Posted by Adam Gordon on Mar 1, 2011 in all, decision-making, leadership, management, strategic foresight
In the pivotal moment of the movie “Remains of the Day,” US Congressman Trent Lewis (Christopher Reeve) in England in 1936 declares to the “gentleman-amateurs” around him who are blunderingly cosy-ing up to the Nazis: “leave politics to the professionals.”
It’s an expression of the 20th century zeitgeist shift to professionalization of not only politics, but all significant decision-making and management. Business certainly led the way through the century with the rapid rise of managers as a distinct class of professional, expecting the commensurate erosion of family-run firms of any real size and clout.
The problem with family firms are legion: under-qualified if not downright incompetent heirs thrust into positions they can’t cope with or don’t want, family wrangles, inheritance disputes, relative non-accountability of management leading to quixotic decision-making, secrecy mitigating against access to capital and therefore growth, and so on.
So the wisdom became that the family-firm management was appropriate in start-up mode, and then as companies scaled up and moved to external funding and responsibility to multiple stakeholders, professional management should take over for the good of everyone.
Generations
Or so we thought. There is a long-running counter-argument that family firms do many things better, even at scale. Key decisions are made with the fearless straight-talk that is often required, and without bureaucracy up and down the chain. Families may have their politics, but they don’t have the chronic office politics nor resume-polishing that besets so much of corporate life, wasting countless person-hours.
Furthermore, industry and business wisdom that is built up over generations stays in the firm rather than getting washed down the river every time the executive door revolves. The bottom line: family firms remain a more-than-viable model very much alive and kicking all across the world.
These are background issues to Randel Carlock (INSEAD) and John Ward’s (Kellogg) new book “When Family Businesses are Best,” (Palgrave, 2010) which is broadly about navigating a family firm in the changing, globalizing world.
What got my attention particularly is the authors’ contention that family firms are better at developing, retaining, and working to a long-term management perspective. That is, the family is an inherently long-term institution, and well-run family enterprises are run in such a way as to endure for the future for the family – and this is an advantage in navigating and surviving a changing world.
The term the authors’ use is for this kind of management is “stewardship.”
The root problem of most professionally managed businesses is they are run without stewardship – without concern for long-term well-being of the firm or its stakeholders. If we needed reminding, the banking crisis was the product of management that couldn’t be further from stewardship – taking absurd risks with other people’s money for short-term personal wins.
Banks have become the poster child for the follies of short-termism, but the reality is short-termism remains endemic across professional management, both in business and politics. Long after “après moi le déluge” CEOs have taken their packages and are on the golf course, others – employees, taxpayers, the environment, etc. – are paying the price.
What’s measured
At least, post-crunch, it is now incontrovertible that short-termism is an extremely poor strategy for managing a complex and uncertain future. “What gets measured gets managed,” and when what is measured is only the next quarter’s profit figures, bigger failure looms.
The family-run businesses offers a model of long-term management. It is a conservative non- “bet-the farm” model to be sure, but perhaps the path a real steward of value genuinely operating in the best interest of valued stakeholders would follow.
So how might one, without the real flesh-and-blood bond of family ties, get senior executives to think through the effect of their behavior on employees or stakeholders 10- or 20 years in the future, as the head of a family would? Surely only by creating incentive structures that mimic family stewardship – incentives that mean that leaders can’t walk away smiling until the organization (or the value it represents) has been safely passed on to the next generation.
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Posted by Adam Gordon on Dec 1, 2010 in all, decision-making, leadership, strategic foresight
I was in Edinburgh recently to deliver a 2-day “Leading the Future” workshop as part of a leadership development program at The Edinburgh Institute of Leadership & Management Practice.
Leadership is most commonly associated with motivating staff and streamlining organizational effectiveness. While this is core, leadership implies far more. It implies foresight and vision. Leaders are not just those who are responsible for an organization’s “best manifestation today.” Whether they like it or not, they also carry the burden of responsibility for their organization’s best manifestation tomorrow.
And tomorrow, as we know, will be different in important and sometimes surprising ways.
