Emerald Group Publishing Limited
Copyright © 2011, Emerald Group Publishing Limited
Article Type: Editor’s letter From: Strategy & Leadership, Volume 39, Issue 4
Since our founding more than 40 years ago, Strategy & Leadership has sought to be “useful and interesting” to its corporate readers. Broadening our mission a bit, this issue of Strategy & Leadership offers corporate leaders a number of articles that deserve to be described as seditious. Here are some manifestos we are especially proud of:
Masterclass: the essential metric of customer capitalism is customer outcomes. Pioneering author Steve Denning urges corporate leaders to listen to the emerging consensus that shareholder capitalism is obsolete and we are entering the age of customer capitalism. Making money and corporate survival now depend on delighting customers. But surprisingly few firms measure outcomes, or supply management with moment-to-moment information about whether customers are being frustrated, satisfied or delighted. The ability to track progress in achieving outcomes and interactions that delight customers is crucial. It enables us to understand where we have come from, where we are now and where we could be heading. It’s the foundation of discovery. It expands our knowledge, defines progress, and sparks new insights.
Roger Martin explores three big ideas: customer capitalism, integrative thinking and design thinking. In a provocative interview, the noted author says he believes that the business world has adopted the notion of shareholder value maximization as the singular goal of the firm to an unhelpful extent.
It has taken several decades for the various key actors – management, stock analysts, and hedge funds – to perfect their ability to exploit the theory of shareholder value maximization for their own benefit, in direct opposition to the interests of shareholders. In essence, they have all figured out how to game the game. The current danger to American capitalism stems directly from the way that we have linked the real world – producing customer value – to the expectations world – the stock market.
In contrast, in the US National Football League, if any person involved in any aspect of the real game – whether player, coach or general manager – is discovered to be betting in the expectations game, he will be banned from the real game for life on the first offense.
Disruption theory as a predictor of innovation success/failure. Author and consultant Michael Raynor claims that disruption theory can deliver statistically significant and practically material improvement in the ability to innovate successfully. According to his experiments, disruption theory offers the genuine hope of becoming better at creating or picking winners than is possible with other growth models.
Reinventing management purpose: the radical and virtuous alternatives. Author Robert J. Allio believes that shareholder value maximization is a flawed corporate purpose and the better alternative is the virtuous corporation that balances the need to reward external stakeholders with relentless attention to internal excellence and virtue.
Robert M. RandallEditor