The Management Revolution

Topic: Accelerating change

Gary Hamel: There’s a very good chance that over the next few years we are going to see a revolution in management, that is just as profound as the revolution in management that gave birth to the industrial age.  When we moved from a craft-based and agrarian economy, to an industrial economy.  Why is this going to happen?

Three forcing functions are going to make this happen.  The first is accelerating change.  We literally live today in a world where change has changed.  We are the first generation in history where the pace of change has gone hyper-critical within our lifetimes.  Think for a moment about all the things right now that are changing at an exponential pace.  CO2 emissions, number of genes sequenced, number of internet domains out there, the amount of bandwidth that's available to people, global population.  Whole variety of things changing at an exponential rate.

We know that the lifespan of a great strategy is shrinking.  A company goes from that takeoff stage through growth, to maturity and senescence, faster than ever before.  All of this is testament to a simple fact.  Our world is becoming more turbulent, faster than most organizations are becoming more adaptable and more resilient.  And you look around us today and you see all kinds of companies that are struggling to get their mojo back.  Entire industries like music and pharmaceuticals and publishing, where the whole industry has fallen behind the change group.  Historically, there was only one way to change a large organization and that was to wait until it tumbled into crisis and then to decapitate the leadership team.  Start with a new leadership team.

When you read all those books on change, you get two kinds of stories.  Change that's trivial, and change that is traumatic, change that is deep, but came as a result of a crisis.  It's kind of sad to admit, but these large organizations tend to change in the same way poorly governed dictatorships change- belatedly and convulsively.  And this is simply no longer good enough.  We're going to have to change the way organizations change, make it much more like the body's autonomic systems, that are constantly taking information inputs in and responding.  But not something that is crisis driven, that's episodic.  We need instead change to be opportunity driven and continuous.

Topic: Competition

Gary Hamel: A second great challenge that's going to produce a management revolution is simply the fact that we live in a world today that is becoming more and more competitively intense.  There's no place to hide from competition today.  You have new competitors with zero legacy costs or with radically new cost models.  We have pressure from consumers who are so extraordinarily well informed today, who can compare and shop and have literally perfect data.  A lot of the friction that companies once relied on to prop up their margins, the friction of ignorant customers and high transaction costs, high search costs, all that friction is being driven out of the economy.

And every company is in a race to create new forms of differentiation, faster than they lost these old kind of sources of protection for their margins.  And the only way you're going to win that battle, is by creating companies that are deeply, deeply innovative.  Innovation's a big buzz word today, but I would argue there's not one company out of 100 that's made innovation the work of every single employee.

And if you want to test me on that, here's a simple question, a couple of questions you can ask to any frontline, first level employee in your organization.  Ask them first of all this; how have you been trained as a business innovator?  I hear all these CEOs talking about how important innovation is, but I know of no more than one or two companies that have trained every single employee to be an innovator.  Why wouldn't we do this in the same way that Toyota trained people to be great problem solvers?

Innovation is not something that occurs naturally.  You can develop an aptitude for it, you can learn how to unpack industry orthodoxies, how to identify the unarticulated needs of customers.  How to look at the world around you, the competencies, the capabilities of other companies and figure out new and creative ways of putting those together with your capabilities, to create new services, new products.  You can teach people all of these things and yet we haven't done it.

 

 

Topic: Knowledge as a commodity

Gary Hamel: Thirdly and lastly, we also live in a world where knowledge itself is becoming a commodity.  Over the last few years as companies have gotten into more and more relationships with other companies, industry consortia, outsourcing, off-shoring, supplier networks, all of those new arrangements are conduits through which skills and knowledge flows.

Think about Apple getting into the mobile phone business.  How is a company with no history in that business, how do you get into that from a standing start, in about 18 months?  How does that happen? It happens because most of the knowledge, most of the technology Apple needed to do that, it could buy off the shelf as commodity knowledge.  The chipset, the RF antenna, batteries, packaging, you wrap a beautiful user interface around it, you build some wonderful new industry architecture, the App Store.

