The Smart Organization

Book excerpt: Why do some firms deliver a stream of successful products and services while others continually make poor R&D decisions? According to the Mathesons, successful firms have internalized the nine interlocking principles of smart organizations -- the building blocks of a corporate culture that emphasize making the right strategic decisions at the right times while aligning organizational practices to support these decisions and sustain their results. Among the nine principles are embracing uncertainty; open information flow; system thinking; and developing a value creation culture. Once in place, these values enable companies to make appropriate choices about their R&D planning, portfolio management, and project and business strategies. The authors stress the importance of evaluating trade-offs, creating alternatives, balancing risk and return, and getting buy-in across functional areas to ensure that decisions will be viable from both technical and management perspectives. "If more companies were to act like this, there might be less demand for off-the-peg strategies from consultants." -- The Economist, July 11, 1998.