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The title
of the story in the Wall Street Journal read: “The End of
Management—Corporate bureaucracy is becoming obsolete. Why managers
should act like venture capitalists.” That article, adapted from the
new book by Allan Murray, “The Wall Street Journal Essential Guide
to Management,” (2010 Harper Business) grabbed me. I’m on my way
out the door to buy it.
It
captured what I’ve been sensing for some time. We are evolving into
some new form of leading companies…which has yet to be fully
recognized. As the article points out, “Even the best-managed
companies aren’t protected from this destructive clash between
whirlwind change and corporate inertia.”
It goes on
to say that Clayton Christensen’s book, “The Innovator’s
Dilemma” “documents how market-leading companies have missed
game-changing transformations in industry after industry—computers
(mainframes to PC’s), telephony (landline to mobile), photography
(film to digital), stock market (floor to online)—not because of bad
management, but because they followed the dictates of ‘good’
management. They listened to their customers. They carefully studied
market trends, They allocated capital to the innovations that promised
the largest returns. And in the process, they missed the disruptive
innovations that opened up new customers and markets for lower-margin,
blockbuster products.”
Just
yesterday, I heard on the radio about the significant drop in cable
subscribers and rise of cheaper Internet television to take its place.
The new cover of Forbes Magazine shows Andrew Mason, the founder of
Groupon, “The fastest-growing company ever.” Groupon “figured
out how to inject hysteria into the process of bargain hunting on the
Web.”
I don’t
think we can brush off these changes as just another dot bomb moment
in time. Something big is happening here.
Christensen
studied big companies to try to identify what caused them to miss the
big innovations. He found it wasn’t that they didn’t see them
coming…it was that they didn’t invest enough to capitalize on
them.
Murray
points to Google’s attempt to rectify that problem. They have a
“20%” policy. Engineers can spend 20% of their time on
company-related projects, rather than just those projects on their
boss’s to-do list.
Besides
resource allocation, structure is another hurdle. The traditional,
military-based hierarchy just doesn’t support the entrepreneurial
culture needed to create innovative thinking. Even the best managers
I’ve seen have a vested interest in controlling their department’s
resources, outputs and turf. And those are the good managers…
The
changes are morphing everywhere you look. Eleven percent of all
employees now work from home at least one day a week. Forty percent of
IBM’s workforce works remotely. Deloitte, the international
accounting and consulting firm, has abandoned flextime in favor of
what it calls “Mass Career Customization.” The idea is that
today’s careers don’t follow the corporate ladder, but rather
lattices, where employees can ramp up or scale down their
responsibilities. GE’s innovation is fueled by a bee hive of
matrixed organizational structures forming around projects. Best Buy
created a ROWE-results only work environment. It’s premise is that
it’s results, not face time, amount of time in office, or how many
meetings you attend that really count.
Economic
regions have also awakened and smell the entrepreneurial coffee.
BizStarts Milwaukee, born out of a realization that attracting big
employers to the Southeast region of Wisconsin wasn’t an effective
strategy, is making big strides in helping entrepreneurs who have
ideas or products with high growth potential. Among other helping
strategies, it includes help with marketing plans, mentoring and
connections to venture capital.
America
was built on the entrepreneurial spirit. In my view, the only way we
are going to stay one of the great nations, effectively competing in a
global economy, is to go back to our roots, whether you work for a
corporation or a start up.
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