Harmony Within

Remember those old, imported European films with the dubbed-in English words that were a fraction of a second out of synchronization with the picture? That infinitesimal error in timing prevented you from losing yourself in the story and gave even the finest acting an air of awkwardness or unreality. Imagine what the effect would be if the delay were a minute or two instead of a second. You would hear people still talking to each other after one of them had already walked out the door. You would hear the bad guy challenging the hero to draw after watching the villain fall dead on the dusty main street. The awkward and unreal would become hilarious and absurd. That is the importance of harmony between words and acts.

Suppose a company performs like an unsynchronized film, saying one thing and doing another—shipping orders after their cancellation dates, purchasing parts for discontinued production models, introducing a technology or fashion after it has already become outdated in the market, paying workers overtime one week and laying them off the next and paying them overtime again the third, borrowing money from the bank at high interest for one division while another division of the same company is depositing its excess funds at low interest, setting priorities that are misinterpreted and executed in reverse at lower levels, adopting high corporate values that are negated in practice by unhelpful attitudes among staff, and so on. An impartial observer of these things is not likely to be very amused. Yet all of these expressions of disharmony in an organization are much more common these days than an unsynchronized film.

Harmony is essential to all life, whether it be the life of an organism or the life of an organization. The most basic form of physical harmony, what we call coordination, is dramatically exemplified by the routine functioning of the human body. At every moment the body maintains a very delicate balance and precise equilibrium between the intake of oxygen, beating of the heart, flow of blood, digestion of food, excitation of nerves, exertion of muscles, functioning of organs, secretion of hormones, and maintenance of constant body temperature. If this harmony of the body is even slightly disturbed, it means big trouble.

At the operational level, companies function very much like the human body. They expend an enormous amount of energy in a steady stream just to maintain routine activities like purchasing, production, storage, distribution, marketing, maintenance, recruitment, and training. At every moment an organization has to preserve the delicate balance between all of these simultaneous activities. The maximum efficiency of an organization is achieved when all its parts function in smooth harmony with one another.

An organization is a complex matrix of interdependent activities. If purchasing slackens, production slows. If sales flag, inventories rise. If collections fall behind, cash flow suffers. If recruitment or training is inadequate, expansion is retarded. A disequilibrium between any of these functions can cause serious, sometimes irreparable, harm to the health of the organization.

Coordination is physical harmony in the horizontal dimension between activities, systems, and departments at the same level of the organization. Integration is physical harmony in the vertical dimension between activities, systems, and departments at higher and lower levels of the organization. Coordination and integration are basic organizational values, without which other values like quality, efficiency, profitability, and service cannot be achieved. Even the simple act of serving hamburgers at McDonald's requires precise coordination among systems for taking orders, cooking, serving, receiving payments, and cleaning equipment. These systems must also be integrated with other systems for purchasing supplies, recruiting staff, training, and facilities maintenance.

Companies usually establish coordination and integration at key points that are essential for their functioning. But there are many other areas of interaction where these values are frequently lacking. A retired Chrysler plant supervisor related an incident that occurred when he was supervising assembly operations at a Chrysler engine plant. The metal-stamping department always liked to run the highest-priced jobs, regardless of conditions in other departments. On one occasion the stamp plant kept running front fenders even though the metal-finishing department had run out of room to store them and had requested the stamp plant to stop. To cope with the onslaught, metal-finishing personnel were pitching the fenders onto a ten-foot-high pile and damaging them in the process.

This incident, which occurred in the early 1950s, might be dismissed as an isolated occurrence; but another description of Chrysler 25 years later suggests that it was not. When Iacocca arrived at Chrysler, he found that

Many companies are like a box containing all the parts of an unassembled watch. They have all the resources required for successful operations—talented people, a fine product, sufficient capital, a good market—yet somehow they are not able to put it all together and make it run properly. Other companies are like a watch that has been clumsily assembled by an amateur. All its parts are grinding and grating on each other. There is some rough working order, but things are constantly stopping, going wrong, breaking down. Then there are companies that function like a precision-made, well-lubricated watch. All the components are in precisely the right relationship to one another, and movements between them are perfectly synchronized, frictionless, and smooth. These companies have achieved harmony at the operational level.

At about the same time Chrysler's stamp and metal-working departments were fighting over fenders, IBM introduced coordination between its engineering and production departments to facilitate the development of one of its first electronic computers. This coordination resulted in faster and cheaper development of a better-quality product and thereafter became a basic operating principle at IBM.

