Chapter One

In his Report to Greco, Nikos Kazantzakis tells us of an ancient Chinese imprecation, “I curse you; may you live in an important age.” So we are all damned, encumbered, and burdened as well as charmed, exhilarated, and fascinated by this curse. What a time! Tom Friedman in his book The Lexus and the Olive Tree tells us that the world is ten years old and what he means by that is that the Berlin Wall fell a little over ten years ago, November 9, 1989, marking the end of the Cold War. The symbol of the Cold War, he wrote, was the Wall; the symbol of our “important age” is the Web; the former, an armed fortress and the latter, a boundaryless world.

The world is just over ten years old when you consider that all of the old foundations of success are gone; for example, controlling natural resources, land, gold, and oil. Now it's information and, as Bill Gates said, “The only factory asset we have is human imagination.” I think he can say that without being accused of hyperbole. (At last count, Microsoft's market capitalization is $470 billion; I suspect that the factory assets don't add up to more than 1 percent or 2 percent of that.) And just consider:

• Ten years ago there were maybe four hundred people who understood the power of the Web and today there are countless millions.
• Ten years ago there was virtually no e-commerce and according to Forrester Research there will be $1.3 trillion in 2003. I think it's going to be closer to $2 trillion.
• Ten years ago Japan was riding high and we were entering a recession.
• Ten years ago AT&T was moribund and now it's an agile giant betting its future on cable TV as much as fiber optics.
• Ten years ago, the top ten growth stocks would have been a combination of energy, banking, and manufacturing companies; today the top ten are all information technology firms—Dell Computer, Cisco Systems, Sun Microsystems, QualComm, EMC, and so on down to #10, Intel.
• Ten years ago Amazon was a river in Brazil … and today it's a verb, as in, we've been “amazoned.”
• Ten years ago thirty-five was young and sixty was old.
• Ten years ago eBay didn't exist; it is now a partner with Butterfield & Butterfield, the third-largest and one of the classiest auction houses.

And what CEOs are worrying about today and keeps them awake after midnight are such nontrivial issues as keeping their best talent, disruptive technologies, new channels of distribution, being dis-intermediated out of business, overcapacity and hyper-competition, phantom competitors (dramatized by two boys in a garage coming up with a new Great App), internal communication (not new but more problematical), grow or be taken prisoner, having to cannibalize their best-selling product.

So the world we occupy today is a vastly different world from the world of just ten years ago, vastly different from the world of fifty years ago when I started work for my Ph.D., or forty years ago when Benne, Chin, and I ingenuously put together The Planning of Change. Of course, we Americans have always lived on the fast track but today's hyperturbulent, spastic, volatile, uncertain, vertiginous—I promise you I won't run out of descriptors—is qualitatively different, more chasmatic, to coin a word, more consequential, affecting more of our life-space than other tectonic changes we've experienced, even the introduction of electricity or the turbine engine.

I can only assert that, of course, not prove it. But it seems entirely plausible to me because my old prophet's rod has failed me and when I wander from my room, I seem unable to see over the three or four hills and the cloud Wallace Stevens saw when he wandered from his room. No, the future has no shelf life these days, but it certainly poses a number of questions that we scholars and teachers and students of human organizations should be thinking about.

I'd like to raise a few of these difficult questions here, both because of their pressing urgency and because they are questions that will enliven our discourse.

1. Playing with the idea that the world is only ten years old, what will the world of organizations look like on its twentieth birthday, in 2010? Will the pattern resemble the huge megamergers of GE, Time-Warner, PB-Amoco-Arco, Viacom, and Intel—or will it look like a smallish, ramshackle Hollywood model, where groups from diverse disciplines gather together for short periods of time, develop or finish a product, and then after a spell, regroup? Or will there be some kind of combination, a hybrid of Great Groups working rather independently under some large, decentralized behemoth?

2. And what about the New Leaders? When the world is twenty, will they look like C. Michael Armstrong, Andy Grove, Jack Welch—or will they resemble Carly Fiorina, Scott McNealy, Tim Koogle, and Jeff Bezos, the under-forties? Will the New Leaders have the same competencies as the over-sixty crowd?

3. What about the future of “high involvement” organizations? American democracy, as de Tocqueville told us long ago, is not always and in all ways the very best kind of thing. It often goes too far, he thought, and when it does it has a tendency to pervert the very values it tries to foster. How does this relate to contemporary organizations, to so-called empowered organizations, where workers are demanding and getting more autonomy, more say in decision making, and where self-managed teams are becoming less exceptional? Will modern organizations turn into parliamentary democracies where leaders are chosen by the led, where employee-owned management companies, like United Airlines, will have board members who are employees calling the shots?

