Editor’s letter

Citation

Randall, R.M. (2010), "Editor’s letter", Strategy & Leadership, Vol. 38 No. 5. https://doi.org/10.1108/sl.2010.26138eaa.001

Editor’s letter

Article Type: Editor’s letter From: Strategy & Leadership, Volume 38, Issue 5

In this issue we introduce several articles dealing with innovative management systems for producing continuously increasing customer value. They contain advice on how to radically transform an organization into a “pull” management culture, how to communicate with employees in a “pull” business environment, actions a CEO can take to put the customer-value-creation zone in the center of the organization and on how to focus all employees on enhancing customer value to produce competitive advantage. (The short definition of “pull” is the organizational capability to tap or recruit talent and resources as needed to address opportunities and challenges.) The articles are:

InterviewJohn Hagel explains the concept and potential of “pull” business modelsBrian Leavy

John Hagel III, co-chairman of the Deloitte Center for the Edge and the co-author of The Power of Pull, introduces managers to the concept of “pull” and explains how this system of management can shape serendipity, drive more rapid performance improvement and foster continuous innovation.

MasterclassRethinking the organization: leadership for game-changing innovation

Stephen Denning examines a radical new approach to achieving game-changing innovation that involves redesigning company bureaucracy and transforming culture.

Defining customer value as the driver of competitive advantage

H. Kurt Christensen proposes a customer-value-based definition of competitive advantage that can lead to more accurate assessments of competitive position and also can help focus strategy discussions on creating, maintaining and enhancing uniquely valuable advantages.

Some managers are going to read these articles as a declaration of war on the status quo, and rightly so. Which side readers choose in the months ahead – the efficiency-driven management of the traditional “push” business or the messy, continuous innovation dialogs of the “pull” approach – will depend on their tolerance for risk and their affinity for experimentation. Unfortunately, the first instinct of many veteran managers will likely be to say, “What’s the fuss about ‘pull’ management, and what’s the rush?”

In answer, I urge all managers to take heed of some sobering conclusions from the Deloitte Center for Edge researchers. As articulated in the new book The Power of Pull, an on-going study of some 20,000 US firms found:

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  The economy-wide return on assets (ROA) in the US has fallen to nearly one-quarter of 1965 levels, even as asset intensity has dropped by 40 percent.

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  Labor productivity has steadily improved, but because of global competition and the shift in power from sellers to buyers, the gains from increased productivity have been mainly captured by consumers and creative talent.

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  The “winners” in this economy are barely maintaining their previous ROA levels, while the losers are experiencing bigger and bigger losses.

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  Companies that out-perform their peers do so for ever-shorter periods of time. The “topple rate,” which measures how many companies fall from leadership positions, is accelerating.

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  Only one in five workers is fully engaged in his or her work, so “passionate commitment to innovation” is unfortunately rare.

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  The life expectancy of a Fortune 500 company has fallen to around 15 years and appears to be declining further.

The three articles are clarion calls to design new management systems and develop new competencies, revolutionary responses to an undeniable, looming business challenge. And these change advocates articulate their message with convincing urgency. Should you initiate an organizational transformation initiative immediately? Who knows? I suggest that we all remember how to play the kids’ ball game of “Think fast.” So read these articles, share them with your colleagues and get ready to catch the future … or it might hit you in the face.

Think fast!

Robert M. RandallEditor