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 / Second Quarter 2002 / Issue 27(originally published by Booz & Company)


Core Group Therapy

The Creative Imperative
Money and the illusion of Core Group status weren’t all the employees at Enron lost, for companies also have other critical factors that drive collective decision making: People want to expand their chances to be creative at a larger-than-individual scale.

Big organizations are not typically seen as creative. The very word “bureaucracy” connotes the opposite of an innovative enterprise. But in reality, progress in civilization depends on the ingenuity of its large organizations. If we learn how to  harness an organization’s creativity effectively, then almost nothing is impossible. That’s why society’s great innovators, from Thomas Edison to Steve Jobs, inevitably begin by building a place for brilliant and imaginative people to work together.

But different organizations are creative in different ways. The exact nature of their creativity tends to surface as a challenge to people throughout the hierarchy. Can a securities company create a compelling investment vehicle? Can a packaged-goods company corner the market on toothpaste? Can a utility reshape the energy industry? Can a marketer invent a franchise that puts its name all over the world? It’s as if each individual is saying to him- or herself, “Let’s take the organization out for a spin and see what this baby can do.”

Money is important to people (which is why the Core Group holds tight to the purse strings), but employee commitment to an organization’s creative imperative has little to do with salaries or bonuses. Former Enron employees, while they grieve the loss of their savings, also keenly miss the excitement they felt there. Like the former investment bank Drexel Burnham Lambert, to which it has been compared, Enron brought an intensive spark of originality to its operations, although often bringing them to the edge of convention and propriety. Enron’s risk-taking culture gave a heightened thrill even to the nontrading departments: “By far my best days in my career were as a consultant for Enron,” wrote contractor Katie Walthall to the Chronicle. “The environment was an extreme rush.”

That brings us to the third factor, which is primarily influenced by the Core Group. People are trying to make a better world — not in any idealistic way, but by following their unconscious sense of what the “right thing to do” is for the organization (and themselves).

Organizations exist to prove, again and again, what the eminent organizational development expert Chris Argyris of Harvard University calls “theories in use” — an organization’s tacit views of the way it believes the world is supposed to work. For instance, some organizations maintain the prevailing belief that people are basically good and need to be nurtured to be developed; others, no matter what they espouse, believe that most people must be tightly controlled to get anything done effectively. Either of these views suggests a “right” way to treat people, and the organization will attract people who concur with its view.

No matter how craven or criminal an organization seems to outsiders, the people inside it are driven by their own conception of honor. Enron is a perfect example: Even in its high-flying days, Enron was perceived by many outsiders as a bunch of buccaneers. But inside, it was apparently driven by at least three shared ideals: a belief that deregulation was a virtuous and liberating force; a trader’s belief in high-speed, high-status gamesmanship as the best road to success; and a fierce sense that the company should protect its “family” of employees. (For instance, when floods struck Houston early in 2001, Enron immediately gave $1,000 to all employees who needed emergency cash.)

Most oil companies see themselves, as investigative reporter Seymour Hersh has noted, as keeping humanity safe from the cold and dark; Enron saw itself as pushing the boundaries of conventional supply and demand, a very different ideal.

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