And so you have this amazing success, but the only way to do it in that timeframe was that a lot of that knowledge was already commodity.  Turn an Apple iPhone or an iPod around and read the back, it will say, "Designed in California, made in China."  Now what part of that equation would you like to have, right?  It doesn't matter today how big you are.  It doesn't matter where you sit in that eco-system.  What matters is the ratio of value to cost that you're producing, right.  What's your share of the total value that customers get out of this ultimate product, versus what is the share of cost that you had to incur in producing that value?

So you look at Apple today with about three, four percent of the market for mobile phones by volume, but representing about 30 percent of the profitability of that industry.  Huge amount of value proportionate to the cost.  How do you do that?  You do that by creating a company where people every day are willing to come to work and bring you their imagination and their creativity and their passion.  You have to create an extraordinary workplace that prompts that extraordinary contribution that drives extraordinary value.

 

Recorded on August 14, 2009

Business thinker Gary Hamel thinks accelerating change, fierce competition and knowledge becoming a commodity will fuel the fire for transforming how companies are run.

Are we really addicted to technology?

Fear that new technologies are addictive isn't a modern phenomenon.

Credit: Rodion Kutsaev via Unsplash
Technology & Innovation

This article was originally published on our sister site, Freethink, which has partnered with the Build for Tomorrow podcast to go inside new episodes each month. Subscribe here to learn more about the crazy, curious things from history that shaped us, and how we can shape the future.

In many ways, technology has made our lives better. Through smartphones, apps, and social media platforms we can now work more efficiently and connect in ways that would have been unimaginable just decades ago.

But as we've grown to rely on technology for a lot of our professional and personal needs, most of us are asking tough questions about the role technology plays in our own lives. Are we becoming too dependent on technology to the point that it's actually harming us?

In the latest episode of Build for Tomorrow, host and Entrepreneur Editor-in-Chief Jason Feifer takes on the thorny question: is technology addictive?

Popularizing medical language

What makes something addictive rather than just engaging? It's a meaningful distinction because if technology is addictive, the next question could be: are the creators of popular digital technologies, like smartphones and social media apps, intentionally creating things that are addictive? If so, should they be held responsible?

To answer those questions, we've first got to agree on a definition of "addiction." As it turns out, that's not quite as easy as it sounds.

If we don't have a good definition of what we're talking about, then we can't properly help people.

LIAM SATCHELL UNIVERSITY OF WINCHESTER

"Over the past few decades, a lot of effort has gone into destigmatizing conversations about mental health, which of course is a very good thing," Feifer explains. It also means that medical language has entered into our vernacular —we're now more comfortable using clinical words outside of a specific diagnosis.

"We've all got that one friend who says, 'Oh, I'm a little bit OCD' or that friend who says, 'Oh, this is my big PTSD moment,'" Liam Satchell, a lecturer in psychology at the University of Winchester and guest on the podcast, says. He's concerned about how the word "addiction" gets tossed around by people with no background in mental health. An increased concern surrounding "tech addiction" isn't actually being driven by concern among psychiatric professionals, he says.

"These sorts of concerns about things like internet use or social media use haven't come from the psychiatric community as much," Satchell says. "They've come from people who are interested in technology first."

The casual use of medical language can lead to confusion about what is actually a mental health concern. We need a reliable standard for recognizing, discussing, and ultimately treating psychological conditions.

"If we don't have a good definition of what we're talking about, then we can't properly help people," Satchell says. That's why, according to Satchell, the psychiatric definition of addiction being based around experiencing distress or significant family, social, or occupational disruption needs to be included in any definition of addiction we may use.

Too much reading causes... heat rashes?

But as Feifer points out in his podcast, both popularizing medical language and the fear that new technologies are addictive aren't totally modern phenomena.

Take, for instance, the concept of "reading mania."

In the 18th Century, an author named J. G. Heinzmann claimed that people who read too many novels could experience something called "reading mania." This condition, Heinzmann explained, could cause many symptoms, including: "weakening of the eyes, heat rashes, gout, arthritis, hemorrhoids, asthma, apoplexy, pulmonary disease, indigestion, blocking of the bowels, nervous disorder, migraines, epilepsy, hypochondria, and melancholy."

"That is all very specific! But really, even the term 'reading mania' is medical," Feifer says.

"Manic episodes are not a joke, folks. But this didn't stop people a century later from applying the same term to wristwatches."

