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Executive Summary

Sweeping political, economic, social, and technological transformations are creating a fundamentally new era of business characterize by unprecedented complexity and rapid change. Countless firms are struggling to stay afloat in this dynamic and intensely competitive environment, but the accepted ways of doing business are proving inadequate. At the same time, advances in information technology, coupled with emerging insights on organizations and the learning process, are greatly enhancing the ability of people to communicate and coordinate with one another both within and among organizations. These advances offer powerful new tools for dealing with the pressures of the business environment as well as promising a framework for creating entirely new opportunities for organizing and managing work. Building on its broad strengths in research and education, MlT's Sloan School of Management developed a major interdisciplinary initiative not only to better understand emerging ways of working but also to invent entirely new and more effective approaches and put them into practice.  On November 16, 1999, a summary conference brought the center to a close, although the research efforts continue in various forms at Sloan, including the Center for Coordination Science and Center for Information Systems Research

Building a New World 

Few people foresaw the vast changes that would be brought by the invention of the steam engine and the host of other mechanical devices that were the technological driving force behind the Industrial Revolution. Yet these advances completely transformed the nature of work as many of the old ways of organizing and managing business died away and new concepts emerged. The network of crafts and small cottage industries that had dominated the production of goods for centuries gave way to large centralized factories, and the concept of mass production not only opened the door to new opportunities and unprecedented growth, but also reshaped the way we live, work, and play. 

The 21st Century has brought on a new era, driven this time not by the technologies of production and transportation, but by the technologies of information, communication, and coordination. These technologies, guided by the organizational needs and human values that are important to us, are completely transforming the nature of work throughout the world. 

Just as at the dawn of the Industrial Revolution, our society is at a crossroads. The choices we make in the next decade will play a major role in determining the broad shape of the world in which our children will live and work. We must take steps now to develop the understanding and insight that will help us make these choices wisely. 

In such a volatile environment, the future belongs not to those who are buffeted by change, cautiously adapting to it as needed, but to those with the foresight to recognize the potential offered by the very changes that others find so unsettling. Our aspirations were ambitious: to bring together the expertise and resources of the MIT Sloan School of Management and a select group of visionary business leaders and others to invent the organizations of the 21st century. 

A New Era of Business 

Today's business climate is undergoing a profound and far-reaching transformation. In the last few years, we have seen a revolution in the worldwide political landscape, the rise of intense international competition, faster product development cycles, and explosive growth in the service sector. As we enter the next century, all signs indicate that both the complexity and the pace of change in the global economy are increasing. 

Already, these sweeping changes have produced startling setbacks for what have been some of the world's most successful companies. Countless firms are struggling to adapt to new pressures or even to survive -- by downsizing, redesigning their business processes, and rethinking their strategic focus. Some of these efforts succeed -- at least for a while, and many fail. 

Against this backdrop of political, economic, and social turmoil, an extraordinary array of information technologies is providing not only powerful new tools for dealing with these changes, but also a promising framework for creating entirely new opportunities. Advances in computers, software, telecommunications, networking, and electronic media are vastly increasing the quantity, quality, and accessibility of all forms of information. At the same time, insights into the structure and dynamics of organizations and the process of learning, coupled with expectations of a more demanding and educated workforce, are challenging our conceptions of the nature of relationships in the workplace. Taken together, these developments are transforming the capabilities for communication and coordination among managers, workers, customers, and suppliers -- nearly everyone involved in the conception, production, delivery, and use of products and services worldwide. 

The unprecedented complexity and uncertainty that characterizes today's business environment, coupled with the rapid-fire developments in information technology and organizational dynamics, pose a host of urgent questions for today's business leaders. Many senior executives are already grappling with such pressing issues as the following: 

  • Learning to Adapt - How can an organization effectively deal with constant and multidimensional change? How can it boost its capacity for learning and adaptability? 
  • Structure - How should a company be organized for maximum responsiveness to continuous and often unpredictable changes in the marketplace? How should it relate to its network of customers and suppliers? 
  • Skills - What leadership qualities are needed to guide tomorrow's organizations? What skills will be crucial to success at all levels of an organization operating in such a dynamic environment? 
  • Management Styles - What happens when "command and control" styles of management collide with ongoing efforts to empower workers? When more workers have greater access to more information, how should business decisions be made? 
  • Impact of Information Technology - What will happen to industry structures when "electronic markets" and "information highways" make it possible for buyers and sellers of any size to find each other easily anywhere in the world without human intermediaries? 
  • New Ways of Working - With greatly increased capabilities for communication and coordination, how will individuals work together? How will their work be evaluated? Will there be less need for large offices and factories? Will more people become "telecommuters?" 
  • Innovation - In such a competitive world where the winners are likely to be the companies that are the first to recognize new ideas and implement them, how can an organization create the environment needed to spur continuous innovation? 
  • Measures of Success - As intellectual capital and other intangibles play a larger and larger role in a firm's success, can we adapt traditional accounting measures to more accurately portray the true assets, liabilities, and long-term prospects of a company? 
Questions such as these have no simple answers. Indeed, they challenge many of the basic organizational principles and practices that have served us so well since the beginning of the Industrial Revolution. Judging by the magnitude and scope of the changes now under way in our society, as well as by the difficulties the global business community is facing in adapting to the pressures they cause, it is time to reexamine the basic tenets of corporate organization, and to create entirely new possibilities that can better meet the demands of a fundamentally new era 

