It is when the showing up stops that you know your organization is slipping into the negative form of fragmented, where low solidarity and low sociability are creating dysfunctional organizational outcomes. Other warning signs: pervasive cynicism, closed doors, difficulty in recruiting, and excessive critiquing of others. In other words, ideas may matter, but so do the people promoting them, and no one is safe.
Thus the rule Wear a bulletproof vest to work. In negatively fragmented organizations, the ethic of the individual is so strong that selfishness and arrogance reign. In knowledge-based organizations especially, smart people can develop an unpleasant sense of superiority They savage all ideas that are not their own, simply because they are not their own. We once attended a seminar by a new associate professor at a prestigious U.S. business school. The woman was young but already well respected in her field. She had not yet received tenure, but her research work looked promising. In fact, several schools were vying to hire her.
Yet as her lecture opened—technically, the woman was "presenting a paper"—you could almost smell the scent of blood in the room. The tenured professors fidgeted in their seats as if bored and whispered to one another as she spoke. Her direct competition, the other associate professors in the department, looked at each other with raised eyebrows and smirks. When she was finally done speaking, the question-and-answer session was brutal. The audience was harshly critical of the woman's remarks, disdainful even. She was given no leeway for reasonable disagreement over points of opinion. Like many members of fragmented organizations she has learned to live with this; in effect she trades an unpleasant work environment for a prestigious institution.
However, in many fragmented organizations, there is very low or no identification with the institution. You only honor thyself. (Thus, the question, "If I knew the rules of survival, why would I tell you?") In fact, in negatively fragmented organizations, people sometimes even work actively to undermine the organization. They sabotage it with their bad attitudes and behaviors.
Most of these attitudes and behaviors make themselves obvious in any kind of collective activity, most notably meetings. If people show up, their performance sends the message that they would rather be elsewhere. We know of one sales executive who spends every monthly planning meeting looking out the win-
dow, biting on his thumbnail. Other salespeople at this same meeting open mail or appear to write letters and to-do lists. It is for this reason that the vice president in charge of the sales force once said the hardest part of his job was to "learn to manage prima donnas ."
The aversion to collective activity is even more obvious and damning when it must be voluntary. Meetings are mandatory, but finding and exploiting synergies between groups or functions can only happen when both sides put in the effort. The CEO of an entertainment company with major film interests in Hollywood and a considerable music business based out of New York exhorted the different businesses in his organization—such as the film, merchandising, and music divisions—to combine and coordinate initiatives. They might, he suggested, even come up with new and exciting marketing concepts. He finally gave up when it became obvious that the various businesses were fragmented—they disliked and distrusted each other. Interestingly, the film, merchandising, and music divisions themselves were not fragmented. The first was mercenary, the second networked, and the latter communal. But the overall company was negatively fragmented, and thus its problems. Meanwhile, other entertainment companies, such as Disney, passed the company by, selling little plastic Cruella DeVils at McDonald's and furry, polka-dotted Dalmatian slippers at Wal-Mart.
The final rule of survival in the negatively fragmented organization is about how much effort you give. Not much—or better put, just enough. If your performance is reviewed over three years, and the important variable is five published articles in scholarly journals, that's all you provide. If you're a lawyer and you're judged and rewarded for client billings, that's all you hand the organization. You don't bother with new associate development. You don't bother with promoting the firm to the public. You just make sure your billings are as good as they need to be. To give more would be giving something—that is, yourself—away for free.
Of course, the negatively fragmented organization does sound "nasty and brutish." By and large, it is. But let's consider what is good about this culture in its positive form.
IN PRAISE OF THE FRAGMENTED
First, it provides the widest possible scope for individual freedom and creativity. It took Francis Crick and James Watson ten years to discover DNA, and they were left alone at Cambridge University to do just that. The institution did not interfere. In fact, it funded their overambitious—at the time—scientific journey. No other culture gives its members such autonomy and immunity. Likewise, the Washington Post gave young reporters Bob Woodward and Carl Bernstein free rein to track down a rather unlikely—at the time—set of assertions by an anonymous source they called Deep Throat. It took them more than a year, but they brought down a corrupt American presidency.
