Organisational Transformation through Strategic Dialogue:
The Amsterdam Airport Schiphol Case
Annemieke J. M. Roobeek, Erik U. Mandersloot and Cristijn J. C. du Marchie Sarvaas (1998). Concepts and Transformation: International Journal of Action Research andOrganizational Renewal, Volume 3, Nos. 1-2, pp. 53-76. http://www.benjamins.com/jbp/journals/Cat_info.html
[Professor Annemieke J. M. Roobeek, Ph.D., occupies the Chair of Complex Problems in Strategy and Policy at the University of Amsterdam and is attached to Nijenrode University -- The Netherlands Business School, as Professor of Strategy and Transformation Management. Drs Erik U. Mandersloot, MBA, is an independent international consultant, director of TIP Consultancy in Amsterdam, and visiting lecturer at Nijenrode University. Drs. Cristijn J. C. de Marchine Sarvaas, MBA, is currently senior consultant at the Monitor Company. Together they formed the Process Team that designed and guided the strategy development process at Amsterdam Airport Schiphol.]
“Joint strategy development is the basis for the new relationship between management and employees.” (Bob Ling, 1996: Quoted from a speech on Transformation Management he gave to the International Conference on Strategy and Transformation at the University of California, Davis, in May 1996.)
Abstract: A well-founded strategy is no longer sufficient for a business. Experience has taught us that it is usually not implemented, even though that is why it was formulated in the first place. We believe that the complex problems that confront business and government demand a different approach to strategy development: one that guarantees that the organisation will actually change. We have developed the concept of Strategic Management from Below, and since 1990 we have been gaining experience with its use in business and government. Since that time, the concept has developed into a participative approach that enables an integral transformation to be realised within a very short period of time. The Strategic Dialogue in cross-sections of the organisation forms the centrepiece of the concept. This article discusses the application of our approach to the creation of the long-term strategy for Amsterdam Airport Schiphol. How have the principles of the concept of Strategic Management from Below, and the Strategic Dialogue in particular, contributed to a successful, rapid transformation under extremely turbulent conditions?
Keywords: Strategic Management from Below, strategic dialogue, interactive process architecture, transformation and implementation management, action learning and action research, transformation of airport management, change management.
The Challenge: Strategy development in a highly complex environment
“We are in urgent need of a new corporate strategy that is understood by everyone in the company, and that can be implemented immediately. The company is under increasing pressure to change, due to the greater than expected growth of air traffic and the numerous political measures that have been imposed on the airport, such as a restriction on the number of passengers and more stringent environmental constraints, especially with regard to noise levels. Our current strategy, of becoming the best and one of the largest transfer airports in Europe, will need to be revised. We have to re-focus our efforts on the airport terminal and associated products, as international competition has increased significantly, and shopping and hotel facilities at other airports have become far more attractive. Schiphol is no longer unique!
Furthermore, our customers, both airlines and passengers, are becoming more demanding. The workload of our people is already high, and despite greater cost consciousness, we will need to continue improving our efficiency and work more innovatively. We need a different way of working.
Can you develop a long-term strategy (1997-2007) in a period of three months, using your approach and including a large number of people from the organisation? The project should include an implementation plan to ensure the strategies can be put into action, focusing on the consequences for the internal organisation, in terms of culture and a new way of working.”
This was the challenge put to us by the chief executive officer of Amsterdam Airport Schiphol.
Strategic Management from Below: Development of a participative transformation and implementation concept
The development of the concept of Strategic Management from Below since 1990 has led us down a radically different route to strategy development compared with the existing approaches ((Roobeek 1991, Roobeek 1993; 1994a, b; 1995a, b; 1996a, b; 1998a; Roobeek, et al., 1998b). Our concept came into being in response to the elitist way in which strategies are developed at the top of organisations. As the need for radical changes became more urgent, these approaches turned out to be increasingly less effective in practice.
We were confronted with the question of what the root causes are of the mismatch between increasing strategic efforts and their declining effectiveness.
The reason underlying the mismatch, in our opinion, is reflected in a paradox: although the business community continues to attract knowledgeable people, top management’s view of the knowledge required for effective strategy formulation is diminishing. The increasing complexity of the business environment on the one hand, coupled with the creation of decentralised business units on the other, confronts both internal policy makers and external consultants with the problem that the relevant knowledge necessary to develop new strategies is barely accessible, even though it is very much present in the organisation. It is visible, but not seen (to paraphrase Wittgenstein). Knowledge runs like quicksilver through the company.
