For more than a decade, observers have been predicting the coming of a new kind of economy. For managers who have been witnessing their world changing, that new economy clearly has arrived. Across the corporate landscape, in every industry and at every level, managers are struggling to adapt to unfamiliar circumstances and new strains of competition. In this article, former HBR editorial director Alan M. Webber argues that managing in the new economy requires not just change programs but a changed mind-set. Managers need to grasp the underlying transformation in the very logic of management that the new economy is bringing about. According to Webber, a qualitative shift is taking place in the ways companies compete, managers manage, and business is conducted. The information-technology revolution makes knowledge the new competitive resource. But knowledge only flows through the technology; it actually resides in people-in knowledge workers and the organizations they inhabit. In the new economy, then, the job of the manager is to create an environment that allows knowledge workers to learn. The chief management tool that makes that learning happen is conversation. But the work of conversation introduces its own unexpected twist: it brings the issue of personal character to the foreground of the workplace. If the job of the manager in the new economy is to foster trust and facilitate the conversations that create new knowledge, then the authenticity and integrity of the individual turn out to be the most critical managerial assets. Even as it sweeps away old assumptions about management and work, the new economy brings to center stage some age-old human virtues. The ultimate paradox of the new economy may be that it is not so new after all.
