Leading into the Future XIb: Holding the Center While Innovating and Opening Boundaries
Even back in 1989, Peter Drucker (1989, p. 230) concluded: “neither the quantity of output nor the ‘bottom line’ is by itself an adequate measure of the performance of management and enterprise.” Peter Senge (1990, pp. 147-148) similarly noted at about the same time that a primary emphasis on profit in an organization diminishes the vision of the organization and leads to a focus on means rather than ends:
Many senior executives . . . choose “high market share” as part of their vision. But why? “Because I want our company to be profitable.” Now, you might think that high profits [are] an intrinsic result in and of itself, and indeed it is for some. But for surprisingly many other leaders, profits too are a means toward a still more important result. Why choose high annual profit? “Because I want us to remain an independent company, to keep from being taken over.” Why do you want that? Because I want to keep our integrity and our capacity to be true to our purpose in starting the organization.” While all the goals mentioned are legitimate, the last—being true to our purpose—has the greatest intrinsic significance to this executive. All the rest are means to the end, means which might change in particular circumstances.
Kenneth Boulding predicted that the problems of measurement and evaluation associated with the intersect organization would become even more common in the future. He was quite accurate in his prediction. When these problems of measurement in intersects are compounded with the measurement problems induced by size then it is not hard to understand the more recent emphasis on relativistic social and organizational values, and its skepticism regarding clearly perceived and measured “realities.”
The intersect challenge is equally as daunting when it comes to building a strategic plan for an organization that resides between two or more sectors of our society. In reflecting on this challenge, we can return to the analysis provided by Kim and Muborgne about the red and blue ocean. Clearly, the blue ocean is filled with intersect vessels. As Kim and Mauborgne (2005, p. 5) note:
. . . blue oceans are largely uncharted. The dominant focus of strategy work over the past twenty-five years has been on competition-based red ocean strategies. The result has been a good understanding of how to compete skillfully in red waters, analyzing the underlying economic structure of an existing industry, to choosing a strategic position of low cost or differentiation or focus, to benchmarking the competition. Some discussions around blue oceans exist. However, there is little practical guidance on how to create them. Without analytic frameworks to create oceans and principles to effectively manage risk, creating oceans has remained wishful thinking that is seen as too risky for managers to pursue as strategy.