4. Another dilemma of democracy and one we tend to duck (I do it myself) is what we do with disparities in talent? Not to sound Nietzschean, but what do we do with—or do we admit to—superior and inferior talent? Is it Hitler's Ghost, the fear of the Übermensch, that blocks the view to that question? The future is here, but as someone said, it's distributed unequally. So is talent. This raises at least two pertinent questions for us: As far as organizations go, can everyone be a leader? Should everyone want to be a leader? Burt Nanus and I argued strongly for yes to the first question and ducked the second. Don't people vary a great deal with respect to intelligence, whether it's emotional or cognitive? Don't certain neurosurgeons, cello players, tennis players, and yes, leaders, have the “touch”? How many Agassi's and YoYo Ma's or Welch's do we have in any given population sample?

The second question is more complex, but must be asked. The increasing chasm of income between the top quintile and the bottom quintile—along with the obscene differential between the average CEO and the average worker ($419 to $1 at last count)—is a serious issue. It's important to note that nearly 90 percent of stocks are owned by only 10 percent of the population with the top 1 percent owning 51.4 percent. Add to that the disparities in education and family background. Should we not be worrying about the “Brazilification” of our society? Do we have any responsibility for that or ways of doing something about those achingly stubborn inequalities?

5. What about the important demographic changes that are now upon us? I'm thinking specifically about ageism, both young and old ageism. It came to mind recently when I was invited to speak at a conference called TED (Technology, Entertainment, and Design). Richard Wurman, the founder of this highly successful confab, told me that in the Y2K conference, the invited speakers would either be in their thirties and under or seventies and older. Interesting, I thought—but it brought more sharply into relief in the New York Times I read this morning, as I was writing this (September 12, 1999). The headline was “Andreessen Steps Down from AOL.” The story went on to say that Andreessen's successor, a fifty-three-year-old former professor, may be more suited to the ways of America Online (where executives tend to be in their late thirties and forties) than the twenty-eight-year-old cofounder of Netscape. I recalled that Andreessen was only twenty-three when he helped found the Internet browser.

Now put that together with the other side of the equation, the sixty-and-older crowd who are not only living longer and living healthier but according to all reports wanting to work way beyond sixty or sixty-five. In fact a recent study by Civic Ventures reports that 50 percent of older Americans (however that's defined) are working for pay in their “retirement” and another 40 percent do volunteer work. The golden years are dead, the report claims.

Think of this: As recently as 1960, according to a recent Economist, “men could expect to spend 50 of their 68 years of life in paid work. Today, they are likely to work for only 38 of their 76 years.” So what do we do with these old duffers who have their energy and health and hopefully their marbles? What should organizations do to retain the wisdom without forestalling the futures of the coming generations? And what about the bored twenty-something millionaires: will they have to suffer a long life starting up start-ups as Andreessen wants to do? Or will they become philanthropizers?

The policy issues these demographics raise have serious implications. Just to take one: if workers continue to take early retirement (and the average age of retirement seems to be declining to the early sixties in the United States; much lower in all the European countries), and with the boomers in massive numbers hitting retirement in the near future, there won't be enough wage earners to support the retirement of the boomer spike.

6. What about the social contract between employers and employees, that hallowed implicit contract that usually offered some form of loyalty and responsibility to both parties? Roughly 25 percent of the U.S. workforce has been dumped since 1985 and even at present, when the unemployment rate is the lowest in over thirty years, you can figure on a half to three-quarters of a million employees in flux every year. What's interesting is that in 1998, about 750,000 workers were laid off or quit or retired, and of those, 92 percent found jobs that paid either more or were equal to what they had been getting. A recent survey reported in the Wall Street Journal revealed that four out of ten of employees were less than three years in their job, only a third of the workforce works in an old-fashioned 9-to-5 job, and the quit rate this year is 14.5 percent. It was about 3 percent ten years ago. I figure that the churn of the workforce at any given time is between 20 percent and 25 percent; that is, the number of workers who are temporarily out of work or looking for new opportunities is roughly that figure.

I'd like to put a more “human face” on those numbers. I was fascinated to read in Peter Capelli's new book the explicit social contract at Apple.

Along these lines, John Sculley told me that one of the reasons he found the culture of Apple difficult (after Pepsi) was what he considered a total lack of loyalty when he was there. Groups of people would abruptly leave, empty their desks in the middle of the night and set up a new business before the next workday was over. And not long ago, I was having dinner with a faculty colleague and his parents. His father was in his late eighties and had been an extremely successful banker. In passing he told me that when he was running his business, he would never—“I mean never”— he proclaimed, hire anyone who had held more than three jobs. “Because I have to assume they're either disloyal or incompetent.” Considering today's serial monogamy of the workforce, where the average worker may have five to eight jobs in a lifetime, I thought his statement was rather quaint.

