In the later decades of the 20th century, the gradual increase in the number of knowledge workers coupled with the sudden appearance of an accelerating pace of change began to stretch the limits of the effectiveness of a century-old management discipline. Despite the pressures from these two emerging developments, corporate executives have been reluctant to relinquish the control and the authority that comes with management positions in command-and-control organizations. Until now, they have been able to handle the competitive challenges of an accelerating pace of change by working everyone harder – but not necessarily smarter – through staff reductions and increases to the workloads of the remaining workers.

Managers have been able to finesse the demands for involvement by the increasing number of knowledge workers by adopting participative management practices that require accommodations in style, but that leave the basic substance of hierarchical management unchanged. While these accommodations reflect the bosses’ begrudging realization that, increasingly, it is the workers and not the corporations who truly own the company’s critical knowledge, the managers have also been keenly aware that worker knowledge only has economic value when it is combined with other workers’ knowledge, and until recently, the only place that workers could go to find other knowledge colleagues was in corporations. Thus, the bosses have been able to sustain their ingrained belief that the workers still need the corporation more than the corporation needs the workers.

Whatever comfort managers may feel in their ability thus far to hold onto their century-old management discipline, they will soon learn that they are acting with a false sense of security. With the firm rooting of the Internet, we are fast approaching a tipping point that will radically transform the focus of work from mass production to mass collaboration and will dramatically change the work we do and the way we work. By making mass collaboration possible, the Web becomes the catalyst that shifts the ownership of economic value from the corporations to the workers and, in the process, accelerates the pace of change to the point where continued use of strategies to work harder is ineffectual. The only effective strategy for working in today’s faster-paced world is to work smarter.

The Internet and mass collaboration are providing knowledge workers with attractive – and oftentimes more productive – alternatives for combining their knowledge with others to create economic value.  As these alternatives expand, it is becoming clearer that today the corporations need the workers more than the workers need the corporations. This will become even more evident as an increasing number of knowledge workers, especially among the millenials, turn their backs on traditional ways of working to become free agents so they can work for several companies at once. Who says you can only work for one company?

The inevitable shift from mass production to mass collaboration means that companies will need to reach outside their organizations for a significant number of their workers if they are to remain competitive in our new wiki world. They will also need to work far smarter and far faster than they currently do today. A century-old management architecture that assumes that change happens incrementally will not get the job done. Harnessing the power of mass collaboration means that the bosses will have no choice but to accept that the successful enterprises of the Digital Age will be peer-to-peer collaborative communities designed for innovation and rapid change. These organizations will be substantially different from traditional top-down hierarchical bureaucracies. That’s because when the primary task of the corporation is to leverage the power of collaborative networks, managers need to learn that the key to managing at the pace of change is to work smarter not harder.

But what happens when the past is no longer a proxy for the future? What happens when the arc of change suddenly shifts from incremental to exponential?  These are questions that Gary Hamel ponders in his latest book, What Matters Now: How to Win in a World of Relentless Change, Ferocious Competition, and Unstoppable Innovation. And if Hamel’s answers to these questions are correct, the survival of many corporations and their managers may very well depend upon their letting go of familiar assumptions and embracing the unprecedented realities that now define business in the twenty-first century. Put simply, a nineteenth century management model is unsustainable in a twenty-first century world. And while this premise may appear intuitively obvious, acting on this postulate may be the most difficult challenge facing business leaders today. Unfortunately, according to Hamel, most business leaders appear poised to fail.

With the rapid convergence of accelerating change, ubiquitous connectivity, and escalating complexity spawned by the transformational power of the Internet, we have been suddenly thrust into a world where the past is indeed no longer a proxy for the future. And while the future may be very different, it is not necessarily unpredictable; it just needs to be predicted differently. That’s because the future no longer begins with a managerial elite charged with orchestrating our institutions; rather, the future today is more likely to start on the fringes in a hyper-connected world far from the control of those who think that they are still in charge. Hamel points out that, while the future may no longer be an extrapolation from the past, it is nevertheless hidden in plain sight. Quoting the author William Gibson, Hamel reminds us “The future has already happened, it’s just not evenly distributed.”

According to Hamel, companies miss the future not because it’s unpredictable or unknowable, but because it’s unpalatable and disconcerting. They miss the future because both they and their leaders need to quickly learn that “organizations lose relevance when the rate of internal change lags the pace of external change.” This means the most important question for any organization is: “Are we changing as fast as the world around us?” If companies are to thrive in a world where the past is no longer a proxy for the future, they are going to need to change the way they change.

