Lots of good stuff recently at Knowledge Problem. Lynne tells us what to think of the new energy legislation.

If you support a forward-looking, dynamic, creative, innovative approach to energy, this is not the legislation for you. If you are a fan of corporate subsidies to oil companies, and you are happy with the reality that “what gets subsidized gets done” (that is, increased oil production and consumption), then belly up to the bar.

I don’t drink, thanks.

On another topic, she points to a post by Grant McCracken.

[Michael] Tushman distinguishes between two modalities in the life of the corporation:

1) The exploitative modality in which the corporation works the world it knows. This is a matter of extracting maximum advantage from the market as presently constituted. This is the traditional modality of the corporation, the very method of “business as usual.” But it is now haunted by a new, tragic understanding: that what makes corporation successful also make it vulnerable to discontinuous technology. Success is now sometimes a tragic flaw.

2) The explorative modality in which the corporation prepares for the world it doesn’t know and can’t fully anticipate. This is the new modality of the corporation, the place it is obliged to give up some of its problem solving, quality controlling, administrative elegance. Here it is obliged to be messy, complicated, iterative, and wrong.

My view, which I expressed in the recent WSJ Econoblog, is that corporations have limited capacity to explore new ideas. The reason is that significan new projects require inder-departmental co-ordination, and you cannot get that kind of co-ordination without top management focus. And top management does not have time to focus on more than a few projects at once. They have to spend a lot of time on baseline functions (Tushman’s “exploitative modality”), leaving time for only a few major new initiatives.

The point I made in the WSJ debate was that Sarbanes-Oxley became a top priority in corporate America over the past two years, which greatly reduced other initiatives. In Tushman’s terms, Sox usurped the “explorative modality.”

For Discussion. Will this year produce a rebound from Sox, or will other factors hold back corporate initiative?