It has often been said in the American business world that the way to survive is to tell management “what it wants to hear.” The late Chris Argyris (1923-2013) questioned that view often in his long career. Of all his books on organizational science, my favorite was ORGANIZATION AND INNOVATION.
In brief, Argyris said that there were two types of companies which he labeled Model I and Model II. He stated that in Model I firms people only said things aloud in meetings that were felt to be appropriate to company culture. Confrontation was avoided at all costs. If an employee felt that he or she would be penalized in some way for candor, or might embarrass someone or announce bad news in a session, they usually would keep quiet, soft-pedal the issue or even lie. By doing so, top management gets knowledge that he categorized as invalid and many errors could not be corrected. Argyris felt strongly that if an organization was to learn, then finding and correcting errors was what it was all about.
Everywhere that I have worked in my career, superiors always said, “Tell me anything. My door is always open.” Think about it yourself and I am certain that most of you have heard the same thing. Did you act on it literally?
It is very hard to find an executive in almost any industry who is not at least minimally defensive about criticisms from an employee. After a period of years goes by and a relationship develops, most of us have learned where they can go and where they avoid comment. I made it a point never to call someone out in a meeting in front of peers. Stronger comments were always better one on one and even then, it was difficult at times. This week I just finished THE MURDER OF LEHMAN BROTHERS (Brick Tower Press, 2009) in which Joseph Tibman (a pen name for a former investor banker at Lehman) talked about how Lehman Brothers CEO Dick Fuld was always insulated from bad news right until the end of the company’s existence. Clearly, they were a Model I firm.
Model II companies, according to Argyris, have somehow found a way to express issues. People are not afraid to raise conflicting views and their is actual encouragement of challenging publicly even what the CEO has to say. Problems can be dealt with even when you are pretty far down the road on a project. Argyris says there are only a handful of Model II companies out there. He wrote that in 1965 and I bet it is still largely true today.
Where do Model II companies exist? Startups, particularly in tech, would likely head the list. I have seen and heard of it in small professional practices in law, medicine and financial planning and analysis. Everyone is experienced and fairly secure. Family businesses sometimes operate on Model II. As one person said to me, “Yes, we argue, disagree and fight. But, at the end of the day we still love each other and we are all owners.”
Does it work in the media world? A sales staff may have it if it is not too large. Everyone is under pressure to perform so the sales chief is not the villain--the bean counters at headquarters are. So, people are often apt to speak up about sales tactics or who to pursue for new business. Ad agencies? Maybe a few start-up digital shops are Model II but generally candor is found in private conversations at long standing agencies among senior management who are financially secure.
The late Andy Grove of Intel once famously said, “Only the paranoid survive.” It always gets a laugh when it is brought up but today in many firms, particularly advertising agencies there is a crying need to move toward a Model II culture.
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