times for development and fundraising; many philanthropies have been crippled by the current economic crisis. Scott Johnson has responded by intensifying his own effort. He‘s literally in 6-1/2 days a week burning the midnight oil.

MRF has secured a $10 million pledge—$5 million for 2009 and $5 million for 2010—contingent on MRF finding matching funds. Scott is bringing to this fundraising effort the same creativity that has marked the foundation’s efforts since its inception.

* * *

Imagine a world in which accelerated scientific discoveries are rapidly streamed into the drug pipeline and delivered to patients who can’t afford to wait. It begins with collaboration.

Does a relative have MS? You may also be at risk. 

Although environmental factors may play a central role in triggering MS, the disease clearly has a genetic component. In the general population, the incidence of MS is about 1 in 1,000. The identical twin of a person with MS has a 1 in 3 chance of getting it; a sibling, about 1 in 25. The child of a person with MS has a 1 in 40 chance of getting it. A niece or nephew of a person with MS has a 1 in 60 chance of being diagnosed with MSMark.

Many believe that possibly 100 genes may be involved with MS, but only a handful has been identified to date. MS is NOT considered a hereditary disease, in which there is a 100% chance that a family member will get the disease if he or she has the gene. However, family members of MS patients do have a “genetic predisposition” or increased likelihood (1 to 3 percent) of getting the disease. MRF reports that in several of its supporter families, siblings have been diagnosed, and one individual’s father and grandfather both had MS. MRF believes that early diagnosis and myelin repair therapeutics are the best ways to stop the disease’s progression.