Contextual Management

Applying the art of dealing creatively with change

By Jim Selman & Vince DiBianca

In many ways, the nature of management is becoming more abstract, and the most successful managers are those who learn how to deal with these abstractions in a way that translates effectively into new organizational concepts offering concrete results. This article, co-authored with Vince DiBianca, was originally published in Management Review in September 1983.

MOST TOP MANAGERS are competent, dedicated, and intelligent people. Yet, a growing number are expressing concern and frustration over their apparent inability to produce the results they want in their organizations. “I’m just not sure if l’m running the organization or if it’s running me,” said one weary CEO, expressing a sense of powerlessness in trying to keep up with the pace of change in his business and industry. “I’m on an organizational treadmill.”

Key managers—CEOs in particular—want answers to some very tough questions: Can we write off our recent poor performance as just the effect of a lagging economy? Do we care more about mergers, balance sheets, and tax write-offs than we do about our own employees? Have we shortchanged R&D by emphasizing short-term profits? Are we marketing products that we really want and need? How do we get our own internal structures, politics, and pettiness out of the way?

The questions seem endless. And combined with the success of foreign competitors in American markets, the situation suggests to some the possibility that our notions about management, leadership, and organizational behavior are no less susceptible to obsolescence than our other tools.

That is not to say, however, there is no hope for a breakthrough. Though to some it appears that what we’re doing in business and management is no longer adequate to meet the demands of change, others suggest that putting management into a new context will permit new ways of thinking about management and organizations to surface and take hold.

Consider that, amid the diverse pressures on the organization, the nature of management is becoming more abstract. It’s apparent to many, for instance, that the most effective CEOs are those with a facility for working with abstractions in a way that translates into concrete results. Such managers recognize the complementary forces at play in combining abstract and practical thinking. Just as calculus empowered engineers to build previously impossible structures, the abstract work being done in management is opening the possibility for organizational structures previously not thought of. These factors, therefore, provide a sharp for examining the key principles supporting a process that we call “contextual management.”

What’s Happening?

Almost 20 years ago, author Alvin Toffler (Future Shock and The Third Wave) described “accelerating change,” a phenomenon in  which change, occurring faster and faster, would eventually reach a rate that would exceed our ability to integrate it into operational reality. In effect, he prophesied, we would be left disoriented and dysfunctional—obsolete.

For many, Toffler’s forecast is an actuality. The increasing rate of change in American business has caused an uncertainty that is affecting the ability of many companies to produce. “l’ve just begun to incorporate fully the use of silicon semiconductors in my product development,” said a concerned president of an electronics manufacturing firm. “But now I understand the Japanese are developing a new gallium arsenide semiconductor 2.5 times faster than the silicon ones.”

The automotive industry is a dramatic example of the need to respond to shifting resources, technological developments, heightened competition, and changing market demand. Yet, isn’t change inevitable? American business has always faced change, so what is fundamentally different now?

One difference may be the incredible and relentless pace of change. While some CEOs attempt to create change, others resist or ignore it. Many, however, may be overloaded trying to assimilate it—whether it’s global, national, industrial, technological, or shifts in the values and lifestyles of people. How can a business respond to that much change?

Another difficulty, some say, is that we are still using essentially the same management models and technologies that were developed during the Industrial Revolution. They argue that the way we used to do things simply won’t work anymore. Other executives insist that it’s time for new ideas and approaches.

Still, as valuable as the new tools and approaches are—and many have been proposed—they haven’t always helped management respond to or create change. The mixed press on the success/lack of success of Japanese management techniques in America illustrate this point. If new ideas—or at least different from what was tried before—haven’t worked, what will?

Try Another Dimension

The answer, we believe, is to establish a new context, or way of thinking about management. The challenge is to discover ways to help the CEO and other top managers discover and build organizational contexts that work. And the secret to doing this is to go to a dimension beyond the power of action—to the power of creation.

Building a new organizational context is essentially an abstract task of creating something where nothing existed before—like an artist about to paint on a blank canvas. There are no models or theorems or proven texts for guidance; the discoveries by those who are “contextual managers” come from their seeing things as they are and in their intention to bring their vision into existence.

