In Search of the New World (of Work)

At age 63, Pat Anderson was still showing up for work every morning. So one day, when she failed to show up by 11 a.m., Boots grew concerned. Later in the day, Boots found her mother at home, dead from lung disease. At the wake, two musicians who had day jobs at Half Price Books sang a country-and-western tribute to their former employer: "If she were here today/She'd raise her glass and say/'Cut the bullshit' and 'Carry on'/I wish that I could stay."

Pat Anderson was years ahead of her time. She recognized, to a degree that few others did, that a business must create benefits that radiate outward and into society. The benefits of her business: saving a few trees and spreading around a lot of books. She recognized that every business needs an organizing principle -- and the simpler the principle, the better. Her organizing principle: providing a source of livelihood and career growth for friends and family. Finally, she recognized that management required tracking information rather than controlling people -- and that the more playful people were, the better her business would do.

And that's it. That is the entire sum and substance of the "strategic planning" that created Half Price Books, the leading U.S. firm of its kind. Anderson's methodology -- or rather, her lack of methodology -- is more apt today than ever. Obviously, people still plan their days, they plan for the change of seasons, they even plan their planning. But these days, there's too much happening in the present to justify devoting very many resources to the future. Play -- the spontaneous exploration of the present -- is now taking its place alongside planning as a vital element of corporate strategy. It may even be the more vital of the two.

Credit Where Credit Is Due

Control is anathema to exploration, which often flourishes far from the center of an organization -- in an outlying division, during the graveyard shift, at an overseas operation. So it is with all living systems: Evolution is most rapid on the periphery of a niche. Innovation tends to occur at the fringes of a system, because that's where people have the most space in which to explore new possibilities. Innovation requires not only freedom but also safety -- the kind of sanctioned failure that large organizations have historically been unwilling to provide. But some are beginning to. Consider, for instance, the transformation of Mercedes-Benz Credit Corp. (MBCC) and the story of a leader named Georg Bauer. A native of Germany's Bavarian region, the son of a Bürgermeister (town mayor), Bauer grew up loving music and art. But he also breezed through business studies and through apprenticeships in finance. In the early 1970s, that record of stellar performance won Bauer a position in the Stuttgart office of Citibank. Practically from day one, he had lending approval well into the six figures -- a degree of authority that it would have taken him 8 to 10 years to earn at a German bank.

Bauer drew the notice of Stuttgart's leading business, the venerated and conservative Daimler-Benz AG, maker of Mercedes-Benz automobiles. Bauer was nervous about joining this hidebound behemoth, but join it he did. The company put him on a fast track and eventually sent him to Portland, Oregon, home of Freightliner, a major truck manufacturer that Daimler-Benz had just purchased. Bauer's U.S. years were glorious, exposing him to the glimmerings of a new, postindustrial age in management. Though still oriented toward command-and-control principles, American management was using methods that were practically anarchic compared with those that held sway in Germany. Eventually, in 1992, Bauer became president of MBCC, a Daimler-Benz subsidiary headquartered in Norwalk, Connecticut, with 500 employees and a portfolio of $9 billion in vehicle loans.

By all outward appearances, nothing in Norwalk needed fixing. The operation had enjoyed years of solid growth: By 1992, it provided financing on about 60% of all Mercedes-Benz cars that were sold and financed in North America. Employees could not imagine that their new president would tamper with such success. Yet not only was Bauer eager to experiment with change -- he actually saw the need for it. He was convinced that Daimler-Benz and other big automakers would one day have to cut back on the generous financing subsidies that they provided to car buyers. Such a move would thrust MBCC onto a level playing field with every bank and credit union in North America. To compete effectively, the company would have to cut costs while improving customer service. Such change, Bauer reasoned, required tearing the organization apart and reassembling it. But what, employees wanted to know, would the new organization look like? He couldn't tell them. They would have to reinvent MBCC through trial and error.