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 sepa rating businesses are fuzzy, and, with equal access to technology, ear ly-market-entry advantages are minimal. A change in management doctrin e is needed to match this new landscape. After five years researching 20 leading European, U.S., and Japanese companies, the authors conclud ed that the role of top management must change. Using these companies as examples, they prescribe the necessary transformation. First, senio r managers must change their own priorities and ways of thinking. Beyo nd designing corporate strategy, they must shape a shared institutiona l purpose. They must expand their focus from devising formal structure s to developing organizational processes. And more than just managing systems, they must develop people. Top management's role in the compan ies researched already reflects the changes the authors prescribe. Con sequently, 3M has managed to retain an innovative capability and an en trepreneurial spirit despite its $14 billion bulk. ABB transformed two ''also-ran'' companies into the leading competitors in the global pow er-equipment industry at a time when world markets were in recession. And big, complex companies like AT&T, Royal Dutch/Shell, Intel, Anders en Consulting, Kao, and Corning are doing well despite what some peopl e predicted as the inevitable decline of large corporations.