So any leader of note is soon asked to go beyond “effective managing,” to look out at the uncertain road ahead and steer to the desired destination on behalf of followers and stakeholders. Leaders take their institutions to the future.
Therefore, as enterprises are forced to transform in response to rapid social, technological and market change, so anticipating and competitively interpreting new opportunities and setting appropriate direction under conditions of complexity and uncertainty has become a key competitive skill — perhaps the key skill — leaders bring to their position.
There are, these days, more high-quality non-predictive approaches to strategic foresight and future-management than most managers are aware of. So this is what I get to go over with an impressive array of real-world Scottish managers in workshop mode in Edinburgh over the weekend.
But will leadership itself change?
In leading the future, there is also a meta-question: will leadership itself change? Does this skill have “a future?” Will leading mean the same thing in the next generation as it has meant in the past? Or are there new skills leaders will need to acquire for the new era of business and society?
In a recent Forrester hub blog piece “Thoughts on Leadership in the Social Era,” authors Josh Bernoff and Ted Schadler bring insight from their book Empowered, and Charlene Li’s book Open Leadership in asserting what it means to lead “in a social world.” They offer this 5-point checklist:
1. Share strategy continuously, especially changes in strategy
2. Embrace half-baked ideas
3. Use councils to coordinate
4. Celebrate failure
5. Celebrate success (Full text here.)
Would he require a skills upgrade? Image via Wikipedia
To be honest, this looks a lot like the flattening and opening-up “leadership revolution” of the dot-com boom and the post-recession 90s, which leads me to think, is leadership (including the foresight injunction) perhaps a constant rather than a changing skillset? Would any leader in history, from Jefferson to Jesus, not be able to lead in today’s environment? Would George Washington, Abraham Lincoln, Sir Earnest Shackleton, Mahatma Ghandi, Golda Meir, Nelson Mandela, et al would be able to lead in the 2nd decade of the 21st Century, or would they they require some kind of “skills upgrade” to be fit for the world of social media, empowered consumers, and so on?
I’m very tempted to say they would do fine. Hyper-information and social networking is just another set of challenges drawing on an age-hold leadership skill set, which includes knowing how to effectively communicate and persuade and inspire, no matter what the media conditions.
But I’m indebted to my friend and foresight-sounding-board-extraordinaire, Andrew Curry, for offering this perspective:
“I think there must be *some* changes in the demands on leadership as a result of:
- rapid feminization of the workforce
- secular shift in attitudes to authority/ trust
- emergence of ideas about complexity.”
Posted by Adam Gordon on Nov 11, 2010 in all, managing uncertainty, strategic foresight
I was recently in South Africa where I had a hand in setting up an executive foresight-innovation executive training program to be run in association with the Stanford Center for Foresight and Innovation.
While I was there I couldn’t help noticing the business print and radio waves being dominated by the potential entrance of Wal-Mart, with all the jitters of local businesses considering the knock-ons and side-effects of the “über cost competitor” turning up at the end of the street.
If it goes ahead, Wal-Mart will enter via acquisition of local retailer Massmart which is, as the name suggests, a copy-cat company anyway, so it would seem all there is to talk about is price. As things stand, Wal-Mart is in its fifth week of due diligence on Massmart, currently visiting all 288 stores under acquisition, according to a recent WSJ report.
Now Wal-Mart is not busting a gut for the SA market, population 45 million, of course. The whole project is about using the South African operation as gateway into Africa as a whole. It is bet on the 5-to-10-year-and-beyond future of sub-Saharan Africa.
Massmart Chief Executive Grant Pattison is quoted as saying “you have to take the long view on Africa,” and this is exactly what Wal-Mart is doing. Enacting a long forward play for the newly strengthening African retail market.
Other than inventing the scale-based supply-chain-squeeze model of retail, which must go down as one of the great business innovations of all time, Wal-Mart is hardly known as a foresight-based player. As forward looking as the Massmart acquisition is, Wal-Mart has in fact been well beaten to the African punch by the Chinese who have been investing across the continent over the past decade (although the Chinese investment has been predominantly in infrastructure and resources, while Wal-Mart’s would be in anticipation of lower-middle class consumer enrichment on the back of that.)
