Interview with Professor Stewart Clegg

Citation

(2009), "Interview with Professor Stewart Clegg", Journal of Corporate Real Estate, Vol. 11 No. 2. https://doi.org/10.1108/jcre.2009.31211baf.001

Interview with Professor Stewart Clegg

Article Type: Talking heads From: Journal of Corporate Real Estate, Volume 11, Issue 2

Interview with Professor Stewart Clegg (Director, ICAN Research – Innovative Collaborations, Alliances and Networks) by Debbie Hepton

Stewart Clegg is widely recognized internationally as one of the leading global experts in change management. He migrated to Australia in 1976, after completing his degree at the University of Aston and a Doctorate at Bradford University. Previously he has held positions at leading Universities in Scotland; Australia, England, France, New Zealand, Hong Kong, Brazil, Canada, Mexico and the USA.

He has been translated into many languages, including Spanish, Korean, Portuguese and French, sits on a large number of prestigious Editorial Boards for leading research journals and is Editor of the Advances in Organization Studies for Benjamins. He publishes regularly in leading journals such as the Academy of Management Education and Learning, Organization Science, Organization Studies, Organization, Human Relations and Administrative Science Quarterly.

He has also acted as consultant to leading international newspapers, such as the British Sunday Times and the Australian Financial Review, for whom he has devised the methodology for their “Power Lists,” as well as to universities, business firms, and health services.

He is currently the Director of ICAN Research – Innovative Collaborations, Alliances and Networks, and is also leading a team that is researching “Alliancing” and related forms of inter-organizational collaboration in a number of industries.

Research areas include: organization and management theory, power, space management, social theory, alliances, projects and elites.

One of your areas of expertise is globalization and global management. When a company is looking at relocating to another country, what are the key steps that they should consider? Do you have any best practise tips in this regard?

A lot depends on the type of engagement they are entering into. There are several models of engagement. The first model can be thought of as one of New Realism: Balance of Power. In this view, corporations operate in a global system of states. These states are engaged in a constant relational struggle; while such power relations might seem to be inherently unstable, most of the time the situation is stable. There is a balance of power. The classic example of this was the situation for most of the latter half of the twentieth century, when the world was divided into two rival blocks under Soviet and US Hegemony, respectively. After the Cold War ended the situation is more complicated: there is one hegemon whose power appears to be in relative decline – the USA – and many regional hegemons, such as the EU, China, and Russia; countries such as Iran, North Korea, and Venezuela, which challenge regional hegemony, and emergent sub-hegemons such as Brazil and India. New Realism suggests that, strategically, corporations will seek self-sufficiency within various power centres; for instance, rather than exposing the corporation to the instabilities of power relations between hegemonic blocs the strategy will be to try and ensure stability within the hegemonic bloc. An example would be developing supply chains within regional commercial centres rather than going to the cheapest provider if they are outside the bloc.

Management structures in such a situation will be decentralized with a global headquarters providing limited corporate functions and mediating the interests of business units operating in different global regions. Corporations should reflect the regional characteristics of the hubs in which they operate and thus have some commitment to formal diversity strategies while marketing strategies will cater to distinctively differentiated cultural markets rather than worldwide brands. Really excellent international relations insight is necessary before making investments and good anthropological insight is necessary for day-to-day management.

Institutionalism: global rules

Institutionalists favor negotiated order in international affairs with good governance and strong rules. Thus, ideally, the world would be governed effectively by a global institutional framework in which the United Nations manages peace and war; the World Trade Organization should enforce rules of free trade; the Kyoto Protocol regulates responses to global warming; the World Bank encourages global economic development, and the International Monetary Fund, promotes sound economies and the Organization for Economic Co-operation and Development will promote good national governance. Multilateral trade arrangements, international protection of intellectual property rights, and standardization of labor and environmental regulations characterize the institutionalist view of the world. Transnational corporations would be free to roam globally in this view: global supply chains could snake everywhere and standardized products be distributed throughout the world. As a perspective it combines elements of classical liberalism and free trade together with a realization that only strong global institutions can shape a world which is free for trade. Pharmaceutical, bioscience, and high-tech industries dependent on consistent innovation and rigorous intellectual property rights, tend to view the world through the lens of institutionalism. They participate in shaping and championing international rules. Typically, they have management structures based on strong central administration and command structures. The firm needs to know that there is a strong institutional regime in place; otherwise they will be robbed blind by imitators, as many investors in China have learnt to their detriment. If the competitive advantage of the firm depends on intellectual capital then the firm needs some guarantees concerning the local intellectual property regime.

