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strategy and business
 / Winter 2006 / Issue 45(originally published by Booz & Company)


Alvin Toffler: The Thought Leader Interview

S+B: You call this shift a radical change. Was that not also true of the original Industrial Revolution? Didn’t the steam engine, the electric light, the telephone, the railroad, and the automobile all change society even more fundamentally?
Yes, they did, but society was much smaller than it is now. And the whole experience was slower: It took 300 years. It was not global; it happened in England, then Europe and the U.S. and a few other places.

By contrast, if you look at the change today, the scale is enormous, it’s increasingly global, and it’s happening at what our ancestors would have regarded as an unbelievable speed. So it seems to me that it is therefore bigger, more complex, and more difficult to understand than the Industrial Revolution.

S+B: You describe de-synchronization as a disconnect between the rapid pace of change in the economy and the slow pace at which our institutions adapt. Many organizations have been reengineered, “leaned,” and “total-qualitied.” Now do they need to be re-synchronized as well?
Yes. Unfortunately, even very smart CEOs and managers have very unsophisticated views about the relationship between synchronization and de-synchronization in their firm, their industry, and in the economy and society.

Companies are spending lots of money to synchronize their internal activities and their value chains, supplier chains, and so forth. But in Revolutionary Wealth, we’re not talking about everything being perfectly synced. It can’t be. Every time you synchronize operation A with operation B, you de-synchronize other operations within the company. Maybe you’re turning out the gizmo faster, and that’s working well, but the billing department has been left behind. This is great for the companies that are in the synchronization business, like SAP and Oracle.

Some degree of de-synchronization is, of course, necessary to keep competition and innovation going, because if everything is perfectly synced, you have a dead company or economy. But it’s also clear that excessive de-synchronization can throw companies, industries, and entire economies into chaos. Indeed, you can look at the great stock market shakeouts as desperate attempts by the wealth system to re-synchronize itself.

S+B: The supply chains for many companies have become so extended in both time and space that the complexity becomes overwhelming.
I think that’s true. And the more you tighten those bonds, the less room you have for de-synchronization. Just-in-time delivery is a great thing, but it also means that all the temporal tolerances get smaller. It makes the system more sensitive to disruption. It doesn’t take much to knock it off its tolerances. Time, in general, has been under-studied and poorly understood in business.

Twin Globalization Movements

S+B: You point out that the world went through a tremendous wave of globalization before World War I, which then ground to a halt. What might make the current wave slow down or retreat?
Globalization, as it has been popularly discussed, is just another word for economic integration across borders, and lots of things could blow that off course. A war with China, for example. I don’t believe that’s going to happen, but if it did, it would turn a lot of globalized operations around.

Some terrible pandemic could reverse globalization, with quarantines for years preventing shipments of goods. It could be slowed by the rising levels of nationalism and nationalist politics that we see all over Latin America, and in Asia, between the Japanese and the Chinese, and between the Japanese and the Koreans. Nationalism, to me, is the second wave of industrial-era ideology, but it’s still a very powerful force.

In other words, any number of things could reverse the course of economic integration across borders. But I don’t think anything is likely to stop the cross-border spread of environmental problems, sex slavery, pandemics, and a variety of other social, health, and cultural issues. These are global problems and they can’t be solved by any one country. I believe we’re going to see increasing globalization or integration of health activities and environmental activities, even if the money economy itself goes into reverse globalization.

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