Goldsmith’s insight serves as the title of one of his most thoughtful books and I presume to add that what got you here won’t even allow you to remain here, no matter whatever and wherever “here” and “there” may be. This is perhaps what Julian Birkinshaw and Jonas Ridderstråle have in mind when observing that “the formulae for success that worked in prior decades offer only very limited insights into what might work in the future. This is because the business context keeps changing: not in the banal sense that we face increasing levels of technological change and higher levels of competition, but rather in the more fundamental sense that every source of competitive advantage carries with it the seeds of its own destruction. This is a version of the famous ‘Icarus Paradox’; the attribute or capability that makes companies successful in one era makes them susceptible to failure in the next era.”
Clayton Christensen is generally credited with formulating a similar concept, “The Innovator’s Dilemma.” In his eponymous work published in 1997, Christensen notes that the logical, competent decisions of management which are critical to the success of their companies are — or at least can be —also the reasons why they lose their positions of leadership. Leaders face a dilemma: Improve an incumbent product or service, or, create an entirely new product or service that can disrupt the given marketplace and (perhaps) the given industry. Apple and Google are among the few companies that have been able to do both…simultaneously.
Birkinshaw and Ridderstråle nail it when observing, “Corporate generals tend to fight the last war, using structures and methods that were designed for the previous, and endorsing plans that are linear extrapolations of what worked before. What we need instead for companies to figure out how to make the rate of change inside at least as rapid as the rate of change outside. This, ultimately, is what the book is about. “
They examine three quite different models that capture and the obvious and hidden aspects of both organizational design and redesign: bureaucracy, meritocracy, and adhocracy. Their approach reflects two separate but related modes of thought: paradoxical thinking, and, what they characterize as “alternatives to the classic hierarchical way of working.”
As they point out, the concept of adhocracy is not entirely new. It is attributed to Warren Bennis in his book The Temporary Society (1968) and then picked up and popularized by Alvin Toffler in his book Future Shock (1970). This third model is particularly suited to organizations operating in a highly unpredictable business environment. “At its core, the advocacy is a management model that privileges action over position and knowledge.”
It is worth noting that in Future Shock, published almost 50 years ago, Toffler observes, “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn."
In their concluding remarks, Julian Birkinshaw and Jonas Ridderstråle suggest a key point to those who read their book: “By adopting the fast/forward principles of advocacy at a personal level, you are putting action and experimentation ahead of analytical rigor or deference to formal authority, and you are sufficiently self-confident to know that you can live with the consequences of this approach. That is what condemned to freedom really means.”
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Those who share my high regard for this book are urged to check out two others: The Three-Box Solution: A Strategy for Leading Innovation in which Vijay Govindarajan provides what he characterizes as “a simple framework that recognizes all three competing challenges face that managers face when leading innovation.” That is, simultaneously managing today’s business while creating tomorrow’s and letting go of yesterday’s values and beliefs that could keep the company stuck in the past. Also, Dual Transformation: How to Reposition Today’s Business While Creating the Future in which Scott Anthony, Clark Gilbert, and Mark Johnson explain how and why combining the assets and benefits of scale and entrepreneurial spirit will drive massive impact for almost any organization, whatever its size or nature may be.
There's been some push-back recently regarding the benefits of the digital revolution. Fast/Forward suggests that organisations that embrace 'adhocracy', make smart intuitive decisions and act decisively will be the best prepared for uncertainty. Whilst it would seem that this almost defines small, agile firms, the book is full of examples of large corporations that have done this successfully.
The core principles of Fast/Forward are built around what he calls 'The four paradoxes of progress'.
1. Creative destruction. A heretical idea challenges orthodoxy (Darwin or IKEA), disbelief of the establishment (Nokia), followed by the innovator becomes the establishment (Microsoft).
2. The more we know the less we understand. 'Whilst the human race is becoming collectively more knowledgeable every year, each of us (as individuals) is becoming relatively more ignorant'. 'Relatively' is the key word here due to the exponential increase in digital information available, compared to the linear rate of learning by us as individuals. Birkinshaw makes the case that team and networking can to some degree mitigate this paradox.
3. Connectivity and unpredictability. Competing on computational power has become a race to the bottom when it comes to solving complexity. 'There is a risk that the combination of new technology and old questions means that you end up with answers that are exactly wrong, rather than roughly right'. This is where the book makes the case for more agile management, particularly experimentation and learning.
4. Knowing and believing. Ironically, the torrent of data pouring into our lives may mean that we may inadvertently be making decisions by 'appeals to our emotions, our intuitive beliefs and our hidden values'. Fast/Forward suggests that this is no bad thing and may be a way of business leaders differentiating themselves. The example cited is Apple, where product design was as much about beliefs and emotions as it was about hard-headed business.
The concept of 'Adhocracy' is not new. Alvin Tofler explored the idea of flexibility in dealing with uncertainty in his 1973 book Future Shock. Birkinshaw updates the concept for the big data and machine learning age. He also neatly contrasts it with meritocracy and bureaucracy. I was glad to see that rather than dismissing bureaucracy as an outmoded concept, he considers the merits of each and proposes a 'Trinity in Reality' model.
The main call-to-action for me is in the chapter 'Linking Strategy Back to Purpose'. 'Leaders need to make a stronger emotional connection to those around them, rather than allowing sterile, data-driven decision making to dominate their actions, reactions and responses'. Birkinshaw suggests that organisations should put 'pro-social' goals first, for example hire for attitude and train for skill (most organisations do the reverse). There are many examples cited of large organisations that clearly instil a sense of moral purpose (Tata, Arla, SouthWest Airlines) whilst innovating to break orthodox organisational models.
With all the excitement (and fear) around AI, big data and machine learning, it is easy to lose sight of vital business principles and values. The first half of Fast/Forward can be seen as a useful playbook for leaders wanting guidance on how to meld a technology revolution, give a clear sense of purpose for their organisations in an increasingly complex world and to embrace disruption.
I have just finished reading Fast/Forward and it's a very illustrative book: It is easy to read and very insightful!
I must admit it has broadened my view on how strategy should be formulated at a company. After reading this book I think my view was probably too rigid and companies can assume certain predictability from following a framework, which the authors show is not the case in today’s world. It was particularly insightful to see so many recent examples discussed in the book.
I would recommend all those interested in strategy and in how companies should respond to today's changes to read the book. While it doesn't contain all the answers you might be looking for, odds are high that it will make you think what is the best approach to stay alert in this fast paced world we live in.