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The lamplighter CEO.

The only sustainable edge for a corporation is the energy and cleverness of its people. To tap that, a chief executive must craft a vision, empower employees, encourage teamwork, and kindle the competitive fires.

Among the most critical issues I face as president and CEO of Hallmark Cards is how to best put to use the company's human resources--our most valuable asset.

In seeking to devise a focused HR strategy, I have no shortcuts to success. But in general, I believe we as CEOs must move our companies away from the hierarchical, command-and-control management style that has long characterized American business and toward a model based on teamwork, communication, flexibility, and employee empowerment.

Our resolve and success in completing such a transformation will enhance not only our ability as businesses to achieve and sustain high performance, but also the competitive position and social well-being of the U.S. Simply put, CEOs who meet the human resources challenge head-on will light lamps that provide illumination well beyond the corporate world.

Adam Smith, in his landmark 1776 work, "The Wealth of Nations," described what, at the time, was considered the best means of achieving and sustaining a high performance organization. He focused on the manufacture of sewing pins and described how, by breaking down processes into different, focused tasks, factories could increase their output exponentially. Under this so-called "division of labor" model, employees were paid to follow directions. Creative thinking--when it existed at all--was the responsibility of those at the top.

The Industrial Revolution spawned this kind of functional/hierarchical system, in which workers were extensions of machines and empowerment was anathema. Iron-fisted management worked brilliantly for a long while: General Motors and other giant companies perfected the approach. But as America's advantages eroded in an increasingly fast-paced, borderless, global marketplace, our models began to crumble. We began to talk about viewing employees as a valued company resource and about initiating a radical retooling of business processes.

Hallmark is in the midst of such a transformation, and our experience, I suspect, is rather typical. Three stages mark our development as a company, each characterized by a different view of the "human factor."


Hallmark began in 1910 with the vision of a young entrepreneur named Joyce Hall. Offering only one product--the greeting card--Hall helped create an entire industry. The small company grew to meet exploding demand. Its organizational approach was both paternalistic and autocratic: "We know what's best; do as you're told; you'll be well-taken care of."

The second phase found Hallmark again strapped to a growth rocket--this time the card shop concept. The Hallmark card shop became the place to find great variety and depth of product. Growth accelerated at such a pace that systems and focused functional disciplines became a necessity. Functional silos were firmly set in place.

We now enter a third phase. The velocity of change in consumers' tastes has quickened; the locations at which people shop and the time available for shopping are different; competition is sharper; and technology offers new avenues of communication. These changes necessitated a response.

Simply put, we decided we must tap our "people power" more effectively.

While transformation is admittedly difficult, and while success is by no means guaranteed, the prerequisites for change are precise. These include the development of a shared vision, not an individual one. This vision must be grounded in a thoughtful, long-term strategy. (In Hallmark's first two phases, strategy was unimportant; only execution mattered.) It must be linked to our strategy, and that requires an open and honest dialogue among employees as we grapple with rapidly changing and ever more complex issues.


During Hallmark's transformation, we are shifting our focus from particular functions to the broader organizational mosaic; from linear thinking to intuitive thinking; from assembly line hand-offs to concurrent development; from specialization to an interdisciplinary approach; from career elevators and functional silos to the lateral movement and broad-gauged development of employees.

The "before-and-after" aspects of our transition are perhaps best illustrated by a comparison between football and basketball.

Football tends to be hierarchical and autocratic. The coach is in charge; the team does what it is told. The game plan is pre-established and rarely varies. Execution always carries the day in football.

Basketball more nearly reflects Peter Senge's learning organization. A game plan is impractical, and innovation is necessary as play unfolds. Thus, the coach cannot dominate decisions. Players must adjust as a unit. Consistent communications, flexibility, and versatility are critical.

Indeed, the same holds true in the corporate arena: As Peter Senge at M.I.T. has observed, these days being a learning organization is probably the only sustainable competitive advantage.

