PHIL SIMON
Don’t believe what management gurus tell you: Management is not a science; it never has been.
There are no immutable laws. No one can control every independent variable. Business is a world apart from chemistry and biology.
No, management has always been about running experiments and, at a high level, there are two types:
- Website formatting tweaks usually measured via A/B testing
- Slightly different products
- Complimentary acquisitions
- Entirely new business models, ideas, organizational structures, products, internal applications, partnerships, and mind-sets (re: platform thinking)
- Vastly different company directions
- Non-adjacent acquisitions
Success and Experimentation in the Long Term
Historically, successful organizations could focus on the left-hand column. That is, they have not had to make really big bets rife with uncertainty. Sure, there have been exceptions. (Exhibit A: The Time Warner/AOL debacle.) For the most part, though, profitable companies could maintain their competitive advantage for relatively long periods of time by preserving the status quo. Huge rolls of the dice have been typically reserved for companies with nothing left to lose.
No more.
We need to get comfortable with being uncomfortable.
Ours is an era of accelerating change, lean methodologies, rapid prototyping, cheap technology, constant connectivity, Big Data, and platform thinking. As such, both types of experiments are more necessary than ever, even for successful organizations. Want proof? This is why Google is embracing moonshots, Pinterest has launched an API, Amazon keeps figuring out ways to sell more stuff, etc. Put differently, the long term has never been shorter. Complacency is a cancer.
Simon Says
New directions, strategies, ideas, and business models tend to make employees uncomfortable, especially in successful, mature organizations. Here, there’s still significant aversion to risk. (Change will always be tougher at brownfield sites compared to their greenfield counterparts.)
That divide is starting to erode. We all need to get comfortable with being uncomfortable.
Phil,
Good post, and I agree that management isn’t a science per se, especially since management is primarily about overseeing people and organizations, which are dynamic and fluid organizations that do not always follow structured rules. However, I think it is important for organizations (as well as individuals) to focus on both the short term / tactical / strategic improvements as well as the structural / innovative / transformational level changes. They both have a place in organizations, and there needs to be a healthy balance. For different types of organizations, that balance may be very different. For example, in a consumer products or banking business, you will tend to be more tilted towards the simpler / tactical / incremental improvement approach. Whereas in the information, technology, or services businesses, you should probably be more focused on game-changing strategies.
Best Regards,
Michael