A tribute to Alfred Chandler

Lessons from a Great Thinker

by Margaret Heffernan

(Fast Company) A master at recognizing patterns and avoiding reductive career structures, Alfred Chandler ensured his business success by recognizing that you can’t understand a business by simplifying it -- you have to master its complexity.

Last month, a great man died: Alfred Chandler. Aged 89, his passing didn't cause much of a stir, but it should have. Because like all great thinkers, Chandler set himself a huge question and devoted himself to exploring it. For Chandler, the question of our age was: how do businesses work? What are the relationships between the times, the technologies and the people that make corporations dynamic and self-sustaining?

A former professor of business history at Harvard Business School, Chandler tended to study the titans of the American economy -- General Motors, Dupont, Standard Oil and Sears -- but the lessons he extracted from those studies could be, and were, applied to businesses around the world. One business leader compared The Visible Hand to The Decline and Fall of the Roman Empire. Chandler's book had shown him everything about how organizations succeed or fail.

I met Chandler socially on a number of occasions and was always struck by two things. First was his immense youthfulness. His most recent book came out in 2005, at the age of 87, and he died in the midst of the next. He must have been eighty when we first met and yet he was the liveliest, best informed, most provocative conversationalist I can remember. Installing himself in a comfy seat, hubbub always formed around him; parties went into full swing when Chandler was there. And that was because of his second quality: curiosity. He wanted to know about everything from everyone. The people gathered around him weren't just business people; he befriended writers, musicians, artists, scientists, anyone with a lively mind. He understood that, at a certain level, you can't understand business by simplifying it. You have to master its complexity. It was no accident that he was married to an artist.

Chandler did what great thinkers do -- which, it turns out, is what great business leaders do too. When studies of thousands of top executives at companies around the world were analyzed, only one cognitive ability alone distinguished star performers. It wasn't technical expertise, schooling or IQ. It was pattern recognition, the big picture thinking that allowed leaders to pick out meaningful trends and to think far into the future.

Chandler was an ace pattern recognizer -- starting with his time in the Navy during World War II, when his job was analyzing aerial photographs of Japanese and German territory before and after bombing raids. He did as a young man what he would do for the rest of his life, and what, I would argue, all business leaders must do: survey the terrain, identify significant changes and figure out what they mean.

This is the most important thing that CEOs do and is almost always what spurs entrepreneurs into action. Business success is all about identifying patterns -- in product development, consumer tastes and social trends. To perform pattern recognition at a high level, you need to be curious, and you need to know a very wide range of people who are curious too. You can't know everything yourself, so you have to know a lot of people who know a lot. You have to place yourself in the midst of the hubbub.

Business failures occur when that pattern recognition stops, when business leaders fall for their own publicity or when the business itself becomes too narcissistic -- more concerned with internal politics and processes than with markets and customers. Many of our reductive career structures contribute to these failures. We start as generalists, and then get increasingly specialized until all we know is our area of expertise, and other people in it. We hang out with people just like ourselves who work in our industry, drive cars like ours, live in houses like ours, speak and think like us. The higher we get in the corporation, the more skills we need -- and yet our careers narrow our horizons at each step along the way. This reductivism is just the opposite of what we, and our companies, need.

One trend in leadership development seems to recognize this problem. More and more of the executive leadership conferences at which I speak feature experts and thought leaders from vastly different walks of life. Filmmakers talk about leading teams that must disband the minute work is complete. Religious thinkers discuss the spiritual dimensions of leadership. Scientists explain how to identify, from a sea of problems, those that you are capable of solving today. This is the opposite of old-style reductive thinking. It embraces the complexity of the business world and seeks to develop the talents to master it, not deny it. It stimulates the curiosity and enrichment true business leaders crave.

So what does that mean for individual careers? I think it means that the best employee, like the best leader, must at once be both narrow and deep. There's no substitute for knowing your business inside and out. But context is crucial and your ability to read the world around you is no longer an optional extra. This may feel like work has become harder than ever. It has. It's no longer enough to know just your job, to live it and breathe it eighteen hours a day. Now you need to have a life too.

The Center for Creative Leadership found a correlation between excellence at work and commitment to activities outside of work. This often comes as a surprise to corporate executives who think excellence and reductivism come together. But it comes as no surprise to women who've always had to combine a career with outside commitments. It serves as a significant wake up call to men who are just beginning to see fatherhood as a career asset. But Chandler, I suspect, would not have been surprised at all.