Now, no business prospers by standing still, and there is no improvement without change. Course corrections, re-orgs and strategic pivots are all necessary from time to time. Technological changes continue to demand the restructuring of major industries. But over the last quarter-century or so, the idea of disruption has also metastasized into a sort of cult, the credo of which holds that everything is to be disrupted, all the time, and that if you’re not changing everything, you’re losing.
You can take courses in disruption at the business schools of Stanford, Cornell, Columbia and Harvard. You can read, on the cover of a leading business magazine, about how to “Build a Leadership Team for Transformation: Your Organization’s Future Depends on It.” And if it is the catechism of chaos you’re after, you can buy the inspirational posters and chant the slogans: Fail fast; disrupt or be disrupted; move fast and break things. Part of this, of course, is a product of the hubris of the Silicon Valley technologists. But part, too, is the belief that the fundamental task of a leader is to instigate change. It is hard to remember a time when there was any other idea about how to manage a company.
Moreover, because a majority of corporate executives — together with the consultants and bankers who advise them, the activist investors who spur them on and the financial analysts who evaluate their efforts — have been raised according to this change credo, the constant churn becomes a sort of flywheel. A leader instigates some change, because that’s what a leader does. The advisers and investors and analysts respond positively, because they’ve been taught that change is always good. There’s a quick uptick in reputation or stock price or both, the executives — paid, remember, mostly in stock — feel they have been appropriately rewarded for maximizing shareholder value, and then everyone moves on to the next change.
But it’s hardly clear that this is having the desired result. Studies of merger and acquisition activity have pegged the rate at which they destroy — rather than increase — shareholder value at something between 60 and 90 percent; a Stanford business school professor, Jeffrey Pfeffer, has argued that layoffs seldom result in lower costs, increased productivity or a remedy for the underlying problems in a business; and few of us who have lived through re-orgs remember them as the occasion for a sudden blossoming of productivity and creativity.
Seen through the eyes of the people on the front lines, the reason for this gap between intent and outcome comes into tighter focus. After all, when the people around you are being “transitioned out,” or when you find yourself suddenly working for a new boss who has yet to be convinced of your competence, it’s a stretch to persuade yourself that all this change and disruption is leading to much improvement at all.
