IDENTITY

A corporation may build the structure of its identity in relationship to an industry, a technology, an inherited way of doing things, a locale, or an organizational structure. Ideally, it will be some combination of these things. An identity that is created around any specific thing drastically reduces searching flexibility. ` When a rigid identity is in place, there is minimal adaptability and survival is immediately threatened by the slightest change in the landscape. A corporation with a rigid identity tends to manifest a seige mentality and squander resources on defending their peak, rather than exploring new terrain.

This is the opposite of the expression of Andy Grove of Intel who uses metaphors of being under attack and paranoia. Intel has created a very high peak, climbed it and is defending it against all comers. This strategy has been hugely successful and, no matter what later outcomes occur, will go into the business history books as a remarkable success. There will come a time, however, when another peak will emerge and Intel will be likely to be so busy defending its own peak that it will not notice until too late that no one is attacking their particular peak any longer. This is not to suggest that there is anything wrong with the Intel approach nor that they should make a change. The kind of economic success they are achieving shows that there are many strategies and many potentially successful identities. While an approach based more on adaptive walk capacities may provide a longer life, it won't necessarily provide the most profitable one.

But every entity must have an identity. A corporation simply can't pursue every peak. Choices must be made, so what will be the foundation of our choices? And whatever we choose as a foundation, inherent in it must be a robust capacity for adaptation. Perhaps values have the most to offer for the emergence of our corporate character. Values are able to endure change. They embody elements which can be recombined to refresh our corporation, to enhance its ability to survive changing circumstances, and to even pursue or be the cause of change. The less detailed and more fundamental the values we choose to constitute our identity, the greater our flexibility. As we collectively explore possible values, we must remain awake enough not to become deluded by prejudices, dressed up as values, attempting to maintain old ways. Falling for such a misrepresentation might shield us from our need to adapt until it is too late.

Our ability to create an identity with a strong capacity for adaptation can be enhanced by perceiving our organization as a set of competences that can be recombined with other competences in order to create new ways of doing old things or create totally new things. Instead of viewing the business or main product lines as local peaks, consider each competency to be a local peak. Combining peaks in new ways may create a mountain range that is superior in survival ability than a single peak would be. An organization that is comprised of a range of local peaks may create a constantly fluctuating landscape, some peaks will be on the rise as others fall, while the overall range continues to increase in height and breadth.

The art of identifying current competences and generating new distinctions, so that new competences can be created from existing ones, is known as chunking. This process creates new competences by breaking down existing ones in order to combine them in new ways or, it may create them combining the existing ones with newly created competences. Chunking is much more than the ability to describe or identify, rather it is an act of creating, made possible through our deep understanding of existing processes, combined with our capacity for creating distinctions of granularity. Our ability to create these kinds of distinctions comes out of being able to see things in extremely detailed and unusually abstract ways.

Companies are beginning to move beyond the trivial exploration of "best practices" into the more complex ground of generating breakthroughs through focus on specific areas that have been considered too small to be worthy of significant attention. Koch Industries, for example, with operations in many diverse businesses, has created communities of practice which are recognised as landscapes of possibility with peaks and valleys. These communities of practice are centered in such areas as valves, grinding, changing set-ups and other operational issues that cross boundaries of industry, geography and application. These communities of practice focus on the terrain of their own interest and generate new possibility in the field. These are tried out against goals of breakthrough and then shared throughout the larger community of Koch. The learning from application in different areas produces further refinements and the peaks get higher - the rewards get bigger.

Integrated circuits, the heart of the technology that is transforming our lives, were initially invented for use in computers. But the computer industry wasn't interested! We might have lost the invention for decades, had the inventors not gone on to explore other local peaks. The highest peaks at that time were basic machines, all which had the potential for being optimally enhanced by intelligence. The first applications of integrated circuits were in washing machines and elevators. Ten years passed before integrated circuits were seen as something that could be usefully combined with the already existing competences of computers.

Visa created a very unique -- and very high peak -- by moving to a higher level of abstraction than other credit card companies. They redefined the business of credit cards to be other than credit. They declared that their business was facilitating exchange wherever it takes place. They transformed themselves from a credit business, with lots of competitors, to an exchange card with none. They created distinctions of granularity and said that they were moving information -- not money. This positioned them on new peaks well ahead of their competition.

Christian Salveson, a company of longevity and substantial profit, utilised their expertise, gained in shipping, for creating a new peak to climb. They again made their way to the summit of yet another peak, this time as a successful storage company. Stora, a Swedish paper conglomerate, has similarly created other peaks and has been able to maintain a level of success that has spanned centuries. They have done this by creating entire ranges of peaks.

If you create the peak, such as Intel or Disney has done, other companies or industries are compelled to climb the peak that you have created and, as they climb your peak, you can be both getting underway in the creation of the next peak and leading the extension of the peak you are on. This kind of strategy can be limitless in its life-span.