Beer and Nohria describe the different between two change theories: Theory E and Theory O. They note that, while each theory has been used successfully to create change, the best, most long lasting change uses a combination of the two theories. Theory E is top-down change with the focus on shareholder value. By contrast, Theory O is bottom up and focuses on other concerns, such as the employee culture and the productive capacity of the organization. Theory E tends to be a quicker process that relies heavily on outside consultants, while Theory O is a much more gradual process that depends on the employees to identify necessary change. Beer and Nohria use two examples of company turnaround to explain these theories and then a third company to explain how the two theories could be merged.
I had a little difficulty understanding the significance of their proposed merging of the two theories, since, in my mind all three organizations didn't change that successfully. For one thing, all three companies were eventually sold and I don't think the authors were very clear as to why the third company (which used the combination of the two theories) was more successful than the first two. However, I think their concept is sound, not based on their explanation but just based on common sense.
In Myers Briggs Personality typing, there are two characteristics that align strongly with Theory E and Theory O. I think that Theory E is a "thinker" way to create change and Theory O is a "feeler" way to create change. Perhaps because I am so interested in Myers Briggs, I am more apt to put things in these categories, but it has helped me make sense of a lot of dynamics that I see. For example, the United States tends to have a more "thinker" culture and China tends to have a more "feeler" culture. Paradoxically, though, China tends to be governed top-down and the U.S. to be governed bottom-up (in theory at least). The paradox is that neither way of operating works very well without using some of the other approach to balance it out, so it makes sense that Theory E and Theory O must be used together. The challenge it so get people who operate according to those different paradigms to see that.
I think normally, I would try to explain this if I could, but I just came back from a meeting where I think I tried too hard to explain things, so I'm going to give it a break for now. If you want me to explain more, just let me know.
Social Justice
I think most social justice advocates would say that Theory O is the superior way to create change, seeing as it allows people at the bottom to create the change. On one level, I think that is a really wonderful idea... except that sometimes the people at the bottom really don't have the vision they need to make productive changes. So much of the time, our priority is our own welfare. When the system is democratically run, people tend to vote themselves more and more benefits and eventually the whole system can't afford itself. I think the higher education systems in the U.S. are a classic example of this. Of course, if the company has good leadership that encourages people to a broader view, that moment won't come for awhile and perhaps this process can be short circuited, but it takes a leader who isn't afraid of offending people or being accused of oppression on occasion. If the people at the bottom are willing to fight hard enough for their "rights," they can still sink that ship.
The other problem with the Theory O approach, though, is that it can create such a strong culture that people who are different become marginalized. Then everyone who is in the group or part of that culture congratulates themselves on creating such strong team spirit and unity without recognizing the way that they have eliminated diversity from their culture--of one sort or another. The classic fallacy in this case is to focus on one kind of diversity and completely overlook the way one is making one's environment inhospitable for other kinds of diversity.
Anyway, I think the drawbacks of Theory E are pretty obvious, especially from a social justice perspective, so I thought I would point out some of the drawbacks on the other side.
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