Smith & Besharov (2017). Bowing before Dual Gods: How Structured Flexibility Sustains Organizational Hybridity

Wendy K. Smith – University of Delaware
Marya L. Besharov – Cornell University (ILR)

Eric Volmar – Stanford University (Management Science & Engineering)
Jason Rathje – Stanford University (Management Science & Engineering)

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Question 1. Your paper has a particularly compelling introduction that includes a personal experience with Digital Divide Data. What was your initial research design when you started researching this DDD in 2000? How did that research design change during your inductive approach? How did you know when you had enough data to make conclusions?

Wendy had known Jeremy Hockenstein for quite some time, and watched with intrigue as he developed DDD in an era in which social enterprises were just starting to take off. What he was doing was bold, novel, and incredibly mission-driven. She was curious to observe this process unfold and learn more. She conducted some interviews and observed the organization to write an HBSP teaching case. As she observed what they were doing and started to talk about this with Marya, we both realized that there was something intriguing here in that DDD’s management frames, practices, structures were counter-intuitive and seemed a bit chaotic, but were really working.

Building on the initial data Wendy collected, the two of us developed a more formal
research design and data collection plan, which included additional interviews and observations. We wanted to understand how DDD was sustaining both its social and business missions over time, when many other social enterprises ended up prioritizing just one mission or became stuck in conflict between missions. Based on Wendy’s initial engagement with the organization, we chose data sources that would provide insight into DDD’s management frames, practices, and structures. As we got into the data collection, we realized that we needed to better understand what had happened in the early years. Jeremy shared with us the full contents of his computer hard drive from DDD’s first five years. The 3,000-plus documents were a bit overwhelming at first, but we are so grateful to Jeremy for sharing them with us, as they contained critical information about early decisions, practices, and relationships and complemented our primary data collection from later years. Jeremy was also extremely open about letting us sit in on board and management meetings and connecting us with board members and staff at all levels of the organization.

We knew we had hit data saturation through the process of creating the case narrative, or “thick description”, which integrated our disparate sources of data. This write-up was over 100 single spaced pages. Putting together the data allowed us to really get a sense of what was unique, interesting, and novel about DDD’s approach to navigating the social and business missions. It further allowed us to see how the different types of data fit together to tell a complete story of how the organization evolved over a period of ten years. As we wrote the case narrative, we saw claims from interviews reinforced by our observational data, and information from the board minutes and Jeremy’s early documents supporting recollections about the early years that surfaced in our interviews. We did a final round of interviews and observation in Cambodia as we were working on the case narrative, and that data further reinforced what we were already seeing. That’s when we knew we had enough data.

Question 2. Your study took place during a fruitful time for hybrid scholarship. From the start of your study, how did your theories co-evolve with the developing literature?

Our experience with any rich data set is that there are usually multiple potential stories in the data that could be situated within a number of different conversations in the literature. We tried on a variety of conceptual frames for the DDD data as the project unfolded. We were both working to develop the conversation about organizational hybridity, and to connect it with ideas from paradox, identity, and institutional theory. Our interest in these areas is probably what drew us to studying DDD, and what drew us to conceptualizing the data in terms of hybridity and paradox. That said, we were mindful of not imposing concepts on the data, but rather allowing them to emerge from the data. To do so, we ran our emerging insights by our informants to get their reactions and make sure that we were appropriately capturing their experiences. We also presented our results to a number of academic audiences along the way, to get feedback about the novelty and robustness of our story. The review process helped us as well – concepts such as identity were initially much more central to the paper and ultimately became somewhat less so as the reviewers helped us to see the data in different ways and draw on additional concepts to more fully convey what was going on in the data.

Question 3. In the paper, you discussed how DDD promoted from within to limit the exodus of home-grown talent. Did you find that new management also had paradoxical framing and dual-institution thought processes as senior managers? Or did they have a distinct, more integrated cognitive framing?

