What happens when there’s no more growth to manage

Eric Garland Economic trends, Eric in the Media Leave a Comment

My new piece is up at Harvard Business Review on how management techniques might be out of date in a world without actual GDP growth:

The 1980s and 1990s was an unprecedented period of economic expansion in the United States. America doubled down on a strategy of suburbs, automobiles, housing, and the debt-fueled trappings of a consumer economy, which worked like gangbusters, boosting GDP for the nation, creating millions of jobs, and swelling corporate profits left and right. Not surprisingly, thousands of business books by American authors were translated into dozens of languages so that business students around the world could learn from what came to be known as “best practices.”

Lately, of course, the old magic seems to be gone. Corporate profits have been doing fine so far, but U.S.-style corporate management seems to be leading in an unproductive direction. Standards of living are falling, jobs are hard to come by, and national coffers are empty. Meanwhile several industries are caught smack in the middle of major disruptions — media, retail, and automotive, just to name a few. 
In other words, the best practices developed during the booming ’80s and ’90s, taught in MBA programs around the world, and liberally applied to industry after industry might be based on outdated assumptions. A look at a few different macroeconomic trend lines suggests that maybe we need to rethink a few things.