Sea Change Demands New Paradigms and Tools

The previous blog entry, Creative Renewal and Legacy Management Tools, briefly discussed the legacy leadership and management concepts and practices that dominated during the 20th century and that had a very big hand in why America dominated the world economy for much of it. The previous entry also briefly discussed why those same tools have become a major impediment in the 21st century.

There is a document available on Schering-Ploughs web site, which is a transcription of a conversation that S-P’s new CEO Fred Hassan had with a writer/reporter. In that document, at one point Mr. Hassan says that “CEOs who understand the human factor, who see the big picture of building sustainable value, do better in the long term than those who just try to appease the Street every quarter.” Indeed. But why?

New principles and practices are needed to meet the challenges of a complete sea-change in the fundamental rules of business in the 21st century. During most of the 20th century, the primary drivers of business success were execution and production. Not to say that innovation wasn’t important; it was important. But if you set up a scale and put “execution and production” on one end of the scale, and “creativity and innovation” on the other end, the scale would tip heavily toward execution and production.

In the 21st century, the balance has changed. Priorities have reversed. The heavier side of the scale has become creativity and innovation. Again, not to say that superior execution and production aren’t important; they are still critical. But execution and production no longer provide competitive advantage; in a hyper-competitive, dynamic global economy, they have been reduced in status to “table-stakes.” You have to have them to play the game; but they are simply not good enough to win the game.

In the new millennium, winning the game requires that creativity and innovation are THE core capability. Creativity and innovation have become the core strategic drivers, the primary differentiators, the foundations of sustainable organic growth. And sustainable creativity and innovation requires fundamentally new practices that tap into, unleash and align blocked and pent-up workforce capabilities, energy, passion and commitment.

The old tools focused on holding all of that down in the quest for continuity, predictability, conformity and control. The old tools are all about compliance to a (relatively) fixed strategy and to a (relatively) fixed corporate ideology, values and behavioral norms. The old tools focused on preserving the institution. In the 21st century, businesses that run themselves under the old 20th century institutional model will go the way of the dinosaurs.

Wholly new leadership and management principles and practices will be required to ensure that a business survives and grows. And those new principles and practices will be focused on ensuring that a business never becomes an institution, i.e. ensuring that it remains alive, vital, creative, innovative and self-renewing.

We’ll discuss these new leadership and management principles and practices over the next several blog entries: They include:

o The New Social Contract
o Leverage Diversity: Maximize Differentiation AND Integration
o All Hands on Deck: The Commitment-Driven Enterprise
o Partnering
o Building Commitment
o Inside-Out Alignment:
o Intrinsic Motivation
o Shared Purpose
o Three-Way Alignment
o Freedom + Accountability
o Dynamic Alignment = Dynamic Company
o Tapping the Current
o Open the Channel with New Communication Practices
o Keep Current to Keep the Current Flowing
o Tap the Underground River (Access the Right Brain)
o The Post-Institutional Enterprise

We'll address these topics in some depth over the next several weeks.

Dean Robb, Ph.D.