Great question. One of the interesting insights for us was how a paradoxical frame on tensions between the social and business missions spread across senior managers. We saw this frame emerge initially through how Jeremy and the four other founders described the project. Over time, we observed board members and managers adopting this perspective as well. Not all of them entered the organization with this perspective, but those who stayed appeared to pick it up and adopt it. We have less data on the managers promoted from within, but the ones who were promoted to the senior management level appeared to adopt this perspective too. Overall, the data suggest something like Schneider’s Attraction-Selection-Attrition model. People were attracted to DDD because of this complex approach to engaging the social mission and financial demands simultaneously, and those who were promoted from within adopted it as well. We also saw leaders leave the organization who were too focused on either the social mission or the business and not able to see the value of engaging with both simultaneously.

Question 4. One of the unique aspects of DDD is that the commitment to a dual mission seemed to become more entrenched as the organization evolved and grew. Did you find commitment to a dual mission to be a symptom of this hybrid structure, or was it a necessary antecedent?

Jeremy and the co-founders were clearly committed to the dual mission from the start. That was why they founded the organization – to help create better economic futures for the most disadvantaged citizens, and to do so through employment in a financially sustainable business. So in that sense, the commitment to a dual mission came first. At the same time, the process we describe in the paper, of structured flexibility, reinforces and sustains the commitment to dual missions. The guardrails we describe ensure that the interests and perspectives of both the social and business missions are represented, voiced, and upheld, while leaders’ paradoxical frames push them toward strategies and practices that integrate the two missions, despite conflicts between them.

Question 5. Your model builds a new hybrid structure, in which dual, competing institutions act in a firm yet flexible manner (i.e., rubber). If a social entrepreneur were starting a new organization today, would you suggest this newly-discovered structure as a designed management strategy? Why or why not?

We do think that successfully navigating the competing demands between a social and a business mission requires a “firm yet flexible” approach in which decisions frequently oscillate between support for the social mission and support for the business, with this dynamic approach enabled by what we call guardrails and paradoxical frames. This process allows an organization to pursue both missions over time, and to see how each one can reinforce the other. Guardrails – the internal roles, organizational structures, and external stakeholders that focus on each one of the missions – ensure that the organization does not make decisions that over-emphasize one mission to the detriment of the other. But many organizations have “guardrails” that uphold each mission, and they just get into significant, and often paralyzing, conflicts.

What’s different about DDD and the model we develop in the paper is the presence of paradoxical frames alongside guardrails. Leaders who adopt paradoxical frames see the value of both missions and seek synergies between them, even when they appear to be competing. As a result, what would otherwise have been a detrimental conflict is transformed into a productive tension. But just as guardrails on their own are problematic, so too are paradoxical frames. Paradoxical frames emphasize both distinctions and synergies, but sometimes leaders only focus on the synergies. Doing so risks supporting one mission – the one with more power – to the detriment of the other mission. We have also seen organizations where leaders adopt an “either/or” frame. Rather than trying to accommodate social and business missions simultaneously, they feel the need to prioritize one and then focus predominantly on that mission, which generally leads to more conflict, and potentially organizational demise. The conclusion we draw from our analysis of DDD is that the combination of guardrails and paradoxical frames is really critical, and new organizations would be well served by adopting both together, not just one or the other.

Question 6. What do you see as this paper’s implications for government agencies or public companies?

Another great question. DDD is a rather unique case – a social enterprise operating in Southeast Asia that employs severely impoverished individuals in an information technology business. Yet in many ways, the types of challenges and competing demands that DDD faced in pursuing a social mission through a business are simply a more extreme version of the kinds of challenges that all organizations face. Public companies grapple with global consistency and local customization, and seek to innovate and explore new products and services while also exploiting their current operations. Increasingly, they are also expected to consider their social impact not just their financial profitability. Government agencies now face mandates to be efficient from an operational and financial standpoint, while still upholding their public service and regulatory missions. To some extent, every organization has multiple missions and faces competing demands, although they may not always be in tension with one another and one may be more clearly dominant over the other(s) – and in fact this is a topic we have written about in some of our other joint work (Besharov & Smith, 2014).

Seen from this perspective, our insights from studying DDD may be quite relevant for public companies and government agencies. These and other kinds of organizations might be very well served by putting guardrails in place to represent and uphold their different missions, and by developing leaders who can appreciate the combination and potential for synergies amongst those missions, even as they recognize their distinctions and potential points of contradiction. In our teaching and executive education, we are now incorporating these insights about guardrails and paradoxical frames and finding that they resonate, particularly with experienced managers who have spent years grappling with how to balance their organization’s multiple objectives.

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