21st Century Strategy in Four Words - Umair Haque - HarvardBusiness.org

21st Century Strategy in Four Words - Umair Haque - HarvardBusiness.org

Harvard Business Publishing - Umair Haque Edge Economy*

21st Century Strategy in Four Words ***

3:57 PM Tuesday December 15, 2009 **
Tags:Economy, Strategy *

It's as predictable as the chorus of a power ballad. Every time I discuss good and evil, howls of protest erupt. Is it polemic? Is it deliberately controversial? Isn't hard-nosed business beyond good and evil, anyways? *

Not a chance. *

Here's 21st century strategy, summarized in four words: minimize evil, maximize good. *

Forget a snot-nosed punk like me for a second. Adam Smith, Jeremy Bentham, John Stuart Mill, Friedrich Hayek laid the foundations (among others) of modern econ. Smith's Theory of Moral Sentiments — the origin of the Invisible Hand — Bentham's utilitarianism, Mill's theory of liberty, Hayek's catallaxy — all were fundamentally concerned with minimizing bad, and maximizing good. Economics is, at its heart, about good and bad. "Goods" and "bads", remember? They're the most elementary concept in econ 101. *

But, in the search for a more perfect model, they've been left behind. Econ 1.0 assumed a perfect world — one of perfect information, rationality, zero friction, etc. That world, it was said, is a utopia: yesterday's institutions — "free" trade, property "rights," annual reports, self-interested managers, etc — are able to perfectly measure and weigh goods and bads. But the real world isn't so simple. All too often, our economy works backwards. "Bads" literally overwhelm "goods." Evidence? Try yesteryear's mega-banking crisis on for size. *

So the central, pressing question is this: How do we design better institutions that do minimize the production of bads, and maximize the production of goods? That is, of course, what Copenhagen is really about — not carbon. It's about redesigning the fabric of the global economy, so bads are erased, and goods pop into existence. *

Welcome to what I call Constructive Capitalism. Here's Jared Diamond, taking a page right out of the Constructive Capitalist playbook: "While some businesses are indeed as destructive as many suspect, others are among the world's strongest positive forces for environmental sustainability." Diamond was surprised to find a set of businesses striving to minimize evil, and maximize good. But getting green is just one path to doing so. *

Here's another. Last year, I took a hard look at Facebook, and suggested, on balance, that it was evil. Howls of protest erupted — yes, it's a strong word, but as per above, the underlying logic was simple. Google made ads better — more relevant to what specific users were searching for — but Facebook, it seemed, was turning a blind eye to more and more scam ads. Today, the "Facebook is evil" meme is mainstream: even Gawker agrees (and here's a nice post from Jason Calacanis about it). *

But Facebook's big mistake isn't about ads, technology, or privacy; their biggest mistake is not seeking to minimize evil and maximize good in the first place. In fact, Facebook is about as radical as McDonalds. Both taste like the same old archetypal industrial era organization. *

Most companies can't maximize good and minimize evil — because they weren't built to. They were built for 20th century economics. But we're a decade into a new century now, and 20th century capitalism isn't fit for 21st century economics. No company can ever minimize bad and maximize good perfectly, flawlessly, or even consistently — we don't, after all, live in an economic utopia. Yet, as Facebook, big media, Wall Street, and Detroit are discovering, it is those that can better rivals at doing so to whom advantage inexorably flows. *

The future of strategy isn't about perfect — it's about better. *

To get started thinking about it, ask yourself: what would minimizing evil and maximizing good mean in our industry? *

Umair Haque is Director of the Havas Media Lab, a new kind of strategic advisor that helps investors, entrepreneurs, and firms experiment with, craft, and drive radical management, business model, and strategic innovation. *

Prior to Havas, Umair founded Bubblegeneration, an agenda-setting advisory boutique that helped shape the strategies of investors, entrepreneurs, and blue chip companies across media and consumer industries. Bubblegeneration’s work has been recognized by publications like Wired, The Red Herring, Business 2.0, and BusinessWeek, and in Chris Anderson’s Long Tail, to which Umair was a contributor. *

Access Original Post: http://blogs.harvardbusiness.org/haque/2009/12/21st_century_strategy_in_four.html?cm_mmc=npv-_-DAILY_ALERT-_-AWEBER-_-DATE


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http://dreamlearndobecome.blogspot.com This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.