The top tier of the (holding) company is usually well informed about the financial performance of the business, but is quite out of touch with what is actually going on inside the organisation. An actual exchange of knowledge and practical experience is a rare event.
The contents of most strategy documents thus have little to do with the reality of the organisation; they neither reflect the nature of the enterprise, nor do they provide a practical basis for an achievable action plan. Consequently, they are usually concerned with cutting and slicing the organisational structure and reducing the number of people. The creation of innovative and sustainable growth opportunities for the company, above and beyond mergers and acquisition, are seldom encountered.
The same holds for the inability of companies to recognise and involve employees and lower tiers of management. This leads to an enormous under-utilisation of the wealth of innovative and creative potential that exists at these levels. Paradoxically, it is precisely this source of knowledge that is required to formulate successful and implementable strategies. For this reason, a number of years ago we took a radically different approach and developed the concept of Strategic Management from Below, in which top management, other management levels, employees and representatives of the works council, work side-by-side to develop strategy. In our view, strategy development is a joint effort of all levels of the organisation -- top, middle and lower echelons.
The concept builds on the methods of strategic action research, in which dialogue plays an important role. To incorporate this principle, we started experimenting using cross-sections of organisations to develop strategy. These cross-sections, or strategy teams as we call them, are the movers in the organisation. They develop ideas, discuss them, organise sessions with colleagues in the company, and formulate the strategy. The principles of the Strategic Dialogue steer the strategy teams. Strategic Management from Below gave birth to the Strategic Dialogue.
The Strategic Dialogue with cross-sections of the organisation
Rather than the classical top-down approach, Strategic Dialogue emphasises the participation of all parts of the organisation. Strategic Dialogue is a key component in the concept of Strategic Management from Below. It stands for the active involvement and intensive collaboration of the top, middle and lower echelons in the strategy creation process, together with interactive communication with the rest of the organisation. Our approach builds on the fact (presupposition) that knowledge exists throughout the organisation and must be drawn together in the formulation and implementation of a new strategic direction that enjoys broad support throughout the organisation. To create the effective involvement required, we always work with cross-sections drawn from people throughout the organisation, working together in one or more strategy teams. It is within these cross-sections that the Strategic Dialogue takes place in the first instance. The members of the strategy teams are responsible for carrying the Strategic Dialogue further into the organisation by discussing strategic issues over the lunch table, in separate workshops and during meetings. The strength of the Strategic Dialogue is the instant translation of notions, ideas and criticism into a language that can be understood by all participants. This is a precondition for understanding and concrete action.
The notions of employee involvement, participation and dialogue are of course not new ones, and the past 30 years have witnessed significant developments, both theoretical and practical (e.g., van Beinum 1963, 1993; Emery and Thorsrud 1976; Emery 1977; De Sitter 1989; Gustavsen 1992; Pålshaugen 1999). Furthermore, Europe has been leading the way with national programmatic approaches like the Industrial Democracy Program in Norway in the 1960s, the Swedish LOM Program in the 1980s, and the current Norwegian Enterprise 2000 Program. Also, at present a further international development is emerging in regard to collaboration and participation in the form of ‘development coalitions’ (Ennals and Gustavsen 1998: See also Richard Ennals’s Interview with Allan Larsson, Director General of DGV, in this issue of Concepts and Transformation).
However, the unique, distinctive components of the Strategic Dialogue approach are:
1. It focuses on the total organisation and on the most strategic issues facing the organisation.
2. It mobilises and involves (directly or indirectly) all the layers of the organisation in a dialogical manner in cross sections (strategy teams). It emphasises a bottom-up approach and the commitment of the top to the process.
3. The dialogue and the relationship between dialogues are carefully organised in a process architecture and purposefully framed in a fairly tight spatio-temporal way in order to avoid a process that will go on and on, and will not identify the distinct practical, achievable points of organisational transformation.
4. It implies responsibility from all participants for process, content of the strategy, and implementation. This leads to a new spirit in the organisation, a new way of working together.
