Editor’s note: William Dunk is an international business consultant based in Chapel Hill. The web site for his firm, William Dunk Partners, is called The Global Province www.globalprovince.com
_______________________________________________________________________________________If you do step in the same river twice, you are probably putting your foot into a black hole of stagnation, something equivalent to the Love Canal. And you will come down with all sorts of skin diseases.

You Can’t Step in the Same River Twice.

Actually, our title is a permutation of Heraclitus’s famous quote: “You could not step twice into the same river; for other waters are ever flowing on to you.” So don’t try to go into the same river or over the same ground twice. It makes you boring, and it’s usually impossible anyway. Time and human experience will not allow us to scramble back into some earlier point in the continuum.

Heraclitus, by the way, was the first existentialist, even if his nineteenth- and twentieth-century emulators thought they were inventing something new. If you plough through the spectrum of Greek philosophers, you will find that they pretty well covered the waterfront and that every modern strand of philosophy was anticipated by the boys in Athens and surrounding city states. We’ve just been adding refinements to their architecture ever since. In modern times, our task is to remix the ancient philosophical ingredients to deal with an altered world.

The Company Philosopher

Years ago, a retiring chief executive told us what the boss can and can not delegate. Most everything can be given away to subordinates. But, he said, strategy, the grooming of key top managers, and communication with significant corporate audiences must be controlled in detail by the CEO.

Implicit in this view is that the chief executive is, above all, the company’s chief philosopher and that he must infect both his company and his marketplaces with a coherent body of thought about his company’s reason for being as an antidote to our conceptually muddled times. The new CEO needs more grounding in the rudiments of philosophy, the like of which they never teach you at business school. We ourselves have pretty well bought into this way of thinking, and have been at pains to get our clientele to give away many of the chores that don’t pertain to the 3 areas he chose for personal attention.

The Meaningful Company

More difficult, perhaps, is the decision as to what a company has to do in house and what it can “outsource,” which is the euphemism used for the last 20 years by those who want to buy everything on the cheap on the outside with the ultimate goal of becoming a “virtual” corporation, ideally with one employee. What can you do outside your walls and not lose your meaning and vitality? As we have hinted already, this decision requires philosophical clarity that goes beyond mere commercial horsesense.

Circa 1990, Gary Hamel and C.K. Prahalad essayed about “core competencies.” These are the key strengths of a company which you enhance and do nothing to impair. In theory, a CEO should ensure that he doesn’t give away any function that would vitiate them. But that’s theory. (See en.wikipedia.org/wiki/Core_competency .) What’s happened since, of course, is that companies have been lopping off cost after cost to stay afloat and to temporarily bolster their stock prices and executive compensation. The bosses have generally figured out how to narrowly redefine “core competencies” to permit cutting to the core and beyond. So much for 1990s end-of-the-century thinking.

We suspect companies are giving away the store, as they cut costs and narrow their focus. The alarm bells went off when we spied a recent issue of Business Week (March 21, 2005), the cover of which blurted out “Outsourcing Innovation.” An editorial at the back of the magazine…this must be the magazine’s most unread section…warns: “Globalization is moving so fast that now even the knowledge economy is being redistributed around the world. A whole new set of winners and losers will appear in the years ahead. Corporations and the nation have work to do if they are not going to be left behind.”

You don’t have to read this rambling article, however, to know we have stepped in a cesspool or some equine elimination. Anything about “innovation” is about as core as you can get, and you don’t outsource it. The thinning down that’s been going on has surely become suicidal, corporate anorexia packaged as a glorious makeover.

Outsource Yesterday, Clutch Tomorrow to Your Breast.

If “core competencies” is, in fact, a squishy concept that morphs on demand, we must work a little harder to say what goes, what stays. We would counsel any company anywhere to throw today and yesterday off the back of the boat, allowing subcontractors galore a crack at doing known, routine, yes-we-know-how-to-do-that tasks. But tomorrow is never delegated. And, by tomorrow, we mean “invention” and “branding,” about which we have said so much in previous letters.

It’s innovation, and R & D, and a lot of things. Essentially it is the process of coming up with (a) new products and services, (b) new ways and processes of doing everything we do, and (c) new definitions of our company that lop off what’s become vestigial and add capacities that will make us flourish. Invention is everything we aren’t but want to be, don’t know how to be, and plays to our innate sense that “there’s gotta be a better way.”

We now live in an age of conspicuous conservatism in which, ironically enough, we are unwinding institutions and ingrained patterns, all in the name of recapturing some mythical past. This conservative epoch is an age of consolidation (of yesterday), and, as such, it does not foster much in the way of invention. Schumpter would call this a period of “creative destruction,” although those of a conservative frame of mind would like to think they are preserving, not destroying. (For more on Schumpter, see en.wikipedia.org/wiki/Joseph_Schumpeter .)

All The Rage

In business and government today, “creative destruction” is foot loose and fancy free, but it is mowing down companies, institutions, cultures, and traditions at a dizzying rate. AT&T, Union Carbide, International Harvester, the old Bank of America, and a host of other giants are no more. This disintegration is preparing the stage for tomorrow. But for those who can look beyond it, to 2020 or so, the task is not to destroy, but to invent.

It is this spirit of invention that we hope Sir Howard Stringer will not diminish at Sony, the maker, for instance, of one of the very few laptops in the world which does not crash and burn with frightful regularity. As he bangs heads together and cuts costs, he could lose sight of the company’s creative destiny, an unfortunate metamorphosis that has long since happened at Hewlett-Packard, once one of America’s premier inventive companies.

The Global Province is a marketplace of business ideas–a site for investors, business executives, journalists, and elitists everywhere. To learn more about William Dunk Partners, visit www.globalprovince.com/williamdunkpartners.htm.