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Published in Print: February 25, 2004, as Organizational Intelligence: Lessons From Enron

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Organizational Intelligence: Lessons From Enron

Having the right structures and systems in place creates an intelligent organization, one that enables everyone to be more productive.

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Having the right structures and systems in place creates an intelligent organization, one that enables everyone to be more productive.

"Are smart people overrated?" That's the intriguing question posed not long ago in a New Yorker article by Malcolm Gladwell. According to him, the relationship between IQ and job performance is "distinctly underwhelming." His case in point: the collapse of Enron, a company that he says "hired and rewarded the best and brightest and is now in bankruptcy." In Mr. Gladwell's telling, Enron overrelied on a traditional definition of intelligence. Raises weren't based on any set criteria. The top third of employees, based on their intelligence, were indulged and fawned upon.

Enron's lack of sound criteria for evaluating employees was symptomatic of larger problems: a lack of organizational design and inadequate reporting systems. These internal checks and balances that enable managers to monitor performance were fuzzy, and individual accountability was almost nonexistent. Employees were basically on their own.

Bottom line: The organization failed its employees. Putting aside for another discussion the question of malfeasance, this seems to be a classic case of laissez-faire leadership. It is, without question, important to have bright people and to reward success. But that alone is insufficient. It is having the right structures and systems in place that creates an intelligent organization, one that enables everyone—the top, middle, and bottom third of employees—to be more productive.

Lack of direction is problematic, yet the other end of the leadership continuum can be equally pernicious. Organizations in which strict adherence to rules and regulations is demanded will find themselves with compliant employees. Managers who supervise too tightly and who allow no creativity or discretion also will lead their organizations to failure. Each leadership extreme is harmful because each fails to create a setting in which employees learn and grow. What is needed is a balance between having the right systems in place and giving employees the right amount of freedom.

Educators can learn from Enron's management errors. Lack of leadership, and, in particular, failure to create an environment that facilitates adult learning, destines an organization to mediocrity at best. In schools as in corporations, this can often lead to a narrow focus on "doing things by the book," even at the expense of finding new and better solutions to problems. In intelligent organizations, by contrast, employees are given enough definition and direction to ensure that their efforts are going to make a difference, but also enough discretion to allow them to capitalize on their knowledge, experience, and creativity. An organization is intelligent when its structure and systems facilitate problem-solving, when its culture is one of collaboration and learning. When this happens, both employee effectiveness and job satisfaction increase.

Lack of leadership, and, in particular, failure to create an environment that facilitates adult learning, destines an organization to mediocrity at best.

Schools vary in many ways. But regardless of the kind of school, the factors that determine its organizational intelligence are constant: Faculty collegiality is at the heart of an intelligent school. In a collegial setting, everyone in the building is a learner, children and adults alike. Teachers and administrators regularly interact as colleagues, learning with and from one another. Unfortunately, that is far from the norm in education. Schools are remarkably insular, with teachers teaching behind closed doors and administrators making their presence known by memo. As a result, these kinds of collegial interactions do not take place by chance. They happen through conscious intent and effort.

If collegiality is understood and valued, certain practices can elicit and support it. These are some of the practices that characterize an an intelligent organization, and create a smart school:

  • Administrators show that they value collegiality. This can be done in two important ways. First, daily schedules need to support teachers' working together. Administrators need to ensure that common planning time is available during the day for teaching teams. However the teams are defined—by grade level or scholastic discipline—their members need time during the school day to come together to reflect on what worked and what didn't, to learn from one another, and to plan. Second, collegiality should be evidenced in teachers' annual performance reviews. Teachers need to know that the expectation is that they will be growing and learning with their peers, and that part of their role is helping other adults learn. This means freely sharing ideas and willingly seeking help from others. When a school is an intelligent organization, every teacher shares what has been learned, and all teachers learn from one another.
  • Teachers pursue team goals. In addition to working toward individual goals, teachers also need to have a team goal. All of the members of a team should have a role in setting the goal and deciding how their progress will be monitored and success determined. A team might choose to improve its members' communication with their students' parents, to implement multiple- intelligences theory, or to ensure that the assessment tools used by all of the teachers in the department are consistent. Throughout the year, team members meet periodically to share their progress and develop strategies. (Exciting growth opportunities can result from forming nontraditional teams, such as, for example, teachers from different grades or departments who come together to focus on a common goal.)
  • Teachers have freedom to experiment and to take risks. If teachers are to grow, they need to feel comfortable in trying new approaches and in learning from their mistakes as well as the mistakes of others. A favorite saying of mine—"Make new mistakes"—reflects the understanding that mistakes are an inevitable part of growth. Making old mistakes isn't smart, but making new mistakes and learning from our experience is how we improve. A good administrator sets the tone by creating a climate in which mistakes are not just tolerated, but are expected. After a classroom observation, the questions are not "What did you do wrong?" or "What went well?" but, rather, "What did you learn?" and "What will you do differently next time?"
  • Faculty meetings are a time for learning and celebrating successes. The focus should be on student learning and the various avenues to help students achieve. Faculty meetings ought to be interactive, times for teachers to discuss issues, to share what they are doing, to recount their successes and mistakes, and to elicit feedback and input from their colleagues. Faculty meetings that consist of one-way communication, information that could easily be shared in writing, are not a good use of anyone's time.
  • Faculty committees are the engines for faculty development. An opportunity is missed when faculty committees only focus on matters such as discipline procedures or a school's logistics. True growth opportunities come from involvement in committees that are focused on child development, curriculum, and pedagogy. A committee's work could begin with reading about a topic or visiting another school; then, teachers might take turns in sharing their reactions and experiences. The journey, how and with whom we learn, is almost as important as the destination, what we learn.
  • Administrators are learners, too. Principals need to model the learning that they want from all of their teachers and students. They need to be conductors, but they also need to pick up a horn or a cello and be a part of the orchestra. One way to do this is by participating on faculty committees, sitting next to teachers and exploring issues with them.

In all of these strategies, time for reflection is essential. Teachers and administrators need a chance to step back, review what they have done, and think about the future. And they should remember that while congeniality is quite different from collegiality, the former sets the stage for the latter. When teachers like one another and enjoy a good laugh together, they are more likely to take risks in learning together. In a collegial setting, teachers and administrators also make time for fun.

The encouraging news is that the strategies to develop collegiality and make schools smart are not costly and don't require voter approval. If they are not in place today, steps toward them can begin tomorrow. All that is needed to create an intelligent organization is for people to step forward and say they want to make a difference by working with and learning from their colleagues. Of course, this is, like many worthwhile undertakings, easier said than done. But when we consider the stakes—student and professional growth—how can we not begin the task today?

Thomas R. Hoerr is the director of the New City School in St. Louis. He can be reached at trhoerr@newcityschool.org.

Vol. 23, Issue 24, Pages 35-36

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