Gary Hamel is a featured speaker at the World Business Forum 2009 on October 6-7,2009 and will be leading the special seminar "The Future of Management"  on October 8th, 2009. He has been ranked "The world"s most influential business thinker" by the Wall Street Journal and Fortune magazine has called him "the world"s leading expert on business strategy."

Management Must Be Reinvented
By: Gary Hamel

"Few would doubt that the environment for business has changed dramatically over the past few months, yet the gut-wrenching U-turn in the business cycle is just one part of a much bigger story.

In recent decades, the pace of change has accelerated wildly. Increasingly, we live in a world that is all punctuation and no equilibrium, a world in which change is seditious, unrelenting and occasionally jaw-dropping. Truly, change has changed.

If you think this is hyperbole, cast your mind back to the business environment of the 1970s. If you worked for a phone company, an auto manufacturer, a bank, a television broadcaster, a newspaper publisher, a drug maker, or just about any other large company, the 1970s were a decade of relative calm. In most industries, there were no dramatic changes in market leadership, no game-changing technology breakthroughs, no radical new business models, and no abrupt shifts in customer habits. Sure there was change, but it was glacial, not volcanic.

Today, there are dozens of once-celebrated companies—like Ford, Motorola, Sony, Starbucks, AOL, Sprint, Home Depot, and Sun Microsystems—that are struggling to regain their mojo. Having been knocked back on their heels by change, these companies are testament to a simple and disturbing fact: the world is becoming more turbulent faster than most companies are becoming more resilient. The result: greater year-to-year volatility in earnings, rapidly shrinking strategy life cycles, and fewer CEOs making it to retirement with their reputations intact. Today, a company needs more than a competitive advantage at a point in time; it needs an evolutionary advantage over time.

A generation ago, industry incumbents were largely protected from the bracing winds of creative destruction. Regulatory hurdles, capital barriers, distribution monopolies, and customer inertia all guarded the status quo. No longer. As these fortifications have crumbled, newcomers like Vizio, Amazon, Ryanair, Google, ArcelorMittal, Acer and dozens of others have rushed in to seize the high ground. Today there are no safe havens, no sinecures, no walled gardens.

And now, even knowledge itself is becoming a commodity. How else can one explain the ability of a neophyte like Apple to jump to the head of the smart phone class? Sure the iPhone’s user interface is cool, but it was the widespread availability of commodity cell phone expertise and components—from the RF antenna, to the chipset and battery—that allowed Apple to go from idea to icon in record time. Dense supplier networks, rigorous benchmarking, an army of industry-focused consultants, and instant communications are just a few of the things that are helping to diffuse and homogenize knowledge. In this environment what matters is less a company’s capacity to exploit a proprietary knowledge advantage, than its ability to generate a rapid stream of powerful new insights.

Building companies that are highly pliable, where change is an autonomic process, creating organizations that protect their leadership with a never-ending barrage of innovation, infusing work environments with the purpose and passion that inspires dramatic new thinking—these are the make-or-break challenges for companies in the 21st century.

But here’s the rub. The technology we use to mobilize and organize human effort at scale—the standard management toolkit—is woefully inadequate to these new imperatives.

Management 1.0 was invented at the beginning of the machine age with the goal of turning free-spirited, obstreperous, and ill-disciplined human beings into semi-programmable robots. And it succeeded spectacularly. One can imagine Frederick Taylor’s ghost flitting about an Intel production line or an AT&T call center and rubbing his vaporous fingers together in glee. But efficiency at scale is no longer the most pressing challenge for modern organizations. Instinctively we know that management is out of date, we know its rituals and routines look slightly ridiculous in the dawning light of the 21st century. That’s why the antics in a Dilbert cartoon or an episode of The Office are at once familiar and cringe-making. Surely, we say to ourselves, we can do better.

So our task — those of us who are managers or care about management — is to reinvent this critical technology for a new age."

Gary Hamel is a featured speaker at the World Business Forum 2009 on October 6-7,2009 and will be leading the special seminar "The Future of Management"  on October 8th, 2009. Learn more at www.wbfny.com

This article is reprinted with permission from The Wall Street Journal Online