Big Bets worked in the past because of clout, monopoly power and other top down thinking and a world that didn’t have freedom of expression democratized for all. Left to the market’s free will and people’s power, a lot of these old concepts of Taylorism will neither work nor contribute to any real value in the future. Taylor’s ideas were just instruments of the large machineries in place to thwart freedom of expression and creationism that would have otherwise blossomed organically. The future is about learning through experimentation in an open information age. That age is real because technology, social networks and globalization have become the proxy for the invisible hand that Adam Smith would have loved to see at work.
A lot of money was made doing things one way in the past, but as the evidence is piling up on how that can’t be made now, repeating patterns from the past as a way to success in the future is another cognitive bias that we will continue to hear from the incumbents and power mongers from 20th century successes.
The future is in the hands of polymaths and people with expert power (as in knowledge of subjects and experience gained through that knowledge, not plain experience of doing something repeatedly). The utility of creationism trumps the utility of plain analysis that is available for a much lower cost and cannot be gamed as it was in the past.
This has huge relevance to the management consulting industry that has been operating in a linear model hiring MBAs out of business schools with no actual operational experience of building something, running something and then bringing those insights back to business. If everyone were to make their powerpoints from reading a Gartner and Forrester bar chart or a month long survey, with no hands on experience in building or running a product or service business, or the intuition based on relevant experience gained from that process, then how am I to trust the consultant’s recommendation? That could be easily switched to a crowd sourced model or just plain common sense or dumb luck as some would call, because there is no guarantee of success in the old analyst model.
The failures of Enron and Wall Street more recently, all indicate one simple truth – strategy by design is a colossal failure and value destroyer. Letting freedom of expression and organic growth blossom is the way of the future. This is a hard thing to digest for highly paid management consultants and corporate executives who have no clue what others think of them. If we do a study of the corporatti of how much someone would recommend working with them (similar to the Net Promoter Score that Bain consultants came up with for how much a brand would be recommended by a customer), the results would not be shocking to many people. People that have coercive power are loathed across the board. I don’t know of people that loved Saddam Hussein or Hosni Mubarak. Because power corrupts power absolutely.
What should large corporations do now?
- Start experimenting with little bets and grow with the new age, again. That is the route to corporate renewal. Not another top down strategy that is fiction at best in packing more blades in a razor with $200M R&D and marketing lipstick on pigs.
- Approach objective 3rd party expert advice differently. Just because someone markets themselves as ‘expert’ or ‘objective’ doesn’t necessarily mean they are.
As Reid Hoffman says in his new book, the fastest way to change yourself is to hang out with people who are already the way you want to be. [For example, hire entrepreneurs as your consultants. Check out TakeOut, a company bringing entrepreneurs to brainstorm with corporations instead of Big Bet top down studies. Read this article.]
If your stodgy management consultant is not ready to embrace change and demonstrate how the consultant’s firm has renewed itself, you know what to do.
Let us welcome the era of experiments and celebrate little bets. In fact that isn’t that how evolution works?