From Harvard B-School Publishing
In 2009, managers will realize that they are no longer dealing with a crisis; they are dealing with a condition. In the Great Disruption, companies simply can’t anticipate that today’s competitive advantage will last for more than a few years. Former Intel Chairman Andy Grove anticipated this more than a decade ago when he wrote, “Only the paranoid survive.”
While companies might want to return to the corporate equivalent of comfort food–cost-cutting and a focus on the core business–the Great Disruption won’t allow it.
This sounds like good advice for all of us in the business world:
# Placing a premium on progress. While more and more companies recognize the name of the game is transformation, the tolerance for blind experimentation has never been lower. Innovators will need to continue to find creative, cheap ways to bring their ideas forward. Fortunately, they can tap into a plethora of powerful tools to facilitate rapid learning.
# Mastering paradox. Leaders in most Fortune 500 companies grew up in an era where they could succeed largely by exploiting their existing business. Today’s leaders need to master both exploitation and exploration. They need to develop the ability to rely on precise data in their core business and intuition and judgment when they are creating new growth businesses. They have to live the old F. Scott Fitzgerald mantra, “The test of a first-rate intelligence is the ability to hold two opposed ideas in the same mind at the same time, and still retain the ability to function.”
Harvard Working Knowledge offers ten reasons to build a better corporate culture that you can read in two to three minutes max. Then you’ll need to think about them off and on for the next month, for there’s some deep advice here from Jim Heskitt, Earl Sasser, and Joe Wheeler.
Leadership is critical in codifying and maintaining an organizational purpose, values, and vision. Leaders must set the example by living the elements of culture: values, behaviors, measures, and actions. Values are meaningless without the other elements.
Employees at all levels in an organization notice and validate the elements of culture. As owners, they judge every management decision to hire, reward, promote, and fire colleagues. Their reactions often come through in comments about subjects such as the “fairness of my boss.” The underlying theme in such conversations, though, is the strength and appropriateness of the organization’s culture.
Organizations with clearly codified and enforced cultures enjoy great employee and customer loyalty, in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely manner.
An operating strategy based on a strong, effective culture is selective of prospective customers. It also requires the periodic “firing” of customers, as pointed out in our examples of companies like ING Direct, where thousands are fired every month. This strategy is especially important when customers “abuse” employees or make unreasonable demands on them.
The result of all this is “the best serving the best,” or as Ritz-Carlton’s mission states, “Ladies and gentlemen serving ladies and gentlemen.”
Jim and Earl were teaching at HBS when I was a student there, and I’m glad to see they’re still going strong.
Yesterday in the “Blogtropolis” room at Web 2.0 Expo, Chris Heuer signaled me to take a seat in the director’s chair alongside his for a chat.
Here’s a podcast of our chat. We spent twenty minutes talking about building on-line communities, enterprise 2.0, coping with mind-blowing change, the relationship with informal learning, un-meetings, redefining the meaning of conference, and what I plan to discuss with corporate clients in the next two months.
The divide separating the old way of looking at the world and the new, networked vision is so wide that, like the issue of abortion, you’re on one side or the other; no one’s in between, and you’re not going to change the way someone else sees it.
You either believe the net changes everything or you think it’s a passing fad. You believe augmenting humankind’s collective intelligence will change the world forever or you consider this virtual stuff bunk. If you’re one of the people on the side of tradition, my advice is to skip this recording altogether. You’ll think we’re raving mad.
John Hagel’s Keynote presentation at FastForward has a vital message for general managers. This high-quality video makes the case for shifting the basic business model from push to pull.
The USER REVOLUTION is in full sway.
The way out of the squeeze is to move from programs to platforms. He’s not talking about media. Rather, programs are push, content, and structured (as with software). Platforms are frameworks, networks, flexible, and loosely coupled. It won’t be an easy transition; many companies will die along the way. (The lifespan of an S+P company is already down to 15 years, an 80% drop from historical levels.)
Hagel suggests three pragmatic, future-oriented metrics:
ROA. return on attention. What’s your profitability by customer segment? How do you encourage serendipity? How easy do you make it?
ROI. return on interest. gather profile information from experiences to deepen relationships. this goes for customer and supplier. what’s the ratio of hassle to value?
ROS. return on skills. this gets tougher to measure as platform customers DIY and co-create.
Hagel is talking about corporations but the processes he describes are like fractals, the patterns are the same if you zoom in a level or zoom out.
Learning organizations need to be working the same metrics, for they face the same squeeze. The fight for attention and the development of talent are hardly new to CLOs. However, effective CLOs will spot a silver lining in the coming revolution: the opportunity to get out of the training business and into the talent development sphere.
The culture of tomorrow’s corporations will mirror the culture of the internet.
For several years now, internet blow-back has shaped the thinking of management thinkers. You’ve probably seen my praise for internet values such as spontaneity, peer decision-making, radical decentralization, easy to prototype, bottom-up power, rapid response, viral connections, and so on.
Gary Hamel’s The Future of Management calls for a new vision of management. Managers will be challenged to create organizations that are adaptable, innovative, and engaging. Hamel identifies these internet characteristics that could easily pass for the new management imperatives.
* Everyone has a voice.
* The tools of creativity are widely distributed.
* Its easy and cheap to experiment.
* Capability counts for more than credentials and titles.
* Commitment is voluntary.
* Power is granted from below.
* Authority is fluid and contingent on value-added.
* The only hierarchies are “natural” hierarchies.
* Communities are self-defining. Individuals are richly empowered with information.
* Just about everything is decentralized.
* Ideas compete on an equal footing.
* It’s easy for buyers and sellers to find each other.
* Resources are free to follow opportunities.
* Decisions are peer-based.
Internet Culture and the Evolution of Learning
Work and the Web are Converging
Designing a Web-based Learning Ecology
One Man’s Net
From Counterculture to Cyberculture
Roots of Digital Utopianism
The Future of Knowledge