The Strategic Dialogue is thoroughly prepared, both in terms of content and design of the meetings, as well as in terms of communication and involvement of external stakeholders. We assist individual members of the various strategy terms to take part in the process. It is our aim to create the conditions for all participants, regardless of their education, functional or hierarchical background, to take an active part in the strategy process. We create the conditions necessary to allow a director and a person from the shop floor to sensibly discuss strategic issues, and subsequently continue to work on them jointly in sub-teams. This structure reflects the values that underlie the new way of interacting by promoting openness, interactive communication, mutual respect, and equality in terms of a right to have a say, to be heard, to contribute, to feel recognised, and to feel responsible for the outcome of the process.
A strategy project is always conducted within a framework that is set out in broad terms by the Board, often after consultation with the works council. The framework is presented to the participants in the strategy teams, to determine whether it covers the relevant problem statements to meet the challenges confronting the business. New elements are often added. The process of the Strategic Dialogue offers a high degree of flexibility on the road towards an end product. The topics discussed are to a great degree determined by the participants themselves. The dialogue guides the discussions, providing a high degree of flexibility and ensuring that the outcome cannot be determined in advance. It does, however, demand a high degree of alertness on the part of the facilitators so that the participants’ differing points of view can be brought together into an understandable,systematically structured big picture.
Figure 1: The strategic dialogue in a context of speeding up strategic decision making (Not Reproduced)
In order to safeguard the quality of the process, we commonly form a Process Team. This team, in which we participate with three or four of the organisation’s own people, is responsible for designing and overseeing the entire project. The Process Team provides the strategy teams with intensive contextual support, continuously enriching the information supplied by the organisation. This demonstrates how the knowledge present in the organisation is put to good use, creating a high degree of recognition for all involved and rapidly raising the quality of the discussions around complex strategic issues.
We also usually attach an action learning component to the process, in which the participants gain insight into current themes in the area of strategic management, and allowing them to apply this knowledge directly to their own working environment.
The close involvement of top management and employees from all parts of the organisation makes it possible, within a short space of time, to find well-founded solutions that can readily be acted on, and that enjoy broad support. The solutions are tested during the strategy formulation process through interaction between team members and their colleagues, both within and outside the organisation. The involvement of external stakeholders can be particularly fruitful, giving the participants new insights.
During the process, dialogues are initiated and stimulated in numerous places throughout the organisation, from the boardroom to the canteen, to allow as many people as possible to voice their opinions and ideas. As the ideas generated are continuously processed by both the strategy team members and the Process Team, and extensively communicated to the rest of the organisation, a much larger group of employees feel themselves to be involved in the process than those taking part in the actual Strategy Teams. This is of great importance for the successful implementation of a strategy, as it significantly reduces employee resistance, which is common when people are kept only partially informed of the results of strategic deliberations.
The activities of the strategy team are largely conducted in addition to normal work activities since this promotes communication with the members’ own workplace. The final outcomes of the cross-sectional strategy teams form the basis for an integral business strategy, which is presented to the rest of the organisation after three months by the participants themselves. The entire process results not only in a well-founded strategy, which is understood by everybody in the organisation, but also in the new way of working that was developed during the project. This synchrony keeps up the pace and ensures an optimum fit between strategy, implementation and organisational renewal.
Over the past few years, the concept of Strategic Management from Below and the Strategic Dialogue have been applied in increasingly complex business environments and in a variety of government organisations. The experience thus gained has been used to extend and enrich the concept yet further. Obviously, our approach has to be adapted to each situation, but the core feature remains the same: the Strategic Dialogue with cross-sections drawn from the entire organisation.
The concept, as we have now developed it, offers a comprehensive answer to the transformation of organisations towards knowledge networks. Application of the Strategic Dialogue leads to a different relationship between management and employees with respect to strategic matters. In contrast to the traditional top-down reorganisation process or corporate transformations by interim managers, Strategic Dialogue and Strategic Management from Below create room for radical renewal from within. This allows new bridges to be built between business units (divisions or companies), leading to the creation of synergy throughout the organisation. The employees themselves become the driving forces behind change in the organisation, and after the initial phase, they are in a position to apply the principles themselves.
Or, as the manager overseeing the implementation of the strategy process at Amsterdam Airport Schiphol puts it: “A year ago, we would not have believed it possible to make such a complete turnaround in terms of strategy, structure and culture.”
The core of Strategic Management from Below consists of (1) speed, (2) the optimum utilisation of knowledge by broad participation, and (3) an integral approach to strategic matters.
