(2020-09-25) Rao Fifth Generation Management

Venkatesh Rao on Fifth-Generation Management, which doesn’t actually exist yet. The idea of generations in management, in the form I’m going to lay it out, is causally related to the idea of generations of warfare, and in particular the idea that contemporary styles of warfare strongly shape future styles of management

don’t make the mistake of thinking that each generation fully displaces the previous one in either military or business. Instead, it adds a new layer, and the older layer simply gets confined to a small zone of the action.

we have to understand the military version first (see Generations of War)

The first generation was based on final abandonment of medieval warfare, and relied on early smooth-bore muskets.

The second generation stretches roughly a century from the end of the Napoleonic wars, around 1815 to World War I.

Third-generation warfare was developed primarily by the German military in the interwar period, and is what is usually called Blitzkrieg in the historical case, or maneuver warfare in more modern terminology.

This is the style that was developed and refined by John Boyd, and is roughly what lasted all the way through the Iraq War. (War on Iraq)

Third-generation warfare is also what is sometimes called total war, where you fight with unsentimental professional skill to win.

Now fourth-generation warfare (FourGW) is best defined not by how war is fought, but by who fights the war... non-state actors who can operate with near capability parity on many fronts....The fourth, I will argue, only lasted about 15 years, from 2003 to 2020, and Covid-19 will trigger a shift to a fifth generation.

Of course, as we’ve all learned by now, fourth-generation warfare, since about 2003, also means dank memes, influence operations, fake news, and disruption of political processes, especially democratic ones like elections, using social media. A good example is modern conflict like Syria involves both state forces, in this case Syria and Russia, as well as ISIS and a people’s resistance. Or Ukraine. It is what is sometimes called hybrid or nonlinear war, and Russia has been the leading practitioner of it. Arguably, the West has been subject to a fourth-generation war attack for four years from Russia.

Guerrilla goals are what Henry Kissinger described with his famous line: “The conventional army loses if it does not win. The guerrilla wins if he does not lose.”

fourth-generation warfare brings guerrilla goals to the political table directly. It is not total war, but what I call infinite war: it brings infinite-game war goals, into the picture, the goal being to continue the game rather than win it (infinite game in the sense of James Carse).

Okay, now that we have our four generations lined up, let’s talk about how that connects to generations of business management.

an episode you may have heard of, called the Millennium War Games, but you probably haven’t heard anything like my spin on it. (Millenium Challenge)

Van Riper avoided electronic communications and instead used motorcycle messengers to communicate, and attacks with fishing boats to destroy the Blue Team. Basically, using relatively low-tech and irregular forces to operate in the blind-spot of the high-tech larger adversary that was overconfident in its technological ability. Classic OODA loop style conflict.

The normal interpretation of the outcome is that low-tech with superior strategic thinking beats high-tech with weaker strategic thinking, but this is simplistic

Network Centric Warfare (NCW) was a doctrine that emerged out of the US Navy...Navies have historically been the highest-tech branch of the military, but not in the sense of adopting the newest, shiniest tech. They are the highest tech in the sense of using the most technology, in the most complete and systematic way, to vertically integrate operations all the way from satellites to bullets. They are platforms

On the other hand, prototypical third-generation warfare is best exemplified by the US Marine Corps. It’s not exactly a low-tech force, but you could say it selectively uses a few really high-tech bits in an otherwise low-tech style of fighting

It’s the military equivalent of a startup, while navies are the military equivalents of large enterprises.

build out strategies and doctrines bottom-up, in real-time, adapted to the current conflict. And this is not because they’re smarter than navies, but because they play a different role: usually offensive, high-speed, messy and ground level.

Navies on the other hand, usually play a very different role. Their firepower is primarily deployed from a distance

in general, you could say that navies play a late-adopter, complex systems platform technology role in warfare, while marines and special forces play an early adopter, startup role. If you want to apply the four-generations model to navies, you have to do it separately. I won’t get into how to apply the four-generation model to these boundary-condition parts of the military, but it’s possible.

If your takeaway from the Van Riper Millennium war games episode is that you should give up high-tech complex military capabilities and network-centric (NWC) operations, and run a cheap military using motorcycle messengers, and fishing boats, you learned exactly the wrong lesson.

In fact all the conflict since 2002 shows the opposite. Network-centric warfare is what’s actually dominating war zones, though not in the doctrinal sense Admiral Owens imagined. Russia, ISIS, China, and other actors who are good at this all operate in a network-centric way. It’s just not in the form that the US NCW doctrine envisioned, but much messier and bottom-up

A better way to think about it is that you should pursue hot military objectives with marines style startup action, but consolidate victories and preserve the peace with navy style network-centric type systemic capabilities.

we’re now ready to make the connection to business management generations. I’m going to state it in the form of two laws, and then describe the four generations in relation to the top half of the diagram.

The first law is: On average, business management generations lag military generations by one.

The second law is: The evolution of business management is driven by more frequent, but smaller magnitude, exogenous events

First-generation management, which is roughly the mercantilist era, overlaps with the first generation of warfare

Second-generation management, which is roughly the Robber Baron era, roughly 1870 to 1930, loosely resembled first-generation warfare.

Third-generation management (3GM), which is roughly the familiar modern managerial era in the old economy, resembles second-generation warfare. It stretched from roughly the Great Depression to 1997, and has two clear phases. In the first phase, about 1935 to 1980, we had a heavily state-regulated corporatist environment, and in the second phase, from 1980 to about 1997, we had a deregulated environment.

• timeline breaks down 3GM to three phases:
  • New Deal
  • Organization Man
  • Welchian (Jack Welch)

Finally, getting into modern times, fourth-generation management (4GM), which is roughly the entrepreneurial era, resembles third generation warfare. It stretches from the dotcom boom and the rise of Clayton Christensen’s disruptive innovation model, which is really maneuver warfare for business settings, all the way to 2020.

Which brings us to fifth-generation management (5GM). Obviously, Covid-19 and what I call the Great Weirding have been a huge disruption for both military and business.

We are fighting a two front war, with the virus on one front and climate on the other... So what can we expect?

First, military affairs are in uncharted territory... Syria and Ukraine were fourth-generation wars, but already fifth-generation situations are cropping up all over the place, like the urban conflicts in Western cities, detention camps for refugees, and so on. I won’t go deep into military futures here.

we can already predict that fifth-generation business (5GM) will look at least partly like fourth-generation warfare (FourGW), 2003-20. In other words, like Syria or Ukraine. Just as non-state actors shape fourth-generation warfare, non-business entities will shape fifth-generation business. This includes culture war groups fighting for social justice, climate action nonprofits, governments administering post-Covid recovery funds, and so on. (stake-holder)

the big thing is that there are a large number of reckonings that have to be dealt with. Besides climate change, we have the trade war, we have China turning into a new kind of evil empire and surveillance state, we have the techlash, we have financialization on Wall Street, we have a world awash in fiscal responses to Covid. And in the middle of all this, we have supply chains breaking down, wildfires, and other climate-related disruptions. (cf collapse)

Trying to figure out how to manage military or economic affairs against this complex backdrop is the task of fifth-generation management (5GM) in both domains, and it will be probably take us all the rest of our lives to figure it out. But at least we now have a starting point and a sense of the nature of the challenge.