When John Huck joined Merck as director of marketing in 1958, the company was dominated by a powerful research division. Research developed new products and gave them to the marketing division to sell, in much the same way Chrysler's engineering department used to design new-model cars. At that time, the research and development staff used to call meetings to present new products to the marketing division. These meetings marked the first time that marketing people were exposed to these products or had an opportunity to comment on them. The relationship was all one way. There was no coordination between divisions at an early stage of product development.

Soon after Huck's arrival, a serious effort was made to rectify the imbalance. A joint research-marketing committee system was established to coordinate work even during the research phase. Product managers began to mingle with researchers on the once-forbidden terrain of the laboratories. One good example of a product that benefited by the improved working relationship between research and marketing was a new antidepressant drug with significantly better characteristics than the competition. This drug soon became number one in its field.

Increased harmony at the physical level through coordination not only raised productivity within the company; it evoked a response from the market as well. When Merck launched its effort to coordinate, it ranked among the second half-dozen drug companies in the United States. By the time the move for internal coordination was complete, Merck was a rising star in the industry. As Huck said: "Coordination makes the difference between being really successful and just being pretty good."

The introduction of a new interdepartmental system for coordination was not sufficient to create a harmonious relationship between research and marketing. Attitudes of people at all levels of the company also had to change. It took ten years before people really came to feel that they should fully communicate and cooperate with each other. According to Huck the attitude is more important than the system. "You probably need the system to get going, but that isn't enough. If you have the right attitudes, you could probably do it without the systems." Systems facilitate coordination and harmony at the physical level. But the right corporate attitude generates cooperation, which is a higher and more powerful form of harmony.

Merck has recognized the importance of corporate attitudes for fostering harmony within and without. As it stresses credibility in its relations with physicians, so it stresses trust in its relations with employees. John Lyons likened an organization to an internal-combustion engine. Friction is a major obstacle to the smooth running of them both. Friction dissipates a lot of energy as unproductive heat. It causes wear and tear on the parts, lowers efficiency, and slows speed. To counteract friction in a car engine, a cooling system and a lubricating system are utilized, both of which add extra weight and bulk to the vehicle. Companies introduce many cumbersome systems to reduce friction between individuals, departments, and divisions. Now suppose friction in the engine could be dramatically reduced by some means. All the extra systems could be scrapped. Equipment, operating, and maintenance costs would drop. Speed and efficiency would improve. Engineers have not yet discovered a way to eliminate friction in a car engine. But some companies have found a way to reduce organizational friction by encouraging positive corporate attitudes that generate cooperation and teamwork.

General Mills gets its high-flying, youthful exuberance from the entrepreneurial spirit it fosters within the company. But if that were its only strength, you might find the company shattered by an infinite number of brilliant inspirations and great ideas, each headed in a different direction! The cement that bonds all these individuals together and makes all their energies and ideas productive is the spirit of team-work and cooperation that has evolved over the years.

General Mills has overcome the functional isolation between departments by establishing interdepartmental task forces, creating systems for coordination, and fostering an attitude of cooperation at all levels. The company has made significant gains in "people productivity" by developing teamwork among research and production, production and marketing, and marketing and sales. The Consumer Foods divisions organize groups for each new product. Representatives from each function (R&D, marketing, and so on) work together as a team. The key to success is an attitude of shared responsibility. "The controllers and the research guy and the market-research woman and the production person all feel that they've got a much greater vested interest in it," one executive explained. Each division has come to recognize that it depends on the others in order to do its job properly.

Cooperation not only saves money; it saves time, too. Raj Puri, a program manager in Consumer Foods, is involved in the launching of new products. He estimates that the company's team approach can reduce the time from conception of a new product to sales by as much as 40 percent to 50 percent, a savings of two years or more. Interfacing between research and manufacturing starts while the product is still in the laboratory. Once again, the key is attitude—"trying to get people to look at the overall business. It broadens our horizons. Everyone has their boundaries and they have to expand across them," Puri says.

The same close rapport exists at General Mills between sales and marketing, which are traditional adversaries in many corporations. A recent incident dramatically illustrates the power of harmony to evoke a response from the market. During the first eight months of 1984, sales in Consumer Foods were lagging behind the previous year. In September it was proposed that 12 separate food product groups combine their advertising budgets and marketing strategies into a single giant, promotion program, which required each product group to relinquish control over its own budget to a coordinating body.

The $20 million spent on the single promotion was the same amount budgeted for separate expenditure by the different product groups, but the results were far better—the biggest sales month in the history of the foods division. Walt LeSueur, director of sales administration, described the joint effort this way: "It is not a marketing and a sales organization that are fighting each other. It's an integrated sales-marketing operation that works together and understands each other."