Sometimes, in other words, great ideas or important projects take a long time and a lot of space, and the fragmented culture offers that. It also gives its members something that is in very short supply today: privacy. Not everyone wants to share his personal life with co-workers. Not everyone has the energy to give to office relationships. They may have special demands at home—a sick parent or child—or they may simply prefer a few special relationships that they keep separate from work. The fragmented culture makes no demands on its members in terms of emotional connections. And this too can be very liberating for some people.
In the same vein, the fragmented culture offers its members the most flexibility of any of the forms in the Double S Cube. When all that matters is performance, does it matter where or when you get your work done? Research and writing can easily be done at home, making the fragmented form one of the most accommodating to people trying to balance work and family
obligations. Take the high-powered attorney at a communal firm who quit to become the in-house counsel for a publishing company after her twins were born. Of course, it had been an agonizing decision for her, as it seemed she must trade off her career against being a good parent. But the publishing company, a productively fragmented organization, allowed her to work from her home, except for one weekly meeting. She did much of her reading and faxing at night after the babies were asleep.
A classic example of the flexibility offered by the fragmented form comes from FI Group. The company began as F International in the early 1960s when Stephanie Shirley, a British working mother with a disabled child, left her full-time job as a computer programmer to work from home doing freelance programming and consulting. Before long, Shirley found her services were in strong demand and that other qualified women were in the same position as she was. She launched her company with the policy 'To utilize, wherever practicable, the services of people with domestic responsibilities or who are otherwise unable to work in a conventional office-based mode." By the mid-1990s the company had grown to a $60 million publicly quoted company and had successfully retained its strong commitment to flexibility and the need to offer a balance between careers and life outside work.
Another advantage of the fragmented culture is that it can be very cost-effective. Why have everyone working together in one building when it is cheaper and just as efficient to have them working at home? Case in point is the book-publishing industry, which for many years had all its copyeditors toiling away under one roof, usually in high-rent Manhattan. With the cost pressures of the 1980s and '90s, however, the companies started piecing this work to independent operators. The freelancers gained steady employment from the publishing houses as well as the flexibility of working on their own schedule. The companies saved money. Again, the fragmented culture facilitated.
Another worthy aspect of the fragmented culture is that it.
like the mercenary, tends to be fair. Because of low sociability, people are generally not promoted due to connections or networks. And because ideas are honored so highly, the people with them tend to benefit. In other words, resources follow the stars. In an academic setting, this means the professor with the best articles published receives the most research money and personnel assistance. In a consulting firm, the partner with the most, highest-revenue clients receives the sharpest MBAs on his team and the most leeway in investigating new, unconventional projects. These examples are indeed features of the positively fragmented culture.
Finally, the fragmented culture can be an effective waiting place—a culture to hover in while a new one is being considered, designed, or forged. Both sociability and solidarity take time to develop, and to rush them is to ask for trouble. Enlightened senior managers, however, can actually use this culture as a vehicle that allows time to consider hard questions of organizational design. Performance continues to matter, yet few biases toward certain behaviors are being built in order to (eventually) be brought down.
More often, however, the fragmented organization is an effective alternative for people who have had too much of the constraints of their job or the corporate world. Charlie Robertson started up Red Spider, the fragmented marketing consulting firm now spread across three continents, Europe, Australia, and America, because he wanted access to top-quality account planners without having to convince them to live in Scotland. (Robertson had long been the head of account planning at the Leith Agency in Edinburgh.) The company quickly went global when Robertson drew in two other principals and established bases in Paris, New York, and Sydney. All three men were attracted to the idea of helping to make great advertising without having to deal with a bureaucracy. Moreover, their independent way of organizing soon appeared to make economic sense. With
the freedom to make the ads they wanted, the principals were able to be more creative than ever, and the company's revenues grew from $1.2 million in their first year of operation in 1994 to $3 million in 1997. And because Red Spider has no offices and outsources most of its services, overhead is minuscule, bolstering the bottom line.