Strategic Management from Below is the answer to ineffective planning, developed on the drawing board. Such plans are often never implemented because they lack any link with daily practice or because they do not have the support of those who are responsible for their realisation. A distinguishing characteristic of the concept is its integral approach to strategic matters. As the strategic direction is set out, the consequences for the development of the organisation are reviewed simultaneously. This synchrony keeps up the pace and ensures an optimum fit between strategy, implementation and the organisational structure. The step from strategy to transformation is thus not a dramatic one; rather, it is accepted and anchored in a new way of working.
Long-term strategy for Amsterdam Airport Schiphol
As we mentioned at the beginning of this article, Amsterdam Airport Schiphol needed a new, integral strategy within a very short space of time.
In a period of three months, four strategy teams developed the core elements for Amsterdam Airport’s long term strategy (1997-2007). To reduce the overall complexity, each team studied and developed a strategy for a specific strategic challenge facing the company. Systematic exchanges between the teams ensured that the component strategies were in line with each other and modified where necessary. Four core strategies came into existence, which together formed a logical whole, constituting a long-term strategy for 1997-2007, the emphasis being placed on the first five-year period. The four core strategies are (a) a location strategy for Schiphol Airport; (b) an international strategy for expansion abroad; (c) an organisation strategy to direct developments with regard to personnel and organisation; and (d) a stakeholder strategy to build solid relationships with internal and external parties. The diagram (Figure2) depicts the four core strategies as closely interlined spheres.
Figure 2. Four areas of strategic focus
With its new long-term strategy, Amsterdam Airport Schiphol seeks to maintain and strengthen its leading position in the airport industry as well as development into a leading international airport business. Given the stringent government restrictions on quantitative growth at Schiphol Airport, the primary focus will be on qualitative growth, through an increase in the number of products and services offered to airlines and passengers, and the expansion of consulting activities, management contracts and participations abroad.
The strategic direction that has been developed has a dual objective. On the one hand, Schiphol will develop in the coming years into a cutting edge international airport, Schiphol will become the most customer-friendly, innovative airport, where the focus is on compactness and efficient traffic flows. Many innovative services will be offered to different customer segments, while a responsible attitude will be taken to economic, societal and environmental interest. Stakeholder management will play a crucial role, and will have a far greater strategic impact than the current management of business relations.
On the other hand, the knowledge and experience that has been developed at Schiphol will be used to build up a chain of related airports around the globe. Schiphol will be the world-wide brand name representing quality and innovation. In this way, Amsterdam Airport will function as a laboratory for innovation and development that can simultaneously be put into practice elsewhere.
The Strategic Dialogue at Amsterdam Airport Schiphol
The strategic process at Amsterdam Airport Schiphol was given the name ‘Transfer to the Future’ (in Dutch: Transfer naar de Toekmst). The core of Transfer to the Future consisted of four strategy teams in which 60 people participated as ‘team members’. An equal number of people took part as ‘shadow members’ who replaced team members in their absence and assisted them on individual assignments. In total, about 120 people were drawn by lottery from among more than 375 volunteers.
The lottery was weighted to arrive at a balanced cross-sectional composition (see Figure 3). All three board members participated actively in the project, and a representative of the works council also took part in each strategy team. Each team was given its own problem statement and was responsible for developing part of the overall strategy. The strategy teams received facilitative support and were chaired by us. The participants received information in advance to prepare themselves for the strategy sessions. After the first session, participants started to work on different assignments to develop specific strategic questions in depth. They reported on the results during the next session or at the exchange days. The presentation of their own findings is a very good way to translate complex matters into understandable language. Concrete examples from their own experiences are often part of the presentation. This contributes to a feeling of recognition by others. Moreover, it is a training in communication skills. Most people enjoy learning to speak in public. Very often top management is amazed to discover that their own people can give excellent, highly professional presentations. This way of working is certainly a way to scout talent, throughout all layers of the company. The process we moderate is heavily based on action learning. Most participants see it as their first experience of true learning. The learning is not only fun; it is also extremely relevant, not only for the individual but also for the entire organisation. These processes have a long-lasting spin-off, because people take their positive experiences with them to their work environment and start to take initiatives to work more closely together.
Figure 3. The cross-functional, cross-hierarchical composition of strategy teams (Not Reproduced)
Strategy Team 1, Triple M, was asked to determine which services needed to be offered to develop Schiphol into a Multimodal, Multifunctional Mainport. The term multimodal refers to developing Schiphol into an intersection of different traffic flows, or modalities, such as air, rail, bus, and automobile traffic.