The basis of all harmony is communication between people. At the level of physical coordination, communication is needed to convey information between related people and points in the organization. Coca-Cola is able to control and coordinate activities around the world because it has developed a daily flow of two-way communication between the head office and its overseas subsidiaries. Coca-Cola has the ability to process the information it receives and to respond within 24 hours. It gets profit-and-loss reports from foreign subsidiaries twice a month and has a very accurate reading on monthly performance by the seventh calendar day of the following month, which is lightning fast for a company of this size operating in 155 different countries. As the company's chief financial officer said: "The information flow creates a tremendous strength. The speed and accuracy of it are phenomenal."

Communication is also essential for establishing organizational harmony. The basis of all cooperation between people depends on two things—an understanding and an attitude. Communication can create both. First, people must understand the importance of cooperation and the place of each active participant in the overall scheme of things. Second, they must acquire a willing attitude based on a recognition that cooperation serves the greater good of the organization. General Mills' 12-product promotion was made possible by this understanding and this attitude.

At Northwestern Mutual communication is a vital function, which supports a very high level of organizational harmony. There is a free flow of communication horizontally between related departments and also vertically between higher and lower levels of the company. The horizontal flow is promoted through a system of liaison committees, which serve to bridge the gap between related departments. Whatever may be said of the cumbersome nature of management by committees, they can play an invaluable role in fostering cooperation and team-work. Northwestern Mutual has made committees an effective channel for coordinating activities, fostering greater understanding, and overcoming negative attitudes within the company. Committees are also used to raise the level of cooperation between the office staff and the company's independent field agents. "We have a pretty good understanding of our mutual interests," says Vice-President Dick Wright.

Northwestern Mutual supplements communication through the committees with educational programs to foster teamwork. A new videotape entitled "In Search for Harmony" is now being used to help the home office staff better understand and appreciate the needs and activities of the field agents.

A harmonious family feeling is not just something management professes at Northwestern Mutual. "You are treated like an individual. You're not just a cog in the wheel," says one middle manager. "They really try to reach down into the clerical level, and I think they do succeed." Top management not only talks; it eagerly listens, too. "There is an upward vertical movement of communication. They really do rely on the input of the people who are on the line. In fact, if they don't hear anything, they'll make [it] a point to solicit a comment. They always ask the service reps for input. That's why it gives you a sense of importance." The effectiveness of communication in fostering positive relationships at Northwestern Mutual can be judged from the results of a 1980 survey, which showed that 85 percent of the staff felt the company kept them well informed, and 97 percent had complete faith in the information they received.

At Marriott teamwork is developed by regular communication through a system of management meetings and employee meetings, so that, as one executive put it: "Everybody knows what we are trying to accomplish and…[is] reminded of it and encouraged toward it."

Meetings are a much-maligned thing these days. A 1983 survey of U.S. executives found that 71 percent believe that meetings are a waste of time. But the real problem is not with meetings per se. Successful companies utilize meetings as a highly effective instrument for improving coordination and cooperation. Like any tool, meetings themselves are neutral. Their effectiveness depends on the skill of those who utilize them.

Coordination, cooperation, and communication enable the organization to harness the available energies more efficiently and utilize them more productively. Efforts to increase organizational harmony afford infinite scope for improving corporate effectiveness. As one bank official writes, with reference to meetings:

Physical harmony is achieved by proper coordination of related activities through a network of interlinking systems. Organizational harmony is achieved when employees acquire a greater understanding of the work done by others and recognize the importance of cooperation and teamwork. But there is still a higher form of harmony, in which the bonding element is a feeling of identification with the company and a sense of belonging rather than a system, an understanding, or an attitude.

There are a few companies in which cooperation, teamwork, and team spirit are raised to the level of a high ideal and core value of the psychic center. The company seeks them in preference to monetary goals, not just as a means to make greater profits. Cooperation and friendliness among peers are then augmented by a deeper sense of the company's commitment to its people and the individual employee's personal commitment to the firm. Cooperation in these companies transcends the necessities of work and the interests of efficiency. Neighborliness goes beyond the limits of mere courtesy and good relations. Harmony among employees and between employees and management is maintained even in the absence of special systems to promote it or peer pressure to enforce it. People are bound together by a set of values that they feel committed to live and work by. Harmony has become a custom or perhaps even a culture in the company.

When outsiders visit a company like this, they can perceive a warm, friendly atmosphere or family feeling in the air. This is how we felt when we visited Delta. So many companies speak about family feeling these days that the phrase is losing its real significance. But at Delta the thing is real and palpable, regardless of what you call it.

