INTRODUCTION:
TIME TO BREAK OUT
WE ARE TRAPPED, caught in a prison of our own making, unable to operate effectively, get things done, or get our people to work together, unable to release the true potential that we know our companies contain.
It’s not a nice place to be, this prison. It inhibits our freedom. It forces us to focus on the inside. It keeps the outside at a distance.
The name of this prison? Quite simply: the organization.
We all know how organizations have developed to meet new market needs. Divisions, departments, business units, operating companies, national sales units have been created. All have had their uses. All were developed to make our companies more competitive, more streamlined, more rational, more profitable.
But now the organizations we created have become tyrants. They have taken control, holding us fettered, creating barriers that hinder rather than help our businesses. The lines that we drew on our neat organizational diagrams have turned into walls that no one can scale or penetrate or even peer over.
For most of us who have been in companies with a history longer than five minutes, the freewheeling spirit of the dot-com organization seems far removed from the darkness of our prison. We understand that new technology, a new approach to doing business, allows such companies to run their operations unfettered by the complicated structures that still exist in much of the business world.1
“It’s all very well for them,” we sigh, “but they don’t have to fight all the interdepartmental battles that we have to fight.” And that’s true. “If only we were starting a company now,” we sigh.
But in business, “if-onlies” simply don’t count. Most of us have to work with what we have, not what we wish we had—if only. So what can we— managers caught up in existing organizations—do to address the new challenges presented by the knowledge-based economy?
Often books such as this one seem to assume that its readers are starting off with a clean slate. Or they seem to suggest that it is necessary to throw the baby out with the bathwater. That’s not what we are suggesting. We understand that existing organizations cannot change overnight. Many are rooted in a long tradition, with established hierarchies, and lines of authority and communication. But these should not be used as excuses for inaction.
The organizational concept of zero space aims to help existing companies understand the requirements of the knowledge-based economy and the changes in structure and mentality they need to make in order to compete with the companies that do start without all the baggage.
Taking a Look at the Other Side
Here’s an interesting explanation of the extent of the universe. Imagine flying in a spaceship until you can go no farther. There you discover that the outer limit of our infinite universe is actually a brick wall. This is where the universe ends, you are told. You look at the wall and one question pops into your mind: What’s on the other side?
Organizations have boundaries every bit as tangible as brick walls. But very few people operating in these organizations ever ask that one question.
Why not?
The question is simple, the answer complex. Many organizations place too much emphasis on individual and functional goals and too little on what’s outside. Boundaries between units arise naturally as different units—units of one, groups, teams, networks, communities, organizations, nations—pursue different objectives and therefore develop a license to operate that is often difficult to imitate. It is impractical to expect people to behave as if these boundaries do not exist.
Many organizations today are still firmly grounded in the industrial past. They have evolved against a background of mature markets, complex industrial processes, and five-year business plans. Hierarchical, cumber some, inflexible, and lethargic, they are the dinosaurs of business. The recent Internet failures have made many of these old dinosaurs believe that their model is the winner, but is it? In the knowledge-based economy, business dinosaurs may make a great noise but they will find it difficult to make a profit. The speed of innovation, shortened product cycles, complexity of offerings required by an increasingly demanding consumer—all mean that organizations must be “all brains and no body.” Nonbrain weight should be kept to an absolute minimum, all such processes outsourced or eliminated entirely. It’s the all-brain processes that add value to a company. They are the intangible assets that make up its weightless wealth that remains essential today—despite the experience of the failed dot-coms.
Asking the Big Question
So how do we break out of our organizational prisons? The first step is to ask the question, “What’s on the other side?” This means applying our natural curiosity to our business.
Many of our companies’ limits are not built with bricks. They are not tangible structures. They cannot be pointed out. And they cannot be knocked down with a sledgehammer. Many of the limits are simply in our minds. We create them, maintain them, give them an indestructibility they do not actually have. And if they exist only in our minds, then that is the place we have to clear first.
“Oh, sure,” you are probably saying, “It’s all right for you to talk—you don’t have to face the fights, the obstructions, the difficulties that I have to face every day.”
That’s where you’re wrong. We fight the same battles as you do, every single day. We deal with a lack of cooperation, a lack of sharing. We deal with inflexibility, indecisiveness, an inability to get things done now— rather than in six weeks’ time. We deal with all the things that any manager, anywhere, has to deal with.
But we also know that these problems won’t go away unless we ask the question. Because asking that simple question—”What’s on the other side?”—is the first step toward obtaining the greatest weapon possible: zero-mindedness.
Becoming Zero-Minded
Nelson Mandela reportedly said that although his political opponents could imprison his body, they could never imprison his mind. And yet many of us in business allow our minds to be imprisoned in old-time, industrial age thinking. We tell ourselves that things were always done this way. The organization was designed to help business. Divisions are natural. It makes economic sense for each division or unit—or whatever you choose to call it—to be regarded as an individual profit center.
Yet deep down we know that we are fooling ourselves. Our rigid organizational structures prevent close cooperation between people who may be doing the same work but are located in different departments or even, as globalization increases, on different continents. Organizational and geographical borders have conspired to keep us trapped.
We’ve allowed ourselves to become victims of the tyranny of the pigeonhole.
Becoming zero-minded means letting go of the restricting preconceptions, emptying your mind of the barriers that exist there, and learning to ask: “What’s on the other side?”
Scope of the Book
Part I deals more closely with the concepts of zero space and zero-mindedness. Matter matters less in today’s world, where companies are changing and intangibles rule. Zero-mindedness means freeing oneself from one’s imagined cell and dealing with the real world as it is today.
