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Gangaram Singh interviews Charles Snow

1. Your idea on strategy, structure, and processes (alignment) is perhaps the cornerstone of strategic management. Where did you develop this idea? And how did you popularize it?

I agree that alignment is certainly one of the cornerstones of strategic management.Our ideas – and by “our” I refer to myself and Raymond Miles, my teacher and mentor at Berkeley – came about when we were writing our 1978 book which happily for us became a classic in the field. A key element of our theoretical framework is the adaptive cycle which we believe is an ongoing process engaged in by every organization. The cycle says that an organization is constantly assessing its “solutions” to what we call the “entrepreneurial”, “engineering”, and “administrative” problems. When one or more of the solutions to these three broad problems does not seem to be working well, the organization must adapt.

Our development of the concept of alignment came several years later. Here we said that when an organization is struggling with its journey through the adaptive cycle, it must check key points of alignment. We described “external” alignment such as the necessity for a firm’s strategy to fit its environment. Of course, misalignment occurs when the firm’s strategy is losing its tight fit with the environment. We also described “internal” alignment such as having the firm’s organization structure and management processes fit the firm’s strategy. Lastly, we discussed “dynamic” fit – keeping everything aligned while both the organization and its environment are changing.

There had been a long tradition in the industrial psychology literature of person-situation fit. We simply tried to apply this concept at the firm level.

2. Your paper in Organization Dynamics in 1984 is often used as the point of departure for empirical investigation of the strategic human resource management paradigm. Tell us a little bit about SHRM.

Our version of SHRM came about when Miles and I received telephone calls a few days apart from the corporate human resource people at Canadian Pacific (Canada’s largest company at the time). They had read the 1978 book and liked the strategies that we identified and described: Prospector (or First Mover), Analyzer (Second Mover), and Defender (Late Mover). They wanted to explore the idea of developing human resource “packages” appropriate for each of these three strategy types which they believed nicely captured the 80 or so business units of the corporation. I ended up going to corporate headquarters in Montreal and spent several days designing a research project with them. Ultimately, they developed a questionnaire called SENSOR that typed the business unit’s strategy, and then the Human Resources Department customized an HR package for that unit based on the three generic types that had been developed earlier. It was really good stuff, and years later one of the HR vice presidents told me the company was still using a version of the original approach. For awhile – perhaps still, I don’t know – the Human Resource Management Society used this model to certify HR professionals in “strategic” HRM.

Today, I would say that SHRM is essentially thinking of all human resource activities at the level of the firm. By doing so, the HR Department can be charged with developing programs and systems that are aligned with both corporate-level and business-level strategy.   

3. Later on, in addition to strategy, structure, and processes, we see this notion of capabilities (and dynamic capabilities) come into the alignment equation. What is your view of capabilities?

Given my tastes, this is probably the most exciting area of strategic management today. We recently wrote a chapter in a book on organization design that argued for the inclusion of capabilities as one of the core components of an organization (the others being strategy, people, structure, processes, and management philosophy). Because an organizational capability is the aggregate of a set of individuals’ knowledge and skills, it is difficult to measure and place a value on organizational capability. And yet both scholars and managers realize that capabilities are one of the first things you need to think about when formulating a competitive strategy. Also, organizational capabilities increasingly are being defined across groups or communities of firms, so the field of strategic management needs to catch up with practice.

4. I just finished reading your new book Collaborative Entrepreneurship, and I am intrigued by the notion of continuous innovation. What is this?

Our book focuses on what we were just discussing – organizational capabilities. We have known for over a hundred years, since the great economist Joseph Schumpeter first advanced the idea – that innovation is what drives economic development in a country. Therefore, all firms in an economy have to be innovative, at least to some extent. We simply extended this idea to its logical limit and called for the ideal of “continuous” innovation, particularly innovation that extended across industries in addition to innovation that takes place within an industry. “Horizontal” or cross-industry innovation requires firms of different stripes to work together – to collaborate. Thus, in our book, we spent a lot of time describing a new organizational form, the multi-firm collaborative network, which would allow firms to work together collaboratively.

5. If I have to criticize your new book, it would be the choice of a hypothetical organization as the basis for unveiling this whole idea of collaborative entrepreneurship. And you picked Europe for the emergence of this new form of organization. Can you elaborate on these possible limitations of your book?

Well, Gangaram, you don’t HAVE to criticize the book! But since you have, here’s how I would respond. First, I’d note that the published reviews of the book are generally favorable, but if a reviewer notes a limitation it is usually the fact that we created a fictional organization, which we call OpWin Global Network, to illustrate how the new multi-firm collaborative network would operate. Our reason for doing so was quite simple – we could not find a single organization anywhere in the world to cite as a complete example of this new organizational form. We did, however, locate several partial examples of multi-firm collaboration such as “industrial symbiosis” in Denmark, “partnering” in the U.S. civil construction industry, the Acer Group’s (Taiwan) “business federation” model, the TCG Group’s (Australia) “triangulation strategy” for new product development, and so on. We then took these partial examples and welded them together into our fictional organization, OpWin.

Also, as you point out, we predicted that the world’s first full-blown collaborative network will appear in Europe – but not anywhere in Europe as we believe it is most likely to appear in a Scandinavian country such as Finland. The basis of our prediction is, first, that organizational experiments along collaborative lines are already underway in Finland and, second, that country’s societal and managerial values appear to be well suited to inter-firm collaboration. Contrast, for example, Finland’s societal values with those found in the United States. Whereas we place high value on self-interest, individual choice, survival of the fittest, self-improvement, and material wealth, Finland’s societal values are much more likely to include community, shared responsibility, stewardship, and a concern for others. Such societal values, we hypothesize, will directly translate into the managerial values that are needed to support inter-firm collaboration and innovation.

6. Our readers will be pleased to know that you are an SDSU alum. Can you reflect on that experience?

It was forty years ago when I was a student there. The campus is quite a bit bigger now – there are buildings where I used to lie in the gutter on Friday nights! I was a Business Management major, and now I’m a Management professor, so my experience as an Aztec led directly to what I’m doing now. For example, one of my favorite SDSU professors was Dave Belcher who, sadly, passed away several years ago. He was the one who suggested that I go to graduate school, and it was his recommendation, I later learned, that got me into Berkeley. When I started taking graduate-level seminars along with my fellow doctoral students, almost all of whom had masters’ degrees from Dartmouth, Texas, Washington, and other big-time schools, I gradually realized that my undergraduate degree from San Diego State was allowing me to keep up with these – I was convinced – smarter people. Plus, I found that on average my professors at SDSU were better teachers than those at Berkeley. So, what can I say? I absolutely loved going to San Diego State, and the education I got propelled me into a life-time career. I wish nothing but the best for the university.

7. Now take a critical look at the SDSU College of Business Administration. Do you think we are on the right track?

I do. When I met with you and Dean Naughton during the Thanksgiving holiday in 2006, I was very impressed by the strides the College has made. Remember, I thought the College was doing a great job when I was there in the sixties. But now the school has a partnership with the San Diego Padres, so MBA students can study sports organizations from a business perspective. Or, alternatively, the MBAs can choose to take a global entrepreneurship option where they learn about business practices in four different, carefully selected countries. And, at the undergraduate level, SDSU’s accounting and entrepreneurship programs rank among the best in the country.

Things were not done on this scale or of this quality when I was in the College. The thinking and the energy behind these achievements are what I notice. All I can say is, keep it up!