The emerging technology that we call “contextual management” brings together a number of basic management principles that, in effect, guide the executive in dealing creatively with change.

Principle 1: Challenge the Limits

It’s important to recognize that there is a principle of limits at work in all organizations. If there were no limits or constraints, for example, CEOs would be able to produce about any result they desire. However, limits have many causes—to name a few, economic, sociological, political, environmental, organizational, and individual. Some are imposed by the organization’s culture—those shared values and beliefs, or organizational habits that seem so difficult to change. For example, a CEO traveling with his family stopped at a motel with a computer-game arcade. “My son and some other kids were scoring in the thousands, but I could barely get on the scoreboard,” he explained. “Later I read an article in the Smithsonian about kids learning whole new areas of abilities that permit them to work in time and space in a way that I can’t even imagine. It isn’t dexterity; these kids ‘see’ the world differently than I do. How can I manage people when I can’t even see what they see? I realize that I am blind to a great deal and don’t even realize it most of the time.”

An increasing number of executives are beginning to realize that the limits to their performance may have less to do with their capability than with their awareness. When you’re aware that you lack a capability, it is easy enough to confront it and then develop it, compensate for it, or resign yourself to it. If you are unaware, you lack these options.

As our executive friend became aware of the fact that he was “blind” in certain areas, he began to look for blind spots in his organization and questioned some of its long cherished assumptions. He said: “I estimated that we spend about $14 million annually to solve problems. I began to wonder, with all the effort we were putting into solving problems,·whether most were really solved. As I looked into it, I noticed some had been solved, but for the most part we were generating a lot of motion and struggle, and very little real movement.”

“Next I saw that my problem-solving department has to have problems to justify its existence and that the problem-solvers generally respond to a problem by designing a new system. We’ve got systems on system—computer systems, reporting systems, personnel systems, operating systems, financial systems, and systems to keep track of systems. It’s not that they aren’t necessary but they don’t seem sufficient. Many of the same old problems persist even after we design a sound system. I realized that the systems had become so pervasive that they were obscuring the source of the organizational problems they were designed to correct in the first place. I’m now aware that there may be something required other than just implementing more and better systems to improve my company. The way I define problems limits my ability to solve them. To the extent ‘problems’ limit our productivity, I realized we are perpetuating the limits ourselves. When my perception of the problems shifts, so do the limits to our effectiveness.”

In sports, Roger Bannister created a new perspective for himself and others when he broke the four-minute mile barrier. In business, managers who recognize that many of the limits in organizations come from limited awareness are able to transcend the limits by creating a new perspective, a new level of awareness. They are able to recognize personal and organizational blind spots.

The question then becomes, is it really possible for executives to create a new organizational awareness? Will more executives reach within themselves for the courage and insight necessary to challenge the status quo and to discover new perspectives and create new alternatives that simply do not exist today?

As Marilyn Ferguson, author of The Aquarian Conspiracy, has pointed out: “New perspectives demand such a switch that established scientists are rarely converted . . . those who work in the old view are emotionally and habitually attached to it. Even when confronted with overwhelming evidence, they stubbornly stick with the wrong but familiar.”

More and more business leaders, however, are challenging the status quo. For example, we worked with a group of senior executives in construction who firmly believed they were employing advanced building technology. However, because they were willing to challenge and re-challenge their cherished assumptions, traditions, and the “way we’ve always done it” syndrome, they discovered unforeseen opportunities. By thinking about their R&D in a new way, they reconsidered technological developments in aerospace, ceramics, plastics, and robotics that they had previously discarded as impractical.

Principle 2: Clarify the Intention

Becoming aware of limits within oneself or in an organization is closely related to becoming aware of what one intends to accomplish and within what timeframes. We are not speaking about goals but about intention. Intention involves the power of bringing something into being or producing an action. In our view, managers with “intention” have a quality that allows for goals to be realized when all of the circumstantial evidence is to the contrary. In our experience, the key role of the contextual manager is to provide clear intention.

In 1961, John F. Kennedy said to Congress: “This nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth.” This was a clear expression of intention. Although the prevailing response was uncertainty—mostly expressed as “it can’t be done”—It was largely through Kennedy’s intention and conviction that the goal was reached. As time passed, the uncertainty began to dissolve, problems became opportunities for new technology to be invented, and the result was obviously produced.