Many reasons can be given to explain it. C. E. Woolman was a kind, affectionate man. The company was started in a small southern town. It has a policy of preserving jobs in times of slack business, promotes from within, and pays high salaries. But in our view the single most important element is not these things. It is an abiding sense of security. How do you feel when you are in your own home with your own family? You feel safe and secure. Delta makes its people feel secure.

Security starts at the physical level—with safe airplanes. Delta employees believe that the company has the best-maintained fleet in the industry and will spare no effort or expense to keep it that way. This conviction generates a feeling of confidence and relaxation in a business where the fear of accidents is uppermost in the minds of many. "There is never any thought of compromising safety," says Senior Vice President Joe Cooper. "There is never any question in the employees' minds that a piece of equipment is not the most reliable thing around."

Delta tries to provide psychological security to its employees, too. We asked one senior executive what is the most important thing he tries to communicate to his staff. He replied, "to give them peace of mind." Then he added. "All of us that work at Delta are members of a family-type organization. A lot of people feel that is just a clichi, the Delta family; but our people and all of us really believe it."

But the true measure of family feeling is in a company's acts, not in its words; and at Delta the action comes from an unexpected source—the employees. In 1982 77 percent of Delta's 37,000 employees contributed toward the purchase of a $30 million Boeing 767 for the company. That act expresses their feelings pretty loudly. "You can interview as many people as you want," Meuse told us, "but basically they'll all tell you the same thing: It's a great company to work for. They take care of us, and we try to take care of them."

Harmony is a formidable power. It improves efficiency, reduces waste, minimizes friction, increases productivity, eliminates conflicts, relieves tension, releases enthusiasm, and generates joy. But that is not all. It also possesses the capacity to attract customers and make the market come to the company instead of the company's going to the market.

What makes a person attractive to other people? It is liveliness and charm, energy and harmony of personality. We are naturally attracted to people of high energy because we feel more intense and alive in their presence. If they have cheerful and harmonious personalities, we also feel calm, relaxed, and happy when we are with them.

The same is true of companies. Think for a moment of the companies that you keep going back to in preference to so many others. Sometimes it is because one firm's price is better than the others'. Sometimes it is because of better quality. And sometimes—it is just because we feel better there. We enjoy it.

When a company has a rich, harmonious personality, it becomes more attractive to customers. Sales personnel are more friendly. Service people are more cooperative. Operators are more cheerful. An associate of ours became a dedicated Delta fan long before he knew anything about the company or had ever flown on one of its flights, just because a Delta reservations agent was so helpful and friendly on the phone.

A Merck professional representative explained a similar phenomenon. When the representatives are happy in their work, proud of the company, and have a positive attitude, "it causes a ripple effect like in a lake. They are more effective, more positive, more persistent, more empathetic; and therefore, when the doctor is looking at you, he sees somebody he likes to be with."

Harmony is expansive. When Tom Watson increased the level of harmony at IBM during the 1930s with his policy of job security and job enrichment, not only did productivity and job satisfaction improve; the market responded, too, enabling IBM to grow right through the Great Depression. Harmony is attractive like a fashion. It spreads by itself and creates its own market where there was none before, because it meets a deeper need in people—the need for harmony in their own lives.

We have so far spoken of harmony between activities, people, systems, and departments. But one of the highest forms of harmony is the capacity to reconcile conflicting values. A striking attribute of the companies we studied was their simultaneous adherence to two or more different, and apparently opposite, sets of values.

At General Mills we found a tremendous emphasis on individual entrepreneurship coupled with an equal insistence on cooperation and teamwork. At Merck there is hard-driving, aggressive selling linked with a meticulous insistence on objective, factual presentations—no easy combination. At Northwestern Mutual the highest priority is teamwork and committee-based, consensus decision making—two things that are known to slow momentum and dampen individual in itiative—yet the company has achieved the highest level of productivity and speed of response in its industry. Marriott utilizes the most sophisticated network of impersonal systems to deliver highly personalized and friendly service to its customers and to achieve the highest levels of profitability in the hotel food business—all at the same time.

Companies that achieve a high level of corporate harmony are constantly reconciling and harmonizing conflicting sets of values in their everyday operations. The greater the apparent conflict between the values they adopt, the greater is the power that issues from harmonizing them.

Anyone who has ever driven across midtown Manhattan at 5 P.M. on a weekday knows what disharmony is all about. Traffic inches forward, jams together, and gets clogged at every intersection. Police look on helplessly. Traffic lights are useless. Pedestrians cross when and where they can. Trucks double-park to make their deliveries, backing up traffic for blocks. Everyone is going every which way, focused on individual destinations, in a total confusion and chaos that is certainly dangerous to people's psychological health, not to mention their physical safety.

