John Hagel is one of the most important contributors to the canon of thought that I consider the foundation for my research in Socialogy. I honestly don’t remember where we met, but John’s contributions — especially his work at Deloitte’s Center for the Edge with John Seely Brown — has been immensely important. Strangely enough, I never wrote a review of The Power Of Pull, by John Hagel, John Seely Brown, and Lang Davison, although I think it is a pivotal work. My pal Umair Haque wrote this about the book:
Instead of cramming that moldy old paradigm down our gullets — and hoping we’re so enamored by interesting examples, florid prose, or yet more jargon that we don’t notice or protest — John, JSB, and Lang do something, well, radical. They challenge it with a novel perspective. It’s one that, a little bit like my own, is uncompromisingly constructivist, humanistic, and dynamic. It says: the economy’s what we create every day, with every decision we make. And we can, with small steps and big dreams, create a better one. It’s a perspective anchored in creating real, enduring value, by doing stuff that matters most, in a messy, complex — and very fragile — human world.
So don’t just read Pull because it tells you what to do next. Read it because it paints a nuanced, compelling picture of why to do next — because it will help you see, and more importantly, feel, the contours of a new paradigm for 21st century prosperity.
I completely agree.
About John Hagel
John Hagel III has nearly 30 years experience as a management consultant, author, speaker and entrepreneur, and has helped companies improve their performance by effectively applying information technology to reshape business strategies. John currently serves as co-chairman of the Silicon Valley-based Deloitte Center for the Edge, which conducts original research and develops substantive points of view for new corporate growth.
Before joining Deloitte, John was an independent consultant and writer. Prior to that, he held significant positions at leading consulting firms and companies. From 1984 to 2000, he was a principal at McKinsey & Co., where he was a leader of the Strategy Practice. In addition, he founded and led McKinsey’s Electronic Commerce Practice from 1993 to 2000. John has also served as senior vice president of strategic planning at Atari, Inc., and earlier in his career, worked at Boston Consulting Group. He is the founder of two Silicon Valley startups.
John is the author of a series of best-selling business books, including Net Gain, Net Worth, Out of the Box and The Only Sustainable Edge. He has won two awards from Harvard Business Review for best articles in that publication and has been recognized as an industry thought leader by a variety of publications and professional service firms. Additionally, he and Center Co-chairman John Seely Brown recently contributed a chapter to Business Network Transformation: Strategies to Reconfigure Your Business Relationships for Competitive Advantage (2009) and The Power of Pull (April 2010; 2nd edition December 2012).
Stowe Boyd: John, do you think that the intensification of competition is a driving force behind CEOs wanting to find more productivity through the adoption of social tools and techniques?"Our point of view is that the rationale of scalable efficiency is becoming less and less compelling, and the alternative rationale is scalable learning."
John Hagel: Very definitely. It’s central to a lot of the research we have been doing at the Center for the Edge. One of the perspectives we have about long term forces shaping the business landscape is that we’re in a world of mounting performance pressure. We’re in the dark side of digital technology, since that’s one of the key forces at work: that it’s intensifying competition. We are feeling it on the individual level, as well as the in institutions and companies. The 20th century corporation was based around scalable efficiency, based on larger and larger scale. The problem with that is that it’s a diminishing returns approach: the more cost you take out the longer and harder you have to work to take out that next increment of costs, because it’s tighter and tighter. It highlights one of the key challenges that companies are facing. An alternative approach from our perspective. We talk a lot about the need for institutional innovation as opposed to innovation on the product level or process level or even business model level. How do you innovate institutions? Going to the root questions: why do we have institutions to begin with? Our point of view is that the rationale of scalable efficiency is becoming less and less compelling, and the alternative rationale is scalable learning. The reason we have institutions is because we can learn faster as part of an institution than we could alone. Most institutions are not structured or operated to deliver on that rationale, but we think it’s an interesting alternative to squeezing harder and harder to get that next increment of cost savings out of the business.
SB: So there’s a fundamental shift in the reason for a business to exist, to make learning scalable. The former model of scalability was around find patterns that could be idealized as business processes, but have we reached the limit on that? Is that part of the shift to social?
JH: I think there is a related trend that were seeing. If we step back and look at the long term changes that are going on: in a very simplistic level if you look at 20th century companies it’s all about the institution and the need for individuals to adapt to the the institution. You had standardized processes that were the key to driving scalable efficiency. Your job was to read the instruction manual and not deviate, being highly predictable. And again I believe that model is less and less tenable, and the focus of power has shifted from the institution to the individual. Increasingly, if you take scalable learning as the key rationale for institutions to exist, then the individual becomes front and center. Because you can’t learn without individuals taking initiative and you can’t predict the learning that happens through serendipity, or unexpected experiments. Now the question is, ‘how does the institution adapt to the individual?’, and that pretty much is the recasting of the business world.
