Core Group Theory

From GTwM

Kleiner's Core Group Theory argues "[e]very organization is continually acting to fulfil the perceived needs and priorities of its Core Group." the group of people who really matter in an organisation, and that there are three great lies of the modern corporation:

the customer comes first;
we make decisions on behalf of our shareholders; and,
employees are our most important asset.

It is important however to note that core groups for Kleiner are neither inherently good or bad, what is important to understand is they are always there and therefore cannot be ignored.

1 Core groups dynamics
- 1.1 Non core group members
2 Great Core Groups & Knowledge
3 Creating your own core group
- 3.1 Welchism; creating a core group
4 Problems; Guesswork & misinformation
5 Expanded core groups
6 Other topics

Core groups dynamics

Kleiner introduces the relationship between the core group and the organisation as a love affair of commitment and dedication.

Non core group members accept their position because as with any other relationship, it relies on a two-way exchange;

the core group offers direction (thereby removing the need for continually "painful" thinking through of each days issues)
the non members bestows support & thereby offers legitimacy to the core group in return

Whilst staff can neither promote someone into or remove someone out of the group they can legitimise or remove support for their presence and in a democratic society legitimacy is very important as positional power on its own cannot guarantee wholehearted commitment.

Non core group members

Kleiner argues it is important that those who are not part of the core group realise they are seen as a "resource". They are dispensable. If they leave, people may miss them, but the organisation won't.

As a result, whilst many non core workers spend their life resenting not being part of the core group others do something about it. Some leave to "start organizations […] because they want to be in the Core Group, if only to see what it would be like." (p7)

Others are happy to be part of the majority waiting for the core group to guide the organization forward. They understand that organisations can enhance their potential and help accrue their equity (e.g., fungible financial equity, rainmaking equity, reputation equity, relationship equity, etc.).

Great Core Groups & Knowledge

An organization holds two types of knowledge:

knowledge of the problem to solve (shared by all competitors); and,
knowledge of the organisation's way of solving it (distinctive).

The same problem can be solved in different ways. The way your organisation chooses to solve it (the distinctive knowledge) depends on the core group's priorities, preferences and interests. This can dictate the success or failure of an organisation.

"[B]ehind every great organization there is certainly a great Core Group" (p8)

And one of the core group's most important roles is regarding organisational knowledge: their members define & maintain the significance of knowledge and its link with the organisation. According to Alfred D. Chandler, Jr., the most successful organisations have a solid and impregnable 'integrated learning base'.

Creating your own core group

Kleiner worked with Peter Senge on The Fifth Discipline and borrows heavily from the ideas of personal mastery in arguing that to create a core group (or to join an existing one) you need to develop as an individual first. Not simply on a technical plain but rather in ones ability to master dialogue (advocacy & inquiry).

Welchism; creating a core group

In chapter 10, Kleiner discusses an alternative approach and how Jack Welch acted to create the core group he wanted in GE. Jack Welch used a performance tracking system to grade all staff on a Vitality Curve and then insisted managers fire the bottom 10% of underperformers.

Kleiner however highlighted the collateral damage Welch's approach created. He argues this approach requires a great deal of subtlety, as it is not viable to simply dismiss the existing core group. Many organisations have tried, and carry on trying, to copy Welch's model. However copycat approaches that lacked Welch's subtlety, such as Nasser's nuking of Ford's, or Albert J. Dunlap's nuking of Sunbeam have lead to disaster as trust / knowledge disappeared.

Problems; Guesswork & misinformation

Throughout his book Kleiner always refers to the 'perceived needs of the core group'. In the abscence of any clear communication, and even where communication is good but inconsistent, non-core group members try to guess the expectations of the core group. These guesses are based on what they would do were they part of the core group, or based on their interpretation of the signs received. Clearly guesses can go wrong & can have drastic consequences for the organisation and/or the individuals. Hence, the importance of core group members being conscious of their role and ensuring the clarity of their views.

One of the ways of sharing their views with all staff members, without the disruption of the usual cascading mechanisms, is through the metrics used to evaluate the work. The metrics will definitely tell the organisation about the core group's priorities.

Expanded core groups

Surprisingly Kleiner argues expanded core groups - one that is roughly the size of the organisation can succeed however they are numerically few because to change to this approach requires all core group members to adopt the same philosophy and that often this is one that is not necessarily as individually rewarding. Whilst Toyota is a beacon in this area other organisations that have tried to copy their approach have rarely matched their success.

Core Group Theory

Core Group Theory

From GTwM

Contents

Core groups dynamics

Non core group members

Great Core Groups & Knowledge

Creating your own core group

Welchism; creating a core group

Problems; Guesswork & misinformation

Expanded core groups

Other topics