Contrast this with the feeling of joy and ease cruising down Seventh Avenue at midnight after a Broadway show, with a long stream of synchronized traffic lights green for as far as you can see and hardly a dozen cars on the road. You float through the usually congested intersections as if on a magic carpet, without even looking to the left or right, because the lights are with you and it's all clear. You save a fortune on gasoline by avoiding all those stops and cut down wear on the brakes and gears. You travel in a few minutes a distance it took you an hour to cover in the afternoon. You feel safe and relaxed, with no fear of an accident and no tension on the nerves. Everything is going your way. That is what we mean by corporate harmony.

The key to the whole thing is the lights—synchronized green lights running all in a row. Nothing to slow you down. No barriers in the road. The lights set the direction of the traffic. This is the role that values play in a company when they are set high enough and seriously pursued. They act like lights clearly fixing the direction of all the traffic and helping it flow unhindered in the shortest time, at the least cost, and with the minimum of friction. The higher the value, the smoother the flow.

There are an infinite number of elements and points within an organization that can be properly aligned and harmonized with other elements of the same type and of different types, with other points at the same level and at different levels. The innumerable systems for production must be in harmony with each other as well as with the systems for purchasing, storage, accounting, distribution, and marketing. Systems at each level must be properly integrated with related systems at all the other levels above and below. They must also be in harmony with technical skills for production, marketing skills for selling what is produced, accounting skills for proper costing and pricing, and so on. So, too, they must be in harmony with the organizational structure and authority exercised. For instance, the system of unlocked laboratory storerooms at Hewlett-Packard depends very much on the milieu of positive authority in the company's corporate character. Systems must also be in harmony with the beliefs, values, and objectives of the psychic center. What is true of systems is true of the other elements as well. Skills must be in harmony with other skills at all levels, with the product, machinery, materials, marketing strategy, organizational structure, type of authority, values, and so on.

This complex matrix of interacting elements can be depicted dramatically by a series of arrows, each arrow representing a different element in the organization and the direction of the arrow symbolizing the degree of its alignment with other elements.

There are moments in the life of every company when harmony rises to a higher level. Often such a moment comes in response to a threatening crisis, as it did at Chrysler a few years ago. When things take a sudden and dramatic turn for the worse, people become more alert, flexible, dynamic, and cooperative. They stop insisting on their opinions, stop standing on prestige, brush aside their grievances, and forget their feuds. Everyone pitches in to save the situation. Activities are better coordinated, departments cooperate with each other, people work with a team spirit, and work flows smoothly. A company that appeared to be in the throes of death suddenly revives with an unexpected freshness and vivacity.

The sudden opening up of a new opportunity can also push harmony to new heights within an organization, as it did at Apple during the first phase of the company's life. In such an expansive period, no one has a moment to think about job security, because the company is hiring as fast as it can and does not even have free personnel to handle recruitment. Every secretary and sales rep is given maximum freedom and responsibility because there is more work than anyone can handle. Every day brings fresh surprises and fresh triumphs that send thrills through the organization. Cumbersome bureaucratic procedures are streamlined in the rush to meet deadlines. Inefficient systems are upgraded and refined to handle greater activity faster. Negative opinions and nonwork attitudes are drowned in a sea of optimism and success. The whole staff feels a sense of pride and joy at being part of a successful, rapidly expanding venture. A harmonious team spirit pervades the organization. The company responds to the market by increasing its internal harmony, and the market responds to that harmony by becoming more expansive.

The types of harmony generated by a crisis or an opportunity are both inherently limited by the fact that they arise in response to the pressure of external circumstances, which is usually temporary. In a crisis the harmonious atmosphere is likely to last only so long as the crisis itself. In an expansive period it is likely to last only so long as the opportunity is expanding faster than the organization can adapt to it. Once growth slows down or levels off, divisive tendencies that have been held in check come to the surface.

For harmony to become a permanent attribute of the corporate personality, it must be generated from within the organization itself as an aspiration to realize some inspiring ideal—a higher value or lofty goal. The internal pressure of that constant quest generates harmony. The higher the ideal, the greater the harmony that results. A corporate ideal like rapid growth or high quality generates a force for harmony within departments. A social ideal like the well-being of employees (Delta) or service to society (AT&T) generates a power of harmony at the corporate level that can integrate and unify the entire organization.

When harmony becomes a permanent attribute of a corporation, the response of the market becomes permanent, too. The market reveals to the company a scope for endless expansion and enduring success.