In the 2.0 era, every business model has an expiration date of just a few years. Continuously hunting for the next business model needs to be the lifelong concern for every company.

Venkatesh Rao, Contributor

March 11, 2011

6 Min Read

Preaching Enterprise 2.0 ideas to old economy companies is like pulling teeth. Preaching them to companies founded after 2000 is pointless: They're 2.0-native companies that couldn't think in 1.0 ways even if they wanted to.

But companies that were born in the two-decade transition between 1.0 and 2.0 cultures present unique cases. Microsoft and Google are two such companies. Neither needs any preaching at the tool level. After all, they supply half the tools we use. Presumably, they've got their tool level problems whipped.

But Microsoft and Google don't get top grades in 2.0 maturity because at the very top, they're still run in 1.0 ways. This shows up most clearly in their adherence to completely broken "mission/vision" models for setting corporate direction.

Microsoft's problems are almost entirely due to an impoverished vision, a consequence of the company's extraordinary success in fulfilling its original vision: a computer on every desk. Check that box. A+.

Microsoft is struggling today partly because it has never really had a clear mission--a set of guiding values and a direction that represents an eternal journey of inexhaustible challenges. Microsoft isn't out of ideas, but it's short one vision.

Strong missions are like renewable passion sources. They help manufacture new visions that build on accomplished past visions in powerful ways. So Microsoft almost seems like it's groping in the dark, without a clear idea about why it's doing anything or where it's going.

Google has the opposite problem. It has never had a clear vision with a definition of a "done" state, but it does have a clear mission: "To organize the world's information." That's obviously something that can never be marked "done." It's merely a design principle that helps the company pick consistently among various options in major and minor decisions.

Google also has a non-trivial, non-banal guiding value that informs its mission--"Don't be evil"--which makes it vulnerable to the moral police.

Google is struggling today because its mission has become somewhat irrelevant in the context of the social Web. In an online discussion about Google's role in the social era, I half-seriously remarked that the right mission for the social Web is "to organize the world's delusions." What else can you call Foursquare with its "Mayors," Facebook with its farms, mafia wars, and chicken throwing? "Information" seems like exactly the wrong word.

Sure, there's a lot of information organization left to do, but Google has never properly defined a concrete "can be marked done" vision consistent with that mission--at least nothing that has the clarity of Microsoft's "computer on every desk."

The troubles of both Microsoft and Google are symptoms of a deeper malaise: For most old economy companies, the whole exercise of using mission/vision pairs, to align companies and set up a steady drumbeat for action, is broken. These companies are used to marching rigidly, in one direction, toward one uselessly distant vision, informed by vacuous missions and banal guiding values (like "help every employee grow") that are of no use in day-to-day decision-making (unlike "don't be evil," which obviously gets tested frequently at Google).

When 1.0 companies maneuver smartly in the marketplace, they do so despite their petrified mission/vision pairs, not because of them.

We need to throw traditional mission/vision thinking into a bonfire of the banalities, along with every other ossified management 1.0 practice. We need, as Gary Hamel declared in "The Future of Management," a whole new conceptual apparatus for management.

And to start, we need to reinvent the very concept of missions and visions.

Management Not Agile

If you think about it, the entire 2.0 world of management is defined by fluidity, agility, and rapid maneuvering in the marketplace, in response to real-time data about competitor moves and the most ephemeral of micro-trends. Software development (and product development in general) has gone agile and iterative. Marketing has also gone agile and iterative. And since Eli Goldratt's "The Goal" hit the shelves in the '90s, most manufacturing operations have gone agile, thanks to the philosophy of repeatedly hunting down shifting bottlenecks on the shop floor.

The only thing that hasn't gone agile is management.

Why are we surprised when 20-year-horizon visions turn out to be useless for companies that expect to go through their entire birth-death lifecycle in two years?

Why are we surprised when missions that aspire to almost heavenly levels of gravitas fail to help us navigate in murky and volatile environments here on earth?

And in an age when young companies adopt practical models of philanthropy, such as giving away a free pair of shoes to a needy child for every pair sold, why are old companies surprised when lofty sentiments like "improve the communities we are part of" fail them?

We need a management philosophy that relies on shifting visions and agile missions.

Shifting visions first. In rapidly evolving marketplaces, big, 20-year visions (what James Collins and Jerry Porras called "big hairy audacious goals," or BHAGs) are irrelevant, even if they may get creative juices flowing at leadership retreats.

What we need are visions that are allowed to change in response to market realities. The driving philosophy should be based on the Clausewitzian notion of Schwerpunkt--a fluid idea of a temporary, dancing focal point; a center of gravity that draws all action toward it but can shift in a moment if conditions change and new realities emerge.

A concept tossed around in the lean startup movement known as a "pivot" (a new business model that builds on one that has been abandoned) is a weak version of the idea of Schwerpunkt. Naive practitioners of lean startup ideas assume you just need a few deliberate pivots as you hunt for a viable business model.

That's amateur stuff.

In the 2.0 era, every business model has an expiration date of just a few years. Continuously hunting for the next business model needs to be the lifelong concern for every company, not just startups. Even if cash is gushing from the pipes, you still need to dance the Schwerpunkt dance.

Similarly, missions need to be agile. "Organize the world's information" is a BHAG-complement mission. What you need is not guiding principles for decision-making that stay stable for decades, but far smarter principles that help you make decisions for a year or less. My favorite example of this approach is LivingSocial, as a recent profile in the Washingtonian noted:

"At its holiday party in December, LivingSocial--still an intimate group with 30-odd employees--continued its annual tradition of voting on a motto for the following year. The year before, they'd selected 'Go big or go home.' For 2010, as the party at M&S Grill on 13th Street wrapped up, the group selected 'Strong moves.'"

That's what I mean by an agile mission--something that will be really useful for a year instead of completely useless for 20.

That's what Microsoft and Google both need right now. Pick a Schwerpunkt focal point. Pick a motto for a year. Hit "Go." Rinse and repeat as often as needed.

Venkatesh Rao is a writer and independent researcher at and the author of Tempo. He can be contacted via LinkedIn.

About the Author(s)

Never Miss a Beat: Get a snapshot of the issues affecting the IT industry straight to your inbox.

You May Also Like

More Insights