So what about the social contract in our Temporary Society, in our Free Agency Society, where the new contract seems to resemble Apple's: “We're not interested in employing you for a lifetime … that's not the way we're thinking about this. It's a good opportunity for the both of us that is probably finite.” Is it all going to be one neat, finite trip?

7. Do we have or need a theory of organizational change? There has been much good work on leading change, on major interventions of change management, from a variety of researchers and consultants—but is there any consensus around the major strategic variables that can lead to sustainable change or a paradigmatic model of organizational change? Are complex human institutions too diverse in history, product, demography, and markets to have one monolithic model?

When I think of the prevalent business models today, it appears as if two extremes paradoxically coexist. On one hand, in this Internet Era, we have the Silicon Valley model: three people under twenty-five with a hot idea. Small is beautiful. Sound familiar? At the same time, we can cite another bromide: Size matters. Mergers are on the rise; is it quixotic to think we can come up with the theory of organizational change?

And by the way, are these megamergers—let's call them by their real name: takeovers—do they perform well and are they good or bad for the consumer? I've got my doubts, especially with the recent creation of the media monoliths, Viacom being the most recent example. The potential for the bureaucratization of imagination—to say nothing of the conflict issues, for example, CBS reviewing a Paramount film or a Simon & Schuster book and pretending it's objective reporting—should concern all of us.

8. Since writing Organizing Genius, a book about Great Groups, I've been concerned about a puzzling moral and ethical issue, one we ignored in the book, which continues to haunt me—and has no name. I can illustrate my question with examples more easily than I can describe it, let alone understand, it. The paradigmatic Great Group in the book was the Manhattan Project under the leadership of the distinguished physicist J. Robert Oppenheimer. Beginning in January 1943, that small group of scientists designed a nuclear device that brought an end to World War II. Exactly a year earlier, another group met, this time in Wannsee, a suburb of Berlin and ironically a district where (before the War) many wealthy Jews had lived. That group, under the leadership of the Chief of Nazi Security, Reinhard Heydrich, assisted by Adolf Eichmann, his secretary, was brought together to design the Final Solution, a plan to exterminate all of Europe's remaining Jews. Another Great Group which formed itself during the last quarter of the eighteenth century was made up of six men, under the leadership of George Washington, and designed and implemented a plan to establish a new republic.

In a way, all these groups were “great” using the criteria ordinarily used in the literature to describe “high-performing systems.” They all had exemplary leadership and a high degree of commitment, alignment, and trust; they all developed innovative solutions and carried them out successfully. What's wrong with that picture? Are there any important differences between groups and organizations that on one hand leave a scar on history and on the other hand, create one of the most significant social inventions of all time, the first modern, democratic nation? Should we consult for HMOs that are not doing right by the patients or a tobacco company that sells a product that kills? I could go on and on, but I'm not quite sure how to pose the question any more than I can get my nervous conceptual arms around it.

9. One of the most frequently asked questions I get on the lecture circuit is about “balance.” By balance, the questioner usually means: Can I make it at work and at home? Can I have fun and a marvelous home life and get a terrific bonus? My first impulse is to respond, “You're asking the wrong guy.” I resist that. My second impulse is, “Brother, can you spare a nanosecond?” I resist that, too.

First of all I should make clear that balance is a mechanical term implying an equilibrium; the first definition of balance in my Oxford English Dictionary is a “weighing instrument.” Somehow I believe that the search for balance, though deeply felt and not to be dismissed, is chimerical. We just don't do one thing at a time anymore. We multitask in the car, with a latte, with a phone, a fax machine … and we floss. It's interesting to note a new fraction has worked its way into our vocabulary, 24/7 as an abbreviation for everything running all the time, like our computers, twenty-four hours a day, seven days a week.

I do have a few friends who tell me they've done this; you know, a second home in Aspen, no phone calls on Sunday, four weeks with the kids on a bike trip in the Apennines. Funny, their cell phone line is always busy and when I do manage to get through, I hear their fax machine chirping away in the background. And it was Sunday! I wonder if any thirty- or forty-something who is trying to make it at their e-company with two children plus another one on the way or a thirty-year-old assistant professor with a working spouse and a child or two and going for tenure can have balance in this rat-a-tat world where the only thing we have time for is a three-minute egg. This sounds more like an editorial than a question, but tell me: Do you know anyone who has reached that state of nirvana called “balance”?

