What will the future of business be like? I know, it’s a colossal question. And one that many people have tried to answer before me. Nevertheless, it’s the question I’ve set out to tackle in a new book project based on an interview relay.
“History never repeats itself but it often rhymes,” Mark Twain supposedly said. And while it might not be a very accurate description, it is true that we can – and should – use the past to inform the future.
For that reason, I started my project by interviewing a trio of business historians. First I spoke to Chris McKenna of Oxford University’s Saïd Business School. Later I had conversations with both Nitin Nohria, the Dean at Harvard Business School, and Professor of Business History Geoffrey G Jones, also at Harvard Business School.
While these three scholars supplied very different perspectives, they all agreed on one thing: that the world is not changing as rapidly as people think.
The hyperventilation of change
The idea that change is accelerating is common. If you search for “exponential change”, for example, you will find endless articles on the topic, written by established voices and published by highly regarded business media outlets.
Today, it’s the amount of data in the world that’s doubling every two years. Coupled with the climate crisis, the rise of artificial intelligence and today’s extreme levels of connectivity – more than 4 billion people are now using the internet – we can understand why the term "disruption" has become a favourite among business thinkers and other commentators.
So what’s the problem?
Well, first of all, this hyperventilation of change has a range of negative implications. It promotes the idea that the world is unpredictable. It generates fear. It prevents us trying to say anything meaningful about the future. And it discourages us from learning from the past.
Secondly, the idea of exponential change is simply not true. Yes, the world is changing. But change is not accelerating.
“They said that change was accelerating in 1900,“ Chris McKenna reminds us. “They said it in 1920. In 1940, in 1960, in 1980 and in 2000. So the presumption is that the people who said it before were wrong, but we’re right now.”
“What we’re doing, is that we’re fetishizing the second derivative. We’re preoccupied with the rate of change.”
Geoffrey G Jones makes the same argument:
“If you go back and read what people wrote in the 19th century, they thought change was happening at an incredible rate we had never seen before.”
That being said, they were right to think that in the 19th century. The level of transformation was extraordinary. Scientifically, between Darwin and Einstein, we saw a huge change in how we perceive the world. And technologically, the speed of information changed completely with the telegraph.
“Before the telegraph, information travelled at the speed of a horse. That’s the biggest transformation one could imagine in the world of information. And the web hasn't done that,” says Jones.
How transformative is the web, really?
Nevertheless, our current notion of exponential change is very much driven by the web and the transition to a network economy in what has been termed "the Information Age".
Yes, the web has changed the media landscape completely. And yes, the web has enabled new, network-based ways of exhanging good and services through, for example, the sharing economy and blockchain technologies.
But, according to Jones, the web has yet to have a big transformative impact beyond the realms of information:
“If we think of for example physical transport and how we move things around, then that technology has hardly changed for 30 or 40 years. We still have the same aircrafts, and we still transport our goods in big ships. And we still haven’t cured cancer.”
Why we love the story of exponential change
But why, then, do we continue to think that change is accelerating? Why do we fetishize the second derivative?
For one, there’s a psychological – or even biological – aspect to it. As always, while the new generations drive the change, their parents and grandparents will feel that the world has gone mad. It simply feels like exponential change.
Secondly, there’s a business aspect to it. A reason to keep the idea alive:
“If you read the business literature, there has never been a time in which managers did not invoke the idea that the world is changing faster than it’s ever changed before,” Nitin Nohria tells me. “It’s a way to challenge your organisation, to create motivational energy. If you say everything will more or less be the same, then why should people pay attention?”
A third reason is the concept of industrial revolutions. At this moment in time, we’re arguably in the middle of the Fourth Industrial Revolution, and during a period of frenzy, such as the current one, things do change at a higher pace than in other periods.
This in turn nourishes the idea that revolutionary change is coming, and that it’s going to turn the business world upside down.
However, in reality change is not exponential. It’s better described as a series of S-curves. There are periods of frenzy, and there are the quiet periods.
Mind the pause
But are we wrong to focus on these periods where change is increasing? And is there an alternative to this story about revolutionary change?
“From my perspective,” says McKenna, “I actually think we should spend more time asking questions like: What happens when there’s a pause? Pauses are as important as periods of acceleration.”
According to McKenna, there are two reasons why the pauses between industrial revolutions are important:
Many important developments have happened during the pauses. Examples are nuclear energy, the television and air conditioning;
The real work takes place in the pauses. The most important thing is not the rapid evolution of robotic technology, for instance, but its application for the next 30 years or so.
Why boring will win
To me, based on my conversations with the trio of business scholars, the following is set to become the real story of business in the next couple of decades:
We have all these (somewhat) new technologies at our disposal. Right now, most of us are trying to understand what they are, how they work, what they will mean, etc.
But soon these technologies will lose their lustre, and we will enter a pause. That’s when the real and boring work begins. And that’s when businesses should stay focused – when the initial tech appeal is long gone.
In short, the winners of tomorrow could very well be the boring companies. The ones that avoid the hyperventilation, meticulously develop their core product, and play the long game.