There was big news in Somalia a few weeks ago. The country’s President, Hassan Sheikh Mohamud, had passed enough reforms to qualify for debt forgiveness by the IMF and the World Bank, re-enter the global financial system and join into the East African Community, an important regional block.
Yet few noticed. With war raging in Ukraine and Gaza, as well as complete disarray in the US Congress, progress in a troubled country in the Global South doesn’t warrant much attention. While the global economy—especially in the US—seems to have recovered from the shock of the pandemic, I can’t remember when there has been so much chaos.
Last year I wrote that we would see a shift of focus from disruption to resilience and that’s largely been true. It’s hard to imagine anyone would argue for shaking things up more than they are now. The question for 2024 is what comes after? It’s fairly clear that a new world order is emerging, but not at all clear what it will look like. Our future lies in the balance.
My friend Stephen Shapiro does not like New Year’s Resolutions. “According to our study, only 8% of Americans say they always achieve their New Year’s resolutions,” he writes. “The way it seems to work now, setting a New Year’s Resolution is a recipe for defeat. It has come to be one of the nation’s most masochistic traditions.”
He suggests that we replace resolutions with broader themes by thinking seriously about what we want to achieve in the year ahead and what we want to focus on. What do we want to do more of and what do we want to do less of? What will make us happier and more productive? A good theme should feel empowering not guilt ridden.
I find the same can work in reverse. By reflecting on the year that has passed, certain themes arise and my ritual of going through my top posts of the year is a great way to reflect. When I look back on what I wrote and what people read, it helps reveal things about the past year that weren’t obvious in the thick of events. Take a look and see what emerges for you.
I mark time through books because books define the zeitgeist. They reflect not only the wisdoms being received, but the questions being asked. We go to books not only for answers, but to sharpen our own inquiry. Last year’s list featured books about Ukraine (and this year’s list includes a great one too).
So perhaps it’s not surprising that this year’s list is especially heavy on change. We’re going through a lot of it and clearly there’s a lot still to come. I don’t think that’s necessarily a bad thing, but it definitely puts stress on the system. Certainly, we are living in an age of great peril and there’s a level uncertainty that I don’t think I’ve ever experienced before.
If we’re going to make it through we need to understand change, how to make it, how to adapt to it and how it happens. There are no easy answers. Change isn’t something you ever really master, but it is something that you can build skills to deal with more effectively. My hope is that some of these books can help you on your path. They certainly helped me.
In the small town of Alamogordo, New Mexico in 2002, a plan was hatched to pass a no smoking ordinance. The wife of a City Council member, a strong no-smoking advocate, orchestrated the campaign. She recruited activists from the next town over, twisted arms and, in a show of force, pushed for a quick vote. It failed.
Compare that to a similar effort in El Paso, Texas around the same time. The central advocate in this case was not anybody with great clout, but a student on an internship assigned to do research on the issue. As he quietly gathered facts, he became a local authority, spreading what he learned. The ordinance passed by a vote of 7-1.
People often say that change has to start at the top, but that’s not really true. Change isn’t top-down, nor is it bottom up. It emanates from the center of networks. Ironically, the way you get to the center is by connecting out to small groups, loosely connected and uniting them with a shared purpose. To really drive change, you can’t overpower, you need to attract.
In 2005 W. Chan Kim and Renée published Blue Ocean Strategy, which found that “blue ocean” launches, those in new categories without competition, far outperformed the shark-infested “red ocean” line extensions that are the norm in the corporate world. It was an immediate hit, selling over 3.5 million copies.
Bain consultants Chris Zook and James Allen’ published, Profit from the Core, around the same time. They found that firms that focused on their ”core” far outperformed those who strayed. For example, they warned that Amazon was putting itself from peril for expanding its business beyond books and predicted dire results.
Clearly, none of this makes sense. How can you both “focus on your core” and seek out “blue oceans?” It betrays logic that both strategies could outperform one another. Today, Amazon makes most of its money outside of books. Yes, new markets lack competitors, but they also lack customers. The truth is that most business research is surprisingly shoddy.
