There is a painting by the German painter Peter von Cornelius (1784-1867) in which one sees Gunther, King of Burgundy, ordering Hagen, a Burgundian warrior, to sink the treasure of the Nibelung. Siegfried, the visionary innovator, will win the Nibelung treasure. Akin to the mythological lineage of the Nibelung, managers hold the vast treasure that consists of customers and consumers. As with Siegfried, visionary innovators will win it.
But the past is hard to kill, for the visionaries first appear with products and services that initially look like ugly ducklings. In addition to technological failures, the first steamboats were clumsy and even dangerous, while evolutionary technologies made sailing boats increasingly beautiful and more performing. The ‘ugly duckling syndrome’ affects successful enterprises. Their managers persist in making good products better for consumers who want improved versions of those already available in the markets.
The underlying premise of focusing on optimising performance and efficiency is that consumers will be loyal and, therefore, will not abandon the brands they know and love. It is this complacency that blinds managers to the facts. The complacent manager neither sees a need to create a new path nor recognizes threats from outsiders who generate innovative pathways that reveal the ‘next markets.’
For example, in mobile communications, one of the fastest moving industries of current times, a lack of attention to threats, epitomized by the firm belief that ‘the cycle of our device is long and alive’, derailed more than one powerful player. When the iPhone appeared, BlackBerry’s managers reacted more or less as Western Union did when the first telephones showed up: ‘After all, it’s just a toy.’
In 2009, BlackBerry held around 22% of the smartphone market, and Nokia nearly 44% in 2008. By 2013 the latter’s share had fallen to a meagre 3%, when its handset sales dropped to about 120 million in the first half year. Likewise the business models of Ikea and Zara have caused severe injuries to their Italian and foreign competitors.
The transition to trans-managerialism
Placed itself at the centre of the company which revolves around it, management has persuaded itself and others of the truth of three cultural metaphors: the efficiency of the markets, the rationality of individuals and the spontaneous movement of the economy towards an optimal state. But those metaphors are losing their hold with the ongoing Copernican-like revolution. The geocentrism of management gives way to the heliocentrism of the entrepreneur. She emanates imagination, intuition, and inspiration, giving rise to entrepreneurial reactions.
If the management provided jobs led by experts in their silos, the entrepreneur turns ideas into action (‘ideation’) with the guidance of the experimenter who learns by testing her ability to imagine and trace innovative paths. In the course of experimentation, ideas, culturally different from each other, are threads that intertwine in such a way as to form business projects that have a substantial impact on corporate fabric. Such a process accelerates the scale-up of the company’s activity and also promotes spin-offs and start-ups. Free spaces for productive collaborations achieve surprising results. That happened in the Renaissance Florence and, nowadays, in the ecosystems such as IdeaSpace in the UK and Vivid Ideas of Sydney, Australia.
Ideation can succeed if management detaches itself from a rationalist approach and embraces post-rationalist behaviour. Following a shock, management tries to restore the company to equilibrium. But that presupposes that the previous situation did not contribute to the shock. To avoid this, the static nature of the old-style management is replaced by the dynamism of managers incessantly moving along the path of ideation leading to entrepreneurial opportunities. They experience moments of imbalance in stark contrast with the concept of equilibrium.
Ultimately, what is at stake is the willingness and ability of management to sail from the bank of intra-managerialism (staying within their own cognitive silos) to the shore of trans-managerialism, overcoming silos and divisions.
Should this radical change of perspective be achieved with a single leap? Is it possible to do so gradually through the stations of cross-management (observing the silo of another manager from the latter’s view, rather than from her own), of multi-managerialism (managers of different areas of business working together, each one drawing from her well of knowledge) and inter-managerialism (finding a synthesis of knowledge and methods that define the disciplinary silos)? These are questions that remain open.
The concept of a fixed management ethos, always trying to regain the status quo, is a modern construct. It need not be so and may be increasingly ineffective in a modern world.
About the author:
Professor Piero Formica is a Senior Research Fellow of the Innovational Value Institute at the Maynooth University in Ireland, and founder of the International Entrepreneurship Academy Network. He received the Innovation Luminary Award 2017 from the European Union Open Innovation Strategy and Policy Group for his work on modern innovation policy.
This article first appeared in the Drucker Forum Series on Linkedin Pulse.