This book describes Malik's strategic solutions for the Revolutions of the New World, which are already underway. They are part of the Great Transformation 21 which the author will address in the book.In the six parts of this book, he will first look at the dynamics of the Great Transformation 21, its inherent risks of crisis and its opportunities, as well as the labor pains that the New World is suffering. After that, he will deal with the amazingly effective cybernetic systems for strategic navigation and the strategy maps required for that, as well as the empirical quantification of businesses, both existing and yet unknown, which will help break the new territory of innovation. Finally, Malik will reveal the patterns that the tidal currents of great transformations invariably follow, as well as the economic dynamics resulting from them and the strategies required to deal with them.In the last part of the book he will describe the revolutionary new methods that enable us to master groundbreaking strategic change with great precision and unprecedented time compression - at the "speed of light", so to speak. This way, even enormous corporate growth and size can be managed and turned into true strengths, with perfect ease and using innovative approaches where conventional approaches have proven useless.

Prof. Dr. Fredmund Malik is habilitated Professor of Corporate Governance and an internationally renowned management expert. He is founder and chairman of Malik Management, the world's leading knowledge organization for integrated management systems based on the science of cybernetics. Based in St. Gallen, Malik Management has around 300 employees, offices in six countries, and a network of partner organizations in the fields of cybernetics and bionics. It is the biggest provider of reliably functioning solutions to interconnected problems of organizational complexity and control. Malik Management helps thousands of managers to integrate and improve their knowledge of general management systems via training and intervention.Malik is the author of more than ten award-winning bestsellers including the classic Managing, Performing, Living. He pens regular columns in opinion-forming media. He is among the most cited and profiled management thinkers of our time. His numerous awards include the Cross of Honor for Science and Art of the Republic of Austria (2009) and the Heinz von Foerster Award for Organizational Cybernetics of the German Association for Cybernetics (2010).

Preface

Strategic Solutions for REvolutions

This book describes my strategic solutions for the REvolutions of the New World, which-although already under way-have yet to be recognized for what they are. That is why most of the measures taken so far are ineffective, with some even having a destructive impact on society.
What I call the New World will be the result of one of the largest global transformations of business and society that has ever taken place. I call it "The Great Transformation21".

The New Challenges

This transformation involves the danger of a social meltdown. At the same time, it also offers a chance for a new economic miracle to bring about a better and more humane social order where organizations function reliably.
What particular course this development will take depends, among other things, on the solutions, methods and tools that leadership elites worldwide can resort to in facing these challenges. It depends on which of the solutions at hand they can identify as genuine solutions, and which they ultimately opt for. One thing is certain: conventional means will not suffice to master the complexity of this transformation, as they have caused much of the current global crisis.
A strong driving force arises from the strategic solutions themselves that I am presenting here. They contribute their share so the upcoming revolutions will happen quickly, while-contrary to previous revolutions-manifesting itself as an innovative breakthrough rather than a violent upheaval.
They liberate us from both, long outdated forms of management and organization and the grotesque limitations of todays's social and political problem-solving processes.
Since 2011 my "Manifesto for Corporate REvolution" has been laid down in my book Corporate Policy and Governance, the second volume in my series Management: Mastering Complexity. Many of the developments outlined there-and even before-have meanwhile materialized, first and foremost the beginning collapse of the financial system. Further profound changes, such as in technology and the sciences as well as in people's social value structures-in particular those of the younger generation-, in their perspective on and perception of the world, have progressed to a point where they cannot be stopped anymore, so they should be accelerated instead and directed along more constructive paths wherever possible.
So, what most people believed impossible at the time of the above publications became a reality just a few years later. In 2008 I wrote that knowledge would outrank money and information would outrank power. The ongoing self-destruction of the financial system proves my first point; the ever-increasing global impact of the social media proves the second. Ruling and leading will never be the same again.
The financial crisis itself, however, will not be a central topic in this book. I have published everything that needed to be said in this respect in the course of the past 15 years; now I let the facts speak for themselves. The scenarios I have presented-some of them as early as in the 1990s-have come true. The basic pattern of this development is "deflationary depression", accompanied by social impoverishment and revolution-that is, unless economists and politicians do a radical rethink and change their course of action. That is why this book is dominated not so much by analyses as it is by solutions and the tools required for implementation.

The Right Knowledge

The knowledge society in the stricter sense is another topic I will not elaborate on here. I have addressed it in my book Corporate Policy.
Rather, what I make available here is the strategic knowledge that enables top managers in all kinds of organizations to tackle the challenges of the Great Transformation21 reliably, quickly, and effectively. The means to do that are my Management Systems® and the navigation, information, and control systems they include, as well as my strategy concepts and about a dozen new and greatly improved methods and tools.
Many of the pioneers among the top managers applying my management systems are left speechless by the power and speed at which problems are solved and more and more often resolved. Particularly effective are the high-performance processes of the social technology of Syntegration which helps master even huge and highly complex challenges better than ever before.
Just like in earlier phases of epoch-making transformation, almost everything is going to change fundamentally and radically. But while past revolutions were driven by machines, the imminent revolution will be driven by a new functioning of societal organizations, of their management at all levels, of their strategies and methods-including the levers of cybernetic self-organization and self-control.
My cordial thanks go to Mag. Tamara Bechter and Dr.?Sonja Böni for their enormously professional support with the new edition of what are so far three volumes of this series. Without their help I could have hardly accomplished the task.

