I recently posted a comment on the Harvard Business School Working Knowledge website where a discussion is developing on the Most Significant Ideas in Management for the 21st Century. Below are five ideas I posted, all of which relate to management trends vs. societal trends. Of course, societal trends are almost always incorporated in forward thinking management views:
1) Global Businesses, regardless of where they are headquartered, will be run by non-Western citizens.
2) In the early part of the century there will be a significant age shift to a younger senior management structure effectively skipping a generation.
3) With the accumulation and availability of investment capital outside the Western World, entrepreneurship will truly become global.
4) A recognition of the growing real financial liability a corporation faces from not incorporating environmental sustainability and other societal issues into its decision-making will lead to widespread adoption of CSR. We already are seeing a valuation differential in the marketplace between CSR adopters and their counterparts.
5) As the developing world begins creating its own patentable Intellectual Property, the fight over IP will become global and intense and, to some extent, may offset expanding universal access to information. The creation of IP may assert itself as a higher objective for management even though the shortened life of a new idea decreases its present value.
By the way, this is an interesting forum and I would urge others to contribute to it, http://hbswk.hbs.edu/item/6639.html?wknews=02222011 .
The last two bullet points above clearly relate to what I think will be a management requirement—incorporating the impact of Climate Change on conducting business as the century progresses. There is an implicit growing business liability related to lack of incorporation of likely legal and administrative response to emissions of various types as well as an impact on various factors of production. Some of that liability is already showing up, and in other instances, e.g., super fund sites, acid rain, there is some element of retroactivity that can be applied. It is not an easy present value calculation to determine if and when a corporation takes action, but it is not clear that many corporations are even making the calculation. Intellectual Property is a part of this calculation. Of course, here, it is not just related to innovations around Climate Change, but all innovations. I wrote, in an earlier post, about steps China is taking to enhance its ability to create and protect Intellectual Property. Maybe coincidentally–or maybe not–the US is now making significantly more noise about increasing its spending on R&D and patent services in the face of significant pressure to cut federal spending. If the differential that the market place is willing to pay for reduction in liabilities through CSR investment and for ownership of Intellectual Property becomes more apparent, the pressure to lay out clearer guidelines in response to Climate Change and to improve our patent services should come from the corporate world with the government following. That is the way it should be. I hope it won’t be too late.