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strategy and business
 / Summer 2010 / Issue 59(originally published by Booz & Company)


Leading Outside the Lines

Carolan believes that creating personal connections to the work helps build and maintain a high level of performance, but he makes it clear that it is measurable performance results that matter most. The energy and enthusiasm we witnessed on our plant tour are great, but are ultimately meaningless if they do not move the performance needle in a positive direction.

“Ed’s approach reminds me of [my] high school,” one of his direct reports told us. “I had a chemistry teacher who treated all her students like kindergartners. She would put a smiley face on your paper if she thought it was good. I really hated her. I didn’t do the work. I didn’t engage with her. My calculus teacher, however, treated us like adults. He expected us to do ‘A’ work, and you didn’t want to disappoint him. I got much better grades in his class than in chemistry. Ed is like that calculus teacher. He engages the team and gets us to engage with each other. But he expects us to work really hard and deliver our personal best! That has built trust, and we don’t want to disappoint him.”

At the end of our day at the StockPot facility, we walked with Carolan to the parking lot. As he climbed onto his motorcycle, a worker came out of the plant.

“Hey, Ed!” the worker called out.

“Hey!” Carolan called back.

“I hear we made more soup last Saturday than we ever have! Is that true?”

“That’s right,” Carolan shouted. “Highest daily production in StockPot history.”

“Yes!” the worker called out, did a quick fist pump, and let out a whoop.

Carolan smiled, we said good night, and he roared away. Clearly, the efforts he had put into galvanizing his team around performance were paying off.

Creating a Tradition of Synthesis

Ed Carolan’s success at StockPot was the result of his unrelenting insistence on performance — both individual and group — and his ability to employ metrics in a way that was meaningful to his employees. His approach was neither “all hard” nor “all soft.” Instead, he took the best of both the formal and informal organizations and integrated them to energize people to fulfill a shared performance purpose. The StockPot turnaround could be seen as a story about metrics, but there were many things that Carolan’s team did informally to reinforce the numbers and help to make them meaningful:

  • They aligned their decisions and actions with strategic intent. Employees understood how company values translated into their daily work.
  • They set up dynamic processes that were constantly improved upon by suggestions from frontline employees as well as managers and leaders. The formal processes were supplemented and supported by informal networks.
  • They promoted the constant circulation of new ideas, continually improving the methods of production.
  • They supported communities and networks that had grown organically, cutting across more rigidly defined groups and structures.
  • They fostered a sense of “institutional empathy” with customers and partners that reinforced coordination, collaboration, responsiveness, and discipline across the StockPot organization.
  • They deliberately encouraged pride among employees — pride in the company, in one another, and in the facility’s day-to-day accomplishments.

In doing all this, the StockPot team was also reflecting a natural evolution in the history of business thinking. Over the past hundred years, business thinkers have been largely divided between rationalists (symbolized most visibly by Frederick Winslow Taylor, the 19th-century “father of scientific management”) and humanists (symbolized by Douglas McGregor, author of The Human Side of Enterprise [McGraw-Hill, 1960]). Researchers have rarely sought to integrate the two perspectives. Stanford University professor Harold J. Leavitt, author of Managerial Psychology: An Introduc­tion to Individuals, Pairs, and Groups in Organizations (University of Chicago Press, 1978), described one battle between the two groups at MIT’s Sloan School of Management in the 1950s: “[Our group] were proud and perhaps arrogant acolytes of Doug McGregor, the pioneering humanizer.… Our hot little group called itself ‘the people-people’ and inhabited the third floor of MIT’s Building 1. Our systemizing enemy — the hard-headed accounting, finance, and ‘principles of management’ people, along with Taylor’s progeny, the indus­trial engineers — held down the first floor of the same building.… We called the first-floor folks ‘make-a-buck Neanderthals.’ They called us ‘the happiness boys.’”

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  1. Andrea Gabor, The Capitalist Philosophers: The Geniuses of Modern Business — Their Lives, Times and Ideas (Three Rivers/Crown, 2000): Introduction to business thinkers on the hard (Taylor, McNamara), soft (Maslow, McGregor), and integrated (Deming, Drucker) sides.
  2. Jon R. Katzenbach and Zia Khan, Leading Outside the Lines: How to Mobilize the Informal Organization, Energize Your Team, and Get Better Results (John Wiley & Sons, 2010): More ideas and tools for helping both sides of an organization work together well.
  3. Zia Khan and Jon R. Katzenbach, “Are You Killing Enough Ideas?s+b, Autumn 2009: Making innovation more effective by rethinking your informal and formal practices.
  4. Harold J. Leavitt, Top Down: Why Hierarchies Are Here to Stay and How to Manage Them More Effectively (Harvard Business School Press, 2005): Formal structures exist because they fulfill basic human needs — and thus we’d better learn to manage them humanistically.
  5. Douglas McGregor, The Human Side of Enterprise, Annotated Edition (McGraw-Hill, 2006): The classic on escaping the tyranny of the formal — and reconciling the two sides of the corporate personality.
  6. For more thought leadership on this topic, see the s+b website at:
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