The sudden emergence of accelerating change means that everything now changes exponentially. Unfortunately, business leaders don’t have much experience with exponential change. They are much more seasoned in the ways of discipline and efficiency shaped by a management ideology where control is the principle preoccupation of most management systems. However, in times of accelerating change, it isn’t the most controlled or the most efficient organizations that survive, but those that are the most adaptable and resilient.

Traditional organizations are not designed to be adaptable or to manage at the pace of exponential change; they’re designed for maintaining the status quo and for steering incremental change. And when they do make large-scale changes, it’s often in the face of a traumatic crisis. As Hamel observes, “Review the history of the average corporation and you’ll discover long periods of incremental change punctuated by occasional bouts of frantic, crisis-driven change.” When exponential change supplants incremental change as the norm, the capacity to change without trauma becomes essential for the simple reason that the severe stress of never ending crises is unsustainable for most human organizations. That’s why Hamel advocates, “Building organizations that are as resilient as they are efficient may be the most fundamental business challenge of our time.”

The greatest impediments to building resilient organizations are the control systems that have served as the standard of management excellence. Resilience requires innovation, creativity, exploration and experimentation. To be resilient, managers must have a capacity for iterative learning, which means that they must have a willingness to take risks, to sometimes fail, and to learn from what are hopefully small failures. While embracing explorative failure may be a hard adjustment for control-oriented managers, they may not have a choice because avoidance of small failures in times of great change may turn out to be the fastest pathway to ultimate failure in a world where only the innovative survive.

If companies are to cultivate the innovation that they need to be resilient and adaptive, Hamel argues that they need to make sure that the senior leaders don’t dominate the strategy discussion. Instead, the conversation about company strategy needs to be shaped by individuals who are emotionally invested in the future rather than experienced in the past. This means expanding the diversity of those who shape strategy. Hamel suggests, “One simple way of increasing diversity is to overweight every team and decision-making body with individuals who are younger than the company average, have worked in other industries, and aren’t based in the head office.”

Creating the future in a twenty-first century world reshaped by change, connectivity, and complexity requires a paradigm shift in the ways we manage organizations.  Managing great change is only possible if we change how we manage. Those business leaders who have the courage to embrace new assumptions and new ways of thinking by building organizations that are designed to adapt rather than to control will be better poised to meet the challenges of an unprecedented exponential world.

When I started my own business in 2007, cost considerations necessitated a change in my preferred airline, and while I approached my new carrier with an open mind, 20 years with the “friendly skies” was a tough act to follow.  In time, I settled comfortably with my new carrier, but the memories of United’s delightful customer service remained my personal standard.

I was somewhat surprised by the viral popularity of the protest song “United Breaks Guitars” in the summer of 2009. The song chronicles the frustrations of Canadian musician Dave Carroll as he persistently tried to persuade United to repair the guitar that baggage handlers broke when they tossed and dropped the instrument on the tarmac in Chicago. The song humorously recounts United’s steadfast adherence to its “standard 24-hour timeframe” for filing a claim. Despite Carroll’s pleas that United take responsibility for its actions, United remained riveted to its policies. It seems that pleasing the bosses was more important to United employees than delighting customers.

“United Breaks Guitars” was an instant Internet sensation, with 150,000 views on the first day, 500,000 within three days, and an astonishing 5 million hits in a little over a month. United’s bureaucratic rigidity in the handling of this single claim mushroomed into a public relations nightmare. The word was out: The skies weren’t so friendly anymore.

Recently, I had a succession of three trips to cities that my new carrier doesn’t service, and so I decided to give my old airline a try.  Despite Dave Carroll’s exploits with my former airline, I had a 20-year history of fond memories in the friendly skies. Surely, my old friends at United would welcome me back.

I learned instead that five years is a long time, long enough for things to change. The smiles were gone, the treatment was brusque, and I wasn’t even sure if I was a number, much less a person.  The last of the three trips, in particular, was a misadventure of errors and omissions. This third trip occurred within days of the not-so-smooth integration of the United and the Continental computer systems. If this system integration is indicative of how the merger is working, things are not going very well.

