Today the economy depends on the ability of companies to evolve past their own reliance on bureaucracy. Companies that move from formalization to personalization tend to do so slowly but deliberately, building the capabilities for decision making as they make relationships stronger, reduce their reliance on procedures, and increase the value they place on accountable individual judgment. Before long, with increasing personalization, people in these companies learn to recognize “false positives”: the risks that are not worth taking because they lead to wasted investments. And they also see the “false negatives”: the risks of inaction when, if they don’t step in, a competitor might or an opportunity could be lost.
- Julian Birkinshaw is a professor of strategic and international management at the London Business School, a cofounder of the school’s Management Innovation Lab, and the deputy dean for programs. His book Reinventing Management: Smarter Choices for Getting Work Done (Jossey-Bass) will be released in May 2010.
- Huw Jenkins is an executive with BTG Pactual, a Brazilian investment bank. He was formerly executive in residence at the London Business School and CEO of UBS Investment Bank.
- An earlier article by the authors on this theme was published by the United Kingdom’s Advanced Institute of Management Research.