Strategy Team 2, Internationalisation, investigated whether, and if so how, Amsterdam Airport Schiphol could develop its international activities abroad. Activities considered included consultancy services for other airports, management contracts, and direct participation in privatised airports. Besides the type of international activities to be undertaken, the most appropriate vehicles, geographic focus, partners, and time frame were also considered.
Strategy Team 3, Stakeholder Management & Communication, considered how improved relations with third parties, such as with KLM Royal Dutch Airlines, as well as with the environmental movement and neighbouring residents, might lead to broader support and more rapid implementation of the company’s strategy.
Figure 4. Strategy teams shape the future of Amsterdam Airport Schiphol
The fourth team, Personnel and Organisation, was composed of a delegation from members of the first three strategy teams. Its work started as soon as the main outline of the long-term strategy, as developed by the other teams, became visible. The Personnel and Organisation team was concerned with the consequences of the new long-term strategy for personnel policy and organisational development. Issues addressed by the team included the adaptation of existing organisational principles, which were strongly directed towards a business unit structure, and improving the long term employability of staff, through training and individual career counselling, and the improvement of internal availability, flow, and use of information through knowledge management.
Creating an optimal service to the customers throughout the logistic chain was the guiding theme in the search for a new organisational structure. This required a redistribution of tasks between the existing business units and an increased focus on developing and using knowledge within the organisation so that the objectives of the new strategy could be realised.
Transfer to the Future: The process architecture
The process architecture constituted the heart of the project (Figure 5). Key events during the process were the ‘strategy team sessions’ in which an entire strategy team discussed and analysed their problem and the ‘joint exchange sessions’ during which the strategy teams presented their findings and ideas to each other, creating cross-fertilisation between the teams. These ‘joint exchange sessions’ were attended by strategy team members and shadow members, as well as the company’s top 40 managers and delegates from the works council.
During three one-day ‘strategy team sessions’, each of the strategy teams explored its strategic problem in greater depth, modifying their strategic recommendations as new insights were gained. A large number of internal and external stakeholders as well as experts on particular subjects were involved in this process. This was done for two reasons: first, to rapidly amass all relevant knowledge and information, and second, to set in motion the communication between the teams and the outside world. The ability to express the strategic concepts in one’s own words is an important part of reflecting on the process and getting to grips with the underlying logic.
Figure 5. Transfer to the Future: The process architecture (Not Reproduced)
Furthermore, it gives people self-confidence if they have to relate their story to others. Above all, it confers a feeling of pride and close involvement, because they represent the business to stakeholders or (internal) clients as ambassadors of change.
The Process Team, supplemented by the secretary to the Board and three staff members from the Strategy and Business Development department, continuously guided the interaction and linkages between the teams to ensure that the teams did not diverge but rather continued to work as complementary teams. Furthermore, the Process Team was responsible for managing the intellectual agenda and conveying progress and outcomes to other parts of the organisation, such as the board of directors, works council, and supervisory board. The members of the Process Team also functioned as an interface to major external stakeholders, such as KLM Royal Dutch Airlines and the Ministries of Environment and Transport, to explain the objectives of the strategy process and to explore possible areas for collaboration.
Working with a dynamic process architecture
During the course of the project a number of unscheduled activities were added, to allow all levels of the organisation to become involved with the strategy development process. This demonstrates the dynamic character of the process architecture, which aims to maximise the opportunity for content development within the allocated three-month time frame.
For example, specialised, thematic work conferences were organised for both top and middle management. During various sessions with the top 40 managers, the frontiers of information technology and internationalisation were explored. In addition, an electronic poll held during a special management conference was used to test a large number of ideas generated by the strategy teams. At the same conference, different strategic scenarios were examined and the strategic dilemmas to which they gave rise were discussed, such as the relationship between Amsterdam Airport Schiphol and its home carrier, KLM Royal Dutch Airlines. Sessions with middle management centred principally on managing change in the organisation and corporate culture. Several progress reports were presented to the works council, of which several members were also participating in the Transfer to the Future strategy teams.
Midway through the process, more than 250 employees, the full board of directors, and a large number of external stakeholders took part in the ‘Transfer Theatre’. During this large and playful spectacle, all employees were given the opportunity to contribute their thinking on strategic issues by actively participating in discussions with internal and external stakeholders. Further, at the end of the day, a lively public debate was held between various stakeholders and board members, highlighting a number of strategic dilemmas. The theatre day ended with topical cabaret and music. Our aim, with this combination of strategic considerations and fun, was to underscore the fact that change could also be pleasant and exciting, especially when one actively participates in the process.
