For George Huber, it's definitely time for us to update our beliefs and theories about the ways we think senior executives should do business in today's post-modern world. It's long past time for us to reframe the ways we think about the issues and problems challenging today's corporations. Simply put, Dr.Huber thinks the ways in which we understand the role of senior executives and their corporations in today's world are both anachronistic and obsolete. For Dr. Huber, it is time for us to dramatically transform and restructure our corporations.
Dr. Huber says it like this, "A firm's survival depends on its ability to attain and maintain congruence with its environment. Top management's primary responsibility is to ensure that their firm possesses the capabilities needed to attain and maintain this congruence. To achieve these capabilities requires that managers at all levels make commitments, that they choose and implement organization design features and management practices well matched to their firm's environment."
There's no doubt the way Huber's defining the essence of an organization -- "attaining and maintaining environmental congruence" -- is a big-time departure from traditional economic and organizational theories. As is his assertion that top management's primary task is ensuring their organization's alignment with its environment's emergent realities.
Throughout the 20th Century and well into the first years of this century, prominent economists, financiers, consultants, and organizational theorists staunchly believed the sole purpose of every business was to make money—the more the better. Another way of making this same point is the assertion that the sole purpose of senior executives is to serve the interests of their stockholders. For Dr. Huber, this narrow sense of purpose is an incontestable fact that's deeply embedded in America's capitalistic system. It's one of its principal tenets. As such, this principal molds the actions of every senior executive and the corporations they're leading. It also forces all of us to simply accept the idea that the primary goal of our economy is maximizing organizations' short-term profits and delivering optimum returns to their shareholders. However, at this point in time, when our world is trying desperately to respond to accelerating rates of technological innovation, increasingly interdependent economies, and ideologically polarized societies, Dr. Huber believes this antediluvian mindset of ours is dangerous and dysfunctional.
The remedy Dr. Huber proposes for this troublesome mismatch between our archaic mindsets and the unprecedented transformations now reshaping our social, economic and political environments is a significant improvement in our senior executives' abilities to sense and interpret the rapidly evolving environments their facing. He frames this point like this: "In the future, the speed and appropriateness of a firms actions, and hence its performance and survival, will depend more than in the past on the firm's ability to rapidly and effectively sense and interpret environmental changes."
In the future, Huber asserts, the largest firms will respond to this mindset -- environment mismatch by creating new staff structures that are devoted exclusively to monitoring and probing the connections and the disconnections between their company's internal capabilities and their environment's emergent shifts. Smaller firms will also be forced to devote serious resources to identifying these mismatches, but they will do it by seeking less expensive approaches to getting a hold of the environmental intelligence they need, for example by contracting with specialized intelligence-gathering service firms.
Beyond these structural shifts, Huber believes that CEO's and their top managers will necessarily have to learn how to discern mismatches that emerge between their firm's adaptive capabilities and its environmental shifts. Alongside this new learning that senior leaders will have to do, the members of effective 21st Century management teams will need to meet more frequently, specifically for the purpose of discerning and defining any connections between environmental dynamics and the existing capabilities of their organizational systems. However it comes, the ability to rapidly recognize and respond to meaningful mismatches is, for future firms, going to involve and require system-wide transformations.
These "primary" responses, according to Dr. Huber, will up up catalyzing the development of cross-functional and collaborative decision making throughout these new future firms. Tomorrow's future firms will be driven to prioritizing the issues of knowledge acquisition, organizational learning, and knowledge management. In the Human Resources arena, all these new organizational structures, systems, and capabilities will drive an increased emphasis on meaning-making expertise and the kinds of personal mindsets that are comfortable with uncertainty and complex realities.
Bottom line, Dr. Huber, in The Necessary Nature of New Firms, is clearly telling us that, starting yesterday, every firm's survivability and effectiveness now depends on their ability to quickly and accurately interpret the meaning and significance of at least most of the emergent changes going on in their environments. "Future firms will...necessarily be different from today's firms. Firms will be able to survive future threats and effectively exploit future opportunities only if their top managers have put into place organizational attributes and management parties well suited to the environments of the future." At TLO, we would go even further. The 21st Century's future firms will survive future threats and effectively exploit future opportunities only after they successfully transform the eight essential components of their corporations.