Very interesting interview with Donald Sull as he touches on a number of important subjects. Regrettably, his discussion seems to view businesses as being very passive economic actors. They are not. Likewise, his analysis places him resolutely in a “developed world” perspective. I think that it is more helpful to view the turbulence trend he describes in the active. If you look back in recent history you will discern a concerted effort by the US and UK governments to shift economic development from manufacturing to services. Most markedly, as a reaction to the perceived vulnerability of western economies to the oil shocks of the 1970’s.

Since the Reagan/Thatcher years there has been an earnest de-industrialization process underway and a shift to services: first distribution, then IT, and more recently financial services. While industrial development has been underway in the “developing world” (I do so hate these terms, sorry) with increasing interdependence. It is the unforeseen and unmanageable consequences of the integration of these peoples and economies into the “capitalist” world economy that causes the turbulence that Mr. Sull describes.

Therefore, contrary to his argument, this trend is active, not passive, and it is those countries and businesses that have the ability to see themselves with the historical continuum who will be most efficient at navigating their future. To put the various examples Mr. Sull provides for the right way to do things into another perspective, they are all movements toward the “empowerment” of the consumer. To be more precise, in a service based economy, businesses are no longer working in a top down manner with their customers but integrating them into their business processes: work that was done by the company is now done by the consumer using IT and thus providing the productivity gains that buoy their bottom line and shareholder returns. Welcome to the do-it-yourself world!

Sull, incorrectly in my opinion, calls complexity “turbulence” and resilience “absorption.” By using more generally accepted terminology he would have exposed readers (through footnotes and attribution) to a much more comprehensive view of the field.

Your man, Eric Beinhocker (Origin of Wealth), did a much better job dealing with complexity and resilience. On the down side, Beinhocker is a formidable read and may be a bit imposing for a general business audience.

Don Sull makes a compelling argument about what it takes to thrive in turbulent times. However he misses an important point when he talks about innovation. Surely innovation defines a firm’s response to changing markets and new opportunities? And isn’t business model innovation really the essence of implementing strategic, portfolio, and operational change?

An excellent video that was useful to my students in my course on international strategic management. Henry Mintzberg’s research on the potter and strategy were often discussed in the classroom. A number of the fundamental premises of strategic management are put into question in a study that tracks the realized strategies of a prominent university over a century and an half. Amidst continual change in detail, there was remarkable stability in the aggregate, and nothing resembling quantum or revolutionary change in strategy ever occurred. This may be explained in some of the terms most popular in business today: “empowerment”, “venturing”, and especially “knowledge work.” Thus, while the typical university may seem very different from the typical corporation, its behaviour may in fact contain sobering messages for the strategic management of businesses.