T h THE The Organization e Praise for the Previous Edition O of the Future 2 r “Th e Organization of the Future is required reading. If you don’t use this book to help guide your g Th e world has changed dramatically since the ORGANIZ ATION organization through the changes, you may well be left behind.” —Nonprofi t World a previous edition of the best-selling Th e Organiza- n tion of the Future was published in 1999. More than The Editors “A book to visit occasionally for something new to stretch our understanding, to think about, ever before, leaders need guidance for meeting the i Frances Hesselbein is the founding president and to integrate into our work. Th is is a treasure trove of some of the best thinking today on z F U T U R E challenges of today’s complex organizations in order and current chairman of the Board of Governors leadership, management, and strategy. If we use it as a self-paced seminar on how to advise, a OF to thrive in the future. t create, and lead the organizations of our future, we will be better equipped by far than most of of the Leader to Leader Institute and editor in i Th e Organization of the Future 2 is fi lled with chief of its journal Leader to Leader. She served our competitors.” —Journal of Management Consulting o THE wisdom and insight on the most important issues as CEO of the Girl Scouts of the USA and was n facing all organizations. Each of the book’s twenty- awarded the Presidential Medal of Freedom, the “Editors Hesselbein, Goldsmith, and Beckhard have brought together the latest views of noted six essays celebrate the wisdom of some of the o highest civilian honor in the United States. In experts about the future of human enterprise in the Peter Drucker context of government, most recognized thought leaders of our day. Th ese addition, she has been awarded honorary doctoral business, and community. Th is volume is highly recommended for organizational executives, f 22 experts share their unique vision of what the orga- degrees from 20 colleges and universities academics, and advanced students of management.” —Choice t nization of the future should look like and what h Marshall Goldsmith has been recognized organizational leaders must do to survive in the “If you’re interested in what tomorrow’s organizations will look like and what challenges our e tumultuous twenty-fi rst century. by the American Management Association as one of 50 great thinkers who have infl uenced the fi eld business leaders will face, this book is a must-read. Anyone seeking a glimpse of the future will F Th e book describes how tomorrow’s organizations fi nd this collection informative and thought-provoking.” —Personnel Psychology u of management and by BusinessWeek as one of can chart the path toward growth and prosperity t the most infl uential practitioners in the history in rapidly changing times and includes amazing u of leadership development. In addition to Th e “Avoiding platitudes, these wide-ranging essays provide a wealth of innovative thinking on examples of how organizations from diff erent r Leader of the Future 2, Dr. Goldsmith is the author leadership and management strategy.” —Publishers Weekly sectors have created cultures that are empowering e or coeditor of 22 books including the best-seller, their employees and transforming their industries What Got You Here Won’t Get You Th ere. 2 and communities. Th e contributors off er varied and diverse views on the organization of the future—for entrepreneurs to large corporations, nonprofi ts, and Visions, Visions, Strategies, and Insights universities—including three diff erent yet comple- Established in 1990 as the Peter F. Drucker Foundation Strategies, mentary approaches to inclusion, integration, and for Nonprofi t Management, the Leader to Leader and horizontal organization. Institute furthers its mission—to strengthen the Insights on on Managing in a New Era leadership of the social sector—by providing social Managing Th e fi nal section of the book focuses on the leaders in a New Era sector leaders with essential leadership wisdom, of the organizations of the future and shows how inspiration, and resources to lead for innovation and they can make a critical diff erence