As s+b marks 20 years of publication, we are looking back (and forward) to reflect on the themes, people, and ideas that have animated two decades of original thinking. This is the last in a series of blog posts.
In an age when business magazines struggle to find their audiences and sustain their business models, it’s extremely gratifying that strategy+business has reached its 20th anniversary. We celebrated that anniversary, in part, by gathering together the history of management ideas in the form of 20 questions. The premise: Management theory emerges as people try to come up with universal answers to day-to-day questions. How do we get the work done? How do we win in the market? How can I work here and still be me? And so on.
We constructed our 20 questions based on a few thousand years’ worth of experience and wisdom. But it may well be that the most interesting questions still haven’t been fully articulated. According to Thomas Kuhn, the historian of science who first put forth the modern concept of a paradigm shift, dramatic change doesn’t happen when people in a field come up with new answers. Rather, the shift occurs because people are drawn to new examples — newly noticed phenomena — that lead them to ask new questions.
So if we want to know where management thinking is going, perhaps it is most useful to look for the questions that people are not quite yet asking. Some of them may be surfacing now, seemingly out of nowhere. They may seem impractical or irrelevant. They may come from out of left field (or distant center or right field, for that matter). But sooner or later, they will likely strike us as the self-evident questions that we should have been asking all along.
As editor-in-chief of strategy+business since 2005, it has been my job — and pleasure — to forage for those kinds of inquiries. Here are four significant questions I think may preoccupy the person (or computer) who holds this post 20 years hence:
· How do organizational habits and individual habits affect each other? Cognitive neuroscience is leading us to understand that people are shaped by what they do every day; in fact, patterns of thinking literally reinforce neural patterns in the physical brain. This means that the daily predispositions of a leader, and the processes and practices built into the design of the back office and the assembly line, probably affect one other. But what is that effect, how can we quantify it, and how can we more precisely and beneficially adjust it to achieve better goals? I suspect part of the answer lies in the way that diverse professionals interact in large enterprises. An engineer, seeking to put the pieces of a technology together, develops very different cognitive habits than a financier, who is oriented toward tracking and deploying capital; and they too are different from line leaders engaged in mobilizing and motivating highly skilled people. When these cultures mix at different levels of the enterprise, including the top level, what kinds of practices become collective habits, ingrained in everyone’s brain — and what practices fall by the wayside? Can that be predicted?
· What is the nature and value of organizational maturity? The dangers of bureaucratic ossification are well known, and experts like Geoffrey West (and Arie de Geus before him) have documented the relatively short life span of the typical enterprise. Cities live for centuries; most businesses fail or are bought after 40 or 50 years. Today, many of the businesses we most admire (or fear, depending on your perspective) tend to be startups that have grown from a garage into gargantuan market caps in a decade or less. But that rate of “Godzilla-style” growth, as Kenichi Ohmae once dubbed it, also makes them prone to crash and burn. How then does a company reach the level of maturity that allows it to continue to grow and thrive, innovating and employing people indefinitely? Or, taking a shareholder’s perspective, is maturity unnecessary in companies? Would we be better off with untrammeled creative destruction, with each new Godzilla rapidly replacing the ones that came before? How would we know in advance which type of management, adolescent or mature, is better for a company?
Would we be better off with untrammeled creative destruction, with each new Godzilla rapidly replacing the ones that came before?
· How do flows of capital and management prowess affect each other — in a way we can reliably understand? For instance, we should be looking into the effect that truly fungible capital has on the ways that investment takes place, on the returns it generates, and on the ways it affects business. Digital currencies like bitcoin and practices like day trading have shown that capital is no longer bound to the community where it is generated. And even before those developments, there was a molten pool of hot money moving rapidly around the world, flooding into whichever region seemed to offer the prospect for rapid returns. As soon as hot money arrives, however, it competes with itself. The prospect for returns rapidly diminishes, and the quick-moving cash often leaves devastation in its wake. The constantly changing dynamics between investment and enterprise weren’t well understood before. How will they evolve now?
· What is the ideal form of regulation? Ten years ago, in these pages, pollster Daniel Yankelovich argued that rules alone would not curb corporate behavior. It would take norms. Now, however, it’s clear that norms are not enough. In companies that bend the rules to their short-term gain and long-term detriment — whether the rule-bending surrounds measuring emissions, or setting LIBOR, or underwriting mortgages — there is usually a norm at play: Don’t send bad news up the hierarchy. Don’t walk into the offices of important people and tell them that what they want to happen will not happen. Short-term fears and concerns (including but not limited to stock price rises) trump long-term value creation. We don’t understand the interaction of rules and norms well enough — not well enough to design regulatory regimes that truly engender good behavior without hobbling innovation. Not yet, anyway.
Having better answers to these questions would enable more profitable, sustainable, and socially useful business activity. But other unvoiced questions will shape the direction of management thinking. And we’ll do our best to cover them, as cogently and creatively as we can, in the next 20 years of strategy+business.