After three months of intensive work in the four strategy teams and numerous additional meetings with management and the works council, the tension peaked. Between mid-September and mid-December 1996 we prepared and led about 35 sessions, varying from strategy team meetings to consultations with the board and exchanges with other companies, such as Hewlett-Packard and Heineken. During the project, especially at the mid-point of the process, the additional workload brought increasing pressure on the participants, forcing their closest colleagues to take over more of their regular tasks. As such a situation is not sustainable over long periods, it is important to set a clear, final date in advance, and to work purposefully towards it. The speed factor is very important. It is our conviction that more time often does not lead to better decisions, and certainly not to quicker implementation. Precisely because our approach is a learning approach, it fits into a ‘just do it’ mentality. When people are given the responsibility for implementation, after they have been closely involved in the formulation process, they will feel much less insecure and will experience the ‘learning as you go’ process as a valuable one.
Communication
Developing an integral business strategy and having this flow smoothly into a transformation of the business cannot be done without a communications plan. Dialogues have to be organised. Collaboration with the internal communications department is an essential precondition, and it is usually necessary to supplement this by consultation with external communications experts. In many cases this generates an intensive internal learning process within the communications department. This can be seen in the different types of information that is communicated to the organisation and the manner in which it is conveyed before, during and after a strategy process.
During the process at Amsterdam Airport Schiphol, the entire organisation received the internal weekly staff newsletter De Week (The Week). Independent reports were published on all team sessions, participants were interviewed, and the director frequently used his weekly column to reflect on the process. Aside from these media, all strategy team members and their shadows kept their own workplace informed of developments in the process. The separate meetings with the top and middle management also had an explicit communications objective, viz., to encourage managers to discuss the strategic ideas with their personnel and to improve the implementation of the ideas in their own business plans. Furthermore, a video was made to show both the progress of process and the most important outcomes of Transfer to the Future.
During the final presentation, which was held exactly three months after the start, the 600 persons present (in two sessions) received an overview of the most important findings, together with a handy leaflet which introduced the key messages with the aid of cartoons. After the process, we wrote a special strategy document for the board, which formed the basis for the implementation process.
In order to close the project with some of our own reflections, we created a booklet with an unusual lay out, which allowed us to describe the process and the foundations on which the strategy was grounded, in a highly accessible way. This booklet also contained mini-scenarios which, in a playfully ironic manner, looked ahead to the future of the airport business. This booklet was published three months after the core project ended, and was presented at a meeting in which the board of directors announced the strategic decisions that had been taken and officially launched the implementation of the long term strategy.
In May and June 1997, we held masterclasses at the Executive MBA Program at Nijenrode University and for Randstad Staffing Services (an employment agency specialised in supplying temporary employees) together with Schiphol members of the process team. We continued to invite them to lecture to our classes at the university, because the opportunity to lecture on a process with which everyone was so intensely involved is an excellent way to provide psychological closure, as it then becomes apparent how much the new way of working has been absorbed by those who carried the process through. For us, as action researchers, it is a means to follow the process from a more distant viewpoint and to hear the latest information at first hand.
The role of process facilitators
For the same reason that one cannot really have a democratic process without leadership, a certain form of guidance is necessary in a participative project in which so many actors are involved.
In this type of integral strategy process, strict guidance of both the content and the process, in their interdependence, is vitally important to the success of the project and requires serious attention. This places heavy demands on those guiding the process, in terms of their knowledge, analytical acuity, psychological insight and above all, a sensitivity to the different actors involved. Sometimes one feels that the management wants to steer the strategy team in a certain direction, whereas some members may have very good reasons not to accept that direction. As facilitator, one uses the Strategic Dialogue to ask questions, to encourage a well-founded argumentation, and to seek where one can find common ground. But it is sometimes difficult for a facilitator to stay neutral, because they often have a broader perspective and more background information, and particularly more knowledge about the group dynamics in this kind of participative process. Our experience reveals that two-thirds of the process management, and particularly sub-top managers, start to feel uneasy, because at that moment the strategy teams are operating at top speed. The contours of the new strategy are becoming clear by then. Management fears a loss of control and tries to slow the process down or to re-frame the outcomes that have been achieved. Sometimes one sees that they try to keep their people away from the strategy team’s work ‘for business reasons’. Another tactic is to say that ‘nothing new’ has come out of the team’s work. The opposite is true, but we know why they say it. As facilitator, one has to react to such signals and rumours, but in a very subtle and constructive way, keeping the process in mind. Again, the Strategic Dialogue helps to overcome these barriers to change. It allows spontaneous discussions to start up in additional sessions with (sub-top) managers to discuss things further, together with the strategy team members. The aim is to keep them on board and to give them a stake in the process.
