Journal of Management Consulting, Volume 10, Number 4, November 1999.

Engines of Prosperity

Gerardo R. Ungson and John D. Trudel (Imperial College Press, London; 1998) $25

Competing on the Edge

Shona L. Brown and Kathleen M. Eisenhardt (Harvard Business School Press, Boston; 1998) $27.95

Reviewed by Charlton R. Price CMC

The text of an old Welsh hymn says that new occasions teach new duties. These four authors say you'd better believe it. Their analyses of the knowledge industries (computers, software, communications, and so on) show how digital technology and its derivatives are proliferating like prairie grasses across economies and societies. These economies and societies are now irreversibly, globally interdependent, and constantly, rapidly changing. To compete successfully today requires not better techniques based on old, mainstream thinking, but an entirely new and different mindset. But, many managers and their advisers are mired in mechanistic, old-fashioned thinking; they are not facing reality.

The scary truth is that in a globalized, digitized, increasingly chaotic world, the perceptions and actions of many managers and consultants are still shaped by obsolete assumptions concerning organizational behavior and strategy. These now out-of-sync notions are mostly diluted versions of traditional management theory, which is at root Newtonian, mechanistic, and based on the equivalent of stone tablets chiseled in the Industrial Age by such old-think gurus as Frederick Taylor and the young Peter Drucker. Ungson and Trudel think these assumptions may persist even as they fail to work or do harm because many people fear that any movement away from that thinking is a step toward anarchy.

Of course, many of our mind-sets as management consultants are the same as our clients. After all, we've read the same one-minute manager type of books and have attended or conducted the same kinds of quick-fix training sessions. Thus, many of us do not offer more realistic alternatives for organizational structures and strategies.

Well, these two books focus intensively, in different yet highly complementary ways, on what we must learn to solve problems and manage change in this postindustrial world. We must forget our conventional wisdom about corporate strategy and use what is coming from recent scientific theories about complex systems and evolutionary change. Complex systems evolve through variation, selection, and retention of elements. Adaptation works best when the systems are only partially connected. [Also see the article by Mills and Friesen in this issue--Ed.]

Successful organizations in the Information Age will be organized to change constantly, to let a semi-coherent strategy emerge from that change, and to think simultaneously about where to go and how to get there. That is to say that effective strategies can best be discovered by keeping systems loose enough to initiate, adapt, and reconfigure themselves, in continuous and complex interactions with the environment. For example, the truth is that competitive advantage today comes more from timely knowledge than any other source. This makes the price of avoiding risk extremely high; old information is mostly useless.

We get some guidance from Competing on the Edge from these observations and suggestions:

• Advantage is temporary. Or, as Ungson and Trudel put it, "Winning in today's product cycle only provides table stakes to play the next hand."
• Strategies that work are diverse, emergent, and complicated. So, make moves that are loosely linked, see what happens, follow through on what works.
• Mine the past and anticipate the future, but know that most ideas about what to do will come from focusing on the here and now.
• Grow and test strategies at the business-unit level, not the corporate level.
• Develop a rhythm for activities such as new product introductions. Timing and tempo may be more important than speed.

Among many other recommendations, the advice in Engines of Prosperity for managers and management consultants is to get back to the basics:

• Unload. Focus on the important things in depth. Shuck off those matters that prevent reflecting and studying those things.
• Measure the things that matter, not just the things that are easy to measure.
• Do not pretend that bean-counting is financial management.
• Wean yourself from much of the so-called management literature: "Most popular business books are simplistic, theory-less, and getting more so ... packaged for consumption on a shuttle flight -- in the center seat, at midnight."
• Use your intuition, but remember that without experience you can't have intuition that will payoff.

We management consultants should immerse ourselves in these two books. Start with their diagnostic analyses -- what they say about what's now needed for organizations to be successful, and what's wrong with the assumptions concerning organization and strategy still made by too many managers and management consultants. Then ponder Brown and Eisenhardt's explanation of how to compete on the edge of the near-chaotic present and future business environment. Finally, read the last two chapters of Ungson and Trudel. They tell us how to accept what many of us do not yet recognize or admit: Much of what we think we know about management, organization, and strategy increasingly ain't so.

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