Next time execs at your company say "innovation is a top priority," show them this tweet:
The source for the bar chart is a 2018 MIT Sloan Management Review article, which you can find here: https://sloanreview.mit.edu/article/with-goals-fast-beats-smart/
This year the US government will allocate $750bn in defense spending using a budgeting process invented in 1961, and which reliably guarantees inertia and incrementalism. Everybody realizes it's not fit for purpose. Former Google Chairman Eric Schmidt, who's been an advisor for the Defense Department, has argued that it's an "outdated, industrial-age budgeting process [that] creates a valley of death for new technology...preventing the flexible investment needed in prototypes, concepts, and experimentation of new concepts and technologies like AI." And yet it persists. Bureausclerosis in action, my friends:
"If everything in a large organization must go up and down the hierarchical ladder, bureaucratic arteriosclerosis along with CYA sets in, and that company’s life expectancy is substantially shortened."
From Jaime Dimon's latest letter to investors, worth a read:
A great overview of Oliver Hart's (Nobel Prize 2016) recent thinking on contracting. Haier has taken this general approach to regulate relationships between their thousands of microenterprises. I've heard Haier CEO Zhang Ruimin cite Hart's incomplete contracts theory on several occasions!
Are you seeking to make a positive change in your organization, or catalyze a movement that transcends institutional barriers? Then do yourself a favor & enroll in the "School for Change Agents" by Helen Bevan--one of the leading thinkers and practitioners when it comes to large-scale change. Starts April 19:
You can learn more about the work and Helen do at the English National Health Service here: http://horizonsnhs.com (we profile Helen and her work in our book).