John Hagel debunks the technology primacy of Race Against The Machines (Erik Brynjolfsson and Andrew McAfee) by suggesting that the way that work is structured makes it liable to be ephemeralized by technology. Hagel says this is a time to rethink how work should be done. He doesn’t use the term ‘postnormal’ but he makes the case that in a world of higher complexity, rapid change and uncertainty, we need to rework work itself: to restructure our institutions, rethink what people are supposed to be doing, and refactor the meaning of work and our place in it.
Matt McAlister makes a distinction between leading and managing in this examination of Chinese motorcycle supply chain dynamics:
Matt McAlister, Leadership lessons from China
John Seely Brown and John Hagel examine how a network of motorcycle parts assemblers in China break traditional centralized management tactics to optimize for innovation in a paper called “Innovation blowback: Disruptive management practices from Asia.”
In the Chinese city Chongquing a supplier-driven network of parts developers work together under the loose guidance of their customers rather than under the orders of assemply-line management:
In contrast to more traditional, top-down approaches, the assemblers succeed not by preparing detailed design drawings of components and subsystems for their suppliers but by defining only a product’s key modules in rough design blueprints and specifying broad performance parameters, such as weight and size. The suppliers take collective responsibility for the detailed design of components and subsystems. Since they are free to improvise within broad limits, they have rapidly cut their costs and improved the quality of their products.
As a manager, when you define what is to be done and how it is to be done, then you are setting the exact expectation of what is to be delivered. There is no room for exceeding expectations, only for failing to meet expectations. Your best-case scenario is that you will get what you asked for.
John Hagel lays out a passionate argument for us to look below the superficial swirl of events, and to seek out deep meaning in our lives and work. He offers an approach to make that happen. He suggests we need to focus on three key sources of stability — aspects of society and our psychology — that are unchanging, even as everything else may seem to be chaotically shifting.
These are, John suggests, tacit knowledge, trust relationships, and talent development. I suggest that the avid reader look over John’s descriptions and his motives for selecting these, and not others. But I want to cut to the chase, where John offers his conclusions:
John Hagel, Finding Stability at the Core of Change
So, the optimist in me says that accelerating change breeds exactly the kinds of needs that will give rise to new sources of stability. While the digerati remain entranced with ever larger data flows and millisecond transactions, something much more valuable calls for our attention. As we enter a new decade, the greatest wealth will be created by a new set of entrepreneurs. These entrepreneurs will understand and address the unmet needs of those who want to participate in environments that foster deep, trust-based relationships across both virtual and physical space. These environments will focus participants on the opportunity to learn faster by working together in addressing challenges that draw on the tacit knowledge of each participant. This is an opportunity that none of the current leaders of the commercial Internet understand, much less address. There is a white space here.
In addressing this white space, we may begin to find common ground with the millions around the world who have reacted to accelerating change by opting out and embracing the never changing word of God. These people might begin to see change as an opportunity to develop their potential more fully and, in the process, develop a deep set of relationships that offer a foundation for coping with the challenges of change. At the same time, the digerati may begin to embrace more fully the need to build long-term, trust-based relationships in order to effectively harness the opportunities created by change. They might in fact begin to articulate a new variant of the sacred, one that is not static and defensive, but one that celebrates the infinite creativity of the universe.
If we listen carefully to the fundamentalist critique, we may come to recognize that our lives have indeed become less satisfying and more superficial because of our growing focus on data and transactions in ways that make it more and more difficult to achieve our potential as individuals, institutions and society. The three T’s – tacit knowledge, trust-based relationships and talent development – may become the common ground to help us all advance to new levels.
Both camps across the global chasm may finally begin to see that sustainable change requires a foundation of stability and that stability has even more value if it enables all of us to more effectively realize our potential. Beyond stability lies thrivability and thrivability can only be achieved by more effectively integrating change and stability. Perhaps it is too much to hope for, but I believe that many of those displaying the passion of the true believer could discover the delights of the passion of the explorer.
John’s thoughts, particularly the premise that we need to find stability at the core of the increasing and incessant change in which we live, are very close to my own. Like John, I am certain that there are new ways to apply social tools — many that have not yet been designed or built — that will support a more resilient way for us to live, and share the Earth. This will require changes in our thinking at many levels, and at the deepest level, the belief that there is a basis for us to find a still point in a turning world: that there are timeless and enduring truths that are the wellsprings of our creativity, innovation, and energy.
John’s piece called to mind T.S. Eliot’s ‘Burnt Norton’. Here’s an excerpt:
Garlic and sapphires in the mud
Clot the bedded axle-tree.
The thrilling wire in the blood
Sings below inveterate scars
Appeasing long forgotten wars.
The dance along the artery
The circulation of the lymph
Are figured in the drift of stars
Ascend to summer in the tree
We move above the moving tree
In light upon the figured leaf
And hear upon the sodden floor
Below, the boarhound and the boar
Pursue their pattern as before
But reconciled among the stars.
At the still point of the turning world. Neither flesh nor fleshless;
Neither from nor towards; at the still point, there the dance is,
But neither arrest nor movement. And do not call it fixity,
Where past and future are gathered. Neither movement from nor towards,
Neither ascent nor decline. Except for the point, the still point,
There would be no dance, and there is only the dance.