Old School Business vs New School Business

The State of the Business World
We're in a peculiar situation in our world right now. There's a whole new way of doing business that's slowly rising on the horizon while the old school is waning in the background and yet we're caught in the middle. Most companies are some sort of hybrid of both ways of doing business--both old and new. I'm talking about the old school, authoritative "my way or the highway" managing techniques, the "although our prices are higher our service is better. That's why people are choosing us" pricing strategies, and the "what the customer (and our employees for that matter) don't know won't hurt them" behind the door meetings about policies and procedures of yesterday are being met with the new school's "we're all in this together, the lowliest employee has just as much right to input as the CEO," the "we're in a global economy, we can't afford to not stay price competitive but what's going to give us the market is differentiation," and being totally up front and honest with your customers and your employees. Recognizing that they are not dumb. People catch on and see through the bs that companies or their employers put out a whole lot more than they realize. And yet we're in the middle.

Symptoms of the Hybrid
This is a major cause of the "beautiful exterior but defunct underneath the hood" way of business I've mentioned earlier. This may be why many businesses talk about "employee empowerment" and yet suffer from group think or why some companies talk about "equal opportunity" employment but will only hire women in their HR department (also a sin of my current company)--because the new school recruits coming in as lower level managers are trained to think new school but the old fossils with the huge office on the top floor have always done things the old-school way.

A Bright Future
But make no mistake about it, the tide is turning. In the next 10 to 15 years the old-school baby boomers will be retiring and the new school will reign in a new era of transparency in business practices and unprecedented overnight global brand building. I'm excited for the new era, being taught in the new school way of business, because it will mean that we'll finally come closer to respecting our employees. For tapping their potential, for including them in on goal setting and strategic planning. For treating them as unique individuals with something to offer the company that will help shape the company's fortune in the years ahead. Right now employees are interchangeable and replaceable cogs in the corporate machine. But not for much longer. In some companies the leap has already been made company wide. In some companies it may just be a forward thinking supervisor or manager who sees the new school way of doing business while the rest of the company lags behind.

Predictions and a Caution
In the next 10-15 years company perks will increase at an unprecedented rate as companies try to attract and retain key talent knowing that they're not just competing with other local or national companies for that talent but with the rest of the world. As we become more and more of a global society more people will choose jobs overseas and companies who don't soup of their benefits will lose out. People will get more vacation time, better health benefits, we'll see more companies structured like the famous Google building in SoCal with day care, on campus spas and gyms, fine dining, and video game rooms all in the name of keeping talented people happy. This will be a great era to live and work in! But there are some things from the past that we should be cautious not to disregard. As many positive things as I see the new school ushering in I fear that we'll lose the habit of patience in business growth. That we'll become so enamored with growing our business that our growth will outpace our ability to sustain growth and many businesses will topple. This will become so common-place that we'll see recessions much like the one we're in now become more and more common. The business cycle will become hyper-sensitive because of the lack of patience that the new school brings. It's like the old allegory of the olive trees that grew too fast on top so that the trunk could no longer support the weight of growth and the trees would topple over and die. One thing the old school did right was to be patient in growth. To realize that building an enduring company takes decades of careful planning and not being swept away by fly-by-night business trends. This, I feel, we in the new generation should be mindful of and in the few remaining years that we have with the baby boomers, we should learn this important lesson from them. Those who do will absolutely experience unprecedented growth, but it will be sustainable growth.

Updated 1/12/2010.
It appears that I'm not alone in my notions that hyper-growth is detrimental in our future. After writing this I read an article about the mega-shoe online retailer Zappos.com (ranked 23rd best company in the nation to work for). It's CEO Tony Hsieh (pronounced Shay) talks about the perils of rapid growth at the expense of patiently building a stable company. Here's an excerpt:
"Zappos was founded in San Francisco in 1999; Hsieh joined the company within a year as co-CEO. He eventually took the reins, moved the operation to Las Vegas for the cheap real estate and abundant call-center workers, and vowed to avoid a LinkExchange-style fate. Looking back, he realized what happened: In boom times it's easy to make ad hoc decisions that feel right because they assuage short-term pressures. But that's the equivalent of driving without a map. 'One of the biggest enemies to culture is hyper-growth. You're trying to fill seats with warm bodies, and you end up making compromises,' says Hsieh."..."Seventy-five percent of our purchases are from repeat customers," says Zappos chairman, COO, and CFO Alfred Lin. "There are a lot of things we do that seem overly costly. But we have always been focused on the long term when looking at whether something should be cut." http://money.cnn.com/2009/01/15/news/companies/Zappos_best_companies_obrien.fortune/index2.htm