in the success of to build vibrant social sector organizations. EDITORS their enterprises. Join Us at www.josseybass.com HESSELBEIN F R A N C E S H E S S E L B E I N GOLDSMITH Josseybass.com USA $29.95 | Canada $35.95 LEADERSHIP M A R S H A L L G O L D S M I T H Register at www.josseybass.com/email for more information on our publications, authors, and to receive special offers. Leader to Leader Institute ffffiirrss..iinndddd vvii 1122//22//0088 1122::2277::1199 PPMM The Organization of the Future 2 ffffiirrss..iinndddd ii 1122//22//0088 1122::2277::1188 PPMM Other Publications from the Leader to Leader Institute The Five Most Important Questions You Will Ever Ask About Your Organization, Peter F. Drucker with contributions from Jim Collins, Philip Kotler, Jim Kouzes, Judith Rodin, V. Kasturi Rangan, and Frances Hesselbein Leader to Leader 2: Enduring Insights on Leadership from the Leader to Leader Institute’s Award-Winning Journal, Frances Hesselbein and Alan Shrader, Editors In Extremis Leadership, Thomas A. Kolditz The Leader of the Future 2, Frances Hesselbein and Marshall Goldsmith, Editors Leadership Lessons from West Point, Major Doug Crandall, Editor Leading Organizational Learning: Harnessing the Power of Knowledge, Marshall Goldsmith, Howard Morgan, Alexander J. Ogg Be*Know*Do: Leadership the Army Way, Frances Hesselbein, General Eric K. Shinseki, Editors Hesselbein on Leadership, Frances Hesselbein Peter F. Drucker: An Intellectual Journey (video), Leader to Leader Institute The Collaboration Challenge, James E. Austin Meeting the Collaboration Challenge Workbook, The Drucker Foundation On Leading Change: A Leader to Leader Guide, Frances Hesselbein, Rob Johnston, Editors On High Performance Organizations: A Leader to Leader Guide, Frances Hesselbein, Rob Johnston, Editors On Creativity, Innovation, and Renewal: A Leader to Leader Guide, Frances Hesselbein, Rob Johnston, Editors On Mission and Leadership: A Leader to Leader Guide, Frances Hesselbein, Rob Johnston, Editors Leading for Innovation, Frances Hesselbein, Marshall Goldsmith, Iain Somerville, Editors Leading in a Time of Change (video), Peter F. Drucker, Peter M. Senge, Frances Hesselbein Leading in a Time of Change Viewer’s Workbook, Peter F. Drucker, Peter M. Senge, Frances Hesselbein Leading Beyond the Walls, Frances Hesselbein, Marshall Goldsmith, Iain Somerville, Editors The Organization of the Future, Frances Hesselbein, Marshall Goldsmith, Richard Beckhard, Editors The Community of the Future, Frances Hesselbein, Marshall Goldsmith, Richard Beckhard, Richard F. Schubert, Editors Leader to Leader: Enduring Insights on Leadership from the Drucker Foundation, Frances Hesselbein, Paul Cohen, Editors The Drucker Foundation Self-Assessment Tool: Participant Workbook, Peter F. Drucker The Drucker Foundation Self-Assessment Tool Process Guide, Gary J. Stern Excellence in Nonprofi t Leadership (video), Featuring Peter F. Drucker, Max De Pree, Frances Hesselbein, Michele Hunt; Moderated by Richard F. Schubert Excellence in Nonprofi t Leadership Workbook and Facilitator’s Guide, Peter F. Drucker Foundation for Nonprofi t Management Lessons in Leadership (video), Peter F. Drucker Lessons in Leadership Workbook and Facilitator’s Guide, Peter F. Drucker The Leader of the Future, Frances Hesselbein, Marshall Goldsmith, Richard Beckhard, Editors ffffiirrss..iinndddd iiii 1122//22//0088 1122::2277::1188 PPMM The Organization of the Future 2 Visions, Strategies, and Insights on Managing in a New Era Frances Hesselbein Marshall Goldsmith Editors ffffiirrss..iinndddd iiiiii 1122//22//0088 1122::2277::1188 PPMM Copyright © 2009 by Leader to Leader Institute. 