Irving Wladawsky-Berger

Business Winners: Combining Scale with Agility

A few weeks ago I posted an entry inspired by an excellent article in The World in 2011, The Economist’s annual issue offering predictions for the following year and beyond.  Another article in the same issue caught my attention, Multinationimbles, by Matthew Bishop, who is the US Business editor of The Economist.

The article is built around a somewhat provocative premise: “The business winners will be those that combine scale with agility.”  It is provocative because people generally associate agility with entrepreneurial startups, and scale with more mature, established companies, although a few relatively young companies like Amazon, Google and Facebook have already achieved scale to complement their entrepreneurial agility. 

But the potential oxymoron in the article’s premise is the notion that a large mature company can achieve this combination of scale and agility.  Doesn’t this violate Schumpeter’s 70-year-old theory of creative destruction?  Once large and successful, aren’t companies that once revolutionized their industries supposed to be too slow and locked into the sources of their past success to respond to the new waves of entrepreneurs now attacking them with innovative products and services? 

Bishop’s article focuses primarily on the few mature companies that have achieved this important scale-agility combination: GE, Procter & Gamble, Wal-Mart, and especially IBM. 

“In June 2011, with much fanfare, IBM will celebrate its 100th birthday.  Big Blue is a rare example of corporate survival: few companies last that long, and at times it didn’t look as if IBM would either.  Its secret is not resilience alone, but an ability to reinvent itself.  As Lou Gerstner recounted in his bestseller, “Who Says Elephants Can’t Dance?”, he brought the firm back from the brink after he became its chief executive in 1993 by shifting its focus from selling hardware to selling services.  Since Mr Gerstner left, IBM has reinvented itself again - this time in how it is run as much as in what it sells - with the result that it will mark its centenary as a role model for what a company needs to be to prosper in the second decade of the 21st century.”

Bishop predicts that in 2011, “the biggest winners will be companies that can combine the advantages of scale with the agility to respond to fast-changing market conditions.”

Sleepovers, Collective Intelligence and Related Subjects

Amy Chua is an American born, ethnic Chinese professor at the Yale Law School.  She recently wrote a book, Battle Hymn of the Tiger Mother about her efforts to give her two daughters a traditional, strict Chinese upbringing.  She also published an article on January 8 in the Wall Street Journal, Why Chinese Mothers are Superior, summarizing her parenting philosophy:

“A lot of people wonder how Chinese parents raise such stereotypically successful kids.  They wonder what these parents do to produce so many math whizzes and music prodigies, what it's like inside the family, and whether they could do it too.  Well, I can tell them, because I've done it.  Here are some things my daughters, Sophia and Louisa, were never allowed to do: attend a sleepover; have a playdate; be in a school play; complain about not being in a school play; watch TV or play computer games; choose their own extracurricular activities; get any grade less than an A; not be the No. 1 student in every subject except gym and drama; play any instrument other than the piano or violin; not play the piano or violin.”

Professor Chua’s book and WSJ article attracted a lot of attention, with people arguing the pros and cons of the demanding Eastern parenting model with its emphasis on achievement, versus the permissive Western model that many would say emphasizes self-esteem instead of actual accomplishments.  Then, on January 17, NY Times columnist David Brooks jumped into the fray with his own take on the controversy in an OpEd with the provocative title: Amy Chua is a Wimp.

Brooks said that he had received many e-mails denouncing Chua’s strict parenting methods.  Her article and book play right into America’s fear of national decline, in particular the fear of being economically left behind by the much harder working Chinese.  But then he writes about Chua:  “I believe she’s coddling her children.  She’s protecting them from the most intellectually demanding activities because she doesn’t understand what’s cognitively difficult and what isn’t.”

Design Takes Over: Making Beauty Out of Necessity

Toward the end of 2010, The Economist published The World in 2011, its annual issue with predictions for the following year on the variety of topics it normally covers.  As summarized in the introductory article From the Editor, the 2011 predictions presented a balanced view of the next year, articulating both the magnitude of the challenges we face as well as the major opportunities for progress:

“It will be a tale of two economies: a rich world struggling with a weak and jobless recovery, and an emerging world growing four times as fast.  Europe will be divided between a solid centre of its euro zone and a wobbly periphery.  . . Look at politics, and you will often see two clashing forces, too . . .  America faces gridlock between the White House and Congress . . . A sense of division, and frustration, will also prevail in international affairs. . . For all the talk of co-operation on global issues  . . .  it will often seem like a zero-sum world. . . But the gloom will be overdone.  The year ahead will produce striking examples of the power of technology and imagination to address fundamental problems of the age. . .”

This was the 25th edition of “The World in . . . .”  To mark the occasion,  The Economist also included a section on The World in 2036, peering 25 years ahead on a variety of topics, including the economy, technology, religion and collaboration.

I particularly enjoyed reading Design Takes Over, the 2036 prediction by Paola Antonelli, senior curator for architecture and design at New York’s Museum of Modern Art.  She starts her short and elegant article, by first explaining the importance of design in our increasingly fast changing and complex world:

From e-business to Social Business

At the beginning of February I participated in a Social Business Industries Symposium sponsored by IBM in Orlando.  Social business is an initiative that IBM launched last November, along with new products and services that combine social networking with advanced analytics capabilities to help organizations build trusted relationships and make better and faster decisions.

What is a social business?  In the past few years, the term has been used to mean “a non-loss, non-dividend company designed to address a social objective,” - a new kind of capitalism to serve humanities most pressing needs, pioneered by Nobel Peace Prize winner Muhammed Yunus and others.
  
But with the rise of social media, another major use of social business has emerged.  IBM’s basic definition is short and simple:  A Social Business embraces networks of people to create business value.