The glass half full
The Chinese invasion is by far the biggest thing to happen in African economies since European colonialism, not only due to widespread infrastructural investment, and not only because it comes without “Washington Consensus” strings attached, but, even more fundamentally, because it is driving a zeitgest shift in business confidence. Deep problems remain, but suddenly the glass that was half empty appears half full, particularly to occidentals.
One expression of the new half-full perspective is McKinsey’s breathless report (June 2010) on Africa’s economic emergence, entitled “Lions on the Move,” which starts: “Africa’s collective economy grew very little during the last two decades of the 20th century. But sometime in the late 1990s, the continent began to stir. GDP growth picked up and bounded ahead…”
Asian Tigers. African Lions. Geddit? But when both Wal-Mart and McKinsey are setting their watches to the near-term future African economic growth story, you can bet other companies are set to pounce too.
Posted by Adam Gordon on Oct 25, 2010 in all, foresight tools & methods, policy, scenario planning, social change, strategic foresight, technology change
This week the Association of Research Libraries in Washington D.C. released The ARL 2030 Scenarios: A User’s Guide for Research Libraries.
Source: http://www.arl.org/rtl/plan/scenarios/
Now it would seem that a 20-year-future-gazing process for libraries is a world away from the concerns of managers making today’s critical decisions, but it is not, for two reasons:
First the study deals with the critical trends and forces changing the operating environment in just about every industry today – digitization, sustainability, social media, China, etc. The scenarios are instructive because they lay out forces changing the operating environment not only for libraries but pretty much every significant organization or company going forward.
Second, while four different “futures” are described and investigated, the organizational subject (libraries) are not explicitly written into them. As the user guide comments: “Scenarios created for use in scenario planning intentionally leave the organizations that are planning out of the picture. This allows the organization to better focus on the main forces that are shaping the environment around it. Thus, each scenario has a blank where the library can fill itself in through the planning process…
“This approach means that other kinds of organizations might also find blanks that they can explore through a scenario planning process. ARL can consider its future as an association using these scenarios, but other kinds of libraries, other actors in the research enterprise, or other participants in the scholarly communication system could find value in using this scenario set and the user’s guide.”
In fact, all kinds of organizations and businesses can use the study in this way: inserting themselves into the stories and asking themselves: do “we” still work? That is, is our value proposition, our business model, our resource or alliance base, still valid? Do our success recipes still apply? If not, what are the necessary new ways to be valuable and to engage with consumers and stakeholders? What would we need to do—how would we need to innovate to transform our organization such that it creates value for future users—given the overwhelmingly powerful external dynamics redefining our operating environment?
The organization deferred
Although the ARL doesn’t say it, it’s actually quite remarkable in the scenario world that the subject organization is NOT written into the story. Often scenarios are hamstrung by exactly this problem: Conflating what the world will do and what the firm can do in response, therein becoming no more than wishful-thinking stories. It is much better for the purposes of real-world decision-making when these two questions are dealt with sequentially, as they are here, and organizations can then think through the options and priorities they can shape within the larger future world they can’t shape.
Bearing in mind that scenarios are not predictions, and that the whole point is that the most likely future operating environment will combine elements from all, these are the four independent strands that the AFL comes up with:
In Research Entrepreneurs, individual scholars are central and their orientation matters more than institutional or disciplinary affiliations. Research institutions provide support services to these agents rather than driving the research agenda. Scenario 2, Reuse and Recycle, describes disinvestment in the research enterprise. With fewer resources, the crowd-cloud approach is widespread, producing information that is “ubiquitous but low value.” In Disciplines in Charge, “computational approaches to data analysis” force scholars “to align themselves around data stores and computation capacity that addresses large-scale research questions within their research field.” Global Followers describes a world similar to today, but where Asia is prominent in providing money and support for research, and Eastern “cultural norms” govern the process.
ARL 2030 Scenarios: A User’s Guide for Research Libraries is available for free athttp://www.arl.org/bm~doc/arl-2030-scenarios-users-guide.pdf. More information on the ARL project, “Envisioning Research Library Futures: A Scenario Thinking Project” can be found athttp://www.arl.org/rtl/plan/scenarios/.