In a learning organization, as with a successful basketball team, all employees or players must be involved as a company develops a culture of inclusiveness.

But involvement cannot be achieved without individual freedom--a quality hard to come by in a hierarchical system.

It is important to recognize that this transformation in the workplace is part of a larger societal phenomenon.

Social historian Riane Eisler suggests that societies around our globe are gradually transforming from a dominator model to a partnership model.

The dominator social model has been the norm through most of recorded history; it places one half of humanity over the other. Force and power are to used to maintain superiority of position. It is a societal system marked by violence, authoritarianism, and ethnic conflict. Communist China comes to mind.

The partnership model, in contrast, is based on the principle of linkage. In a partnership society, diversity is not equated with either inferiority or superiority. It is equated with opportunity. Nurturing is emphasized over aggression. The European Community at least seeks this kind of union.

Eisler suggests that all the post-Enlightenment movements for social justice--from the abolition of slavery to the women's movement to the ecology movement--reflect such a partnership thrust.

And so there is a convincing argument to be made that the way we design our societies and our institutions will inevitably reflect particular views of human nature.

One of the great chapters in literature is a fable called "The Grand Inquisitor" from "The Brothers Karamazov." In it, Russian novelist Fyodor Dostoyevski painted a brilliant picture of the rationale for authoritarianism.

The fable's protagonist is an elderly cardinal in the Roman Catholic Church and a leader of the Spanish Inquisition. He is a man who holds absolute authority in matters of both church and state--a man who has authorized the burning at the stake of hundreds of heretics. One day in Seville, Christ returns to Earth in human form. Not surprisingly, he creates a stir and is ordered jailed, because the Grand Inquisitor fears he will upset the tranquility established by the church.

Late that night, the cardinal visits Christ in his cell. He explains that God made a major miscalculation in giving mankind free will. Freedom, he maintains, is a "fearful burden," a burden most humans would gladly give up for security, bread, and a simple, reassuring system of belief. The church provides all these benefits, and the people compliantly give up their independence as a gesture of their appreciation. A powerful hierarchy, the clergyman concludes, is all that is needed to keep the sheep contented.

The Grand Inquisitor would have admired Adam Smith's pin factory.

Contrast this view of human nature with that found in Genesis--where human beings are created in the image of God and entrusted with the stewardship of the Earth. The Declaration of Independence flows directly from that account of creation: "All men are created equal...they are endowed by their Creator with certain inalienable rights...among these are Life, Liberty, and (wondrous concept) the pursuit of Happiness." The Declaration's author, Thomas Jefferson, also wrote: "I know of no safe depository of the ultimate powers of society but the people themselves, and if we think them not enlightened enough to exercise their control with wholesome direction, the remedy is not to take it from them, but to inform their discretion."

While the Grand Inquisitor sees people as simple souls who long to be controlled, Jefferson sees them as beings endowed with the capacity for self-rule and creativity. Certainly, the two would have run very different kinds of companies. Jefferson would have championed the creation of a learning organization. But even for a founding father, achieving such a transformation might have proved a difficult task.


Anyone who has spent time around young children knows it is their nature to learn, to create, and to seek meaning. Yet somehow, by the time individuals join the work force, these impulses have been successfully suppressed. We are rarely able to reignite that flame--in some cases, we seem to do our best to douse it--and generally, the search for meaning and creative growth must find its object outside the workplace.

But what if the corporation could liberate those basic human impulses? What if it were a place where human beings could learn and create? What if they could find there a mission that meshed with their deepest desires?

As Bill O'Brien, CEO of Hanover Insurance, has said, "The ferment in management will continue until we build organizations that are more consistent with man's higher aspirations beyond food, shelter, and belonging." The partnership model could help to build such organizations.

Transitions are never easy. Ironically, those that hand people more autonomy can be particularly tough. Witness what is happening in the former Soviet Republics and Eastern Europe. Witness IBM, DEC, Salomon Brothers. Initially, change breeds ambiguity. Ambiguity breeds anxiety.

