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.