The challenges before most businesses today, and certainly facing American businesses in general, are at least as formidable as those that faced the space program. What may be required is that top management get in touch with their intention.

As one company president said to us: “I started telling people that I wasn’t interested in why things couldn’t get done within budgets and that I wasn’t going to compromise on quality or anything else. I was pretty unreasonable and kept asking for results. It was tough slogging at first, but after a while people stopped talking about all the problems they were having doing their work within budget and started working. The mood and tone of the office shifted, and people started surprising themselves about what they could do. I can’t explain it, but something shifted when I kept clarifying and communicating my intention—everything else followed.”

Intention seems to have a power unto itself. For example, we all know disabled people who out of their will and commitment can produce almost unimaginable results in spite of their handicap. Executives with strong intention also produce amazing results in the face of contradictory circumstances.

What problems underlie this process? Why are some able to use the power of their intention and others not? We are finding that some of the dual-hemisphere brain research provides some clues. Many business executives have highly developed left hemispheres where rational, structured, analytical, linear thinking supposedly occurs. These executives who blend their imaginative, spatial, abstract, and intuitive thought from their right lobe with that of the left seem to think clearly and powerfully. They don’t need to have a rational, logical, well structured reason in order to do something. In large part, they trust their own intuition.

In support of this theory, a CEO of three medium-size companies in the Midwest requires and pays for his management to take two to six weeks of personal growth training a year, “where they can become more aware and learn intuitive skills.”

Principle 3: Create a Vision

Once we consider that, given sufficient awareness and intention, organizational limits can be transcended, the next question is: what do you want? What is your vision? Vision is defined by psychologist Sandra Seagal as “open-seeing,” the ability to see wholes, not distinctions. Vision is not a “wish list” or fanciful scenario of the future. Rather, vision is the heart of the ability to generate intention and communicate it effectively.

The executive director of a health maintenance organization in California said that for some time he had known that “we had an opportunity to expand our services, to develop an alternative to the existing provider and somehow have an impact on the health of the community.” Then he realized that he was thinking too small. “My standard was the other provider,” he said, “and I figured that at best we would be a viable alternative. Then someone asked me what my vision was. I gave him my five-year plan story, and he said NO—he wanted my ‘vision’…the answer to the question what would I want if I had no limits, no constraints…my conception or imagine of how it could be in a perfect world.”

The HMO director discovered that for vision to be authentic in his organization, it had to exist for everyone. For example, his vision was that all in the community should be totally responsible for their own health and that most of the work done in healthcare would be in the area of prevention. In the ensuing months, when sharing this vision with others, he said: “The amazing thing is that, while lots of people thought it unattainable, everyone said that they wanted that too. What is unbelievable and unexplainable is that in the course of focusing on our shared vision, many of our organizational issues, particularly with our personnel, simply disappeared.”

Vision certainly isn’t a new phenomenon, although we usually regard it as belonging to “visionaries” and rarely to ourselves. As a management principle, it doesn’t exist. In fact, the prevailing ethic in many organizations is that people with vision are often unrealistic, idealistic, and impractical. On the contrary, vision is a quality that must be developed in managers.

In our experience, when vision is understood, it becomes almost magical in its power to inspire results. “It is difficult to trust my vision sometimes,” our CEO friend said, “particular)y when people are convinced that what I propose is impossible. Yet, the more we focus on it, the more we discover that people naturally want to produce; they really want to get their jobs done and to contribute to what we’re doing. This sort of orientation seems to take much of the effort out of managing. Now when we have problems, we mostly deal with them by first determining how that particular issue can be viewed as an opportunity to move us forward toward our common vision.”

Once they have clarified their visions, some groups become more creative in developing new product concepts, corporate mission statements, logos, and solutions to problems. By clarifying their picture of what they really want, they’re able to focus their energies on it.
Shared vision, like a reorientation toward limits, becomes a context for the organization. In these examples, people discovered that organizational circumstances need not determine the results produced. Clear intention and vision on the part of the CEO, and eventually the entire organization, may be essential elements for a truly effective organization.

