NSL Blog

Current business entombed by a linear world?

February 5, 2013

It has been an interesting start to the year, and a number of conversations I have had have made me ponder on this question: are current business entombed by current business systems, the quarterly cycle and analysts demanding ever more?

As one executive said to me, “we have to keep dancing until the music stops playing”. Yet in 2006 IBM produced a report called ‘The enterprise of the future’. Their survey of CEOs revealed that 8 out of 10 CEOs saw significant change ahead and yet the gap between expected levels of change plus the ability to manage it had tripled. That feels to me a bad place to be. The situation has changed but the rules stay the same. Something I explore in No Straight Lines.

The current obsession with efficiency, lowering costs and reinvesting in ever more efficiency, which seems to be on the surface the least risky thing to do will not get these organisations to where they need to be (perhaps being the greatest risk these organisations take). And so we arrive at a systems challenge and a tricky design problem. We must address these problems by changing, as economist Diane Coyle and many others suggest – the metrics (see further reading), and we must also address it politically perhaps to the extent that we re-evaluate what sort of society we want? We should think about pension funds which as an overall industry holds a $25 trillion sum. Their demands require companies by law to operate in a particular way, leaving them ham strung and exposed as our world changes. So perhaps we need to think about the legal structures of organisations and also the mandate for pension fund holders?

I have also been asked how bad does it need to get before we see real efforts to address this larger system issues? I worry about that. Until our financial systems evolve we face a truly uncertain world. We are, as they say, a victim of the rules we live by. That said I still believe we will evolve our society and the systems that define us. Our job is to [1] demand better [2] define and describe a new destination. Because without that we wont get there. We need a systems upgrade.

Further reading:

 

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