With specialization and globalization, life is now divided between our individual connection to the world and the world as whole playing out in real time before us. We are simultaneously able affect it, and stand powerless before it.
Many businesses are going through what Walter Kiechel calls a “re-engineering,” with the individual customer at the focus of global business strategy—and with mixed results that he says are largely seen as failures, or perhaps just “a fad.” Kiechel says business focus has shifted from the somewhat robotic efficiency measures and philosophical high-mindedness of previous eras to one that now values two things above all else: leadership and innovation.
Innovation is the 21st-Century Gold Standard
And it probably should be. Leadership, on the other hand, is a much grayer area.
Hardline proponents of shareholder value still cling to stock price. It guides their decisions, tells them exactly how they are doing, and must comfort them on cold evenings. It’s directly measurable. But human behaviorists and “leaders”—and count the agile among them—seem to be all over the map, much of it fire without heat. If customer-focused re-engineering is a fad, it will join many others that have come and gone on mainstream bookstore shelves over past 20 years, with themes like:
- navigating change
- the wisdom of teams and power of loyalty
- running a learning organization
- “core competencies”
- “delighting customers”
- moving the cheese
And maybe agile will fall upon the pyre, too.
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But Agile’s a Little Different
“Innovation is where satisfying the fierce demands of the market depends, as never before, on eliciting the best from the humanity of production,” says Kiechel, adding that “Perhaps the biggest managerial challenge facing the 21st-century company will be finding ways to free that spark, resident in employees, from the organization’s tidal pull to keep doing the same old things.”
By design, agile business management tries to maintain a safe haven for that spark to happen, allowing flashes of human insight beyond analytical calculation, though somehow driven by analytical calculation. Agile business management strives to make the innovator’s spark possible by taking small steps and testing a broad range of opportunities—small risks that change often, rather than a giant hierarchical strategy imposed from above.
Innovators Vs. Leaders
Innovators tend to march to their own beat. Leaders tend to play to a collective beat. They are in many ways opposite mindsets, but they must find a way to be complementary.
In 1970, U.S. business schools granted 26,000 MBA degrees. In 2000, that number had quadrupled to 112,000. Rather than training general managers to run the factory, today’s business schools sell the value proposition that they are helping leaders develop—giving them a safe harbor to develop their sea legs.
But can leadership really be taught?
Can innovation be taught?
Can creativity be taught?
The short answer is “no.” The long answer is “um, kind of.” Perhaps the same could be said of leaders as of innovators and of creativity, in general: you cannot teach it, but you can help it emerge.
We’ve Come a Long Way
As a society, we are objectively better off due to the 100-year rise of business management in terms of literacy gains, poverty rates, food production, and average quality of life. However, there are big challenges ahead in the U.S. and in the world that status quo shareholder-value measures cannot address.
- How are we going to create jobs for everyone who wants one?
- How are we going to balance environmental constraints with a need for constant growth?
- Will we deal with the new normal, which is constant change?
- Can we maximize returns in a world where there is no “one best way”?
In a metaphysical sense, what will be business management’s source of authority to try to handle these problems? Hierarchy, wealth, and notions of innate intellectual superiority fell short in previous eras because, as Kiechel says, They lacked a “moral resonance” earlier generations hoped for. Can agile achieve that kind of resonance?
Time will tell.
My Apologies to History
The same history can serve polar opposite ideas and ideologies. And my summary of 100 years, based on someone else’s summary of 100 years, glosses over many events with broad generalities. But I think history is like cultural DNA: though it may mutate over time, it still contains within it the record of adaptations past, and you don’t have to recite every nucleotide chain to appreciate the general shape of the helix. The history of business contains different eras, leaving us with legacy ideas about efficiency, social duty, and shareholder value. All of these things shape what we deem important and how that expresses itself today.
It seems we’re approaching the end of the Shareholder Value Era. A new way of thinking about business must rescue us from diminishing returns and the effects of non-exclusivity. Like the robber baron age that came before, shareholder value has exploded the gap between the haves and the have-nots, while bringing American business practices to global attention. And stakeholders around the world are beginning to wake up.
If the Agile Era is to be the next era—concentrated on faster and faster adaptations for better and better innovation and (one assumes) bigger and bigger acquisition fortunes to be made—what makes it something people ought to support? What will agile do for us? Or as Kiechel puts it, what is business management’s “source of moral authority”?
Is agile a completely agnostic process?
Is agile meritocratic—such that, to the best innovators and best leaders go the spoils?
Or is agile simply the best alternative to authorities of hierarchy?
Or is agile a fad?
Or none of these things?
Time will tell.