Wednesday, 20 August 2014

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    If there is one thing which keeps growing unabated, no matter how the stock markets soar or economies flounder, it is “management thoughts”. Management thoughts are taking us by storm.

Two decades ago Prahalad and Hammel persuaded us to look at core competence – the combination of pooled knowledge and technical capacities that allow business to be competitive in the market place. Prahalad and Hamel were confident that core competence is what allows a company to expand into new end markets as well as provide a significant benefit to customers. Core competence is not easy to replicate.

It is important to consider that core competence is based on past experience of the organization. Its basis is the way you ran the business in the past – taking that concoction of ideas, values, capacities, learning together which enabled your business to take great strides. If you figure out what your core competence is, you can move forward taking advantage of them. If you do not, you become a scatter-gun.

Today, we find the idea of core competence has lost its luster. The past no more gives us the clue to the future. What management Gurus propose now is not reorganizing, or re-orienting the organization. Some like Tom Peters talk of disruption. Disruption and Re-Imagining is the “new” prescription!

In his 2003 book, Re-Imagine Tom Peters rants, “We pursue preservation. But the old order is doomed… We value permanence. But ‘permanence’ is the last refuge of those with shrivelled imaginations…We practice change. But ‘change’ is not enough.” So, what is Tom Peters’ vision of the future? Is it about mending the organization based on what we learnt from the past or ending the past and building a new future? This is what he says:
“A world where the idea of Corporations that exist in Perpetuity is considered…So Much Nonsense.A world where the urge to merge is buried beneath…the Drive to Self-Destruct  (and to Re-Imagine)A world where the timid goal of ‘improvement’ (and the tendency to tinker) has given way to …and unabashed commitment to destruction.”

When you self-destruct and re-imagine you do not go by core-competence and past learning - you create anew. Haven’t organizations broken from their past and built their future? Have all organizations grown progressively by only dreaming about their perpetuity, merging, improvement, tinkering?

The story of Nokia is not one dramatized by management Gurus. Much before Peters wrote about destruction Nokia had done what he urged in 2003. Nokia’s history of a humble beginning as a paper pulp manufacturer in 1865 and over the one hundred and fifty years since progressing to cables, paper products, tires, rubber boots, consumer and industrial electronics, plastics, chemicals, telecom infrastructure and more is a long history of not only successful change but also of “unabashed commitment to destruction”. The latest in the process is parting with its hand-set business. But looking at Nokia’s history means we are looking at the past, there is a lesson there.

On the contrary there are organizations not ashamed of their “permanence”. An example is Siemens. The Economist claims to have first written about Siemens in 1868, when it joined a consortium to build telegraph line from Britain to India and Russia. By 1882 the company was in the business of manufacturing electric dynamos. Today it manufactures everything from hearing aid to gas turbines, trains to software. No, no destruction, but a huge re-imagining!.

A look at some of the largest companies in the world like IBM and GE will persuade us that they are not the same companies they were a hundred years ago. They have not just transformed, but in a way, become different companies. Do they have any core competence? Have they indulged in self-destruction? Apparently no. What about re-imagining? Indeed, they have done gargantuan re-imagining of their business! Have they done all these without building core-competence? Indeed, not. Their core competence is not in technology or marketing. Yet, they may be very good at them. Their main core competence is to Re-Imagine themselves, and to become newer and newer corporations.

So, what is new about Tom Peters?



By V.K.Talithaya (vktalithaya@managementmasala.com)
Management Masala V K Talithaya.jpg
On 8/20/2014

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