Part II discusses the eight features of zero space—eight zeroes. Each one is based on practical conflicts that businesses face, conflicts caused by needing to move faster, with less baggage, without constantly encountering resistance.
If we were honest, we would all acknowledge that it often takes too much time to get things done. Large organizations are like mammoth tankers: the pilot can change course but it takes a long time for the tanker to respond. In today’s world there’s simply not enough time to wait for that change of course. We have to trade in our tankers for tugboats—nippy little workmanlike vessels that can zip in and out of a harbor in no time.
But there’s more to a tugboat than speed. There’s strength too, strength to pull an idea into port. And a readiness to do this with whatever vessel is waiting. Tugboats see nothing wrong in pulling a tanker one minute and a liner the next. They are prepared to work with any ship around. Because working with others is what their business is about.
In contrast, in corporate life, a “good guys, bad guys” mentality lingers. Needless to say, we all consider ourselves one of the good guys. Yet in the knowledge-based economy there cannot be good guys and bad guys but only useful and trustful “guys and girls.” Part of becoming zero-minded is no longer pigeonholing companies as friends or foes. People used to say you have to go where the money is; today companies have to go where the knowledge is. It’s no longer a question of owning knowledge but rather of making use of knowledge to add value. You’re expanding into a new market? Why build up your own distribution and logistics operation when you can make use of one—probably a lot better than yours, anyway—that is run by logistics specialists? After all, if your car needs a can of oil, you go out and buy one—you don’t start drilling your own well!
YAHOO VERSUS GANNETT
Gannett, a diversified U.S. media concern, owns the national newspaper USA Today, a slew of local newspapers, and twenty-two television stations in mostly secondary and tertiary markets. Yahoo is an Internet portal through which nearly two hundred million people around the world pass every month.
In 1999, Yahoo’s market capitalization was roughly five times that of Gannett. In 2001, Gannett’s market capitalization was roughly twice that of Yahoo. Put another way, two years ago, Yahoo could have acquired Gannett with relative ease. Now Gannett would be the more likely to acquire. The question is: Why doesn’t it? Gannett is a solid, well-managed company. It delivers a steady profit, operating its various properties at high margins—between 17 percent and 35 percent—while rigorously controlling costs. But its growth prospects are constrained by the nature of the business it’s in. It still has to buy roll after roll of newsprint. It still has to run printing plants all around the country. It still has to operate huge fleets of trucks. And although many of its news properties run Web sites, Internet companies continue to attack its most important advertising revenue stream: classified advertising.2
This idea—that you no longer have to own knowledge—is frightening to many people. They believe it compromises their business, puts them at the mercy of a competitor. But being zero-minded means being ready to break bread with your enemies, sit down with them, talk to them, share with them.
One of the most moving business events in the aftermath of September 11, 2001, was the decision of the New York Stock Exchange to offer office space—and access to its confidential systems—to its archrival, the American Stock Exchange. For many people such an action had been unthinkable, but in the wake of the Twin Towers disaster, traditional competitors realized that cooperation was the name of the new game in town.
The eight zeroes of zero space are all logical. They do not require a gigantic reengineering process, only a new mentality.
Finally, Part III offers some practical ideas about how to launch into zero space, how to apply the eight zeroes to your own business, to understand how flexibility is the key attribute of knowledge-based companies.
Today, knowledge is the currency. The challenge to business is to leverage the knowledge within, create knowledge-expanding alliances, and create new knowledge that can be turned into profit-making products and services.
Tangible assets have had their day; intangibles now rule. Ideas and actionable knowledge are valuable. In his book Accidental Genius, Mark Levy writes: “Companies worth millions—Millions? Hell, billions!—are somehow leveraging their smarts, their imaginations, and are ringing registers worldwide by bringing their head-built products to market. Take Microsoft, for instance. Here’s a company with $1.5 billion in hard assets, yet it has a market value of over $318 billion. That means the ‘invisibles’ of the company—’goodwill,’ perceived brand value, and the thoughts percolating in Bill Gates’s noggin—are worth three hundred times the company’s ‘touchables.’”3
But where, you may ask, do all these ideas reside? You got it—inside the heads of employees, the people who make up a company. There’s no way a company can own what’s inside people’s heads. If they decide to leave, all that knowledge and power walks out the door with them.
If there’s one area where zero-mindedness has to be employed to break the tyranny of the pigeonhole, it is in the relationships companies maintain with their employees. This is why we deal with a major transformation taking place—the move away from human resource management toward people relationship management.
Ultimately, people have the ideas that make a company successful. It is the manager’s task to ensure that people feel happy and comfortable enough to release those ideas. It means that their main task, once again, will be to manage people. For they are the lifeblood of a company.
Zero Space Awaits You
We are not promising an easy journey into zero space. But we are promising an exciting, rewarding journey. Once you break through all the limits—physical and mental—that keep your company trapped, you will be able to start leveraging the knowledge you already have to build a sustainable and successful company.
How long will it take? We cannot set a time limit. Indeed, we wonder if there is any final destination! For we do not believe that our universe ends at a brick wall—we are, after all, zero-minded. But we do know that only companies that understand the full value of zero will be able to navigate the streams of business in the knowledge-based economy.
Clear your mind of all barriers and all preconceived ideas. Allow yourself to move into the knowledge-based economy. Allow yourself to discover the liberation of zero space, where you can alternate between two states of existence: a matter state and a space state. Zero-mindedness stimulates the imagination to find new possibilities for overcoming limits. It gives people the courage to create new organizational forms that suit them and their organizations. Finally, it drives people to move others beyond their personal comfort zone without making them uncertain.
If we are to zero in on the future, then we must take a giant step into zero space. So come with us on a journey into infinite potential.