St. Gallen, 2013
Fredmund Malik

Introduction
The Right Strategy for the Great Transformation21

The Great Transformation21-as I have been referring to the transition from the Old to the New World-will be larger than any other social transformation we have seen so far, as it will span the entire globe.
The more intensely I studied the effective but also explosive power of the Great Transformation and the relevant strategic solutions, the tighter became the limits of language. Describing the complexity of globally interconnected systems and finding words for the simultaneousness of their change dynamics is just as difficult a task as putting a Beethoven symphony in words. Wherever I turn there is a lack of terms to describe the new, its many forms and dimensions, and above all the enormous speed of change as well as the unknowable that comes with it.
The usual superlatives-all the "super" and "mega" terms-, even if they were not as trite as they are, would never suffice to capture the scope of the Great Transformation. Apart from that, these terms originated in the Old World, so they can hardly convey any more than the Old World's limited power of imagination. Still, occasionally I have to use these terms for lack of better ones (at least to date).
If, for instance, the new methods introduced in this book enable even the most complex decisions to be taken and implemented 100 times faster, to increase team efficiency by more than 80 times, and to find solutions based on maximum consensus in just three days where even the smallest compromise was previously blocked by social gaps, and if this power of solution has led to success in hundreds of applications, without exception-what terms could be considered adequate for such achievements, when the aim is to describe the new dimensions of effectiveness but avoid both grandiloquence and advertising slang?
Historically, previous transformation of a similar kind-in particular in technology and science-have always spawned a new language because the new could not be put in old words. In the social and political sphere, however, new terms will often gain ground when the change itself progresses, or even later than that. For instance, people in the Renaissance age did not know they were experiencing the Renaissance-a term coined as late as in the 19th century. And it was more than 10 years after Columbus had landed in "India" (1492), in 1503, that someone else realized that a "mundus novus", something completely new, had been discovered-a fact that never occurred to the discoverer Columbus himself in his lifetime. Amerigo Vespucci had never set foot on the continent called "America"-which, however, was rightfully named after him, for he was the one who ultimately identified it.

The Revolution in the Great Transformation21

The Great Transformation from the Old to the New World will fundamentally-and almost completely-change what people do, why they do it and how they do it. It will also change who we are and what concept of the world we have.
It will revolutionize the way society and its organizations function. Functioning twice as well at half the money is just one of many challenges that most people consider impossible to solve-although its solution is already being practiced.
In just a few years' time it will be with incomprehension and pity that we think back of the sluggish political decision-making processes we have today, of coalitions getting in their own way, of corporate management bodies paralyzing themselves, of slowly moldering change processes, of lethargy and resignation in so many organizations, of monstrous mega conferences that had no impact, and of the cluelessness of global organizations.
With the challenges we are currently facing and which seem to have appeared out of the blue-such as the complete turnaround in energy policy, the rotten financial system, the global debt mountain, and the increasing decay of the social fabric-the limitations of our present problem-solving approaches have become more obvious than ever.
The leaders of these organizations will be pitied and admired at the same time for having given their best and having tried to do their duties even under such inhumane conditions-although their efforts have increasingly failed, as even the most outstanding driver cannot win a race if he is given an outdated car.

Innovative, Intelligent and Right Solutions

At the same time, people will wonder why the new solutions were not made available to those leaders much earlier, in particular as they had long been published by us and applied successfully in hundreds of cases. Anyone who knows these solutions will immediately see how they offer new ways to end crises, and even to use these crises to make inroads into the New World.
For me, the ethical mission resulting from all that is to ensure with all my might that the necessary information about these new, global, society-saving solutions will be spread.
The funds to be freed up by the new solutions-and which are presently and pointlessly tied up in old structures and processes-will be used to create the innovations of the New World, instead of continuing to finance outdated approaches from the previous century.
For instance, one key task will be to establish the new type of high-performance educational institution-preferably outside the current educational system, as this will be the fastest way-and teach the new generation right from the outset of their student careers the leadership skills that, had they been in place, would have had the potential to prevent the current calamity. They include wholistic and networked thinking, familiarity with systemics as the science of entities, practical application of cybernetics as the science of functioning, and the ability to leverage bionics by using evolution's best solutions to innovate societal organizations.
This would strengthen our social solution intelligence by several orders of magnitude, because all of the above can be accomplished in less than half the time and in one integrated and in itself fully compatible study course.
The present book-just like the other volumes of the series Management: Mastering Complexity-presents the knowledge and approaches required to prevent the immiment social disaster and bring about new prosperity as well as a well-functioning social order well beyond the current political categories of left-wing and right-wing.

