FUTURE SPECIAL................. JULIAN BIRKINSHAW

FUTURE SPECIAL   JULIAN BIRKINSHAW 

ONE STEP FORWARD TWO STEPS BACK     

             

PROFESSOR OF STRATEGIC AND INTERNATIONAL MANAGEMENT AT LONDON BUSINESS SCHOOL 

THE BIG IDEA: COMPANIES EXPERIMENTING WITH PROGRESSIVE NEW MODELS CHANGE FIND THERE EXTREMELY ARE POWERFUL DIFFICULT INERTIAL FORCES

There are three ways of tackling the question of what the world of work look like in ten years. The first is to look at the broad trends in the business environment, and to think about their consequences. Technology is making the business world more interconnected, and allowing greater mobility in where work takes place. Gen Y, those born after 1980, are more tech-savvy, better at multi-tasking and they are starting to move into positions of responsibility in large companies. There are social trends towards increasing transparency, in terms of sharing of information, and greater responsibility for the environment. There is a shift in the centre of gravity of economic activity from west to east, with India and China, in particular, wielding increasing influence. A second way is to look at the leading-edge practices that some companies are experimenting with, on the basis that their innovative ways of working will gradually get adopted by more traditional companies. For example, Google has an informal and meritocratic model, where employees are encouraged to spend 20% of their time on their own innovative projects. HCL Technologies, under former CEO Vineet Nayar, became very well known for its “employees first, customers second” mantra and the notion that managers provide service to their employees, not the other way round. Chinese white goods company, Haier, has recently got a lot of publicity for pushing profit and loss accountability down to its front-line business teams, to improve responsiveness and accountability. Silicon Valley gaming company, Valve, has been in the news for building a fast-growing organisation with no managers, and where employees set their own salaries. These examples, and many others, help to paint a picture of what is possible. Put them together, and you get a picture of the workplace of the future as flatter, fluid, more empowered, open and responsible. This is an alluring list of attributes, and it is tempting to stop here. Given the trends and examples documented above, it seems highly persuasive that the companies of the future will look like this. Not so fast. I suggested there are three ways to look into the future, and I have only talked about two of them. The third way, paradoxically, is to look into the past and, to give our discussion of changes in the workplace some historical context. In 1990, the current Dean of Harvard Business School, Nitin Nohria, published a book with Bob Eccles called Beyond the Hype, where he described his research in the late 1980s which sought to identify the workplace of the future. Sure enough, the consensus back then, 25 years ago, was that companies would become more decentralised, self-organised, virtual and engaged. Nohria concluded that the talk of virtual, flat and empowered workplaces was largely empty rhetoric. Companies were not actually changing in the ways they had expected. Rather, executives were simply using the rhetoric of change to inspire their employees to work smarter and better. The companies they were managing, in the meantime, were as hierarchical, slowmoving and silo-based as ever. So looking at the same set of issues in 2013, we have to ask what, if anything, has changed since Nohria and Eccles’ study. My view is that there are, indeed, powerful forces causing change in the workplace and there are, of course, companies experimenting with progressive new models. But at the same time, there are equally powerful inertial forces that are making change extremely difficult. These forces are partially internal. But inertia also comes from external conditions that executives have little control over – regulation, uncertainty in the economy, labour unions. Put it all together, and these forces tend to cancel each other out over time. Companies such as Google, HCL and Haier are often pushing new ways of working, and succeed in showing the rest of the business world what is possible, the benefits are often shortlived. Perhaps the CEO moves on and a more traditional leader is put in his place; perhaps there is a recession and the company gets into financial difficulties, leading to a recentralisation of power; perhaps the company simply “grows up” and finds that a more traditional structure is necessary for managing at scale. So the workplace ten years from now isn’t going to be dramatically different to what we see today. The biggest areas of change will be in how we use technology (the mobile Internet) to change the way we communicate and collaborate with one another. But the progress towards flatter, more empowered business practices will be “two steps forward, one step back”, just as Nohria and Eccles observed 25 years ago.

 CDET 140103