How Important are Big Ideas?
A couple new books, including most controversially Does IT Matter? focus on sources of competitive advantage. Are management concepts on their own the best way to compete? And, does it matter that new concepts—and their guru practitioners—seem to come from the U.S.?
Judging from responses to the June column, big ideas rank high on a list including technology and intellectual property as sources of competitive advantage. But they are only a starting point, outweighed by methods and the state of the "managerial mind" necessary to execute them. This raises a new set of questions concerning the future of global competition.
As Winfried Schoepf put it, "The big idea is the only thing with the ability to attract enough people around a new concept when real change is needed in an organization." Rodrigo Borgia comments, "... big ideas guide us to put our brain to work." And Don Martin added, "Management concepts provide a benchmark against which the desired direction within a company both externally and internally can be measured."
Others suggested that the big idea is of little importance without effective implementation. Matt Crichton pointed out that "... you can have the biggest idea in the world but if you don’t make it personal in your employees’ lives ... the idea will go nowhere." In Kathryn Yates’ words, "Big ideas or new management concepts are a useless (though entertaining) exercise unless management approaches them with military discipline." Mike Kirkeberg goes even further in saying, "All new management philosophies and strategies work ... until they don’t. ... It seems very simple: Make a good product; treat people like people (employees, customers, shareholders) and treat them well; don’t worry about gurus ... ."
While big ideas may have originated, according to at least one study, primarily from the U.S. in recent decades, what does this mean for future competitive advantage on a global basis? Here the predominant thought was that the rapid dissemination of these ideas bodes well for companies able to execute them anywhere in the world. Tom Davenport, one of the authors of the study in question, commented, "... while most gurus come from the U.S., idea practitioners can be found all around the globe ... ideas are so broadly distributed today that it’s relatively easy to access them no matter where you’re located." In Thomas Kermorgant’s words, "Outstanding companies create the concepts that are then formalized and spread by gurus. Outstanding companies exist in all cultures and continents."
Anju Marempudi poses the question of the month in helping us sum up responses to issues surrounding big ideas. In his words, "It’s the right mix of management concepts, IT and IP—not just one of them—that probably defined the American century. Now all these ingredients are more transferable to the rest of the world in the emerging global context. This ... paves the way for an Asian century through the information highway." What do you think?
Several recent books have focused on an examination of sources of competitive advantage. Nicholas Carr's Does IT Matter?—perhaps the most controversial—essentially argues that information technology is highly overrated in providing competitive advantage and should not be regarded as an important source going forward, at least at the level of an individual organization. Other writers fret about the continued importance of intellectual property in a world where patents can be practically replicated through careful innovation. On a third front, however, Thomas Davenport and Laurence Prusak argue in What's the Big Idea? that the successful implementation of management concepts can offer real opportunities for sustained competitive advantage. And judging from their sample of citations, one has to conclude that nearly all management concepts emanate from the U.S.
Davenport and Prusak lay out a roadmap tracing the development, adoption, and implementation of management concepts such as reengineering, balanced scorecards, Six Sigma Quality, benchmarking, core competence, and matrix management. The map includes a variety of players such as business gurus (the source of many of these concepts), top management sponsors (typically CEOs or other high-ranking executives), and "idea practitioners," those at lower levels of organizations who are the real foot soldiers in the battle to see that ideas come to fruition through effective implementation. They identify 200 "business gurus" based on the frequency with which their work is accessed or cited in the media. Only a handful, and none of those at the top of the list, practice outside the U.S. (For the curious, the top four they list are Michael Porter, Tom Peters, Robert Reich, and Peter Drucker.)
The authors point out that "although gurus vary in how they go about their work, all of them must do three things: interact with companies, think and write, and present their ideas at meetings and conferences." Similarly, most of those in their sample of adopters and implementers, including "idea practitioners," are associated with U.S. organizations. Idea practitioners, for their part, must distinguish more timeless management concepts from fads, time their moves carefully to meet the needs of their respective organizations, and enlist top management support. One might infer from this work that the real secret weapons that many U.S. firms possess in their competitive struggles may well be business gurus, idea practitioners, open-minded CEOs, and the concepts they develop and implement.
This raises a number of questions. Do the development and application of management concepts represent a significant source of competitive advantage? Is it more important than that represented by either information technology or intellectual property? If so, is the U.S. management community fortunate to be close, both geographically and to some degree culturally, to so many of the business gurus? Is this the product of coincidence or of some real shift in the intellectual center of management from Europe and the days of Henri Fayol and his successors to the U.S. and Peter Drucker and his disciples, with a brief detour through Japan during the 1980s? And what does all of this portend for the future of competitive advantage, particularly in an increasingly global context? What do you think?