Strategy: Navigating Effectively Through the Complexity of the Great Transformation21

In the six parts of this book, we will first look at the dynamics of the Great Transformation21, its inherent risks of crisis and its opportunities, as well as the labor pains of the New World.
After that, we will deal with the astonishingly effective cybernetic systems for strategic navigation, the strategy maps required, and the empirical quantification of existing and new businesses from where the new territory of innovation will be explored.
Finally, I will show the invariant patterns in the tidal currents of great transformations, as well as the resulting economic dynamics and the strategies to deal with them.
In the last part of the book I will describe the most revolutionary tools for social change known to date: the social methodology of Syntegration, which enables us to master ground-breaking strategic change with great precision and "at the speed of light," compared to conventional approaches, The Syntegration technology helps to manage the growth and size of companies with ease and even turn them into strengths, specifically in cases where conventional approaches have proven to be futile and to paralyze rather than strengthen organizational performance.
The almost magic efficacy of these methods is based on cybernetic communication processes which, to an extent previously unimaginable, enhance collective intelligence and generate social energies. The simultaneous use of innovative system design tools creates highly effective intelligence and power centers for successfully mastering the challenges of even hypercomplex systems as well as their control and regulation. "Mega Change of Mega Systems at Mega Speed" will then turn out to be more than just a pretentious advertising slogan, instead denominating a program to open a bright future in a New World.
The topic threaded throughout the entire book series is how to master the Great Transformation21 and its unprecedented complexity. In the following graph, this complexity is depicted by means of the double S-Curve, indicating the substitution of something new for something old. The Old World is replaced by a New World.
This replacement generates the revolutionary socio-political and economic distortions and crises we are faced with today. They represent the labor pains of a New World.
This third volume of the series Management: Mastering Complexity, I describe how the right strategy contributes to the development of an effective solution.

ContentsPreface 19Strategic Solutions for REvolutions 19The New Challenges 19The Right Knowledge 21The Right Strategy for the Great Transformation21 23The Revolution in the Great Transformation21 24Innovative, Intelligent and Right Solutions 25Strategy: Navigating Effectively Through the Complexity of the Great Transformation21 26Key Propositions 28A Word On the Terms Used 30Part I: Strategy for the Great Transformation211.What Strategy Looks Like When the Future is Unknown 372.The Great Transformation21 41The Old World Ends as a New World Is Born 43Megachange in Megasystems 44The Current Crisis as the New World's Birth Pangs 45It Takes More than Economics to Understand the Global Economic Crisis 46Anglo-Saxon Corporate Governance-A Machine of Destruction 47Complexity and Management Crisis: The Absence of Neuronal Systems 50Third Act of the Crisis: Deflation 51The New Way of Functioning: Mastering Complexity 533.When You Do Not Know What You Need to Know: The Minefield of Strategic Errors 55Strategic Delusion by Operational Data 55Operational and Strategic Management 60Strategic Thinking Traps 66Part II: Strategy as Master Control in the Wholistic Management Systems1.Making Companies Function Well 77Enhancing Management Impact Through Management Support Systems 77Right and Good Management-Universally Valid 78Management, Financial Markets, and Alpinism 81A Practical Hint for Readers in the Know 82What are Master Controls? 83The Basic Management Model and Its Basic Concepts 84Management of Institutions: The General Management Model 85Management of People: The Standard Model of Effectiveness, or "Management Wheel" 88The Integrated Management System-IMS 89Integrated Strategy as a Top Cross-Divisional Function 922.Providing Direction Through Corporate Policy and Business Mission 95The Right Purpose 95The Right Mission 100The Right Performance 106Part III: Mastering Complexity Through Reliable Navigation in Any Circumstance1.Revolutionizing Strategic Navigation 113The Malik-Gälweiler Navigation System 114The Right Strategy for a Future Unknown 117Putting an End to Arbitrariness in Strategy Design 117Looking Further Into the Future-Without Forecasts 119Time Constants and System Dead Time 119Limitations of the Market Economy: Why Economists Do Not See Far Enough 120What Must Be Monitored: Variables for Control and Orientation 121Reliable Function With Cybernetic Control Systems 1222.Reliable Control Through Cybernetic Navigation 124First System Level: Liquidity 124Second System Level: Profit 129Third System Level: Current Profit Potential (CPP) 131Fourth System Level: Future Profit Potentials (FPPs) 1363.Setting the Right Strategy, Irrespective of Economic Climate: The Strategy Map 143The Solution-Invariant Customer Problem 147Solution Technologies 154Socioeconomic Trends 157Market Position 159Investments and Cost Reduction Potentials 166Research and Development Objectives 168Finance and Balance Sheet Variables 170Part IV: Following the Change: Success Factors for Your Current Business1.No More Blind Flying: PIMS-The High Art of Strategy Development 175Strategic Leadership 176The PIMS Revolution 178Strategy at the Strategic Business Unit Level 179Discovery of the "Laws of the Market Place" 179A Brilliant Research Idea: Profits Are Driven by Structure, not the Industry 181New Benchmarking Based on the Biological Pattern 182The PIMS Database Suites 183Universally Valid Factors Determine Seventy-five Percent of Profits 185Answering Key Questions of Strategy 187Eight Key Factors for Success 1882.