Think Inc.
A forum for Hawaii's
business community to discuss
current events and issues.
Think Inc.
A forum for Hawaii's
business community to discuss
current events and issues.
Sailing a square ship | Ward sale revisited
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Many contemporary leaders have difficulty in navigating and adapting to the often unsettled waters of change. This difficulty is often related to their organization's design. When hindered by an inappropriate and perhaps outmoded design, an organization will not perform well and may be further burdened by the misdirected and maladaptive efforts of leaders.
Many business leaders wrongly
blame employees rather than
a flawed business designBy Jerry Glover and Gordon Jones
For example, imagine that you have been appointed the managing director of an ocean shipping company. Upon arrival at the company's operations center, you look out the window of your office and observe that your flagship is struggling to leave the harbor.
To your amazement, you can also see that the hull of your flagship is square. You are further amazed that no one else in the operations center seems to notice the flagship's square design. Instead, they are complaining about the ship's crew and officers, as well as the crew of a tugboat, who can be observed from the window to be working very hard to get the ship and its cargo out of the harbor.
To you it is obvious that the ship is restricted in its movements by its ineffective and inefficient square hull design. No matter how hard the crew may work to improve the performance of the ship, it simply won't move at a reasonable rate of speed.
What would you do to respond to the situation? Find a motivational speaker for the crew? Increase the training budget for the crew? Downsize your crew? Apply pay-for-performance? Bring in a consultant with still another management fad?
Unfortunately, these "remedies," which are often used by contemporary leaders as change initiatives, would have little impact on the real cause of the ship's performance, its design. In fact, applying such remedies may divert attention and resources from fixing the real problem.
This case has great relevance for many government, community and corporate leaders who likewise feel frustrated when they attempt to change their organizations to meet the demands of participating in the global economy.
Instead of realizing that their real problem is a "square" ship, they focus on the inability of employees or other stakeholders to produce expected results. They attempt to implement the newest management fads instead of adapting organizational systems and practices to fit stakeholders and contextual needs. Their maladaptive responses result in problems, and frequently failures, for both leaders and organizations.
Adaptive leadership requires continuous efforts to make sense of the noise in our environments and then to be able to know when our organizations are square pegs operating in round contexts. Adaptation is a process by which leaders continuously both assimilate information from their environments and then accommodate their organizations to the specific contexts in which they are operating. Decision-making and strategies can not rely on what has been successful or unsuccessful in the past.
Adaptive leaders need to do more than think outside the box. It is often necessary to create new boxes. Adaptation involves on-going systemic change. But it is more than that. It involves a leadership response that enables an organization to cope successfully with ever-shifting internal and external environmental demands. During continuous periods of change, adaptive leaders must be open to signals from their environments to be able to make fundamental and continuous changes their organizations.
To be truly adaptive, an organization must have a fundamentally new structure; its leaders and employees must commit themselves to very different behaviors and responsibilities. Traditional organizations cannot just add "adapting" to their current set of goals or capabilities. According to Stephen Haeckel, in his book "Adaptive Enterprise," they must become adaptive organizations, with different cultures. That new culture must be open to future changes that are predisposed to self-renewal and continual redesign.
Next week we will begin to discuss what it takes to be adaptive.
Jerry Glover is a professor of organizational change a Hawaii Pacific University. Gordon Jones is a professor of management information systems at HPU. They can be reached at JerryGlover@compuserve.com and gjones@hpu.edu. BACK TO TOP
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CHANGING TIMES IN RETAIL
When it was announced this month that General Growth Properties, the Chicago based publicly traded real estate investment trust, had agreed to purchase Victoria Ward Ltd.'s stock for $250 million, there was a collective groan in the business community. Mainland investment is
helping to break up Hawaii's
stifling land oligopoliesGeneral Growth Properties'
purchase of Victoria Ward will
increase competition, not diminish itBy Stephany L. Sofos
It had been the desire of many that Alexander and Baldwin Inc. would buy Victoria Ward's 65 acres in Kakaako, thereby keeping the 130-year-old Hawaii company in the control of a Hawaii-owned business.
In our state there is continuous hope for diversification vs. accumulation or consolidation when large companies come into our islands. This is because so much of our land, as well as commercial and retail properties, are controlled by a small group of owners. The land oligarchies created more than 125 years ago persist today. Among the examples are Damon Estate's power in Mapunapuna, Kaneohe Ranch's control of Kailua town, Campbell Estate's ownership of Kapolei, Maui Land and Pine's Kapalua, Alexander and Baldwin's in Kahului, Grove Farms on Kauai, and Kamehameha Schools' control of much of Honolulu's urban core. These entities plus the federal, state and county governments control more than 90 percent of our state's land base.
When a small group of organizations controls a great deal of land there is a tendency and an incentive to manage competition and keep control over rates and values. With no competition people often pay regulated prices. The economic principle of supply and demand goes out the window. There are even anti-trust implications with controlled competition and the fear of the landowners as the most effective peddlers of political influence.
So what are the implications of the purchase of Victoria Ward Ltd. by its chief rival? In 1959, when Dillingham Corp. built the Ala Moana Shopping Center on its 50 acres in Kakaako, the hub of retail was at Fort Street Mall. This location had been the center of activity since Kamehameha the Great moved the capital of the islands to Honolulu from Waikiki in 1820. But in just three years Ala Moana became to center of retail and has remained so for 43 years.
General Growth has been in Hawaii since 1985, first as the manager of Ala Moana, then as its owner in 1999 with the $810 million purchase of the center. It has continually worked to enhance that property by bringing in tenants new to the state and redeveloping the property to offer consumers new and innovative entertainment and eateries. The overall experience at Ala Moana is a pleasant one for both residents and tourists.
With another 65 acres in General Growth's portfolio, it will develop this land to intensify, improve and strengthen Ala Moana's position in the community.
With this acquisition, it has a chance to redevelop and change the course of urban Honolulu. General Growth, like Dillingham years ago, has the ability to grow a city within a city and create its own synergy for its main property.
This redevelopment will create competition for the old land oligarchies. There will be pressure on them to redevelop their properties for fear of losing their market base and to work with their retailers and consumers to keep them in their shopping environments. There will be changes made to how business will be conducted with the large land owners; forcing them to not just manage but to perform at the level of this new rival. Overall, the future is positive for the consumers and residents of Hawaii.
With the purchase of Victoria Ward Ltd., the urban core of Honolulu will be taking its first step into the 21st century. It will, in effect, be moving the rest of the state into the new millennium, whether the business community or the land oligarchies wish it or not.
Stephany L. Sofos is president of SL Sofos and Co. Ltd., a real estate consulting company, and a licensed real estate broker and appraiser.
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