articulating what we mean by business model, and I think we can
spend at least as much time and have potentially at least as much benefit in taking seriously the concept of a management model — and
getting people to articulate the choices that they’ve made.
For example, one of the dimensions of management I look at in
my book is the question about making decisions top-down versus
bottom-up. Should we be relying on the wealth of experience at
the top, or should we be tapping into the wisdom of the crowds?
Whole books, as you know, have
been written on the wisdom of
crowds and “crowdsourcing.”
RELATED
RESEARCH
; J. Birkinshaw
and J. Goddard,
“What Is Your
Management
Model?” MIT
Sloan Management Review 50,
no. 2 (winter
2009): 81–90.
And it’s not very helpful to say
that we should rely on one or the
other. What is much more helpful is to say, “Let us think through
what a ‘wisdom of the crowds’
approach to making decisions
looks like. Let’s look at what
would make a top-down approach to decision making work. Then
let’s look at the pros and cons of each, and let’s encourage people to
figure out the right approach to decision making based on their
analysis of the situation.” Every company faces, to some degree,
different circumstances, and every company is potentially looking
to differentiate themselves on slightly different dimensions.
You mentioned at some point in the book that companies
should spend as much time thinking about improving their
management practices as they do developing new products
and services. Do you think any companies actually do that at
this point?
No. I’ll be completely frank: I think the chances of that happening
anytime soon are remote. We know that many companies spend
literally billions on product development. For the most part, that
money is not wasted, but much of it is spent on matching competitors, and very often it ends up being spent on what we might call
derivative products.
Innovations in the way that we do management have the potential for creating long-lasting advantage. Yes, you’ve got to continue
to do product innovation, but the advantages you get out of that
are almost always fleeting. If you actually took management innovation in the way that, say, W.L. Gore & Associates did, or perhaps
Google has done at some point, then you can actually see management as an engine of long-term sustainable advantage.
Innovation in management to some extent begets innovation
in other areas; it’s not an either/or story. I think it’s just a matter of
rebalancing the prioritization of the different types of innovation.
Reprint 51404. For ordering information, see page 10.
Copyright © Massachusetts Institute of Technology, 2010. All rights reserved.
[INFORMATION TECHNOLOGY]
The Surprising Impact of Fashions
in Information Technology
Large companies that invest
in trendy IT innovations may
see their reputations — and
CEO compensation —
increase the next year.
BY PING WANG
Enthusiasm for many information technologies
(IT) developed for business use often mimics the
ebb and flow of fashions. When a research team I
led analyzed press coverage of various IT innovations over the period between 1971 and 2002, we
found that media coverage of many innovations
tended to grow over time to reach sharp peaks
in popularity that didn’t last long — in a manner
reminiscent of the spiky life cycles of fads and
fashions in the apparel and entertainment
Information technology fashions pick up cues from the broader environment into which companies seek to fit.
COURTESY OF APPLE
SUMMER 2010 MIT SLOAN MANAGEMENT REVIEW 15