Liberalism: social order

Classical liberal thought in international relations was sketched by nineteenth century theorists such as Herbert Spencer who foresaw that trade would replace war as the major mechanism for adjusting power relations between states. Liberalism assumes that complex transnational interdependencies are driven by decreasing transaction costs, while war and violence become less important; thus, the chances for cooperation among states increase. Also, in contemporary times, such cooperation will be supported by increasingly powerful societal actors such as non-governmental organizations – think of Greenpeace or Oxfam. Corporations that are strategically fit for liberalism would be loose-knit “movements,” usually with flat management structures in which managers act as visionaries, setting the principles, but letting colleagues negotiate the details. Diversity will be essential: in the workforce, culture, gender, and socially. Diversity will enables more strategic responses to the heterogeneity encountered in a global liberal order. In a liberal world market those products that can appeal across the intersectional lines of difference that distinguish people will be most effective. McDonald’s is a classic example, as the American sociologist Ritzer (2004) recognized when he coined the term “McDonaldization”. It refers to the application of technical rationality to all areas of human life. It is, as Ritzer acknowledges, a contemporary variant on the Weberian theme of the rationalization of the world.

Postmodern anarchy: fatalism

When the strategist looks at the word as a whole not everywhere represents a liberal marketplace. Some places have insufficient effective demand – for instance, outside of corrupt oligarchs and despots, much of Africa can be written out of the picture, except for purposes of resource extraction. Especially, those parts of the globe subject to resurgent and fundamentalist Islam, such as Iraq and Afghanistan, offer little opportunity to the liberal strategist. The nation-state cannot secure order in these benighted world regions. Where governments fail the Hobbesian task of establishing sovereignty there are still commercial opportunities for anarchic corporations that exploit markets wherever possible, converting huge transaction costs and collateral damages into commercial activities. Think of Hailburton, Blackstone and the Australian Wheat Board in Iraq, where the major relational devices used strategically become guns and bribes. Short-term market share is what counts; hearts and minds, brand loyalty and identification are unimportant because long-lasting customer loyalty is unlikely. Regimes change rapidly; local gangsterism often rules rather than national government and deals will tend to be highly local, unstable and contingent on ad hoc relations.

Can you share any unusual/humorous/educational stories with us about relocating to another country?

Well, a couple come to mind. I was born and brought up in a small country: England. I had a mental map of distances that was based on that background. Before I migrated to Brisbane in Queensland, Australia, I really did not have much conception of the vastness and emptiness of the continent. Nor did I have any experience of Federal Government. In England I met Australians who seemed horrified that I would go to Queensland. The reasons were that the state government at that time was led by a Premier who was notorious for his populist right-wing policies of unfettered development, curtailment of civil liberties, and use of the police as an arm of executive government. I thought that being in Brisbane would be pretty much like being in Birmingham rather than London, that what I was being told was that Brisbane was provincial.

The issue of distance was brought home early. I began to realize the distance when, after stopovers in Singapore and Bangkok, the plane landed in Darwin, still largely flattened from the 1974 Cyclone Tracy, to refuel and for the passengers to clear immigration. It seemed we had arrived, but, when we got back on the plane, it was still many hours before we landed in Sydney. The distances were vast beyond my small country comprehension. I had no idea that Brisbane was 11 hour’s drive from Sydney, the next big city, and that in between there were only country towns.

In 1976 Brisbane was still a big country town anyway. On the first day we were there, a Saturday, we went shopping into the city centre, after a leisurely breakfast, arriving at about 11.30. At 12.00 all the shops shut, the people vanished, and cannons could have been fired down the main street with little chance of bowling anyone over. We soon worked out that people headed for the beach: shopping was what one did on the weekend in cold climates maybe, but not in the Brisbane of the 1970s. And you could not get a drink or buy any alcohol on a Sunday except around two hours in the middle of the day!

Also, I had no idea of how, in a Federal system, so much power was vested at the state level. It was a shock to arrive. The heat, the distances, the politics, these were all very unsettling for someone leaving England in the middle of the 1970s. And then there were the houses! I had never seen anything like them. In my imagination they looked like large seaside chalets on enormous stilts. They were made of wood and sat high on these, often on precarious, slopes with rough red soil underneath them, with corrugated iron roofs. And the sound of the tropical rain on the roof! It was like the Edinburgh Tattoo in full march. The houses were designed to capture the prevailing breezes and be cool in summer. The only thing was, as wooden boxes high on stumps, they were freezing in winter, as the nights were clear and cold (even though the days were clear and warm – about 17°C usually – but it could get very cold at night) they had no form of heating: no fireplaces, no central heating, and no gas fires. The view seemed to be that the climate did not require heating. In fact, I was colder one or two frosty nights in Queensland than ever in the darkness of Yorkshire.