The misadventure began when I booked the flight and the automated reservation system wouldn’t recognize my frequent flyer number – the same number that I’ve had for 25 years. The automated system informed me that I would be transferred to a customer service agent, and that I might be charged $25 for this involuntary transfer. Despite the agent’s assurances that the $25 charge would not apply, the fee did indeed appear on my next credit card statement. When I tried to contact United to get them to correct their error, the automated system informed me that due to unusual call volume, it would be a while before my issue could be addressed. Fortunately, my credit card vendor was able to promptly handle the reversal of United’s error.

Upon arrival at the airport on the day of the flight, my boarding pass does not contain my 25-year old frequent flyer number, but instead prints out two strange letters followed by asterisks. When I approach a customer service agent, she brusquely informs me that the systems conversion required a change in all the frequent flyer numbers, that I now have a new number, and that I will be receiving my new card in the mail, which almost one month later still hasn’t arrived.

Because I recently enrolled in United’s Mileage Plus Explorer card, as the 20 foot by 20 foot ads all over the airport stipulate, I am now entitled to priority boarding. My boarding pass, however, shows that I’m in boarding group #7. As I approach the gate agents to rectify my boarding group, there is a long line and four agents behind the counter, but only one of which is serving passengers. Two of the agents are intently involved with a computer printout, while the remaining agent is merely standing behind the counter with her arms folded.  As my fellow passengers and I exchange amazed glances, I know we are all wondering if we have somehow inadvertently wandered into the DMV. Fortunately, when my turn comes, the single servicing agent manually adjusts my boarding group, wondering out loud why the computer didn’t recognize the Mileage Plus Explorer card that I used to book the flight. She then offhandedly remarks that they are having computer problems, and that the agents are still trying to learn the new system.

While waiting to board the plane, I decide to call the United frequent flyer help line to check on the computer glitch only to hear the automated system inform me that United is experiencing unusual call volume, suggesting I call back in a couple of days. The automated voice then goes on to say if my Mileage Plus balance is incorrect, the airplane hopes to have that corrected with the next few days.

After boarding and waiting for the plane to leave the gate, I wonder what ever happened to the friendly skies? The smiles were indeed gone. We were treated more like enemies than valued customers. In that moment, I realize that United Airlines could learn a lot from Zappos. Would Zappos change frequent customer numbers without informing customers? Would a Zappos representative ever treat a customer brusquely? Would Zappos allow three customer agents to leave a fourth to handle a long line of customers by herself? Would Zappos allow a computer system merger that wasn’t sufficiently ready for primetime, leaving its customers and employees in utter confusion? No, Zappos would never do any of those things. The people at Zappos understand that delighting customers is always more important than pleasing the bosses.

As we pull away from the gate, we view a video of the big boss, United’s CEO, beaming with pride about what he sees as the wonderful merger of two great airlines and how delighted he is to share with us how smoothly the repainting of the fleet is proceeding.  It then becomes clear that this boss doesn’t have a clue what is most important to his passengers. We really don’t care what color the planes are. If you want to delight us, don’t charge us fees when your systems don’t work and when your agents assure us that the system’s error will not be at our expense, let us know our frequent flier numbers by sending us our new cards before you change the numbers, bring back the smiles on your employees, put us in the right boarding groups, please don’t have agents standing around while customers wait in long lines, and please, please, please don’t take days to answer our calls, especially when you screw up! United Airlines could definitely learn a lot from Zappos – then maybe we’d see a return to the friendly skies.

In the meantime, I’m sticking with my new carrier. They still smile at me when I board the plane!

However, there are companies, such as Amazon, Google, Linux, W.L, Gore & Associates, Whole Foods and Zappos, who aren’t concerned about the twin challenges of increasing change and complexity. That’s because they know that the key to mastering change and complexity is to create agile collaborative networks, not slow-moving bureaucratic hierarchies.

We are at a unique point in history as we find ourselves catapulted from the industrial world we knew so well and thrust into the very unfamiliar wiki world. We suddenly find ourselves in a new world with a completely different set of rules. We are at a tipping point in the evolution of management where traditional executives find themselves confronted by unprecedented business realities for which most are totally unprepared. In this new world, digital technology has made networks far smarter and far faster than hierarchies, and has consequently created a deep management crisis as these traditional executives stubbornly persist in trying to use a 19^th century management model to tackle 21^st century problems. It can’t be done.

