Gorbachev as CEO Roadkill: Lessons for the Modern Corporation from the Soviet Foreign Policy Establishment’s Failure to Manage Complexity

Robert M. Cutler

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Gorbachev as CEO Roadkill: Lessons for the Modern Corporation from the Soviet Foreign Policy Establishment’s Failure to Manage Complexity

[0. Introductory Remarks]

Western specialists on the Soviet Union during the Cold War encountered, without realizing it, many issues under current discussion in management science. Those issues presented themselves as problems in understanding the cognitive aspects and organizational development of the Soviet political system. Indeed, the first major political interpretation of the post-Stalin Soviet system (Meyer, 1965) literally characterized it as “USSR, Inc.,” in order to make the point that it was organized as a large bureaucratic institution. The political disintegration of the USSR can be regarded as a failure by the Soviet system to adapt successfully to demands from increasingly complex international and domestic environments. As such, there is direct relevance to the situation encountered by managers in complex bureaucracies today.

In a nutshell, the organizations in the Soviet foreign policy establishment auto-complexified in response to the increasingly complex global environment. By the time Gorbachev finally accelerated changes in Soviet foreign policy doctrine, the complex multiplica-

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tion of political resources and incentive structures in Soviet society had already made that society effectively part of the global environment external to the Soviet political system. Consequently, the constituent parts of the USSR self-organized their own foreign policies independent of Moscow (Matlock, 1995). In the end, what impeded Soviet foreign policy adaptation was pre-existing doctrinal constraint upon organizational cognition and interest-articulation. People were not allowed to say they saw things that, according to the doctrine, were not permitted to exist; even the ideology could not be modified enough (Remington, 1985). That is why, for example, to discuss the nationalities questions in the late 1980s, it was necessary in the USSR to invent a whole new language with new analytical terms having meanings that the previous rules of discourse did not permit to be recognized. The Soviet system imploded and collapsed due to accumulated structural inertia, under the force of being required to deal with too much cognitive change, and consequent organizational chaos, too fast.

This collapse holds lessons in this collapse for the modern North American corporation. Most prominent among these lessons are strategies for dealing with the tension of stress and its duration. With this in mind, it is easy for an organizational observer to find analogies between the Gorbachev era of Soviet politics on the one hand and, on the other hand: IBM’s failure to exploit the personal computer, American auto manufacturers’ inability to deal with changing markets, Apple’s failure to develop its market niche, Microsoft’s initial response to the Internet, and even the quick demise of “New Coke.” All such analogies are based on the presence of cognitive dissonance between different organizational levels: what management understands as “fact” may mean little to the folk in the field, and vice versa.

The Soviets had some awareness of this cognitive dissonance. Under Khrushchev in the late 1950s, the Party’s Central Committee sent fact-finding propaganda groups into the regions to find out exactly what was happening on the ground (Hoffmann, 1968). At first, these fact-finding missions talked only with the local officials and administrators. Only a few years later, in the early 1960s, did Moscow realize that this was insufficient and sent such groups back out into the field to see what was really happening. When Khrushchev was overthrown in 1964, his successors redirected these developments in organizational feedback and denied scarce political resources to those interesting in “framing” the new information with the help of new ideas. The resulting failure of the central control mechanism of the system, to receive and properly interpret feedback, meant that the system was increasingly fallible and unable to respond to demands emanating from the society at

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large. The latter thus became radically divorced from communications with the “elite,” and this ultimately led to collapse.

The Soviets had some awareness of this cognitive dissonance. Under Khrushchev in the late 1950s, the Party’s Central Committee sent fact-finding propaganda groups into the regions to find out exactly what was happening on the ground (Hoffmann, 1968). At first, these fact-finding missions talked only with the local officials and administrators. Only a few years later, in the early 1960s, did Moscow realize that this was insufficient and sent such groups back out into the field to see what was really happening. When Khrushchev was overthrown in 1964, his successors redirected these developments in organizational feedback and denied scarce political resources to those interesting in “framing” the new information with the help of new ideas. The resulting failure of the central control mechanism of the system, to receive and properly interpret feedback, meant that the system was increasingly fallible and unable to respond to demands emanating from the society at large. The latter thus became radically divorced from communications with the “elite,” and this ultimately led to collapse.

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Dr. Robert M. Cutler [ website — email ] was educated at MIT and The University of Michigan, where he earned a Ph.D. in Political Science, and has specialized and consulted in the international affairs of Europe, Russia, and Eurasia since the late 1970s. He has held research and teaching positions at major universities in the United States, Canada, France, Switzerland, and Russia, and contributed to leading policy reviews and academic journals as well as the print and electronic mass media in three languages.

 
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