Indeed, an 1889 piece in the Newcastle Weekly Courant declared: "The watch mania, as it is called, is certainly excessive; indeed it becomes rabid."

Similar concerns have echoed throughout history about the radio, telephone, TV, and video games.

"It may sound comical in our modern context, but back then, when those new technologies were the latest distraction, they were probably really engaging. People spent too much time doing them," Feifer says. "And what can we say about that now, having seen it play out over and over and over again? We can say it's common. It's a common behavior. Doesn't mean it's the healthiest one. It's just not a medical problem."

Few today would argue that novels are in-and-of-themselves addictive — regardless of how voraciously you may have consumed your last favorite novel. So, what happened? Were these things ever addictive — and if not, what was happening in these moments of concern?

People are complicated, our relationship with new technology is complicated, and addiction is complicated — and our efforts to simplify very complex things, and make generalizations across broad portions of the population, can lead to real harm.

JASON FEIFER HOST OF BUILD FOR TOMORROW

There's a risk of pathologizing normal behavior, says Joel Billieux, professor of clinical psychology and psychological assessment at the University of Lausanne in Switzerland, and guest on the podcast. He's on a mission to understand how we can suss out what is truly addictive behavior versus what is normal behavior that we're calling addictive.

For Billieux and other professionals, this isn't just a rhetorical game. He uses the example of gaming addiction, which has come under increased scrutiny over the past half-decade. The language used around the subject of gaming addiction will determine how behaviors of potential patients are analyzed — and ultimately what treatment is recommended.

"For a lot of people you can realize that the gaming is actually a coping (mechanism for) social anxiety or trauma or depression," says Billieux.

"Those cases, of course, you will not necessarily target gaming per se. You will target what caused depression. And then as a result, If you succeed, gaming will diminish."

In some instances, a person might legitimately be addicted to gaming or technology, and require the corresponding treatment — but that treatment might be the wrong answer for another person.

"None of this is to discount that for some people, technology is a factor in a mental health problem," says Feifer.

"I am also not discounting that individual people can use technology such as smartphones or social media to a degree where it has a genuine negative impact on their lives. But the point here to understand is that people are complicated, our relationship with new technology is complicated, and addiction is complicated — and our efforts to simplify very complex things, and make generalizations across broad portions of the population, can lead to real harm."

Behavioral addiction is a notoriously complex thing for professionals to diagnose — even more so since the latest edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-5), the book professionals use to classify mental disorders, introduced a new idea about addiction in 2013.

"The DSM-5 grouped substance addiction with gambling addiction — this is the first time that substance addiction was directly categorized with any kind of behavioral addiction," Feifer says.

"And then, the DSM-5 went a tiny bit further — and proposed that other potentially addictive behaviors require further study."

This might not sound like that big of a deal to laypeople, but its effect was massive in medicine.

"Researchers started launching studies — not to see if a behavior like social media use can be addictive, but rather, to start with the assumption that social media use is addictive, and then to see how many people have the addiction," says Feifer.

Learned helplessness

The assumption that a lot of us are addicted to technology may itself be harming us by undermining our autonomy and belief that we have agency to create change in our own lives. That's what Nir Eyal, author of the books Hooked and Indistractable, calls 'learned helplessness.'

"The price of living in a world with so many good things in it is that sometimes we have to learn these new skills, these new behaviors to moderate our use," Eyal says. "One surefire way to not do anything is to believe you are powerless. That's what learned helplessness is all about."

So if it's not an addiction that most of us are experiencing when we check our phones 90 times a day or are wondering about what our followers are saying on Twitter — then what is it?

"A choice, a willful choice, and perhaps some people would not agree or would criticize your choices. But I think we cannot consider that as something that is pathological in the clinical sense," says Billieux.

Of course, for some people technology can be addictive.

"If something is genuinely interfering with your social or occupational life, and you have no ability to control it, then please seek help," says Feifer.

But for the vast majority of people, thinking about our use of technology as a choice — albeit not always a healthy one — can be the first step to overcoming unwanted habits.

For more, be sure to check out the Build for Tomorrow episode here.

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Credit: World Values Survey, public domain.
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