A precondition for the optimally functioning of a Process Team is a very high degree of independence -- ‘autonomy’ even -- particularly for the facilitators. In contrast to traditional strategy projects and consultancy work, the role of the body that commissions the project should be barely perceptible. This demands a very high degree of mutual trust between the commissioning body and the Process Team. This in turn forms the basis for the trust that has to be created between the participants, the organisation, and the Process Team: a trust that is continuously affirmed by dialogue and by the outcomes of the process.
As facilitators we took on a very different role during the formal decision making process and the preliminary implementation phase than during the strategy development phase with the strategy teams. During the latter, we played the parts of explorer, process architect, driving force, strategist, facilitator, communicator, and advisor on content. During the implementation phase we were no longer obviously present, making room for the members of the implementation team (who were the internal members of the Process Team). In this phase we fulfilled the role of reflective scribes, coaches to the internal implementers, and co-organisers of the sounding board meetings. In other words we engaged in ‘role taking’.
Our project room with glass walls was regularly visited by strategy team members, who spontaneously voiced their views on how matters stood. During the implementation phase it is difficult, as facilitators, to adopt a more remote stance, while one can see that ‘standard’ mistakes are going to be made yet again by the managers. Managers have a tendency to revert back to ‘traditional’ hierarchical behaviour, focusing the discussion around organisational structure and building insufficiently on the plans of the strategy teams. The members of the implementation teams often display cautious behaviour initially, creating worries about progress in the lower echelons of the business. And finally, the communication department must continue to communication progress after the strategy development process has finished and implementation starts. Ultimately, everyone will settle into their new role, and the facilitators should not try to intervene too much, as the search for these new roles is part of the learning process.
Nevertheless, it may be very important that those mistakes are allowed to be made, but appropriately corrected in time, in view of the ‘ownership’ of the process.
Reflections on decision making and implementation
In our role as facilitator of the implementation process we made a number of observations that are characteristic of organisations wrestling with the passage from a hectic, sometimes overwhelming phase of interactive strategy formulation to a phase devoted to embedding the strategy in the organisation. At Schiphol Airport, the pace of this phase was very different from the previous phase and was no longer governed by a process architecture, rather being dictated by the official decision making time frame within the company.
It was during this period that the first mutterings arose from within the organisation. People felt that the implementation was not proceeding rapidly enough, and that there was too little communication from those who had been appointed by the board of directors to lead the implementation process. It was as if they felt becalmed during this period; perhaps it was the clam before the storm, because the word ‘reorganisation’ was heard increasingly often in the corridors. However, this was diametrically opposed to what was set down in the Transfer to the Future process, in which it was explicitly argued that a re-organisation was neither necessary nor desirable. According to the strategy teams, the objectives of the strategy could be achieved by making minor modifications to the structure, but mainly by revising the performance measures for both the business units and individuals, and by adopting a radically different way of working. Several of the board members and heads of business units, however, appeared to adhere to the old mindset: that a strategic reorientation must be associated with a re-organisation. So it seemed to us that the game of musical chairs would still be played, even though this would not affect the personnel, but mainly the second tier in the organisation. If we look back now, and if we read the weekly company journals, it is remarkable how the management first stressed the need for re-organisation in terms of structure, but at the same time tried hard to behave in the new style. All important pre-decisions were published openly and people were invited to comment. Accordingly, adjustments were made, and we could see that top management and the implementation manager really tried hard to act more interactively. Surprisingly, the word reorganisation became ‘banned’, to be substituted by ‘reallocation’, which had a much better connotation.
While the content of the Transfer to the Future strategy rapidly received consent, weeks were spent shuffling around various parts of the organisation. This re-shuffle sapped a great deal of energy at the start of the implementation process and nearly dissipated the goodwill that had been built up in the Transfer to the Future process.
It was striking that, during the first two months after the final presentation, part of the organisation had become very familiar with the new, fast way of working and the open communication. This group, consisting mainly of well-motivated employees, showed signs of impatience and expected management to display the same drive that they had become accustomed to during the process.