Managing innovation is now the central business issue across all industries. The new economy of wiki world is all about change – continuous unrelenting change.  If business leaders want to survive the current management crisis and learn to successfully manage at the new pace of change, they will need to do an extreme management makeover and redesign their organizational architecture around the set of principles used by successful businesses that are mastering the twin challenges of change and complexity. We call these principles The 5 Disciplines of Collaborative Leaders:

1. Understand What’s Most Important to Customers. The best companies are customer-centric; they build their strategies around what matters most to customers and design their processes to give delighting customers priority over pleasing bosses.
2. Build Shared Understanding by Bringing Everyone Together in Open Conversations. Companies that successfully manage at the pace of accelerating change have innovative processes that enable them to effectively integrate diverse points of view and reach agreements on their disagreements.
3. Aggregate and Leverage Collective Knowledge. In a knowledge economy, organizations are fundamentally intelligence systems. Today’s most intelligent organizations no longer leverage individual intelligence by constructing bureaucratic hierarchies; they build collaborative networks to leverage their collective intelligence because they understand that nobody is smarter and faster than everybody.
4. Focus on the Critical Few Performance Drivers. The most effective leaders know that management is about creating the future. And when they are good at creating the future, they never have to explain the past. That’s why smart leaders don’t focus on outcome measures; they focus on the leading indicators that drive the outcomes.
5. Hold People Accountable to Their Peers. The secret to mastering the unprecedented combination of accelerating change and escalating complexity is to make sure that no one in the organization has the authority to kill a good idea or keep a bad idea alive. In the best businesses, leaders aren’t bosses; they’re catalysts and facilitators orchestrating collaborative networks. These networks are far smarter and faster than hierarchies because holding people accountable to their peers is the great enabler of the collaboration necessary for speed and innovation.

These five disciplines are the foundation for successfully mastering the change, chaos, and complexity that shape the unprecedented business realities of the 21^st century wiki world. They are also the secrets to creating extraordinary performance for those leaders who are willing to accept that we are now living and working in a completely new world with a completely different set of rules.

Traditional organizations have lots of secrets. With work subdivided among departments and directed by managers who are often engaged in some form of “turf battle,” it is not surprising that information does not flow freely and that many workers are unaware of what people do outside their departments. Sometimes the secrets are intentional, such as when information is shared on a “need to know” basis or even deliberately withheld. More often than not, most corporate secrets are the unintentional consequences of the functional fragmentation of work. Whatever the reason, hierarchical organizations breed secrets. And that explains why they need elaborate control systems.

When secrets prevail, there is little or no shared understanding among either the managers or the workers to guide consistent delivery of customer value. Worse yet, without the transparency that naturally accompanies shared understanding, there could be plenty of opportunities for greedy or malicious employees to defraud the company. To protect themselves from the potential adverse consequences of bureaucratic secrets, hierarchical organizations promulgate a continuous stream of rules and regulations and establish complex control structures based on checks and balances.  These structures rely upon armies of supervisors and auditors to assure that everyone is following the rules and that people are not using their secrets to inappropriately enrich themselves. The theory is that, if everyone has someone to watch over him or her, the risks associated with the inevitable secrets in bureaucracies will be mitigated and the business will be under control. The unfortunate irony, however, is that often the application of complex rules and regulations only slows things down, creates confusion, and actually weakens control.

The only way that the increasing number of Digital Age businesses can remain consistently under control is by moving away from centralized authority to decentralized transparency. That’s why at W. L. Gore and at Morning Star, there are no supervisors and people are accountable to their peers.  In these self-organized enterprises, pertinent business knowledge is freely shared among the associates, all related data and metrics are continually available to everyone, and most importantly, anybody can talk to anybody else. Transparency isn’t just about everybody knowing everything. It also means that everybody is available to everyone. Without both of these dimensions, true transparency is not possible.

Transparency is the new currency of business, especially among business alliances. The sophisticated collaboration structures that are essential for horizontal business arrangements are impossible without a high order transparency based on trust and freedom of information. In addition to sharing previously proprietary intelligence such as financial data, business plans, and market analyses, anyone working in a collaborative business partnership must also have the ability to independently verify this information at all times.

When companies have the benefit of high order transparency, executives do not have to depend upon the representations of supervisors or auditors to assure the business is running smoothly. They can take comfort in the fact that when everyone has access to everything, if there’s something that they need to know, they will find out sooner rather than later because when everyone is available to everybody, there are no secrets.

