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how strategy defines structure rather than on how structure affects strategy. My goal from the start was
to study the complex interconnections in a modern industrial enterprise between structure and strategy,
A lot has changed since the rise of the railroad and the multi-divisional corporation, but Alfred
Chandler's insight is still relevant. In fact, the information age amplifies the importance of struc-
ture. Increasingly, we spend time and make decisions in “places made of information.” These
contexts that we create profoundly shape our beliefs and behaviors, but the links are hard to see,
so we don't even know what we're missing.
Figure 5-1. Which comes first, strategy or structure?
Alfred Chandler saw “the existing structure of the enterprise shaped - usually holding back -
changes in strategy.” Over time, these firms failed to adapt and collapsed. This problem only
grows worse. Half a century ago, the life expectancy of a Fortune 500 firm was 75 years. Now it's
less than 15 years. The external environment is changing faster every day, and even our best or-
ganizations are failing to learn and adapt.
We can be more responsive but only by changing how we organize ourselves and manage in-
formation. We've hit the limits of reductionism. Silos, short-term metrics, and quick fixes are
dead ends. We must read between the lines and dig beneath the surface to wrangle with struc-
ture. We must cultivate a new way of seeing. Insight isn't enough. To inspire action we must
help others see what we see. We must practice what Pierre Wack, the French oil executive who
pioneered scenario planning, called “the gentle art of re-perceiving.”
I have found that getting to that management “Aha!” is the real challenge. It does not simply leap at you
when you've presented all the alternatives, no matter how eloquent your expression or how beautifully
drawn your charts. It happens when your message reaches the mental models of decision makers, obliges
them to question their assumptions about how their business works, and leads them to change and reor-
ganize their inner models of reality.
cxxxvi
To advance, we must slow down. Even the most brilliant strategy will fail without shared un-
derstanding and organizational support. Peter Drucker explained “culture eats strategy for
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