Before letting go of this question, I do think that Charles Handy is right and that we are all “hungry spirits” and that work should contain more meaning than stock options. Recently, I spoke before an audience of software executives, average age twenty-nine, average compensation, $2.5 million. They were not especially happy campers; all seemed to have a certain malaise about, yes, meaning, a kind of “is-this-all-there-is” type of question. A bad case of “affluenza,” I called it. Maybe balance qua meaning can be found at work because I don't think the world is slowing down. As the historian Stephen Kern remarked, “Human Beings have never opted for slower.”

10. About twenty years ago I wrote an article with the poignance of a flower child titled, “Where Have all the Leaders Gone?” What I wonder about today is where will the leaders come from? Not too long ago, I did some pro bono consulting for an outstanding research center with a small research faculty with a gazillion Nobel Laureates on staff. Over the last few years, they've had a lot of difficulty with their leadership. The problem was simple and also seemed intractable. Anybody who was good enough to pass the rigorous scientific criteria of the search committee didn't want the job. They wanted to do science. Having served on dozens of search committees for academic deans and presidents, I know the same problem always presents itself. There is a genuine dearth of people who are accomplished in their disciplines and want to do leadership and are competent at it. So every other year, the aforementioned research institute, after a long, drawn-out process, hires some reluctant soul who, after a year or so, finds out he really wants to go back to his lab and the search starts again. Ad infinitum.

More recently, a large financial house in New York asked if I would partner with them in developing a leadership development program. After interviewing a few of their senior partners, I decided against it because most of them were more interested in trading or doing investment banking than they were managing and leading. By the way, they didn't seem to have the foggiest notion of what leadership is, nor did they care. On top of that, many of the partners felt that doing management was somewhat beneath them, if not demeaning, certainly not worth their time. In a way, I can't fault them. They loved what they were doing, trading millions of dollars a day seemed to have more of an edge to it than worrying about the supply chain or whatever. The problem is, How do they get someone to “manage Asia”? Beats me. But perhaps that's why I should have accepted their invitation.

Now what's interesting about all this is that more and more of our workers are, to use Peter Drucker's twenty-five-year-old phrase, “knowledge workers.” And today, I should add that more and more of the workforce are “investor workers,” bringing their own profitable ideas into the company. Most organizations will soon resemble that research institute and the modern research university and that New York financial house. And then what: Where will the leaders come from to run this new economy?

11. Is the high rate of CEO churn we see today necessary in this business environment? There's been a lot of interest recently on the revolving doors for CEOs. A recent Harvard Business School study shows that boards are 30 percent more likely to oust a CEO than they were ten years ago. Doubtless, a number of complex factors are involved in the diminishing half-life of executive tenure: hypercompetition, Internet volatility, turbo-globalism, trillion- dollar mergers—you can round up the usual suspects. Reflecting this interest, Fortune ran a cover story recently with ten notable CEOs who had been axed by their Boards.

Both Morgan McCall and Dan Goleman have written seminal books on the social and emotional dramas that often lead to executive derailing. Jim O'Toole and I have written an article based on our belief that boards of directors have an enormous and not fully understood impact on executive failure. I've been intensely curious about how leaders sustain creativity, keep their juices flowing, and I think a lot of Gary Hamel's powerful question: “Are we learning as fast as the world is changing?”

How do we keep our eyes and ears open to nascent and potentially disruptive inflection points? How much does sheer luck play a part or are executives just not up to the warp speed nature of change and if so, why? Or why is it that we're witnessing this tsunami of senior executive churning?

12. Now for my final and inevitable question, and mercifully the shortest to state. What is the role of business education for the next generation? Do we continue to do what we have been doing, with just a little fine-tuning and tweaking? We are doing fairly well as it is, or so it seems. Certainly in terms of prestige and importance and yes, endowments. I would wager that over the last decade more business schools have been named and given major bucks than the combined decades preceding the 1990s. So why fix what ain't broke?

But what inflection points are we ignoring or not paying attention to? Are we providing an education that will provide the cognitive, emotional, interpersonal, and leadership competencies that will be required for sustained success in the New Economy? Is there space in our clogged curriculum for the philosophy, the metaphysics, the critical thinking of the enterprise? Are we giving our students a passion for continual learning, a refined, discerning ear for the moral and ethical consequences of their actions, and for an understanding of the purposes of work and human organizations? My greatest wish is that our students and alumni don't end up like some of those twenty-nine-year-old software millionaires, with their cell phones buzzing in their second homes in Aspen, suffering from a new kind of bug that causes affluenza and who wonder, when they retire, “Is this all there is?”