Earlier this year I wrote that President Obama is making 30 year decisions. The premise is that we have generational Presidents. Those that set true directional policy. He reinforced this recently with the change in the average miles per gallon metric – it is set to 35.5 by 2016.
The Business Community follows a similar path. I believe that much of the financial breakdown we are currently dealing with is a result of President Reagan’s policy directions. In the 1980s it made a lot of sense, we had to deal with new international competitors. It spawned a boom of productivity in the 1990s and has been manipulated in the 2000s. The lifecycle has run has its course. But the problem is that many in business don’t recognize it. Here is an excerpt taken from Alan Webber‘s blog on HBR.com called Conversation Starter:
But what if the problem isn’t economics? What if the problem is a
business problem–a failure of management and an absence of leadership?
Shouldn’t business and business schools be looking at their practices
and precepts with the same critical eye as the economics profession? I
recently wrote a book called Rules of Thumb, a collection of 52 life lessons. I think three of them can help propel the thinking on these issues in the right direction.
Years ago, when America’s competitiveness appeared to be failing,
two legendary HBS professors, Bill Abernathy and Bob Hayes, challenged
business schools and business leaders to take a hard look at
themselves. “Managing Our Way to Economic Decline” became a must-read text. Isn’t it time for another such review?
What is the business of business school? And what is the purpose of business?
At least once per decade for the last 30 years we’ve seen American
business go seriously off the rails. The reengineering fad, Mike Milken
and junk bonds, the savings and loan crisis, the dotcom boom and bust,
the Long Term Capital Management panic–only a partial, abbreviated
history of business disasters–suggest that something systemic is wrong
with the way business goes about business. An individual with this
track record of crises would be a candidate for an intervention, a time
out in a recovery center, and life-long participation in the 12-step
program of their choice. Something is wrong–and it’s time to face it.
Business schools teach finance and strategy, marketing and HR, IT
and operations management. Those are the courses of a trade school, not
the developmental curriculum of a profession.
He then goes on to give three questions/rules. They are (I especially like the last one):
The first question business schools should teach their
students to ask is my Rule #3: Ask the last question first. The last
question is, what’s the point of the exercise? Jack Welch
famously said it was to maximize shareholder value–a terrible answer
in retrospect. Peter Drucker famously said it was to make and keep a
customer. What is the answer that fits our situation in 2009, and
beyond? Today, business schools need to teach students to ask the last
question first–or risk taking their company down the old dead-end path.
The next piece of the curriculum has to be Rule #23: Keep
two lists, one that holds what gets you up in the morning and one for
what keeps you up at night. Managers and leaders have got to
know themselves before they know their businesses. They’ve got to have
passion for their work and concern for their world. Otherwise they’re
just punching the time clock and risking everyone’s future.
Finally I’d teach Rule #4: Don’t implement solutions. Prevent problems.
Everything that will be put in place as a clean up to the mess we’re in
now won’t be enough if we keep creating new disasters. We need a new
generation of business leaders who anticipate problems and prevent them
from happening. It’s smarter, cheaper, and more effective than the
every-ten-year clean up we’ve become accustomed to.
Working Thoughts 05/21/08
Empower Your Employees or They Become Powerless