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Book Review

Who Really Matters

The Core Group Theory of Power, Privilege, and Success

Currency Doubleday—2003 (277 pages in hardback)

Author–Art Kleiner

ISBN 0-385-48448-8

Jim Collins, author of Good to Great and co-author of Built To Last, says, “Art Kleiner has uncovered a central truth about the way organizations work.” Every decision, such as who gets the promotion or how to spend money, is affected by the perceived wants and needs of a group of people who are the genuine heart of an organization. This group, called the Core Group, is usually made up of most, but not all, of the people at the top of the organization chart. It may also include others. A Core Group might be huge, or it might be small. But be sure, if you have an organization, you will have a Core Group.

A Core Group guides and controls the organization. Core Groups are informal networks of key people who set the direction of the organization. Only rarely will a secretary or aide rise to the level of Core Group member. Usually they stand as gatekeepers to the real Core Group members.

The vast majority of employees are outside the Core Group. They make up “employees of mutual consent.” These are people who feel their jobs require them to protect the position and status of the Core Group. The Core Group may consist of tenured faculty, established executives, or whoever the bureaucracy might be. The needs and wants of the Core Group actually come first, despite lip service that “the student comes first” or “the customer comes first.”

In fluid organizations membership in the Core Group shifts from year to year, while in other types of organizations, such as family firms, membership of the Core Group is fixed enough to last for generations. When times get tough, sometimes a Core Group is streamlined, as in the case of “Welchism.” Jack Welch was brought in as CEO of GE in 1981 to turn the organization around. He redefined the Core Group at GE—from a large body of employees with lifelong membership to a very small group of people whose membership is permanently insecure. Those in the new Core Group were expected to have the same brash, hard-driving, energetic personality that Welch himself has.

Occasionally one finds an organization where the chief executive is barely a member of the Core Group. For instance, Art Kleiner points out that in some universities nothing happens without the approval of long-standing tenured faculty members in critical departments. The president or dean has a limited term or limited power, and if he or she tries to change the organization, people simply say yes but ignore the changes. A dean may ask, “What is the difference between a tenured faculty member and a terrorist? You can negotiate with a terrorist.”

In rare cases, such as Southwest Airlines, Scientific Applications (SAIG), Toyota, or St. Lukes Advertising Agency in London, an organization may have an expanded Core Group, where everyone’s welfare and development is one of the entire organization’s priorities. However, an “Expanded-Core Group” organization is difficult to create and maintain. This is because it must continually refine and expand the financial and learning-and-development structures, trying to make them more transparent and inclusive.

The author explains why more organizations don’t follow the model of Toyota or Southwest Airlines. It is “because it would require most Core Group members to fundamentally change—not just what they say, but how they think, how they are paid, how they carry themselves, and how they build relationships.” He then points out that most Core Group members have an unconscious vested interest in keeping themselves and their organization going in the same pattern of basic management. They have invested their careers, their habits, their thinking, and their feeling in an organization that maintains its current Core Group form.

Art Kleiner is a talented and seasoned writer. He worked as a collaborator with MIT lecturer Peter Senge, helping him conceive and edit his best seller, The Fifth Discipline. He later collaborated with Senge to produce the follow-up Fifth Discipline Fieldbook series which included The Dance of Change and Schools That Learn. He is a contributing editor at strategy+business magazine and the author of The Age of Heretics, which was a runner-up for the Edgar G. Booz Award for the most innovative business book of 1996. Who Really Matters is destined to be another significant contribution to this body of knowledge!

For more information about Art Kleiner, and a closer look at Who Really Matters, see the Spring 2004 issue of the E-Journal of Organizational Learning and Leadership (www.weleadinlearning.org) to be published in April 2004.

Review by Dr. J. Howard Baker

weLEAD rating - highly recommended

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