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HD58.8.O72842 2009 658.4(cid:1)06—dc22 2008041913 Printed in the United States of America first edition HB Printing 10 9 8 7 6 5 4 3 2 1 ffffiirrss..iinndddd iivv 1122//22//0088 1122::2277::1199 PPMM About the Leader to Leader Institute Established in 1990 as the Peter F. Drucker Foundation for Nonprofi t Management, the Leader to Leader Institute furthers its mission—to strengthen the leadership of the social sector—by providing social sector leaders with essential leadership wisdom, inspiration, and resources to lead for innovation and to build vibrant social sector organizations. It is this essential social sector, in collaboration with its partners in the private and public sectors, that changes lives and builds a society of healthy children, strong families, good schools, decent housing, safe neighborhoods, and work that dignifi es, all embraced by the diverse, inclusive, cohe- sive community that cares about all its people. The Leader to Leader Institute provides innovative and rel- evant resources, products, and experiences that enable leaders of the future to address emerging opportunities and challenges. With the goal of leading social sector organizations toward excel- lence in performance, the Institute has brought together more than four hundred great thought leaders to publish twenty-three books available in twenty-eight languages, and the quarterly jour- nal, Leader to Leader. This Apex Award–winning journal is the essential leadership resource for leaders in business, government, and the social sectors—leaders of the future. The Leader to Leader Institute engages social sector leaders in partnerships across the sectors that provide new and signifi cant opportunities for learning and growth. It coordinates unique, high-level summits for leaders from all three sectors and collabo- rates on workshops and conferences for social sector leaders on leadership, self-assessment, and cross-sector partnerships. Building on its legacy of innovation, the Leader to Leader Institute explores new approaches to strengthen the leadership of the social sector. With sources of talent and inspiration that range from the local community development corporation to the U.S. Army to the corporate boardroom, the Institute helps social sector organizations identify new leaders and new ways of manag- ing that embrace change and abandon the practices of yesterday that no longer achieve results today. ffffiirrss..iinndddd vv 1122//22//0088 1122::2277::1199 PPMM ffffiirrss..iinndddd vvii 1122//22//0088 1122::2277::1199 PPMM Contents Preface xi Frances Hesselbein Introduction xiii Marshall Goldsmith PART ONE: STRATEGY AND VISION: SETTING THE DIRECTION OF THE ORGANIZATION OF THE FUTURE 1 1 Outsmart Your Rivals by Seeing What Others Don’t 3 Jim Champy 2 Organization Is Not Structure but Capability 13 Dave Ulrich and Norm Smallwood 3 The Leader’s Mandate: Create a Shared Sense of Destiny 27 James M. Kouzes and Barry Z. Posner 4 A Different Kind of Company 37 Srikumar S. Rao 5 Free to Choose: How American Managers Can Create Globally Competitive Workplaces 49 James O’Toole 6 Managing the Whole Mandate for the Twenty-First Century: Ditching the Quick-Fix Approach to Management 63 Paul Borawski and Maryann Brennan PART TWO: ORGANIZATIONAL CULTURE: VALUES, EMOTIONS, HOPE, ETHICS, SPIRIT, AND BEHAVIOR 75 7 The Values That Build a Strong Organization 77 Thomas J. Moran vii ffttoocc..iinndddd vviiii 1122//22//0088 1122::2277::4444 PPMM viii Contents 8 Revisiting the Concept of the Corporation 88 Charles Handy 9 Mobilizing Emotions for Performance: Making the Most of the Informal Organization 98 Jon R. Katzenbach and Zia Khan 10 Beyond Retirement: Mature Workers Are Essential Talent for Organizations of the Future 112 Richard J. Leider 11 The Best Hope for Organizations of the Future: A Functioning Society 120 Ira A. Jackson 12 Reframing Ethics, Spirit, and Soul 132 Lee G. Bolman and Terrence E. Deal 13 Environment Drives Behavior and Expectations 145 Bill Strickland with Regina Cronin PART THREE: DESIGNING THE ORGANIZATION OF THE FUTURE 157 14 Dynamic Organizations for an Entrepreneurial Age 159 Christopher Gergen and Gregg Vanourek 15 Multidimensional, Multinational Organizations of the Future 174 Jay R. Galbraith 16 Designing Organizations That Are Built to Change 188 Edward E. Lawler III and Christopher G. Worley 17 Refounding a Movement: Preparing a One-Hundred- Year-Old Organization for the Future 203 Kathy Cloninger 18 Three Challenges Facing Nonprofi ts of the Future: People, Funding, and Strategy 217 Roxanne Spillett 19 Pioneering the College of the Future: Building as We Walk 228 Darlyne Bailey ffttoocc..iinndddd vviiiiii 1122//22//0088 1122::2277::4444 PPMM