My students did not seem to feel the cold: for winter they would still be barefoot or in rubber-thongs, sometimes in locally produced Ugg boots (now a fashion item; then decidedly tacky), still wearing shorts, but maybe with an extra T-shirt and a scarf and gloves.

After we had been there for a few weeks I realized that the shoes I had brought from England – sturdy leather ones – were not really the best thing for the climate. I could not face the prospect of thongs so I went to a shoe shop – getting up early one Saturday – and asked for a pair of “pumps”. “Pumps” was the name given at my school in England to a pair of white canvass sports shoes: everyone called them pumps. I just thought that it was a generic name. The shop assistant was very confused: I was directed to a hardware store! Eventually, I learnt that they were called sand-shoes in Queensland.

When we bought our house we were high on a ridge with views back towards the city. On a far ridge, about thee kilometres away, I could see a mass of smoke and what looked like fire flickering. Convinced there was a fire, I could not understand why I could hear no fire truck sirens. When, the next night, and the night after that, I saw the same thing, it twigged that this was not a fire! Indeed not; it was the Castlemain-Perkins brewery and what I could see was the steam condensing from the brewing stacks and through it, the large red fluorescent XXXX sign flashing on and off. Four X is the name of the local beer; years later in California, I discovered that a Four X was a condom brand!

There were many other things to get used to: mosquitoes and their bites, cane toads and their croaking, the humidity that saturated everything. But there were good things as well: cold beer and good cheap wine – revelations to an Englishman – and mangoes – the food of the gods, I thought when I first tasted one. Giant prawns the like of which I had never seen before. Beautiful fish like barramundi and steaks the size of plates at the Breakfast Creek Hotel. There were no such things in supermarkets in UK in the 1970s.

Many years later, after living for five years in a country town high on the New England Tableland, where it was so cold in winter it actually snowed and frost used to blow the paint and sandbagging finish off my garden wall (when I was selling the house I would be up early every morning repairing the damage before any prospective buyers came), when I was offered a job in Scotland, at St Andrews University, I thought that I would be well-prepared for it: after all I had lived somewhere most Australians regarded as pretty cold. Nothing could have prepared for the chill of the Scottish climate. It was not just the winters – which went on for months and months getting up in the dark and coming home from work in the dark; it was also the summers. They have this habit at St Andrews of interviewing people for senior jobs in May. May is the only good month in the calendar: before that it is too cold and wet; after that, as summer warms up the sea surrounding the East Neuk of Fife, a dank, bone-chilling sea mist creeps up and envelops the land and all on it in a dripping misery-making shroud. That is why they interview in May: it is sunny, not too cold, rarely rains much. Before you take a job overseas check out the climate all year round – that is my advice.

What techniques should be adopted to enhance engagement with the relocation process?

Read as many novels about the place as possible before moving; read anthropological and sociological studies; watch any movies set there. Use the Web and Google information; always put it in context. When I moved to Scotland the salary looked good; when I factored in the costs of heating a house with central heating and paying twice as much for food, drink, petrol, restaurant meals, etc. I had less disposable income than I had on less money in Australia. A straight transfer of income from one currency to another is no guide to how far the money goes: during the winter I was paying hundreds of pounds a month to try and keep the family warm. Our sons would sit swathed in Doonas and wearing beanies and gloves with their backs against the radiators and still be cold! Always consider context.

In your opinion what is the single most serious concern facing corporate real estate today? Do you think this/these concerns will remain during 2009 or can you envisage the concerns changing as fast as the bad news announcements regarding the global economy?

Obviously it is the non-liquidity of credit. It will remain during 2009 and will last into 2010, possibly beyond. I doubt that we will ever see a return of the unregulated irrational exuberance of the recent past.

Given the current economic climate, what role can the CRE strategy play in attracting and retaining employees?

There will be great uncertainty attached to all new hires and relocations. Who wants to risk investing in real estate in the current climate? Companies and organizations will need to develop either housing subsidy packages over the longer term – much more than the usual month or so for settling in – or will have to become property holders to provide housing as a part of the package at a percentage rate of salary.

Only under these conditions, where the uncertainty of a highly depressed and difficult to forecast market clouds judgements most conservatively, so people will not want to take the risk of moving, is it likely that fluidity will re-emerge. If liquidity is institutionally short the organizations that have an interest in hiring and moving staff will have to step in. CRE will have to think about not just the office but also the home.

