Rethinking the Future




NICHOLAS BREARLEY PUBLISHING                        1997


Front cover

This book is a meeting place of minds. It provides a unique opportunity to gain insights into tomorrow from today’s most highly regarded business thinkers.

Rethinking The Future brings together a list of luminaries that reads like a ‘hall of fame’ –

Charles Handy, Stephen Covey, Michael Porter, C.K. Prahalad, Gary Hamel,

Michael Hammer, Eli Goldratt, Peter Senge, Warren Bennis, John Kotter, Al Ries and Jack Trout, Philip Kotler, John Naisbitt, Lester Thurow and Kevin Kelly.

Their cutting-edge thinking has helped to guide many thousands of corporations through the changing landscape of business.  Now, in a series of original and inspiring contributions, they define the new paradigm that will revolutionize business and society in the 21st Century.

Everywhere we look today, powerful new forces are reshaping the world that we thought we knew. Traditional boundaries between industries, disciplines and countries are rapidly blurring, and the old rules of management no longer make sense in a post-industrial world.

Rethinking The Future is about a world of increasing uncertainty in which the very nature of work, of organizations and of economics is changing. It is about the move away from traditional hierarchies and the democratization of power. It is about giant nation states and corporations giving way to global networks. Tomorrow’s executives will need to understand business at a far more global and synergistic level than ever before, and to feel comfortable leading people who have learned to manage themselves. This is a book for those executives.

The book looks at how organizations can be redesigned to survive and thrive in tomorrow’s hyper-competitive global environment. How they can learn to adapt to change and dramatically improve their performance. And how they should be ‘managed’, if at all.

Rethinking The Future examines the changing role of the leader and the powerful influence of corporate culture. And it probes the universal principles and values that ultimately govern the success of any leader or organization. It also looks at strategies for creating tomorrow’s competitive advantages and tomorrow’s markets, which will be driven by new demographics, new global structures and new technology.

Most importantly of all, the book gives readers a framework for understanding the big picture. It provides a panoramic perspective that puts all the pieces together in a coherent and easily understandable context. In fact, it represents an entire bookshelf condensed between two covers – a business education for the 21st Century. Rethinking The Future is essential reading for anyone concerned with business success beyond the next quarter.

About the editor

Rowan Gibson is an independent business consultant who works in close association with EURO RSCG – Europe’s largest advertising agency network. He spends most of his time creating international marketing strategies and making top management presentations. Born and educated in London, he lives today with his German wife and two sons near Düsseldorf in Germany.

Foreword by Alvin and Heidi Toffler

Not since the dawn of the Industrial Revolution have managers had more to learn (and unlearn) about the art of business leadership. And seldom have they been offered so much diverse and confusing advice. The reason for the current upheaval in management thinking is the arrival on the world scene of a revolutionary new ‘system for creating wealth’. Historians can slice the past into countless slivers. But in terms of transformational change, there have been only a few true turning points in history, each associated with the emergence of a different system for wealth creation.

The invention of agriculture provided the human race with a new way to convert the earth’s resources into wealth, and almost everywhere launched a ‘First Wave’ of change in civilization that gave rise to peasant-centered economies and eventually supplanted hunting and foraging as the primary means of human subsistence.

Similarly, the Industrial Revolution triggered a ‘Second Wave’ of change that gave us a factory-based system for wealth creation. In turn, this led to mass production, the drive for larger and larger markets, and the need for bigger, ever more bureaucratic business organizations. Until very recently, most of what was taught in management texts and in schools of business reflected ‘Second Wave’ thinking.

Based on assumptions of linearity and equilibrium, and heavily quantified, the dominant management paradigm paralleled the mechanistic assumptions of western economics, which, in turn, attempted to parallel Newtonian physics. This multileveled parallelism – the belief that management ‘science’ fitted perfectly with economic ‘science’ and that both were compatible with what was known about physics – made the industrial management paradigm enormously persuasive.

Indeed, all three of these disciplinary ‘layers’ formed parts of an even larger set of epistemological and philosophical ideas which has elsewhere been described as ‘indust-reality’ – reality as perceived through the eyes of people reared in an industrial culture. In short, the dominant business paradigm of the Second Wave era was part of a much larger architecture of thought.

