That particular sentiment is a common one at conferences exploring enterprise collaboration. Here's the way Steve Wylie, general manager of the Enterprise 2.0 Conference, put it in an interview in October: "It's no longer a question of 'do I need to have a social strategy?' It's how quickly can we get our social strategy formulated and executing."
But Hagel and fellow panelist John Seely Brown, independent co-chairman of Deloitte's Center for the Edge, framed the discussion in starker terms.
Hagel said that his organization had looked into how companies are actually doing and found that since 1965, for all public companies in the U.S., return on assets has declined 75%. He characterized the situation as a sustained and significant erosion that shows no sign of leveling off.
"Our basic management institutions and practices are fundamentally broken," he said.
Seely Brown proposed that in the 20th century, the corporate core served to reign in the organizational edge. In the 21st century, the edge needs to draw the core outward, to become more agile.
That's a broad metaphor for the reversal of traditional corporate norms that organizations are wrestling with as the workplace becomes social, mobile, and collaborative.
Hagel expressed skepticism in the concept of a free agent nation. Large organizations will continue to have a role in the economy, he said. But their role needs to be rethought.
If the old rationale, that bringing workers together in one place led to greater efficiency no longer holds true, the new rationale ought to be talent development.
"Our skills don't last more than five years," Seely Brown said. "The half-life of skills has shrunk."
Hagel said that the work environment should be reoriented to accelerate talent development.
"If you develop talent more rapidly than anywhere else, why would anybody leave?" he said.
Seely Brown suggested that the notion of skills is outdated because skills themselves become outdated so quickly. What matters, he said, is disposition, the willingness and desire to learn new skills.
And disposition can be fostered by encouraging employees to do work they care about. He recounted the experience of visiting a Toyota assembly line and marveled at the passion and commitment of the workers, the result of a high level of autonomy.
Unlike at some other car companies, he said, "the best assignment you can get as a designer is to spend a couple of years on the [assembly] line."
Organizing the workplace to empower workers to do work they're passionate about "is not just for highfalutin knowledge workers," he said.