The corporate world is awash in transformational ideas, but this jargon is extremely risky if it is not anchored. It will only add to the anxiety if it is not based on the right assumptions and an organizational structure that logically and convincingly flows from these assumptions.

This brings us to the roles of the CEO and HR professionals in deploying human resources.


A CEO has many responsibilities, but the primary ones are to provide vision, to motivate all employees, and to develop leaders.

Vision is a galvanizing conception of the future. It is a statement of intent about where the company wants to be. Yet it means little unless it is embraced by employees.

Soon after the completion of Disney World, someone said, "Isn't it too bad Walt Disney didn't live to see this." Mike Vance, creative director of Walt Disney Studios, replied, "He did see it--that's why it's here." But it is also there because hundreds of other Disney employees shared that vision--it became their vision as well.

Similarly, People's Express began in 1980 with a vision. The new airline aimed to become the "Ford of the Skies" and to bring air travel within reach of ordinary people. That meant providing the lowest fares and friendly, efficient, no-frills service.

The company's mission statement was underpinned by a host of innovative human resource policies that have since been adopted by many other firms--team management, universal stock ownership, and a flattened organization. At first, the airline was enormously successful. By 1982, People's Express had more departures from New York airports than any other carrier. Morale was high. But the hiring and training of employees didn't keep pace; soon one-quarter of the staff was temporary help. As a result, customer service went into a tailspin. The original vision became blurred. The definition of victory was not clear. The company eventually collapsed.

Another CEO priority is to motivate employees. As Harvard University's John Kotter defines it, "Leadership is that ageless process of deciding where a group of people should go, of getting them lined up in that direction and committed to movement, and then of energizing them to overcome the inevitable obstacles they will encounter along the way." To do that requires communication--open, frequent, and flowing both from the top down and the bottom up. It is the responsibility of the CEO not just to listen to and communicate with employees, but to foster an environment in which everyone else does the same.

Finally, the CEO must develop leaders--a responsibility shared with the human resources staff. At Hallmark, we have created a Leadership Development Institute. An extension of our HR division, it offers different programs for different stages in employees' careers. It is used as a vehicle of communication about visions and values, and as a way to elicit creative thinking about strategic issues.

It is essential that the human resources department be a full partner in the process of renewal. Senior HR personnel must understand what it takes to reduce cycle time and to develop products concurrently, rather than sequentially. They must understand the implications of using technology to bring the company closer to its customers. And perhaps most importantly, they must understand the impact of change on the people who are investing their lives in the process of transforming an organization.

Hallmark has addressed these needs by decentralizing our human resources function and by making HR a partner in the process redesign of our core business. In addition, the head of Human Resources reports directly to me, sits on our Strategic Development and Planning Committee, and attends all meetings of the Office of the Chief Executive.


Empowerment is seldom easy, and it always raises a host of tough questions: How do you set up interdisciplinary teams and provide for succession, performance evaluation, and compensation? How do you encourage people to experiment if such experimentation may result in the disappearance of their jobs? Finding workable answers to these questions is essential for optimum corporate performance, and certainly, high performance is essential to survival. But these answers also help to define corporate purpose--a purpose, ideally, that looks beyond the bottom line to the good of society as a whole.

I will conclude with an anecdote about the lamplighter in a small, rural village in England. As dusk came on, the lamplighter would appear with his ladder, climbing the lampposts one by one and proceeding down the street. People in the village could always chart the direction of the lamplighter by following the trail of lamps he had lit.

As CEOs, we, too, must clearly mark our path. We must deploy our human resources effectively, embrace change, and confront the wrenching strategic and cultural adjustment it precipitates.

In short, I suggest, we must become modern-day lamplighters.

Irvine O. Hockaday Jr. is president and chief executive of Hallmark Cards, a $3 billion publisher of greeting cards and related products.
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Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Human Resources
Author:Hockaday, Irvine O., Jr.
Publication:Chief Executive (U.S.)
Date:Mar 1, 1993
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