Gary Hamel’s speech on Reinventing Management for the 21st Century. I captured many highlights below, great video.
How do we build organizations that are built for the future and fit for human beings?
Think back – what are the most important inventions of the past 100 years? The things that have changed our lives, that you could hardly imagine living without? What would be on your list?
- Combustion engine?
- Modern medicine?
- The internet?
How about management? It may sound weird because we don’t usually think of management as an invention. But if you think about the tools and methods to bring people together to mobilize and organize resources for productive ends – that was an invention.
We now have to reinvent management. The way we plan, lead, organize, hire, motivate, etc because organizations are facing a set of challenges that are unprescented.
Think back about 120 years ago to 1890. If you lived in the developed world at the time about 90% of people were still in agriculture. The average manufacturing company had less than 4 employees. So, very fragmented and small organizations.
Over the next generation, all of that would change.
1915 – Ford is making 500,000 automobiles and US Steel is the first company in the world with a market capitalization of one billion dollars.
In this small amount of time (1 generation), almost of the tools of modern management are invented:
- Pay for performance
- Capital budgeting
- Task design
- Brand management
All of the management tools you find today in organizations all around the world were invented before 1920. Most of them were invented by individuals who were born in the middle of the 19th century. This is what we call MANAGEMENT 1.0
The way we have managed over the past 50-60 years has hardly changed. It’s time to change this. Here are 3 challenges as to why we need to change:
- How do you build a company that can change as fast as change itself? We are the first generation in history has has to cope with an accelerated rate of change. Change has changed.
- How do you build a company where innovation is the work of everybody, all the time, every day? Hyper competition. Companies must be more adaptable and must innovate. You have to earn your place in the market, every day.
- How do you create an organization where people are willing to bring the gifts of their creativity and passion? This is perhaps the most pressing challenge. We live in a world where knowledge is becoming a commodity. It’s harder and harder for any organization to differentiate itself.
- Knowledge advantages dissipate very quickly, because:
- Your good people go work for your competitor
- You have consultants benchmarking all these companies and transferring knowledge from the fast to the slow and the smart to the not so smart
- All these companies are using the same network of business partners and vendors
It’s less about what kind of knowledge advantage do I have right now than how fast am I creating new knowledge? Emphasis on the word CREATE.
Companies that thrive over the next decade and beyond, will be the companies that make progress in these 3 areas. Companies that evolve their management models faster than the competitors in ways that make them more adaptable, more innovative and more engaging places to work.
So, what can you do to accelerate this?
1. Aspiration – Aim High and Start Working
- Every employee rates their boss and their boss’s boss
- All of the ratings are published online
- If employees (at any level) have a complaint, for example:
- Don’t agree with a decision from their boss
- Think they’ve been treated unfairly
- Think it’s taking too long to fill out an expense report, etc
- The employee can fill out a ticket for the complaint
- Anyone can see the ticket
- The employees is the only person that can close the ticket
- The manager of the employee, is the first person to help address the concern
- Any ticket not closed within 24 hours gets escalated to the next level of management
This model lets people hold their managers accountable (are you helping me be successful at my job)? HCL believes this model is important because all value is created at the interface between employee and customer. This says to employees “you are more important than your managers.”
Employees First Customers Second ~Vineet Nayar, CEO HCL Technologies
Vineet told him customers, I’m sorry you don’t come first. For me, unless I take care of employees, they’re not going to do the right thing for you.
- Show up on time
- Tend to a machine
- To do the same thing over and over and over again
For the first time since the industrial revolution, you cannot build a company for the future without building one that is fit for human beings. Human beings are amazingly adaptable and already have the qualities that organizations lack.