Wow! One of the handful of "management gurus" that I admire, Shoshanna Zuboff, has written a blisteringly stark condemnation of the way that Harvard Business School, and the rest of the MBA mills, have indoctrinated a generation of piss poor business leaders.
[The Old Solutions Have Become the New Problems - BusinessWeek by Shoshanna Zuboff], via Bruce Sterling]
The idea of devising new rules for managers isn't just a casual thought or theoretical exercise for me. It's personal. That's because I spent a quarter-century as a professor at the Harvard Business School, including 15 years teaching in the MBA program. I have come to believe that much of what my colleagues and I taught has caused real suffering, suppressed wealth creation, destabilized the world economy, and accelerated the demise of the 20th century capitalism in which the U.S. played the leading role.
We weren't stupid and we weren't evil. Nevertheless we managed to produce a generation of managers and business professionals that is deeply mistrusted and despised by a majority of people in our society and around the world. This is a terrible failure.
While it is possible to read her piece as the draft of her next book -- and to interpret the degree of her scorn as simply grandstanding to draw attention -- I believe that she is both convinced of what she says and that the results more or less speak for themselves. We do have a cratering capitalism as we are careening wildly into a post-industrial world, and we do have a cadre of management in America that have willfully and blissfully (for the most part) ignored the harsh realities of the coming near future. An energy industry committed to distorting the facts about global warming. A food industry that has ignored the growing threats to health based on the global agribusiness network they have constructed. A transportation industry dedicated to gas guzzlers and actively blocking the transition to better mass transit. A heath care and insurance industry interested, apparently, only in profits and not our well being. I could go on and on, but I won't; and I won't in particular discuss the financial sector, because I might take a fit and roll on the floor barking like Cujo.
If anything, she stops short of saying that business leaders were spoonfed Gordon Gecko ethics -- taught that nothing matters more than money -- and instead suggests that we have now have lost faith in them because they eroded profits, not that they broke faith with us:
Trust toward business has reached new lows, with only 10% of Americans now saying they trust large corporations, according to the Apr. 8 edition of the Financial Trust Index. Some 77% of Americans say they refuse to buy products or services from a company they distrust, according to the 2009 Edelman Trust Barometer. But the sad truth is that even before the current economic crisis, people had lost faith in business. In 2007, only 16% of Americans were confident in business leadership—vs. 55% in the mid-1960s (Harris Poll No. 19, March 2007). Even more startling: In the mid-1950s, about 80% of U.S. adults said that Big Business was a good thing for the country and believed that business required little or no change (Roper, August 1954).
When I read such surveys, I hear a cri de coeur from everyone we failed: working moms, devoted dads, dual-career couples, factory workers, office employees, eager young adults, our parents and children, the educated and uneducated, the affluent and struggling. This failure has contributed to the decline of American business, to the point that companies have had a hard time creating enough wealth to sustain prosperity for an ever-wider circle of consumers and employees. Margins have shrunk steadily for 40 years; return on sales for the Fortune 500 has been declining since the early 1960s.
Many companies reacted to this decline by finding new ways to cut costs. The Harvard Business School, along with other business schools, taught them how: outsourcing, off-shoring, downsizing, reengineering, and finding new overseas markets for old products. Under the flag of "shareholder value," (a concept honed by HBS faculty and glorified in many of our courses), firms also turned to "financialization," another specialty of the curriculum. Since the 1980s, goods-producing firms have made more of their revenue and profits from finance than from selling their products.
But that's not why we distrust these businesses. It's because they don't care about us, and even when they say they do we know now that they are lying.
Zuboff goes on to offer three new rules for the new world we are entering, but I think it's weaksauce, in the final analysis. Check them out:
- Race to I-Space -- Zuboff suggests a necessary business headshift from an administrative view to one centered on the individual: hence, I-space. This feels very 1999 to me, actually, but perhaps a good start for people who's heads are back in 1989.
Economic value is hidden in consumers' unmet needs and is released by providing people with the means to fulfill those needs. But in order to release new value, you need to get out of organization space and into the subjective space where individuals live. I call it "I-Space." This means shedding the "us-them" mentality. Now everyone is an insider.
- Advocate, Don't Alienate -- Once again, changing to the individual viewpoint, and companies seeing themselves as acting on behalf of customers.
- Collaborate and Federate to Compete -- Man, people have been singing the collaboration hymns for a long time now, and yes, companies need to reorder themselves for the post-everything economy, but it will have to be more radical that learning how to collaborate internally and with partners. She comes don strong on transparency and openness, and I think that is a necessary issue, but the whole issue of 'doing what is in the customer's interest' is a trap, so long as the companies are the ones figuring out what are unmet needs are.
I respect Zuboff's candor about the failings of business leadership, but she seems to be suggesting a relatively mild prescription, like this was just a bad head cold, and business leadership can get away with saying "excuse me": as if the worst they did was sneeze in our faces. However, it's more like waking up in a Mexican bathtub and both your kidneys have been stolen. Yeah. More like that.
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