Learning to Act Like Janus

Should Janus, the ancient "two-faced" god celebrated by the Romans, be considered the patron of modern management? Janus is typically shown with two faces looking in opposite directions, reflecting the gift of being able to see both into the past and into the future. This ability is what all organizations need in increasingly competitive and turbulent environments. How do small organizations thrive and survive long enough to become large? Small, youthful organizations must inevitably "grow up," professionalize, face cost disciplines, develop formal structures and control systems. Even Google now finds itself facing the need – created by combined effect of shareholder and economic environment – to become more selective in its projects, more careful with its labor costs, and more formal in its structure and processes than in its not long forgotten youth. A significant aspect of uncertainty is negative – it involves threats to the organization such as cost inefficiencies, changing technologies, markets or consumer tastes. To cope with this negative uncertainty, organizations build ever more sophisticated structures and systems to support prediction and control. They build routines and procedures so that their prior experience – the past – can be used to better respond to the next round of threats. For example, uncertainty over the future evolution of core technologies may be met by investments in R&D. However, the choice of where to invest is heavily influenced by the prior history of the organization. In one sense, the formalization of organizations reflects the high art of responding to negative uncertainty. It also represents increasingly sophisticated utilization of historical knowledge. It is the backwards-looking face of Janus, and it serves organizational learning and effectiveness. How do large organizations remain dynamic, and entrepreneurial "elephants learning to dance?" In contrast to the upstarts, many large organizations seek ways to break from the myopia created by their own prior successes, by establishing "skunk works" for innovations, informal "learning communities" and corporate venture capital funds. These firms are interested in being responsive to a positive aspect of uncertainty: opportunities to create value. Entrepreneurs and entrepreneurial organizations respond to this positive form of uncertainty with a different set of skills than those used to respond to negative uncertainty. Rather than emphasize predicting and controlling, they manage a fundamentally unpredictable future world by creating their own. They find partners (lead customers, lead investors, lead suppliers) and together build both product and market. Many significant innovations, from eBay to the mountain bike, to the old favorite the Post-it note, were the result of co-creation by the dynamic interaction of users and producers. In this process, sometimes users and producers even exchange roles – both eBay's clients and early mountain bikers were responsible for important developments in these products. The result is the co-evolution of a product and a market. Entrepreneurs and entrepreneurial firms become masters of co-creation because they reduce their emphasis on prediction, control and appropriation, and increase their emphasis on creation, commitment to the project, and partnership. Those that take this orientation may also develop that Janus-like gift of a vision of the future. Both large firms seeking to be dynamic, and small firms needing to become more formal have to adopt the skill set of the other, while maintaining its strengths: to be both highly effective in exploiting existing know-how and resources (managing negative uncertainties), while simultaneously exploring new opportunities (managing positive uncertainties). This is the Janus-face of today's management.