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(originally published by Booz & Company)


The Life Cycle of Great Business Ideas

With the right support and judgment, the corporate “heretics” of today could become tomorrow’s most effective leaders.

Thomas Huxley wrote that new ideas begin as heresies and end as superstition. He was referring to Charles Darwin’s The Origin of Species. The same might be said of management concepts today. In August, at the annual meeting of the Academy of Management in Anaheim, Calif., Art Kleiner brought together a group of distinguished management thinkers and practitioners to explore the evolution of management ideas. Kleiner is the editor-in-chief of strategy+business and author of The Age of Heretics: A History of the Radical Thinkers Who Reinvented Corporate Management, 2nd ed. (Jossey-Bass, 2008), which traces some of the leading management practices of our time to people who challenged the conventional wisdom of their companies in years past.

This edited version of the panel discussion shows how, in a variety of ways, the quality of management thinking has made a difference — and how the most compelling business practices often have countercultural roots. The panelists are known for their leadership in the domain of management ideas.

Panelists included former National Training Laboratory (NTL) President Edith Seashore, an eminent organization development figure whose work there as one of the “four horsepersons” championing diversity was chronicled in The Age of Heretics, and who later cofounded American University’s AU/NTL graduate program. Edith’s husband, Charles Seashore, is the faculty chair of the doctoral program in human and organizational development at the Fielding Graduate University and a mentor and guide to many people throughout this field. Phil Rosenzweig, a professor at the International Institute for Management Development in Lausanne, Switzerland, is the author of The Halo Effect...and the Eight Other Business Delusions That Deceive Managers (Free Press, 2007), an exploration of the (often unreliable) substantiation underlying business ideas. P.V. Kannan is the CEO and a cofounder of 24/7 Customer, an international outsourcing service company that has actively applied ideas such as self-managing work teams and customer-oriented data streams. Steven Wheeler is a former partner with Booz & Company and currently performs research, with the University of Southern California’s Center for Effective Organizations, on organization and leadership drivers of agility and sustained company performance.

During the roundtable session, the panelists focused on three primary questions: Is there a life cycle to valuable management ideas? How do we learn to tell a good idea from an idea that’s not worth much? And what one idea most intrigues you as a harbinger of the next wave of management thinking and practice?

Anatomy of a Great Idea

S+B: Is there a life cycle to valuable management ideas?
I don’t think it’s that simple. Not all good ideas begin as heresies, and not all heresies turn out to be good ideas. We have to be a little cautious before we overlay this sort of pattern.

We also need to be careful about what we mean by “valuable.” In management, ideas are of value to the extent that they can prompt people or organizations to do things differently to achieve more effectiveness and performance. And if we’re looking at the firm as the unit of analysis, performance is often more relative than absolute. A company adopts a new idea, it does things differently, and it gains some advantage. Once its competitors begin to do things in the same way, then that relative advantage dissipates, and the idea goes from being wise to being obsolete.

E. SEASHORE: My experience has been that the heretics — the people who really get excited about new ideas — have special leadership qualities and a different concept of authority. They want to make the organization very different from what it was when they entered the system. I recently worked with the commander of the Walter Reed Army Medical Center, Colonel Patty Horoho. She was brought in after two generals, both men and both surgeons, were dismissed from the position. For the first time in the hospital’s 98-year history, they chose a woman and a nurse to head it. That in itself was heretical. But more important, Horoho had to turn a climate of chaos into a working unit in just 18 months, and she did it by doing things differently. She understood that the way people communicated had to change; they had to build more solid relationships and exchange information more openly.

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