Gary Hamel, who is the professor of strategic management at the London Business School and leading world authority on “management”, recently visited New Zealand. Earlier this year he organised conference in California in partnership with Management Lab (whose founding partners are McKinsey & Co, the London Business School, and the Union Bank of Switzerland).
The theme of the conference was “Inventing the Future of Management” and 35 prominent academics, CEOs, and consultants were invited to participate with the aim of identifying the big challenges for management in the future.
In his introduction to the conference, Hamel explained that management is one of humanity’s essential technologies but that its evolution has now slowed to crawl. New dynamics of competition and technological change have made “management-as-usual” untenable and his belief is that we are caught in paradigm trap of ‘Management 1.0’. That is, managers are focused on:
• Standardisation
• Specialisation
• Hierarchical planning and control
• Extrinsic rewards
• Shareholder value.
He said that in their time these were highly productive targets but are now increasingly obstructive barriers to progress. He raised the alternative concept of ‘Management 2.0’ with the prospect of achieving much-needed step-change in modern management practice.
To start the process, those attending were given four questions to consider:
1. What are the design flaws that prevent an organisation from changing until it can only be done by coup and from inspiring the joyful imagination and commitment of their employees?
2. What are the grand challenges that need to be addressed if we are to create organisations as adaptable as their environments and as human as the people who work in them?
3. What might answers to these challenges look like, and are there experiments that would help push through the limits of “management-as-usual”?
4. What can be done to speed up the evolution of management in the future?
The conference discussions were far ranging and produced number of general insights and themes which start to set long-term agenda for development and innovation in future management practice.
The first important insight was that in today’s world, attracting and fully engaging people is critical requirement of organisations as they need more than ever to tap into the creativity and innovative potential of the human brain. This means managers need to deliver purpose for the organisation beyond just shareholder value to capture the imagination of people in the organisation. Also the values that support the bigger purpose need to be defined and role modelled by the leaders of the organisation so that people feel it is truly worthwhile being involved. There is also need for deliberate consistency and coherence to be in place so that from the human point of view the organisation doesn’t become too frenetic and disjointed as it takes the necessary step-change forward.
A second significant insight is that it is now critical role of leadership to reject standard models and legitimise dissent and experimentation. If organisations are going to be successful in tapping the creativity and innovation potentially available in the brains of their employees, they need to deliberately break the mould and enable people to be free to try new ideas and raise issues without fear of knock back. This places heavy responsibility on the leader who on the one hand needs to encourage disagreement but on the other needs to ensure the organisation doesn’t get totally off track in the process.
Another crucial insight was the apparent lack of need in today’s world for conventional management education. In fact, some of the organisations involved actively rejected recruits with formal management education. This doesn’t mean that all that has gone before is bad and should be rejected, but it does recognise that today’s education system has inherent barriers that prevent people from stepping outside the square and experimenting and innovating.
The attendees concluded that managers of the future would need to be able to create organisations that were truly inspiring places to work and at the same time fulfilled their obligations to society. They would need to be primarily focused on unleashing the inherent potential and innovation in people’s brains and enabling their organisations to adapt and innovate in the general absence of any external crisis. They then explored what make-or-break steps would dramatically improve the capacity of organisations to achieve this. The following challenges for the future of management emerged from the conference.
There is requirement to invent new “management” paradigm for the future based on encouraging innovation, new ideas and experimentation. Managers will need to create the environment where every idea competes on level-playing field. The CEO as ruler will be abolished.
Future management will need to bring about an appropriate balance for people between stretch and comfort, and risk and support. New social networking technologies will have significant role to play in this.
Managers will need to be able and willing to protect the organisation from “group think” and the gravitational pull of the past by ensuring industry and corporate conventions are regularly challenged.
Employees and other stakeholders will need to be involved more than they have been traditionally. This will involve inverting the information pyramid and enabling people at the front line to make trade-offs in real time and for the led to have more choice over their leaders.
Organisational units will need to become smaller, less structured, and more fitting with the human scale, but at the same time more fluid and flexible. Rules and regulations will be minimal.
Finally organisations will need bigger purpose than just making money. This will deliver the necessary step-change in energy, passion and commitment needed for the future.
The debate arising from this conference will continue for some time into the future. You can join the debate on Gary Hamel’s blog at www.nzim.net.nz
Kevin Gaunt, FNZIM, FAIM, is CEO of NZIM Auckland and has been senior executive with, and consultant to, some of New Zealand’s largest companies.