The last great phase change happened more a century ago when the agrarian economy gave way to the industrial economy. Then, a dominant way of living that had lasted 8,000 years was completely disrupted as large numbers of workers left family farms for mass production factories, and old assumptions were displaced by new ways of thinking and working. One of those new ways was then innovative organization model that came to be known as Scientific Management. Scientific Management was the brainchild of Frederick Taylor and, until recently, had endured as the essential gospel of management. Its influence has been so pervasive that the late Peter Drucker referred to Scientific Management as “the one American philosophy that has swept the world – more so than the Constitution and the Federalist Papers.”

Taylor’s philosophy provided the foundation for much of what many of us consider to be the givens of professional management: top-down hierarchies, the sharp divide between managers and workers, centralized decision-making, and functional organization. The basic assumptions of Scientific Management are that the smartest organizations leverage the intelligence of their smartest individuals by giving them command-and-control authority, and that the past is a proxy for the future. When work was about running factories where the average worker had less than an eighth-grade education and business models could be sustained for 30 – 40 years, these were reasonable assumptions.

However, today we suddenly find ourselves in the next phase transition as the old assumptions of the industrial age are rapidly giving way to new rules that are spawned by the three forces that have given birth to the digital age. Accelerating change has shrunk the expected life of a business model down to 7 – 8 years. In the world of music, for example, we have witnessed, in a very short time span, the rise and the fall of the CD as consumers drove a preference for the digital download over the compact disc. Ubiquitous connectivity means that the power to be connected now trumps the power to be in charge, as we recently saw when those in charge at Verizon could not sustain their $2.00 online payment fee over the objections of those who were connected. And finally, escalating complexity means that we now live in an exponential world where the most effective organizations are based on the operating principles of complex adaptive systems, which explains why Wikipedia is now the most popular reference work on the planet.

In the new economy, the smartest organizations are those that leverage the collective intelligence of their leaders, their workers, and their customers and those that understand that the past is no longer a proxy for the future. And as more organizations come to terms with the reality that we are indeed in a new world with a completely different set of rules, they will learn that a 19^th-century management model is ill equipped to deal with the complex challenges of a 21st-century world.

In a recent survey of over 1500 chief executives, IBM found that the top management concern among CEO’s is the sudden appearance of escalating complexity, but more importantly, more than half of the CEO’s indicated that they had serious doubts about the ability of their organizations to handle the challenges of a more complex world. Thus, it’s no surprise that, when asked to identify the most important attribute for leadership success, it was creativity, and not problem-solving or analytical ability, that topped the list.

The late Steve Jobs defined creativity as the ability to connect things. Jobs understood that creativity in organizations is only possible if management structures encourage serendipity and emergence. These unplanned occurrences are what happen when people in companies are highly connected. They are also the building blocks of innovation. That’s why, at Apple, there are no business units. Jobs never wanted different areas of his company competing against each other or placing the parochial needs of the unit ahead of the best interests of the company. He designed his organization so that the engineers and the designers had to continually deal with each other to get things done. By keeping these disparate groups connected, serendipity and emergence enabled Apple to become one of the most, if not the most, creative company on the planet.

With the sudden intersection of the three forces of change, connectivity, and complexity, it seems clear that the answer to Denning’s question is an unequivocal “Yes.” We are indeed in a phase change to a creative economy, and this phase change will bring with it an inevitable transformation of management. If creativity is indeed the most important leadership attribute, then organizations must be designed, not as hierarchies with fragmented silos and chains of command, but rather as hyper-connected agile enterprises that are able to innovate at market speed. That’s why it’s goodbye to Scientific Management and hello to what can best be called Creative Management.

The late Peter Drucker continually advised that we should not confuse the words “controls” and “control” because they have entirely different meanings. Drucker noted that controls are analytical and provide information about past events, whereas control is normative and focused on future direction. This is an important distinction because, when the world is stable, the past can serve as a proxy for the future, and therefore, systems of intricate controls can provide reliable assurances about the state of organizational control. However, in fast-changing times, the future is likely to be very different from the past, and systems of controls can actually weaken the overall state of control when change and adaptation are critical to future market success. In that case, control is better served by a clear focus on what’s most important that is reflected in a simple shared understanding that permeates the organization and helps to drive consistent and responsive adaptation to changing circumstances. The texture of control in complex adaptive systems of the Digital Age is fundamentally different from fabric of practice in complex stable systems of the Industrial Age. Perhaps this explains why Amazon flourishes while Borders is no more.