For the principals, the fragmented culture of Red Spider has generated a work environment characterized by a high degree of freedom—structural, personal, and intellectual. Gone are the headaches and constraints of trying to be creative in a rule- and process-bound organizational setting. And yet, the members of the company will also tell you that working for Red Spider involves some sense of professional isolation. Further, the company must address how it can move forward—in particular, how it can grow—a problem if it remains a "loose bunch of freelancers rather than a real company," in the words of one principal. After all, without some form of "glue," what exists to provide the coordination and communication required for the formulation and implementation of strategic intent? 5
Thus, a key challenge for the fragmented organization is ensuring that its members act in ways that reap the benefits of being a "real company"—in other words, to make sure that fragmented behaviors serve the whole organization's results and future opportunities. Take the example of Gemini Consulting, a global consulting company with offices all over the world and a specialist in change and organizational transformation. Now part of the Cap-Gemini organization after its recent tie-up with United Research, a U.S.-based firm specializing in business process reengineering, the merger has raised issues of corporate integration across different products and markets. As with many consulting firms, this challenge is not always aided by a reward system that incentivizes individual performance perhaps at the expense of cross-selling opportunities and the collective good.
THE FRAGMENTED LEADER: A TOUGH ROLE
In such contexts, leaders can play a pivotal role. Effective ones will continually remind the members of their fragmented organizations of their obligations to the collective and enforce their advice with a formal control system. At London Business School, for instance, faculty members are measured and rewarded for their "good citizenship," such as advising junior faculty, attending meetings, and presenting new research to alumni. In fact, the number of times each faculty member interviews MBA candidates—a task not equally attractive to all members—is logged and circulated.
Effective leaders in the fragmented form also encourage minimal levels of sociability. At a London-based consulting company that had just failed to land a big sale, the general manager noticed a worrisome slide toward backbiting and blame among his employees. Indeed, the anger and unhappiness were getting so pervasive that employees had stopped going out for drinks together after work, a long tradition at this once networked organization. Then, at the company holiday party, the general manager noticed that the company's high-profile CFO had stationed himself at a corner table and surrounded himself with a group of cronies. The CFO was noisily sounding off about the company and generally acting grumpy and disenfranchised. In an effort to fight back this aspect of negatively fragmented behavior, the general manager asked the CFO to join him in a private room away from the party. There he told him, "Look, it's your duty as a senior executive to take a full part in this social activity. Either have a good time, or look like you are." The CFO swallowed hard, returned to the party, and danced the rest of the evening.
WHEN THE FRAGMENTED FAILS
Some fragmented companies, however, don't have the leaders who take the appropriate steps to prevent them from veering off or slipping into the negative fragmented form. These organizations crash into the networked spectacularly. That is to say, they rather suddenly exhibit all or many of the features of the negatively fragmented form. This often happens during layoffs or massive reorganizations, when suddenly management cannot be trusted anymore and the company itself becomes the enemy. At the same time, co-workers begin to suspect each other. Whose job will be cut and whose will remain? What do Joe and Sally know that you don't? The same kind of dynamic can easily happen when a company is bought or merged. Old ties of sociability become irrelevant, since everything is suddenly all mixed up and old concepts of solidarity become confused too. Who is in charge? What does my job entail? Whose values do we adhere to now? What are we trying to do as an organization?
