Founders and entrepreneurs set the tone as they form their new organizations, so leaders clearly create culture from the outset. But as these organizations mature, their cultures determine what kind of leaders they choose. They develop a very clear idea of what leadership is supposed to be in that environment, and they select people for senior jobs who match that profile. The same thing happens throughout the ranks. A young organization draws on a variety of talents to achieve success, but as it ages, it develops strong beliefs, expressed in job descriptions, about what kinds of talent are needed and then recruits only those people. Talent management in the very mature organization then becomes a subtle process of the culture just re-creating itself, of hiring only people who “fit” in both the technical culture (how tasks get done) and the social culture (how relationships work in the organization). When the outside environment, or microculture, changes, organizations arrive at a moment of truth: We need innovation, yet we can't get our people to do it!

—Edgar Schein1

If we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place, it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately ...

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