Posted by Adam Gordon on Oct 11, 2010 in 2015, all, forecast filtering, managing uncertainty, strategic foresight, technology change
I’ve been mulling over an S+B interview with Lawrence Burns, former head of R&D at General Motors, ahead of the release of his book ‘Reinventing the Automobile: Personal Urban Mobility for the 21st Century’ (MIT Press, 2010, co-authors Christopher Borroni-Bird and William J. Mitchell.)
Truth be told, the foresight field is littered with predictions about the future of the automobile, from the futurists’ flying car that never happened to the-pumps-run-dry doomsday, and everything inbetween.
The Xiao EN-V concept car. Photograph © General Motors / Wieck Media Services Inc
But, judging by the interview, Burns has a higher-quality foresight view of this industry than most, and this because he prioritizes what consumers really value as a guide to what will emerge over any policy principle or ideological interest.
What do consumers really value? “There’s nothing like the freedom they (cars) provide to let us go where we want, when we want, with the people we want to travel with,” says Burns.
“Ever since people could walk, the ability to move when they want and where they want is something people have found very compelling.”
Nothing new, but what he is warding off, in preparing the ground to looking to the industry future, is views of the automotive future that are ideologically colored, particularly those imbued with the virtues of public transport.
Says Burns, “Three major impediments get in the way of public transportation:
This balance could change — this is what public transport executives seek to effect. But until there is clear reason to see public-transport pain-points diminishing, there’s no reason to see anything but private-dominated transport in the future (other than very dense urban environments such as Manhattan.)
Pain avoidance
Burns places automotive foresight at the intellectual crossroads between what the majority of consumers really want (or what pain they want to avoid) and what pundits and ideologues think would be a better solution. Guess which always wins?
With that issue solved, the question then turns to what these private vehicles are exactly? Here Burns and co-authors have a vision, but it is more “anybody’s guess.” Their fundamental assumptions is that onboard inter-vehicle accident-avoidance technology is watertight, which means cars don’t need all their defensive armour and can so be far lighter, and therefore use less energy, so battery power and life is no longer the limiting issue it is today. See the concept-car above.
This blog first posted at Forbes Leadership: http://blogs.forbes.com/adamgordon
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read morePosted by Adam Gordon on Sep 7, 2010 in all, economy & finance, failed predictions, forecast filtering, strategic foresight
Here’s a video of Arthur C. Clark in 1964, remarkably predicting that in 50 years we would be able to communicate equally from anywhere on the planet, and so work from Tahiti or Bali equally well as from London. He predicts brain surgeons in Edinburgh operating on patients in New Zealand as technology collapses distance. Fabulous foresight? To a point, yes. This has all become possible, and in the time frame specified.
But, making one of the classic mistakes of technology-driven futures thinking, Clarke lets his technological imagination blur basic insight into human nature and social service/product adoption. Specifically, he goes on to say that because of communications technology advances, “the city of 2000 may not even exist at all. The traditional role of the city as meeting place for a man will cease to make any sense.”
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Note the gender paradigm blinkers. But anyway – the end of cities? Fat chance. One of the defining issues of the early 21st century is urban growth and the emergence of 10+ million-population mega-cities. And across the world, a higher proportion of the human population live in cities than at any point in history (and that proportion has just crossed 50% making humans for the first time a primarily urban species.) Hello? Arthur?
Urban concentrations 2007. Source: The Guardian
Why the miscue? First Clarke makes the classic error of holding key variables still while running technology forward. The key variable here is population growth. The number of people on the planet has doubled, at least, since 1964.
But that population could all be comfortably telecommuting from rural idylls, so there is another problem. Clarke fails to factor in social and economic pressures which sometimes run counter to technology advancement or, as in this case, merely absorb technology shift with no change. No matter how good communications get, nothing in the information-communications revolution has changed the age-old social truth that proximity matters. It matters to community welfare. It matters to social opportunities. It matters to career advancement, and so on. It mattered in the past. It will matter in the future. That’s why people are in jam-packed into into Los Angeles and São Paulo and Johannesburg and Seoul, etc., but not Tahiti.
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