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.