This is not to imply that measurement of past events and details is not important. Quite the contrary, historical measures are incredibly useful because they provide essential facts that workers can draw upon to bridge the inevitable anomalies between past circumstances and future expectations as they serve customers and execute day-to-day business processes in times of great change. What we are saying is that management’s primary focus is always the future and never the past and that, when the past is no longer a proxy for the future, managers should stop monitoring the myriad of details as their primary strategy for fostering control in the organization. The details should be left to the people who are closet to the customers, more familiar with the business processes, and are, thus, also in the best position to execute quick and intelligent responses to changing conditions.

It’s an uncomfortable, yet true, paradox: The most effective way for executives to assure that their organizations remain under control is to give up the illusion that they can exercise personal control over the details of the work. For leaders schooled in the traditional ways of managing, this is a difficult pill to swallow because they still believe that the past is a predictor of the future. Whether they like it or not, today’s new business reality is that the future is likely to be very different from the past, which means control is far more important then controls.

When our constitutional government was formed, the founders knew that it was impractical for every person’s voice to be heard on everything. We had too many people spread over too much land. The best that we could do was to build a representative democracy, where the people had a voice in who would represent them in their government, and those elected would have the voice in how government works. One of the consequences of this representative democracy was the emergence of lobbyists who, using political connections and money, could influence the voting behavior of the representatives to preserve the special interests of their clients. Most times these clients were professional and trade associations with fairly “deep pockets.”

The growing influence of lobbyists has become a concern for many voters, even to the point where these citizens feel that their power at the ballot box pales in comparison to the lobbyists’ power of the purse. However, recent events may have lifted the spirits of these citizens because they may have suddenly and decisively found their voice. Despite traditional media’s massive $91 million spending on lobbying efforts through the 2011 third quarter, they were no match for significantly lower-funded lobbying efforts of the new media. That’s because the social media were able to unite the voices of the people into a chorus of protest that simply could not be ignored. Those who were in charge bowed quickly to those who were connected.

With the sudden and rapid emergence of our new Wiki World, we find ourselves thrust into a completely new world with a completely new set of rules, and one of those new rules is that the power to be connected now trumps the power to be in charge. Those who insist on holding onto traditional notions of power better take notice because the people have been able to accomplish what those who are in charge have not, and that is to forge common ground among both Democrats and Republicans in getting their representatives to appreciate their concerns.

As the people gain more experience in exercising their voice through the unprecedented options provided by the new media, we are likely to see a dramatic change in the fabric of our democracy. The Digital Revolution has given us the technology where it is now practical to bring everybody together in the same virtual space at the same time. This means that it is no longer just well funded lobbyists who get to roam the halls of Congress. These traditional power brokers now have to contend with a new breed of well-connected players whose sheer numbers can quickly neutralize the lobbyists money. Welcome to democracy in the 21^st century!

A century-old management model that assumes that the world is linear and that the best way to organize large numbers of people is in compartmentalized boxes is ill equipped to handle the increasingly complex issues of a hyper-connected world. Perhaps that explains why we are well on our way toward the 70 percent turnover in the Fortune 1000 that is expected for the decade ending in 2013.

Recently, a small group of international management thinkers gathered to focus on the need to propagate a management makeover better designed for the challenges of 21^st century business. We quickly and clearly recognized that the forces of change are already in place in the form of companies, such as Google, Apple, and W.L. Gore, who are thriving, despite the worst recession since the Great Depression. In fact, we believe that the transformation of management is inevitable – we are only waiting for the tipping point to happen. Our humble role is to help facilitate this tipping point. What follows is the collective communiqué from the gathering that states our purpose and extends an invitation to all who would like to be a part of facilitating a tipping point:

Reflecting on leadership in organizations today, we find ourselves in a bit of a mess. We see reliance on linear, mechanistic thinking, companies focusing more on stock price than delighting customers, and knowledge workers whose voices are ignored by the bosses who direct them. All these factors are reflected in the current economic crisis, increased inequity, bankruptcies and widespread disillusionment.

There has to be a better way.

In January 2012, a diverse group of twenty one people including senior executives, business strategists, managers, academics, and lean/agile development practitioners from four continents met in Stoos, Switzerland. We believe that we uncovered some of the common characteristics of that better way. For example, that organizations can become learning networks of individuals creating value and that the role of leaders should include the stewardship of the living rather than the management of the machine.

Most importantly, we committed to continue our work, both in-person and online. A problem this size will require many minds and hearts. We’d love to hear your voice and your experience. Help move the conversation forward by joining our LinkedIn Group and on twitter with hashtag #stoos.

