Entrepreneurs and managers who can't adapt to the fast pace of change in the world—"a world that should be on Prozac"—are likely to miss out on opportunities in the years to come, says HBS Professor Howard Stevenson.
The good news: For those who adapt, this upheaval in the economic landscape presents a world of possibility. "We're seeing a world that will open up opportunities in ways unimagined," Stevenson told alumni at the HBS 2001 Global Alumni Conference.
In a lively discussion entitled, "What An Old Guy Learned From the Internet Experience," Stevenson reviewed the past few years of dot.com madness, chaotic markets, and companies thrown asunder. Stevenson said that business is changing in fundamental ways and business leaders better start changing too.
Characteristics of this new world order Stevenson outlined include: connectedness; ultra-quick, yes/no decision making; Web-conditioned users who believe "free" is an entitlement; rapid mood swings in markets; and a lack of loyalty among customers and employees.
New World, New Expertise
In this topsy-turvy environment, a number of challenges are presented. For one, leaders and their companies must develop new expertise. Stevenson pointed to the Chief Technical Officer as a key figure in this transformation, a person combining the right technical acumen with an understanding of the competitive landscape. The CTO, said Stevenson, can tell management, "you're missing something," and identify ways to change the business.
Also on the technology front, Stevenson urged companies to consider using hosting services and application service providers to manage non-mission-critical applications, and to emphasize standards management as a way to yoke together disparate technologies. He reminded listeners that the key to Microsoft's success has been not through technology excellence, but rather by its ability to have the industry embrace standards built around its products.
Companies must also become smarter at business development—developing alliances and partnerships—because no company can do it all in-house anymore.
In addition to developing new competencies, Stevenson said companies internally must emphasize responsibility, not authority. Responsibility-based corporate cultures are very different than those ruled by command-and-control. For example, you are not likely to hear, "That's not my job," in a company where responsibility is not only accepted by individuals but also shared and delegated.
Solid teamwork also becomes critical. In this more complex world, teams win, Stevenson said. Using teams, companies can develop multiple skills. A major mistake is that companies will often break up teams after the initial job is done. A better alternative, he argued, is to keep teams together and find new tasks for them to accomplish.
Questions For Entrepreneurs
For entrepreneurs, Stevenson laid out several basic questions they should ask themselves before beginning a new venture: What am I betting on? Do I know my economic model? Will I be able to formulate a sound strategy that seizes opportunity and combats threat? Will management be able to transform and reinvent the organization? If there is no IPO market in five years, is this endeavor still worth my time?
But while much is changing in business, a lot of the challenges still involve basic block-and-tackle work around product development, sales, and distribution. Also of major importance: hiring, training, motivating, and rewarding great employees.
"And by the way, collecting is nice," Stevenson quipped.
In the new world order, Stevenson said, here are the keys:
- Hire great people; take a pass on the mediocre
- Understand and use technology
- Think globally
- Don't believe your own financial PR
- Happiness is a positive cash flow