Do you want to be a dinosaur or bacteria?: Gary Hamel

Work according to the best values, not rules, and you will always add value to tomorrow's economy, management guru Gary Hamel tells senior writer Cheong Suk-Wai
The Straits Times, 14 Sep 2012

IMAGINE a workplace where you have no boss, no designation and no obligation to commit to work you do not want. You may skip any meeting you consider a waste of time, use company money to test a crazy business idea and even choose with whom you want to work.

Seems like the height of anarchy, right?

Well, says management don Gary Hamel, welcome to Management 2.0 where everyone, and not just the bosses, calls the shots.

This way, ideas bubble up from all across the organisation - a good way to stay ahead in today's ultra-competitive, super-speedy and ever-uncertain world.

Management 2.0 is his antidote to the existing lumbering corporate pecking order.

Dr Hamel, 58, was in town late last month to give the Singapore Institute of Management's Annual Management Lecture on how managers must change the way they oversee people.

He emphasised how crucial ethics was to success.

He talked about big companies; not to laud them, but to flay them - Microsoft, he charged as being near obsolete and having, as he put it, "been late to every trend in software and advertising services in the past 10 years".

He criticised the field of management studies, crowded with "I have the answer" gurus.

As he told his audience here: "We management thinkers have been fiddling at the margins. We talked about flattening hierarchies but did not eliminate them. We talked about empowering people but would not surrender power to them. We asked people to choose their leaders but did not give them authority to do so."

But these days, he noted, there are companies that live out Management 2.0. Among them are America's W.L. Gore, famous for making mountaineers' Gore-Tex fabric, and Indian IT firm HCL Technologies and Whole Foods Market, which is the world's largest natural and organic food grocery.

Gore's chief executive Terri Kelly told Dr Hamel that the hardest lesson its new managers had to learn was never to give an order to their colleagues and that they could not fire anyone who disobeyed them.

It used to be that managers were considered innovative if they could make their organisations run more efficiently, offer new products and services from time to time and perhaps even change existing business models, just like how Swedish retailing giant Ikea made DIY furniture cheap.

But today, organisations need to find ways to create entirely new business ecosystems, such as how Apple went from making cool gadgets to changing the way everyone communicated and was entertained.

In an interview the morning after his talk, Dr Hamel pointed out that to be as innovative as Apple, everyone in a workplace needs to be connecting, communicating, creating, challenging and choosing ideas freely.

All that, he added, can only happen when every employee is engaged and inspired enough in his work to use his initiative and gifts to add as much value as he can to whatever he does.

But surveys show only one-fifth of the workforce are truly invested in what they do today. That's from a 2007-2008 survey of more than 90,000 employees in 18 countries by global recruitment firm Towers Perrin (now known as Towers Watson).

It found that only 21 per cent, or 18,900 among those surveyed, were really keen on their work, while 38 per cent, or 34,200 people, could not be bothered to add value to it. The remaining 41 per cent, or 36,900 people, did the bare minimum to keep their jobs.

The only way to get all employees invested in an organisation's future is to let them do work that highlights their strengths and honours their best values. The rub, he noted, is that many bosses still believe employees cannot be trusted to work effectively if given too much leeway.

But there are ways to instil order, such as setting spending limits or trying out only ideas that can make money.

One of his mantras is: "Bureaucracy must die! Hierarchy must die!"

Or as he scathingly put it: "The way we manage human resources impedes human resourcefulness."

But surely, the pecking order is hotwired into human beings from birth, with authority figures from parents to teachers to bosses?

"You're right," he allowed, "as all of us grew up, we were socialised just to assume that formal hierarchies were the only way to organise ourselves." But today, he pointed out, there are alternative ways to getting people to work well together, such as how the Internet has enabled millions of boffins to come together online to write open-source software.

Consider IBM. Since 2008, the IT giant has brought thousands of staff together online for "values jams". Or Toyota, which introduced the concept of kaizen, or continuous improvement, to all its workers 50 years ago. That meant training even the least educated employee to do sophisticated business analyses and enhance quality in ways that other carmakers needed experts to do.

"Empowering individuals like that," he said, "enabled Toyota to tell the world, 'We will not give you something akin to either a Mercedes-Benz or a Fiat, but we can give you both'."

"The trick of innovation," he mused, "is knowing when to focus and when to be opportunistic."

It is because managers tend to focus so much on commanding and controlling their colleagues that they lose sight of chances to change for the better or exploit trends or new markets.