Principle 4: Define the Purpose

Once people become aware of their intention and vision, it’s possible to have a clear context for the “purpose” or mission of the organization. Purpose is like a magnetic compass for an organization moving into uncharted waters. It can be defined as the stated and ongoing direction of the organization. Further, it is the reason for the organization’s existence; it is often derived from the original vision created by the organization’s founder. While purpose asks where are we going, vision asks where are we coming from.

Purpose is often misunderstood. Recently, we asked 20 top managers of a corporation what they saw as their organization’s purpose. Reading their answers, you might easily assume they worked for at least ten different companies. As organizational consultant Bob Berkman has said, ‘The reason people often seem like they’re working at cross-purposes is because they are.”

It is all too easy to confuse purpose with goals. In one company some executives feIt their ultimate purpose was to make money while others contended money was a requirement or goal and only existed as one critical measure of their performance. Organizations often establish goals that may bear no relationship at all to the corporate purpose. The real function of the organization is not to reach its goals, but to fulfill or advance toward its purpose. No organizational goal has any meaning at all unless it exists as a benchmark of progress toward realizing the corporate purpose.

Principle 5: Deal with the Corporate Condition

The word “issues” usually refers to obstacles, problems, or concerns. Managers, from the CEO on down, address issues and confront issues and grapple with issues. Too often, though, in its preoccupation with specific issues, management is not aware of the overall condition in which these issues exist. So another positive step toward a new perspective for the organization is the distinction between the “issues” and the “condition” in which they exist.

At a recent meeting of executives, we asked, “What are the issues in your corporation today?” In just 30 minutes, over 100 different issues were raised by this group—general business issues, human resource issues, and personal issues. Their organizations were stuck in a quagmire of interconnected issues.

Then, with all the issues (which really didn’t differ from executive to executive) out on the table, the group began to discuss possible solutions. It wasn’t long before every executive present admitted that solving one or two or three or even a dozen so-called issues wasn’t going to make  that much  difference within their organizations. In fact, often a solution simply turns into the next problem;  like the company that solved the issue of “needing more large clients” by obtaining two major clients and then found itself unable to provide adequate service to any of its clients. Dealing with specific issues, alone, was not getting their organizations unstuck.

Why not? When this question is engaged, a new view of the organization as a whole begins to unfold.

Every organization develops its own personality or culture: a complex mix of implicit and explicit group values, attitudes, behaviors, historical experiences, rituals, standards, and perceptions. This organizational culture may consist of both positive and negative attributes; however, people generally focus on the negative aspects or “issues” within their companies. For example, how many meetings are held with the purpose of concentrating on what’s working well? In our opinion, the sum total of these issues reflects the “corporate condition.” This “condition” is an intangible force far stronger than any job title or individual within the company. It is the corporate condition that seems to limit the capacity of  the organization to successfully respond to these issues.

An analogy of an organization’s condition might be a polluted pond full of sick fish. If we add more or better or different fish, we’ll find the new fish will become sick like the old fish, reflecting the condition of the pond. It’s not until we recognize the condition of pollution that we can really have an opportunity to meaningfully impact the health of the fish. People in organizations, like fish in a pond, reflect the condition in which they live.
As a leader, you can’t change people; however, you can change their environment, and people do change. With the preoccupation of most executives to deal with specific issues, they have lost sight of the ability to see the conditions of the organization as a whole. One company that was unsuccessful in resolving the issue of low staff morale came to recognize the underlying condition of pervasive mistrust, so it hadn’t mattered what counselling or reward program they installed. Issues normally cannot be resolved until the corporate condition has been accurately identified and transcended.

Responsibility simply provides a frame of reference for people to experience power over the circumstances.  Being responsible begins by realizing that one has choice in how to behave In performing a particular job.

Principle 6: Commit to Expanded Levels of Integrity, Trust & Responsibility

There appear to be some underlying elements which, when taken as a whole, are key to an organization’s ability to identify and transcend its condition. These elements, rarely discussed in organizational settings, are integrity, trust, and responsibility. Responsibility is necessary fur integrity and trust to exist. The CEO and everyone else in the organization must recognize and take responsibility for their own actions  and commitments. They’re also responsible for their contribution to the entire organization. Responsibility is often the most difficult quality to confront since many people associate it with blame, fault, duty, obligation, or “taking credit.” Responsibility, as an organizational context, simply provides a frame of reference for people to experience power over the circumstances. Being responsible in an organization begins by recognizing that one has a choice in how to behave in performing a job and in relating to others.

