review the lords of ideas
A smörgåsbord of essential reading, classic thinking, distilled wisdom and trends to watch.
Review reading
The lords of ideas
Review ILLUSTRATIONs: Tonwen Jones
Stuart Crainer meets the true originators of modern strategy, thanks to an introduction from Walter Kiechel. The business world is focused relentlessly on action: doing is valued more than contemplating. And managers throughout the world have elevated the art of doing to higher levels than ever thought imaginable. Look around next time you’re at an airport and marvel at the industry of smart-suited executives tapping furiously away on their smartphones and laptops. Now, try to spot an executive looking into space, simply thinking. There is an anti-intellectual element to the modern executive suite. Practice beats theory. Yet, the strange thing is that, if you peer beneath the surface, business leaders are actually often enthusiastic devourers and devotees of the latest business ideas. I am consistently surprised by the number of senior business leaders who read widely and avidly. Like Vittorio Colao of Vodafone (see page 10). They have a pile of books next to their beds and are as likely to be found in airport lounges reading the latest Ian McEwan as they are an analyst’s report. Think also of the influence of business books. The daunting and somewhat surprising reality is that, as we speak, someone is devouring the latest book from Gary Hamel, Malcolm Gladwell or Nirmalya Kumar and thinking how he or she
can put their ideas to work. That isn’t happening in any other profession. In business there is a real thirst for knowledge, because knowledge equals competitive advantage. Fifty-yearold lawyers can afford to sit back and contemplate their bedrock of knowledge, knowing that updating it will be an occasional chore; managers have no such luxury. If 50-year-old managers look back and contemplate their knowledge, they will quickly find they are out of a job. Management demands change and continuing development. There is no hiding place. Updating knowledge is an ever-present necessity. Secret intellectual history In The Lords of Strategy: The Secret History of the New Corporate World (Harvard Business School Press, 2010), Walter Kiechel provides further insights into what he labels the ‘secret intellectual history of the new corporate world’. Kiechel is a former editorial director of Harvard Business Review and former managing editor of Fortune. He is an old-school journalist whose beat was not the sexy world of mega-takeovers, but the world of management consulting and business thinking. Neither, he admits, have great reputations. The term ‘business ideas’ can sound like an oxymoron; and management consultants usually feature alongside
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Q3 – 2010 BUSINESS STRATEGY REVIEW 57
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A smörgåsbord of essential reading, classic thinking, distilled wisdom and trends to watch.
REVIEW
lawyers, politicians and journalists in lists of untrustworthy professions. “It’s such a funny thing that you’ll get a management consultant who’s written books, articles, who’s given lots of presentations over time, but if you ask, ‘Do you think of yourself as an intellectual?’, they will say, no, of course not, I’m nothing like that,” says Kiechel. “But the importance of ideas in business is undeniable. I talk about an intellectualisation of business. More and more people are coming to business and learning about it — in universities, then business schools and through business books. There will be 8,500 new business titles published this year in the US alone. That’s up on two or three thousand five or six years ago and up from less than a thousand in the time of In Search of Excellence, published in 1982.” Kiechel tells the surprisingly entertaining tale of the rise of strategy as a serious discipline. The chief protagonists in his story are Bruce Henderson, who founded the Boston Consulting Group in 1963 (“Extraordinarily, impossibly difficult but, at the same time, creative, just a fascinating guy”); Bill Bain who left BCG to start Bain & Company; Fred Gluck of McKinsey; and Harvard Business School’s eminence grise Michael Porter. They are a surprisingly colourful group, cutting an intellectual swathe through the grey-suited corridors of corporate might. Kiechel has little time for management consultant stereotypes. Armed with his own Harvard MBA, he could have joined the consulting ranks but preferred journalism (and half the salary on offer from a consulting firm). “The best of consultants really are trying to figure out how the world works and to describe generalisable principles that can be applied to help clients solve their real world problems. There are charlatans and hucksters among them, as there are among investment bankers, teachers and
civil servants. But, at their best, they are intellectuals with a very practical bent. They try to solve problems and are good at things like pattern recognition and empiricism. I find it interesting that people honour economists as much as they do and yet disdain consultants when it seems to me the underpinnings of what consultants do at the coalface of corporate problems is every bit as substantial as what the economists base their generalisations on.” And there are other attractions. Kiechel has talked to dozens of CEOs and business leaders but believes that strategy consultants are generally more intellectually curious. Their contribution to the development of ideas is, he argues, often overlooked. “When was the last time The Wall Street Journal really had an interest in covering management ideas?” he asks. “It struck me that if you look at strategy as an intellectual construct, a framework, a set of ideas, it really didn’t exist in a formal way much before the 1960s.” There is a sense that the period described by Walter Kiechel was a golden era for management consulting. The invention of strategy created a ravenous corporate appetite for strategy. But, since the late 1980s, the strategy bonanza has slowly dried up. Consulting assignments now tend to offer specialised advice on industry segments or particular products rather than grand strategic ideas. Ideas such as the experience curve, the growth-share matrix and the McKinsey nine-box matrix no longer emerge from consulting firms. Instead, ideas have been democratised. They can no longer be bought off-the-shelf from a consulting firm in the confident expectation that market share will leap. Bright ideas have to be sniffed out, discovered, extracted from best practice in distant markets and cultures. The one constant is that managers and business leaders need them more than ever.
58 BUSINESS STRATEGY REVIEW Q3 – 2010
the author Stuart Crainer
[email protected] Crainer is Editor of Business Strategy Review.