100 years of Harvard Business Review articles
I attended an interesting panel last week in Vienna, Austria, in which a group of distinguished scholars and practitioners discussed what they considered the best articles in the last one hundred years of the world’s leading management journal, Harvard Business Review.
The panel, entitled “Thinking About Management Ideas on HBR’S 100th Birthday”, was ably chaired by Ania Wieckowski, Executive Editor, Harvard Business Review, and included:
· Adi Ignatius, Executive Vice President & Editor-in-chief, Harvard Business Review Group.
· Amy Edmondson, Professor, Harvard Business School.
· Claudio Fernández-Aráoz, Executive Fellow for Executive Education, Harvard Business School.
· Roger Martin, strategy adviser, and former Dean and Institute Director of the Martin Prosperity Institute at the Rotman School of Management at the University of Toronto in Canada.
· Laura Morgan, Roberts Sr. Associate Professor, Darden School of Business.
The panelists were asked to choose the article that had influenced them the most. It was fascinating to see what these insiders picked as the landmarks of management.
Several of the panelists chose articles on important but narrow aspects of management.
Learning And Diversity
Amy Edmonson chose “Teaching Smart People How to Learn” by Chris Argyris (HBR May–June 1991). “Put simply, because many professionals are almost always successful at what they do, they rarely experience failure. And because they have rarely failed, they have never learned how to learn from failure. So, whenever their single-loop learning strategies go wrong, they become defensive, screen out criticism, and put the ‘blame’ on anyone and everyone but themselves. In short, their ability to learn shuts down precisely at the moment they need it the most.”
Laura Morgan chose “Making Differences Matter: A New Paradigm for Managing Diversity,” by David A. Thomas and Robin J. Ely (HBR, September–October 1996). The article explained that “companies should concern themselves with diversity, not just because discrimination is wrong, but because a more diverse workforce can increase organizational effectiveness., improve morale, enable greater access to new segments of the marketplace, and increase productivity. In short, diversity will be good for business.”
On both topics, progress in implementation is still urgently needed.
Towards A Theory Of High Performance
Claudio Fernández-Aráoz chose a broader topic: “Toward a Theory of High Performance,” by Julia Kirby (HBR July-August 2005). It begins: “To be sure, many management researchers continue to believe it’s a quixotic quest, but several first-rate scholars have been unable to resist pursuing it.”
“If the first requirement of a theory of high performance is that it have explanatory power—in other words, the patterns of practice identified truly do account for the superior outcomes—then the second requirement is that it have predictive and even prescriptive power… And this is where Harvard Business School’s Clay Christensen says that efforts to identify the best practices of successful companies have tended to fall on their faces.?
As the article itself concludes: “The quest to find the master keys to company success, which was spurred by the audacity of two consultants in 1982, has in some sense become a joint endeavor. It’s fair to say that, as an ongoing effort, it still falls short of excellence.”
Maximizing Shareholder Value
Adi Ignatuius cited “The Error at the Heart of Corporate Leadership” by Joseph L. Bower and Lynn S. Paine (HBR May-June 2017). The article pointed out that most CEOs and boards were mistaken in thinking that their sole legal duty is to maximize shareholder value. The article challenged the shareholder value theory and argued that the time had come for change: corporations must create value for all stakeholders.
Ignatius said the article was important in paving the way for the 2019 decision of the Business RoundTable (BRT) to reverse its 1997 support for the shareholder value theory, though without necessarily clarifying what the goal of a corporation should be. When all the stakeholders are to9p priorities, as the BRT implied, then none are. Thus, the BRT 2019 declaration created as many issues as it resolved.
A New Society Of Organizations?
Roger Martin chose “The New Society of Organizations” by Peter Drucker (September–October 1992). It was not what people would see as Drucker’s most famous article but it was important to Martin, because it inspired him and clarified what leadership should be. It started from the perspective that organizations were having more and more specialists in their businesses. Drucker’s article sought to explain the bigger picture of what organizations did for society, and showed how companies would need to organize, how they should be structured, and what their role in society should be. When Martin read the article, he was struck by the audacity of trying to link all those things together.
“Every few hundred years throughout Western history,” Drucker wrote, “a sharp transformation has occurred. In a matter of decades, society altogether rearranges itself—its world view, its basic values, its social and political structures, its arts, its key institutions. Fifty years later a new world exists. And the people born into that world cannot even imagine the world in which their grandparents lived and into which their own parents were born.”
In 1992, Drucker said, no such transformation had yet taken place. “If history is any guide,” he wrote,” this transformation will not be completed until 2010 or 2020.”
The Transformation Is Still Ahead
As the interventions of the panelists showed, organizations and society are still some distance from resolving the issues that Drucker raised. In particular, the question of who will take care of the common good in a pluralistic, society remains unresolved. Many large corporations are still the recognizable successors of 1972 corporations, primarily pursuing self-interest for shareholders and their executives, amidst considerable “virtue signaling.”.
Relatively few corporations have taken to heart Drucker’s dictum that “the only valid purpose of a corporation is to create a customer.” “The challenge that faces us now,” wrote Drucker in 1992, “and especially in the developed, free-market democracies such as the United States, is to make the pluralism of autonomous, knowledge-based organizations redound both to economic performance and to political and social cohesion.”
In 2022, that challenge is still largely ahead of us, although now we know the way, and we know the firms that are pursuing it, as shown in Figure 1.
Figure 1: Logos of 13 firms pursuing customer capitalism
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