Maybe it was inevitable that the first few weeks of the new millennium would bring a backlash against the dot.com frenzy. Too many people had been voicing too many concerns about some of the extravagant valuations that Internet companies were achieving for there not to be some reaction.
And those who point out that even the most extraordinary technologies cannot defy the logic that links business sustainability to at least some sort of profit are introducing a much-needed dose of sanity.
But that does not mean that senior executives can sit back and dismiss the Internet and its various ramifications as some passing fad, or as a development of only limited significance. The net is already changing the way business is conducted: for example, it has done much more than global branding campaigns and aggressive overseas expansion by US companies to bring about the reality of the global village. No longer are consumers limited to the choice of goods in their domestic high street. And no longer can companies get away with selling the same products for much more in one country than in another.
But, while the Internet – even if there is a little more doom-mongering than there was a short time ago – attracts the lion’s share of attention, it won’t be the only agent of change in the years ahead. And this is wonderful news for all those management consultants who have been preaching change – and the need for the development of “change management skills” for years.
But it can also be welcome to their clients, provided they are prepared to adapt and learn.
It is easy to get carried away by this. For instance, Business Climate Shifts, a book recently published by the accounting and consulting firm PricewaterhouseCoopers in association with Butterworth Heinemann, begins with a section entitled “Change isn’t what it used to be” and adapts that overworked consulting term “paradigm shift” to create another catchphrase, “phase shift”, which seems to have pretty much the same meaning as former Intel chief executive Andy Grove’s “strategic inflection point”. In other words, a big change.
But not everything written about change is nonsense. As Warren Bennis, the distinguished US authority on leadership, makes clear in his foreword to the book, companies need to be aware of the chances of “critical discontinuities” bringing about their downfall. While some companies grow complacent and others fall out of step with changing customer tastes (you supply the examples), “today’s smartest and most resilient companies are those that don’t take anything for granted”, he writes.
Now, not taking anything for granted might sound frightening – and it is certainly different from the environment in which our parents worked.
However, it can also be invigorating – and it is part of what seems to be making business attractive to talented youngsters once more, after a lengthy period in Britain especially, when it was a huge turn-off. But keeping those bright young people interested requires a new way of doing things. They will feel sadly let down if corporate life turns out to be a lot less exciting than it seems to be in all those tales of Internet start-ups.
All this means that the real challenge in this discontinuous, topsy-turvy world is one of management. If companies are going to survive they will need top-class people with the confidence and vision to make brave and quick decisions. And that does not happen in the command-and-control-type organisations that – for all their protestations to the contrary – so many companies remain.
In another, just-published book, Management 21C (Financial Times/Prentice Hall), Subir Chodhury, a young business executive who has pulled together a selection of writings by such well-known experts as Rosabeth Moss Kanter, Peter Senge and CK Prahalad, suggests that this century’s corporate leaders need to be more like entrepreneurs in that their most valuable asset should be the ability to dream. Nor does he reckon that the similarity with entrepreneurs will end there. Describing them as the “next-mentality breed” on account of their constant striving for the next success, he says that the ideal leaders of the coming age will be hard-working, never satisfied, fascinated by ideas, curious and also persistent.
The fact that so many corporations have trouble hanging on to the entrepreneurs they inherit when they acquire promising-looking young companies suggests that this happy circumstance is still some way off. Accordingly, in the short term at least, those consultants who talk in terms of grave threats rather than wonderful opportunities probably have it about right. But now is as good a time as any for senior executives to save themselves and their businesses by confronting what for many will be the biggest change of all – a change in their attitude.
Roger Trapp writes about management and other business issues for The Independent and Independent On Sunday.
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