At a time where many employees may be worried about job security, how can space be used to enhance their health and wellbeing?

Creating desirable, sustainable and healthy spaces in which to function is a way of communicating that this is a company that cares about the impact it makes: on the local environment, on employees, and on the built environment.

How can the corporate real estate solution impact on organizational culture?

Markus and Cameron analysed the organization of the Glasgow Homoeopathic Hospitals in 1999 in a seminal contribution that emphasised the importance of the spatial arrangements of organizations in relation to a strategic goal – in this case, to be an alternative hospital. The outline brief emphasised natural resources, self-caring patients, therapeutic community, whole person care, holistic interpretation with orthodox care, understanding health and well-being, as well as issues of patient comfort. The building should embody, reflect, and trigger these values. The different organization of the hospital required a different organization of space. Self-caring patients and the establishment of a therapeutical community required “access of patients to a knowledge base, both about their own case and what is generally known about their condition and treatment” (Markus and Cameron, 2002, p. 58). They were aware that without challenging taken for granted divisions in and of space, attempting change of an organization’s tasks, processes and objectives seemed less likely to succeed. The successful enactment of the proposed homeopathic hospital strategy was regarded as a precondition for a fundamental reorganization of the spatial structure. Otherwise the idealistically formulated vision in the brief would merely reflect the gap between ideas and actions, embodying rational discourse as mere myth and ceremony, disguising mundane and mediocre realities. In fact, the brief used language “in a rhetorical and imaginatively innovatory way in the general discourse but was not seen as an instrument for change in the creation of categories and classification” (Markus and Cameron, 2002, p. 58). These categories proved to be conventional, hierarchically grouped, and subdivided. The plan established six different categories (staff, patients, activities/processes, objects, administration, kitchen, such that “the radical, boundary-breaking aspirations of the general discourse” were hardly reflected (Markus and Cameron, 2002, p. 57). It was an instance of organizational metaphors framing the conception of architectural space.

Markus and Cameron (2002) also researched the headquarters of Scandinavian Airlines System (SAS) built near Stockholm in 1987 to illuminate the limits of design seeking to realize rationally planned change. The SAS CEO emphasised the importance and significance of the new building, saying “Good ideas spring from impromptu meetings […] (the new building is designed to generate) good ideas (which are) rarely created when you’re sitting at your desk alone and tense, but during creative encounters between human beings” (Markus and Cameron, 2002, p. 59). In his vision, the new building would contribute to “something of a cultural revolution,” triggering openness, creativity, teamwork, leading to a “buzz of conversation between people who meet on their way to work” (Markus and Cameron, 2002, p. 59). In planning the building the whole environment was integrated into the plans seeking to enable “growth as complete human beings – socially and privately and not only as workers” (Markus and Cameron, 2002, p. 60). Here the CEO spoke a language of radical creativity, aware that a conservative taxonomy could hinder realisation of challenging ideas and that the functional language of management can obstruct reorganization of the spatial structure.

A new discourse of office design has been established. Joroff et al. (2001, p. 21) argue in their manifesto for the “agile workplace” which “requires us to see […] work in new ways. Typically, work is seen in limited ways: by functional categories such as accounting or marketing […] [t]hese parameters are routine and static”. The new discourse of office design sought to overcome routine and static parameters. How successful was it? 1993 Grajewski investigated whether creative interaction, encounters and teamwork were actually achieved by the new office design discourse (Markus and Cameron, 2002, p. 60). Using Hillier’s method (1996) he found that 64 percent of all interactions happened in individual offices, and not, as intended by the planners, in the multi-rooms, café shops and meeting rooms. The findings suggest that both spaces with some enclosure and open plan spaces “could be either interactive or non-interactive; what determined the outcome was the spatial integration or segregation, within the block or the whole building, of the specific workplace itself, not its type – as labelled and designed” (Markus and Cameron, 2002, p. 61) “The classification of a layout into one of these types does not necessarily describe either its spatial characteristics or its use patterns” (Grajewski, quoted in Markus and Cameron, 2002, p. 61).

