Airlines want to be safe, friendly, and profitable. Maybe not
in that order, but all three are important.
Luxury brands in cars, clothes, bags, and watches all want to be
exclusive and high-selling. Both at once, of course. These combinations involve
conflict among different goals, which means that at some level there has to be
a compromise. Saying that compromise is needed is not enough to understand it.
How and when will United Airlines make a compromise between friendly and
profitable without, for example, compromising the friendly part? And how does
Rolex make a compromise between exclusivity and high sales?
The answers to these questions involve both a final outcome
and a process of reaching a compromise. Now we know more about the process,
thanks to a paper in Administrative Science Quarterly by Carlo Salvato and Claus Rerup. They look at product development in Alessi, the Italian company
making all those household items that either you or someone you know has
purchased. They make products with great designs that are inexpensive relative
to the price of many comparable products, and at least in principle it is
pretty easy for other makers to produce legal (or illegal) variations of them.
How does Alessi combine the goals of artistic design and
effective manufacturing? We can see the results – egg holders, for example,
that are wonderfully playful and well designed but obviously inexpensively
produced. The process is harder to see, and that is exactly why some firms like
Alessi can put these goals (and products) together very well, but most
competitors cannot. The process involves three steps, which function to blend
goals and routines in a way that creates a balance between them. First,
splicing means connecting routines associated with different goals – like
bringing a visionary designer in contact with how things are made. Second,
activating means using routines that make people take each goal into account
and consider how they can be balanced. Third, repressing means using routines
that simplify tasks that benefit some goals while drawing people away from
other goals.
Splicing, activating, and repressing are actions that can be
taken any time, one by one or in combination. That is not the way to create
consistency in how an organization puts things together, however, because if
they are done through improvisation the results will differ every time. That is
exactly why routines are involved in splicing, activating, and repressing, because
routines mean that the same or similar results can be expected every time.
Managers can help design and redesign the routines so that employees handle
goal conflicts well.
The results are easy to appreciate. Alessi is consistent in
how they do things, which means that every new product is an artistic surprise,
but we know it will be economically made too. United Airlines is inconsistent,
so flights don’t always avoid dragging passengers off, nor do they always
involve passenger dragging (fortunately). We all understand that conflicting
goals involve compromises. As long as
the compromises are consistent, we know what we are getting and can make
informed choices. In the long run, the consistency is more important than the
goal resolution itself.