The immediate dilemma for most managers now, he said, is how to remove such deeply embedded notions as top-down leadership, command-and-control and blind obedience and replace these with bottom-up leadership, flexi-work and the will to try new things. "The old ways are like the blue (mould) in blue cheese," he said, "very important but not really what creates value in the future economy."

Buttoned-down and as precise as his well-groomed paintbrush moustache, Dr Hamel made his name with his former teacher, the late C.K. Prahalad of the University of Michigan, by introducing the concept of core competencies in the 1990s, which is about harnessing employees' strengths so that they produce ideas that are hard to imitate, that can be used widely and that keep giving customers value.

A former visiting professor at the University of Michigan and Harvard Business School, he now teaches at the London Business School, is founder-chairman of the management firm Strategos and is also a fellow of the World Economic Forum. He lives with his family in the heart of Silicon Valley and has advised such global icons as General Electric (GE), IBM and Microsoft.

As compelling a speaker as he is a thinker, he is considered by The New York Times to be "one of the world's most successful experts on corporate strategy" while The Wall Street Journal recently called him "the world's most influential business thinker".

His critics, though, say that he is strong on soundbites but short on practical solutions and that he expects too much of managers.

So, you ask him, where does Management 2.0 leave managers?

For starters, he said, they have to rid themselves of the "conceit" that just because they are high up on the corporate ladder, they must be "inherently smarter than everyone else".

"Most managers," he rued, "have a (logic-focused) left brain as big as a watermelon and a (creative) right brain the size of a walnut - and this age needs the right brain."

The effervescent Dr Hamel, who is ever-bursting with examples, said that former GE chief Jack Welch may have been "the smartest, toughest and baddest Tyrannosaurus Rex" of his day, but tomorrow's leader more resembles Wikipedia founder Jimmy Wales. Dr Hamel quipped: "Tyrannosaurus Rex and all the other dinosaurs are gone, but the bacteria are still here."

He is not knocking old leaders just for kicks. In fact, he said, most leaders are "mostly good people" who were trained, mentored and vetted by the shrewdest people and yet failed to make a difference in the end. That is because globalisation has made human endeavour so complex, fast-paced and volatile today that the task of steering organisations or, for that matter, countries, through choppy waters needs all hands on deck.

So he thinks Prime Minister Lee Hsien Loong is firmly on the right track when Mr Lee recently called for a national conversation on where Singapore should go next. Dr Hamel, who watched the "live" telecast of PM Lee's Aug 26 National Day Rally, said: "I like that so much better than a leader who says, 'Here is our plan. This is our vision'. Your Prime Minister was inviting people by saying, 'You know what? We don't know what is possible for us, but we need to have a conversation where we get the very best ideas'. And that is the way to think about it."

Dr Hamel is careful to add that he does not know Singapore well, having been here only about six times since 1989. He once had a three-hour chat with former prime minister Lee Kuan Yew on what skills and attitudes were needed to make a country innovative, and spent half a day with members of former prime minister Goh Chok Tong's Cabinet.

For his part, Dr Hamel has launched a platform called the Management Innovation eXchange to think up better ways to lead and manage (www.hackmanagement.com). He also has a new book on surviving uncertain times, titled What Matters Now.

His star shone brightly in the 1990s but dimmed in 2001 when American energy giant Enron, which he had held up as the epitome of an innovative company in his book Leading The Revolution, went bust after massive internal fraud. Asked how Enron had deceived him so, he said wryly: "By its nature, fraud takes place in secret... and by the time I wrote about Enron, chief executives everywhere had voted it the most innovative company in America for six years running."

"It's just occupational risk, you know," he added, sanguinely, on lauding a company for its management that later proved a lemon.

In the end, he said, the key to staying alive in the future is to imbue one's workplace with values that all hold dear.

As he put it: "If you see your boss taking short cuts and you do the same thing, that malfeasance spreads like an infection.

"But if you choose to work by your values and not just rules, moral courage is also infectious."

ON TOYOTA'S KAIZEN METHOD

'Empowering individuals like that enabled Toyota to tell the world, 'We will not give you something akin to either a Mercedes-Benz or a Fiat, but we can give you both'. The trick of innovation is knowing when to focus and when to be opportunistic.'
- Dr Gary Hamel on the concept of kaizen, or continuous improvement, in which Toyota trained even the least educated employee to do sophisticated business analyses and enhance quality

ON PM LEE'S NATIONAL DAY RALLY

'I like that so much better than a leader who says, 'Here is our plan. This is our vision'. Your Prime Minister was inviting people by saying, 'You know what? We don't know what is possible for us, but we need to have a conversation where we get the very best ideas'. And that is the way to think about it.'