A group of department heads with whom we worked “contextually” came to realize that, although they had the job of running a specific department, they were really responsible for the entire company. They recognized that their narrow view of their responsibility as just department  heads resulted  in their feeling as though they had to protect their “turf.”  They saw how unwilling they were to allow “outsiders” to contribute to their group and how they were not very willing to offer creative ideas to others.

Once they recognized they were truly responsible for the well-being of the entire company, not just their departments, a contextual shift occurred in the organizational environment. They saw the organization as a network of interrelationships. People naturally came together more as a team. As one department head said, “My view shifted from: ‘I’ll run my department well’ to ‘I’ll run my department well and do whatever I can to ensure the overall organization runs well.’”

Considerable attention has been focused on participatory management. But does management need to move toward what Ouchi calls Theory Z or a more open management style in all decisions? In an environment of trust, integrity, and responsibility, it probably doesn’t really matter what kind of management style is used. Although participatory management has many advantages, if you could trust your boss or co-worker and feel responsible for his or her decisions and actions, you need not actively participate in the decision.

People, in part, want to participate because they don’t trust the process without their input. If they did, there wouldn’t be any issue. One executive vice-president, who was initially angry at the hiring of another EVP, said: “At first I couldn’t believe they brought in my peer without involving me in the process. Then I discovered that I actually trust my boss. It’s his role to hire who he wants and it’s my job to make it work.” Does this sound ideal and maybe unrealistic for many companies? Our EVP friend went on to say: “Look, it’s my responsibility to communicate how I feel, so I did talk to my CEO. It’s so much more productive to communicate and not harbor ill feelings. He understood, thanked me for my candor, and respected my willingness to move on. I’m convinced that if we trust and feel more responsible for one another and communicate openly, that’s 90 percent of the battle.”

The six elements described above exist in most companies in varying degrees. In our experience, as a company identifies and manages its underlying condition and moves to the next higher level of integrity, trust, and responsibility, it gains the power to produce more results in an environment that’s more satisfying to its people. As one top manager told us recently: “The primary way I seem to create a context for qualities like trustworthiness and responsibility is by living them, by demonstrating them myself each day. And the more I do it, often unconsciously, the more I find others doing the same thing.”

The Creative Experience

Contextual management is a truly creative process. The basic key to putting it into motion lies in the manager’s willingness to be responsible for creating a context that works for everyone.

Dr. Ernest Dichter, president of the Institute for Motivational Research, describes the creative experience like this: “Ahal Yes, that’s right. I have never thought about it before, but it fits into place now.” Dichter compares his “Aha” experience to what happens when a light goes on. Suddenly, a reality exists that wasn’t there a moment before. But you have to open your eyes to see it.

Another way to view contextual management is offered by Stan Davis, professor of management at Boston University. He says: “Manage the context, not the content.” He suggests stepping outside the assumptions through which you normally look at the hierarchy and the machinery of your operation. Consider the result you want to produce—see the structure and people you would have if you were producing that “already existing” result completely. Move into strategic planning from there.

The way not to do it, Davis says, is to keep pushing around old pieces of content—old decisions, old plans, inside an old organization chart.

Contextual management reflects a growing commitment to discovering new ways of thinking about organizations. It says, “All things are possible for those who are ready,” and “Be sure to open your eyes when the lights go on.” It is also a skill that can be learned, and its use can help the contemporary manager discover what can be and what must be involved in creating effective organizational contexts.

Donald M. Alstadt, president of Lord Corporation, sums up the contextual management approach this way:

“We must face the fact that we will need leaders with different types of training and experience than possessed by those who have historically managed the majority of our corporate  institutions. I use the word ‘leader’ in distinct contrast to the word ‘manager.’ Leadership implies the added ability to conceptualize what the future could be. Without this conceptual ability at the top of the organization, the innovation process, through the use of new knowledge, will be seriously inhibited—if it occurs at all.”


© 1983 Jim Selman