Let’s start the transformation, before it’s too late.

Collins’s latest book, Great by Choice, co-authored with Morten T. Hansen, once again employs the now familiar matched pairs methodology to contrast seven pairs of companies and focuses on how high performers master unstable environments. This research effort is clearly worthy, given the sudden emergence of the unprecedented combination of accelerating change and escalating complexity over the past decade. However, because the matched pairs methodology requires longitudinal data from publicly traded companies, the research period for this latest study covers the 30-year period between 1972 and 2002. Unfortunately, the conclusions derived from the research may be of limited value today because they are based on the untested assumption that the world before and after 2002 is essentially the same. This may explain why in this latest study, Microsoft is the high performer and Apple is the contrasting comparison company.

Like the proverbial person who looks under the lamppost to find his keys because the light is better there, Collins and Morten fall prey to a methodological bias that systematically blinds them to the most important business realities of our time. Had the study focused on the past decade, it’s more likely that Apple would be the high performer and Microsoft the comparison company, and if the methodology had been designed to include privately held firms, then businesses such as W. L. Gore & Associates, Linux, or Wikipedia – who are primary forces in the reinvention of management and the redefinition of leadership for a hyper-connected world – may have yielded more relevant observations.

Throughout the book, the authors draw insights for their conclusions from the sagacious actions of heroic individuals, such as Herb Kelleher of Southwest Airlines and Andy Grove of Intel. In particular they focus on two instances of extreme physical challenges where the choices of contrasting individual leaders were the difference between life and death for their teams. In the first instance, the authors contrast the discipline behind Roald Amundsen’s unprecedented expedition to and from the South Pole in 1911 with the contemporaneous journey led by Robert Falcon Scott that tragically perished in the extreme cold. In the second instance, Collins and Morten compare the actions of a little known production team led by David Breashers, who achieved the incredible goal of shooting an IMAX film on top of Mount Everest, and the calamity of the Everest expedition led by Rob Hall and Scott Fischer, notably chronicled in Jon Krakauer’s book, Into Thin Air.

An unspoken assumption in the Collins and Hansen’s research is that the past is a proxy for the future. According to this assumption, analysis of historical trends is the portal to future success, which may explain why traditional managers love data-driven forecasts. Until recently, this assumption has been a reasonable management guide. Given the relatively slower pace of change of the world before the Internet, the past did serve well as a proxy for the future. However, we now suddenly find ourselves in a hyper-connected fast-changing wiki world where the unprecedented has become commonplace. Facebook, LinkedIn, Twitter, Wikipedia, YouTube, iTunes, and Skype – none of which existed or could be forecasted as we celebrated the birth of new millennium a mere dozen years ago – are the harbingers of the new rules of a very different world where the past is clearly no longer a proxy for the future.

The revolutionary dynamics that define our new wiki world are that nobody is smarter or faster than everybody and that networks are far smarter and faster than hierarchies. That’s why Wikipedia has displaced traditional encyclopedias, why the late-entry Google became the world’s most popular search engine, and why, this past summer, a group of online gamers leveraging their collective intelligence took only three weeks to solve a molecular problem in AIDS research that had evaded the world’s most intelligent individual scientists for over a decade. In a post-Internet world, just as the past is no longer a proxy for the future, the smartest organizations are no longer those with the smartest individuals. Today’s smartest companies are those who know how to aggregate and leverage their collective intelligence.

Research focused on how the choices of the smartest individuals are the key ingredient behind great companies provides very limited lessons in a world reshaped by digital technology. The intelligence of highly skilled heroic leaders may still be preferable when it comes to leading physical expeditions. However, when the key challenge facing business executives is mastering the complexities of fast-changing times, the relevant leadership lessons are more likely to come from the new breed of leaders who build networks leveraging collective intelligence rather than hierarchies amplifying the individual smarts of heroic leaders. And when we understand these lessons, we are likely to discover that creating great companies is more about organizational design than individual choice.

Few of the networked companies being built by this new breed of leaders have 30-year histories and many are not publicly traded firms. Nevertheless, the secrets behind their innovative approaches to creating great companies in a post-digital world are the lessons that are most needed for our time. Perhaps it’s time for Collins and Hansen to step out from under the “light of the lamppost” and adapt their methodology to enlighten us about the new rules and the new realities of the wiki world. Their insights into the discipline and the habits of a new breed of great companies and their leaders would be most welcome and certainly very valuable.