The willingness to change had increased significantly in the lower and middle layers of the organisation. The openness expressed during the process ensures that there was a great deal of understanding for both the new strategic course and the organisational consequences. By contrast, management had more difficulty in rationally and emotionally embracing the new strategy and the organisational developments.
This phenomenon was in line with observations in earlier projects: the lower strata usually learn far more quickly than the top. It is not necessarily the lower layers that slow the process of transformation. It was at the top, from various sides, that resistance was felt to the first careful steps taken by the newly installed implementation team. The translation of the strategic guidelines into business plans and operational plans was therefore fairly difficult.
To remain abreast of what was going on in the organisation, we set up a ‘sounding board group’ in January 1997, after consultation with the implementation team. This group consisted of 12 people from a cross-section of the strategy teams, all of whom were capable of communicating well with the rest of the organisation.
This group gave independent presentations to different parts of the organisation, which rapidly revealed that some managers were far more receptive to the new strategy than others. Certain managers believed that the Transfer to the Future strategy would not take off and that, by delaying matters, they could carry on as they had in the past. They were unpleasantly surprised to discover that the proposed strategy was a truly integral, long-term strategy, and that the organisation had already begun to change. Even if a good communications plan has been set up, with intensive, face-to-face communications, it seems unavoidable that those managers who do not what to hear the news will act as if nothing has happened.
The sounding board group meets frequently to blow off steam and encourage each other, but also to pressure the implementation team to keep the pace of change high. There came a point when the sounding board group was so discontented with the marginal progress being made by top management that they organised a meeting with the directors to discuss the delay.
The fact that the urge to change was so great in the lower tiers, and that use was being made of the openness that had been created to put their concern to the directors, was a sign for us that great strides had already been made, and that the rest of the organisation would soon follow.
At a certain point between the formal decision making process and the implementation phase, a group of strategy team members became worried about the slow rate of progress. During the strategy formulation phase they had discovered that things could be speeded up. They felt that it was their responsibility to express their worries to top management. We encouraged them to organise a special meeting with the CEO and to speak up about the signals that they were getting from the workfloor. The meeting turned out to be fruitful for both sides. A few months earlier, such a meeting would not have been thinkable, but since the Transfer to the Future process had shown that a new way of working was possible, it was no longer even considered as something unusual.
The implementation gathered pace rapidly in late spring of 1997. The content had never been an issue, but now, with everyone knowing their new place in the organisation, managers had time to settle down and absorb the changes. The process could have been expedited, but the emotional incubation had needed time.
Despite the delay of four months, significant progress has been made in other areas, such as the employability project that had been set up with a cross-section of the organisation by the Human Resources department, the creation of a group devoted to improving the availability and use of knowledge within the company (knowledge management) to stimulate the speeding up of innovation in the company, the setting up of a corporate marketing group, as well as the extra impetus that was given to mobility and capacity management. Great headway was also being made internationally, with Schiphol winning the management contract for the International Arrivals Building at John F. Kennedy Airport, and a major stake in Brisbane Airport in Australia.
However, employees were anxious to hear from top management about changes that would affect them, and this could not be postponed for long. Fortunately, the sign had finally been given: ‘design teams’ were appointed in each business unit, creating an opportunity to actively involve management, personnel and the works council. Since that point in time, the implementation process has been in full spate, and people are working enthusiastically in the Transfer to the Future way.
What can the concept of Strategic Management from Below and particularly the Strategic Dialogue contribute to a successful transformation?
Amsterdam Airport Schiphol succeeded in transforming the entire organisation, under turbulent circumstances and in an extremely dynamic and complex environment. This changing environment is not unique to Amsterdam Airport Schiphol. Many businesses are under immense pressure to innovate and provide strategic responses to new challenges in a short time span.
Within the concept of Strategic Management from Below, the redefinition of strategic guidelines and organisational change go hand in hand. The Strategic Dialogue is the centrepiece of the concept. This approach sets in train an integral process of change, simultaneously impacting the strategy, structure and culture of an organisation. It actually changes the way people work with each other and relate to each other. The intensive process of strategy formulation is also a time for the adoption of a new, informal style of working in the business, in which networking is encouraged. It brings closer the desired situation, where continuous strategy development and organisational transformation go hand in hand.
Or, to put it differently, dialogues (and their effective organisation and guidance) make an organisation an effective enterprise.
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