But perhaps most painful to witness is the crash from the communal to the negatively fragmented when the charismatic founder or leader departs. When Chris Blackwell sold Island Records (the music label that had brought Bob Marley—and later U2 and the Cranberries—to the world) to Polygram, the organization lost some direction—he had been the glue that held it together. In the period that followed, friendships were strained to breaking point and creativity suffered. As people grew increasingly nostalgic for the old days under Chris, a blame culture emerged. Buried animosities and agendas surfaced—getting in the way of work. As the slide into the negatively fragmented continued, one senior executive was described as dividing the world into two groups of people—enemies and slaves. It took the arrival of fresh leadership and a new structure to reverse the trend.
But no matter how a company lands in the negative form of the fragmented culture, its advantages are few and far between.
Cynicism and personal attacks push good people out the door. And in the meantime, those that remain may, with their clever antagonism, be hurting the reputation of the institution.
Perhaps the biggest problem, however, with the fragmented culture—and this is true of both the negative and positive forms—is that it hinders institutional learning. When information is not shared, people must learn on their own. This happens, of course, but much more slowly. The reason, once again, has to do with the power of tacit knowledge. The latest thinking in the field of learning suggests that the most important"stuff" we know is tacit, or implicit. It is a function of experience, wisdom, insight, and so forth. We feel this knowledge but don't often express it systematically, let alone explicitly. It is a matter of judgment.
Take our experience of designing a major new executive product—the Accelerated Development Program at London Business School. We had thought long and hard about producing an innovative design for the new product—and were pleased with the results. Then we shared them with a senior professor with massive experience leading programs all over the world. Is his knowledge codified anywhere? Hardly. But he communicated it to us in the questions he asked and through his body language and the look on his face. In fact, one of the best and most important ways he shares his tacit knowledge is by grimacing and groaning. As we had worked with him for several years we had learned to decode the signs. The design wasn't quite right, he felt; we needed to strengthen the core themes. This we had learned without him saying anything directly. But it did depend on knowing each other well and spending time together. In fragmented organizations, people don't do enough of this to ensure meaningful exchanges and institutional learning.
If learning suffers in the fragmented culture, so does creativity. Not individual creativity, of course. The fragmented culture is a great ally of individual creativity. But how many organizations need or want people innovating alone? Some academic in-
stitutions, yes, and perhaps organizations that sponsor scientific research. But more and more, creativity is happening collectively. 6 The reason is that collective creativity works. Brainstorming is hard to do alone but is increasingly important in businesses where creativity is a source of competitive advantage—and not many businesses can say creativity is not important.
Indeed today, as technology, the economy, and what we know and need to know get increasingly complex, work can only benefit from teams of minds untangling problems and forging solutions. No wonder the number of Nobel Prizes for science being awarded to teams has soared in the past thirty-five years. Between 1900 and 1960, less than 20 percent of the prizes went to teams. Between 1961 and 1997, almost half did.
The greatest scientific breakthroughs of our times have come from aggregated effort, but collective creativity makes sense even in more routine business situations. Think back to our discussion of the development of a new drug. These projects require the best ideas of biologists, chemists, geneticists, and clinicians, whose insights don't just synthesize but combine and combust to create solutions none of the scientists could have come up with alone. In other words, in today's environment collective creativity is fast becoming a competitive imperative.
When, in that case, is the fragmented culture appropriate? The answer may be as we said above: It may be best used as a holding place—somewhere to take stock—while a new culture is evolved. It is also a useful way out for people who no longer want to deal with the constraints of a typical organizational bureaucracy. In those rare cases when individual creativity is critical, the fragmented is also appropriate. But even academic institutions should beware. The individualist model of organization may not be sustainable as universities face new competitive threats from emerging sources of knowledge and information exchange, such as the Internet and for-profit "executive education" programs.
Perhaps the only competitive situation that demands the fragmented culture is the virtual organization, which we are told is here, or at the very least, arriving shortly. In these organizations, people work wherever and whenever they want, communicating largely by E-mail, voice-mail, and fax. These organizations, it is claimed, are as cleanly efficient and sharply effective as high-tech machines. All that gets done is the work, with no scrap left over.