Business hierarchy; ranking and strategy concept with chess pieces standing on a pyramid of wooden building blocks with the king at the top with copy space.[/caption]Business hierarchy; ranking and strategy concept with chess pieces standing on a pyramid of wooden building blocks with the king at the top with copy space.[/caption]The industrial era started at the end of the 19th century and it went on until the 1960s, 1970s. What companies have been doing is to take labour and capital and transform it into outputs that people want to spend money on. Therefore, the crucial resources of the industrial era were labour and capital.
The Fords and the General Motors that employed 60% of the workforce became so obsessed with the return on invested capital in course of time that they lost sight of the issues such as quality what their customers actually wanted to buy. The Toyotas and the Hondas started taking leadership away from the traditional General Motors, Fords, Volkswagens, and Mercedes as they focused too much on return on invested capital for making money. They missed the information that could enable them to make the right decisions.
Information/knowledge became the crucial resource on which far sighted companies actually succeeded in knowledge era (1960 onwards). Toyota became incredibly good at figuring out how to use information to make their products high quality and more customer friendly. In the transition from the industrial era to the knowledge era, labour and capital) became a necessary rather than sufficient condition of success of businesses and knowledge became the crucial resource on which competitiveness is created.
How the businesses of the future look like? Let us imagine three eras, the industrial era, the knowledge era and the post-knowledge era. The labour, the capital continues as necessary requirement and the information is plentiful. The focus shifts on figuring out which information we need to use to get our work done. But in businesses today we become obsessed with scientific knowledge – the knowledge that is based on research and which is quantifiable. However, there is a real risk that if we obsess about that sort of knowledge, we do miss out on the emotional side of the scenario. Any good decision that businesses make requires a combination of hard scientific knowledge with intuition and judgment which is much more an emotional factor. We have to tap into our intuition. So in the post knowledge era in terms of other kinds of sources of competitiveness, we focus on decisive action and emotional conviction.