About a decade ago, the management guru Gary Hamel wrote a highly cited article in Harvard Business Review entitled First, Let’s Fire All the Managers. He analyzed the success of Morningstar, a leading manufacturer of tomato products that operates with a flat management structure and called for other corporations to follow its lead.
“A hierarchy of managers exacts a hefty tax on any organization,” he wrote. “This levy comes in several forms. First, managers add overhead and, as an organization grows, the costs of management rise in both absolute and relative terms.” The article created a lot of buzz and helped bolster other flat models, such as Holacracy.
Yet the “flat organization” idea hasn’t caught on. “Since 1983, the size of the bureaucratic class—the number of managers and administrators in the US workforce—has more than doubled, while employment in other categories has grown by only 40%,” Hamil recently wrote. The truth is that we need managers and trying to eliminate them is a waste of time.
In the late 90s Fortune magazine named Enron the most innovative company for six consecutive years, right up until the company collapsed in scandal. GE’s strategy of stack ranking was seen as a model to be emulated by other firms, even though there was no evidence it worked. McKinsey advised companies to fight a war for talent.
Today, we know better. It’s obvious that Enron was incredibly dysfunctional, that stack ranking undermines a high-performance culture and that talent is something that you build through upskilling, not something you “win” in a metaphorical war. It’s mind boggling to think of all the damage that was done before those ideas were exposed.
Yet if we accept all that we need to ask ourselves which ideas are widely accepted today that don’t hold water. Every era has its own fictions, things that are accepted because they are repeated, but lack any serious foundation. They become memes replicating themselves throughout the zeitgeist, rarely being questioned. Here are three truths that will surprise you.
When we’re passionate about an idea, we want others to see it the same way we do, with all its beautiful complexity and nuance. We want to believe that if others can just understand it, they will embrace it. That’s why most change management practices focus on persuasion, explaining the need for change and creating a sense of urgency.
But consider recent research that finds that we can’t even agree on simple concepts such as what a penguin is and it becomes clear that for any given initiative, people are bound to see it differently. The simple truth is that change doesn’t fail on its own, it fails because people resist it. If we are to bring about genuine change, our first job is to overcome that resistance.
We need to internalize that humans form attachments to people, ideas and other things and, when those attachments are threatened, we act in ways that don’t reflect our best selves. Every change strategy has to begin with that. Clever gimmicks or snappy slogans won’t bring about true transformation. We have to build a strategy to overcome resistance from the start.
In 1988, a young management student named John Krafcik published an article in MIT’s Sloan Management Review entitled, Triumph of the Lean Production System. Based on his study of 90 manufacturing plants in 20 countries, it argued that manufacturing could be made vastly more productive, while improving quality at the same time.
These methods would grow into the lean manufacturing movement and their effectiveness has been well documented. Krafcik himself went on to have a successful career in the auto industry, taking over Google’s self-driving division, Waymo, in 2016. There is an amazingly strong case for manufacturers to adopt lean methods.
Yet surprisingly few do. In fact, a recent survey found that less than 15% of manufacturers have adopted lean methods. This dilemma is much more common than you’d think. We’ve been conditioned to believe that a good idea, once proven out, will prevail in the marketplace, but that’s not really true. There is often a large gap between what we know and what we do.
In the 1990s, western-style liberal democracy was triumphant. The Berlin Wall had fallen and the Cold War had been won. Teams of diplomats and consultants rushed to spread the Washington Consensus, an agreed upon set of reforms that poor countries were pressured to undertake by their richer brethren.
Francis Fukuyama noted at the time that we had reached an endpoint in history, when one model had achieved dominance over all others. Yet even as he laid out the rational case, he invoked the ancient Greek concept of thymos, or “spiritedness,” to warn that even at the end of history, there would be some who would insist on going their own way, no matter the consequences.
That’s why any change, even if provably good, noble and just, will inevitably incur resistance. It’s a simple truth that humans form attachments to people, ideas and other things and, when those attachments are threatened, we see it as an outright attack on our identity and lash out. That’s why identity needs to be at the center of any change strategy, if it is to succeed.
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