A Distinctive MIT Approach 

To help meet this challenge, the MIT Sloan School of Management developed a major forward-looking research and educational initiative: 

Inventing the Organizations of the 21st Century. The overall goal of this landmark interdisciplinary effort was to work with business leaders and others not just to understand, anticipate, and exploit novel ways of working, but also to build on a broad-based knowledge of organizations, economics, and emerging information technologies to actually invent entirely new approaches that can be put into practice. No short-term analyses or trendy management techniques are likely to provide the depth of understanding required to fully appreciate the implications of the fundamental changes now under way in society. Nor are they likely to point to realistic new possibilities. What is needed is a thoughtful and creative approach that actively synthesizes the best insights from the worlds of theory and practice to lay the groundwork for the future. 

Building on Sloan's broad base of ongoing research in information technology, organizational learning, and strategic management, the initiative has integrated a thorough understanding of the nature and potential of emerging information technologies with an in-depth reevaluation of ways to organize work. This knowledge is balanced with a sensitivity to evolving needs and expectations of the workforce and the operational experience of business leaders.

For example, the initiative included the following components: 

    1) Study of the 1990's innovative organizations - Like biologists cataloguing new forms of life on a planet never before explored, an important part of the work is to find and carefully study current examples of companies using innovative organizational approaches or advanced technologies. A key facet of this work is the establishment of a global "intelligence network" to keep up with the latest organizational innovations wherever they are found in the world. 

    2) Experiment with new technologies - Many of the most important influences on future organizational possibilities will arise from advances in information technology. Some of these technologies are already being developed and tested at MIT. Special attention is being paid to identifying and understanding the most promising new technological opportunities from around the world long before they are widely used. 

    3) Develop new theories on the nature of work - In order to systematically create or evaluate new organizational possibilities, it will be especially helpful to build a conceptual framework for understanding them. This involves blending insights based on economics, organization theory, management science, and other disciplines with the lessons drawn from practical experience. 

    4) Create scenarios of future possibilities - A crucial activity is to build on the knowledge and insights gathered through other program activities to formulate a series of practical scenarios of possible organizations. The object of this novel approach is to break the bonds of preconception to create, explore, and evaluate alternative futures and how to get there. 

    5) Encouraging testing and implementation of new concepts - The true test of a new idea is how it works in practice. We hope to work with companies who want to apply appropriate research results and insights as they arise. 

    6) Develop educational programs - To help bring new ideas to practice, the initiative will seek to develop educational programs for corporate participants as well as for other audiences, and to establish links to existing Sloan executive education programs. Sloan faculty have integrated the findings of the Initiative into courses offered through the Master's program to help prepare new generation of managers be leaders of the organizations of the 21st century. 

The MIT Sloan School of Management: A focus on the Future 

At the MIT Sloan School of Management, the future is our business. As an educational institution, we select the very best students from around the world, and provide them with the basic skills and intellectual underpinnings that will allow them to grow and flourish as leaders in the dynamic international business community. 

Our executive education programs focus on the road ahead as well. The selection of courses we offer is designed not only to prepare executives of all levels for new responsibilities brought on by career changes, but also to provide a sound understanding of the emerging ideas, trends, and techniques that are likely to affect the practice of management. 

As part of its commitment to the future, Sloan has also distinguished itself as a world-class research institution. Leading-edge research at the School has led to better understanding and new practices in such diverse fields as finance, economics, organizational behavior, entrepreneurialism, innovation, decision sciences, marketing, information systems, manufacturing, and the management of technology. 

Among Sloan's key strengths are its close ties to other academic departments on campus. As the world's leading technological institution, the Massachusetts Institute of Technology provides a wealth of expertise in the full range of scientific and engineering disciplines that are laying the foundations for change and opportunity in nearly every industry around the globe. 

In the spirit of its motto, mens et manus (mind and hand), MIT has a long-standing tradition of close cooperation with industry. This productive relationship-unique among universities-has played a leading role in shaping today's world, and we are committed to continuing to work together to shape a new and better world for tomorrow. 

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