Allen (1977, p. 248) focused on “interaction-promoting facilities”. In interaction-promoting rooms, such as washrooms, copying machines, cafeterias, laboratories, libraries, supply rooms, and conference rooms, unintended communication can happen. Architecturally, the general idea behind these designs is to create reasons for the movement of people between different subsystems and departments on the premise that the “traffic pattern in any building certainly has a direct effect on communication” (Allen, 1977, p. 248). One way to counter undesired physical separation is “to locate a specific facility (such as washroom or a laboratory) in such a way that it is shared by two groups whose physical separation might otherwise inhibit communication” (Allen, 1977, p. 249). The underlying idea is that contact and communication with (potential) discussion partners is the “prime vehicle for transmitting ideas, concepts, and other information necessary for ensuring effective work performance” (Allen, 1977, p. 269). Allen crystallizes this idea around the concept of the “nonterritorial office”:

Under this concept, not only are all office walls removed, but most desks and other permanent stations are eliminated as well. There remains but one permanent station, occupied by a “central communicator” who handles incoming and outgoing mails, assists visitors, and operates a switchboard directing calls to the telephone nearest the recipient of a call. All work is performed at laboratory benches and large round tables, and an individual may choose to work anywhere that suits him in the area or that is convenient (Allen, 1977, p. 270).

Lars Spruybroek and NOX Architects (Amsterdam) designed the V2 Lab. First, they mapped desired movements in the building, looking for existing repetition in movement. Then they mapped “all that is in tension, all possible movement” (Spruybroek, 2000, p. 171). Rather than keeping events apart they connected them in different (virtual) ways. In the diagram points become the intersection of lines (knots) and lines took on the form of waves and created zones of transformation and intensification (plateaus). Spruybroek used the example of merging floor and office space to create opportunities for people to lie down between table and corridor, drink their tea in the afternoon, or walk up and down while speaking with a colleague. Following Hillier (1996, p. 54) we see such architecture as “taking into reflective thought […] the non-discursive, or configurational, aspects of space and forms in buildings.”

What strengths do you feel a CRE leader needs to have on a day to day basis and within the executive boardroom – particularly within this current economic climate?

A capacity to resist arguments that stress the immediate bottom line and an ability to communicate longer term value propositions that will build strength after the recession.

According to a recent article, “Corporate real estate plays an important but poorly recognized role in organizational competitiveness”. Can you comment on this?

When one designs a building, potential problems necessarily arise: people between whom there seems to be no current, rational reason for communication will be separated, while people who are thought to share a common understanding will be located within an interactive space. There may even be steps taken to minimize intrusion of apparently unrelated groups and to minimize the need for movement on the part of staff by making sure that all facilities required for work are conveniently located. These, and many other efforts, would be “reasonable steps to take in order to produce a rational and efficient building plan” (Hillier, 1996, p. 270). Such an efficient building would increases certain, pre-formulated areas of knowledge by controlling for randomness but the boundaries of its knowledge will seldom be challenged or broken. In contrast, losing control a little requires cross-boundary and sometimes boundary-blurring communication and, in this sense, it seems that the spatial organization of a building is actively involved in the creation of new power/knowledge relations.

Creative architecture must balance “predictability and randomness”. Completely ordered or completely chaotic systems have difficulty evolving, improving or progressing. “By contrast, a system pushed far-from-equilibrium to the boundary between order and chaos – to that crucial phase transition – is rich in possibilities” (Jencks 1997, p. 85). For Jencks (1997, p. 168) architecture happens at the edge of chaos because a:

[…] too-simple order is boring, and overly-connected building is too complicated, so one looks for an upper mean of connections. The conjunction is not “New Age” – “connect, always connect everything” – nor traditional – “order out of chaos”; but rather “higher organization out of order and chaos” (Serres, 1982).

Such a conception of a building exists as a point of reference; a theory of order defined not only by the uses it enables but also the organization that occurs in it, as well as by the material form it presents and represents (Tschumi, 1995, p. 82).

Hillier (1996) investigated the creativity of two research labs that differed in terms of their spatial structure and effects:

[…] weak ties generated by buildings may be critical because they tend to be with people that one does not know one needs to talk to. They are, then, more likely to break the boundaries of the existing state of knowledge represented by individual research projects, organizational subdivisions, and localism (Hillier, 1996, p. 264).

The creation of positive power requires randomness that can be actively encouraged by architectural design. The major task becomes “[h]ow to combine the protection of the solitary with the natural generation of more randomised co-presence with others – the need for which seems to grow the more the objectives of research are unknown” (Hillier, 1996, p. 265). The architectural output of such a complex combination is what Hillier (1996) calls a “generative building”. Generative buildings feed creativity, imagination and innovation.

From a CRE perspective, what is the best approach to organizational redesign?

Broad consultation, inputs from the margins, a comprehensive user survey, visual presentations and mock-ups, a commitment to modelling values into the fabric of the building that represent the values of the organization: hopefully, inclusiveness, transparency, and egalitarianism – because these kinds of environments are incubators for creativity and ideas.