In 1970, we publicly attacked the prevailing paradigm for the first time in our book Future Shock, and suggested that businesses were going to restructure themselves repeatedly and move ‘beyond bureaucracy’; that they would have to reduce hierarchy and take on the character of what we termed ‘ad-hocracy’. At the time, all this sounded sensationalist to many readers. We had a similar experience in 1972, when we delivered a consulting report to AT&T, then the world’s largest privately held corporation, saying that it would have to break itself up. For years, that report was literally kept hidden from the very managers who needed to prepare the firm for the break-up which, in fact, came 12 years later – the biggest and most excruciating corporate break-up in history. And when in 1980, in our book The Third Wave, we coined the term ‘de-massification’ to describe the coming move beyond mass production, mass distribution, mass media and socioeconomic homogeneity, we again were thought by some to be too visionary.

We suspect that many of the contributors to this volume have faced comparable skepticism. The reason is simple: anyone who attacks a dominant paradigm too early can expect to be regarded with suspicion by the reigning intellectual and academic establishment. But paradigms – including management paradigms – are not permanent. And the industrial era management model, especially in the US, is now blowing its bolts and rivets.

Today’s knowledge revolution, having launched a gigantic ‘Third Wave’ of economic, technical and social change, is forcing businesses to operate in radically new, continually shifting ways that stand Second Wave notions on their head. The industrial faith in such things as vertical integration, synergy, economies of scale and hierarchical, command-and-control organization is giving way to a fresh appreciation of outsourcing, minimization of scale, profit centers, networks and other diverse forms of organization. Every shred of industrial-era thinking is now being rescrutinized and brilliantly reformulated.

It is precisely when an old paradigm crumbles and the new one is not yet fixed in place that we get great bursts of creative thinking. This is such a moment, and some of today’s most innovative thinking about management is reflected in these pages.

Of course, as in any collection, some contributions are better than others, some fresher and more pioneering than others. But the overall thrust of this volume is exciting. It offers us a work-in-progress picture of a new business paradigm in the making.

What is still missing from this paradigm is a strong link between emergent Third Wave management thinking and Third Wave economics. One reason for this is a disparity in the relevant rates of change. While business theorists and management consultants like those in this book are exploring many aspects of the new business reality and rapidly reporting their findings, economists, with some notable exceptions, remain imprisoned by their own previous successes, seldom venturing into Third Wave territory.

A good example of the current disparity has to do with knowledge – the primary factor of production in the new system for wealth creation. An increasing amount of work is being done by consulting firms on questions of knowledge management – the assessment of knowledge assets, new approaches to organizational and individual learning, attempts to create a metric for dealing with knowledge. By contrast, mainstream economists, for the most part, ignore or underestimate knowledge as a factor of production.

If ‘thinking outside the box’ has become a buzzword among smart business people and their advisers, economists do so at far greater risk to their reputations in the profession. As a result, Third Wave economics is still in its pre-natal stage, and the intellectual framework that might unify management theory and economics is not yet in place. The task of creating that framework still lies ahead.

What business practitioners – as well as their economists and advisors – will need, however, is an even more comprehensive model of the oncoming Third Wave reality, not just focusing on economics and management issues, but showing how these must respond to social, technological, political, cultural and religious shocks – of which there will be plenty in the years immediately ahead.

Many of these can be anticipated, as can their impact on business, and they need to be taken into account, since a sudden massive swing in any one could wreak as much havoc on a company or industry as could economic change. Unfortunately, these broader issues still lie outside the frame of reference of most business thinkers and economists alike.

Nevertheless, the distinguished contributors to these pages provide important conceptual components out of which the next business paradigm will be built. The chapters teem with provocative, illuminating ideas, good questions, fresh insights and alternative ways of thinking about the competitive/cooperative combat to come. As the Third Wave system for wealth creation spreads, marked by hypercompetition, successive technological revolutions and social dislocation and conflict, it is creating high unpredictability and non-linear conditions. Business leaders and strategists who wish to flourish in so turbulent and revolutionary an environment will ignore this book at their peril.

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