On The Future of Management

Nov 18

Ron Baker in his smartly titled post Elephants and Blind Lawyers presents his take on Gary Hamel's book The Future of Management. Recently, I completed reading it myself and would like to add to Ron's thoughts.

First, I wholly agree that it is an excellent book, certainly in the top three that I have read this year. A few quotes and comments from the opening section of the book:

"As managers, we are captives of a paradigm that places the pursuit of efficiency ahead of any other goal. This is hardly surprising since modern management was invented to solve the problem of inefficiency." As Ron preaches we must destroy the temple of efficiency as it is meaningless to knowledge workers. Do you want an efficient heart surgeon or an effective one? I'll take the latter.
"Because the technology of management varies only modestly from company to company, you'll find that most of the failings you need to address of endemic rather than idiosyncratic." As advocates of systems thinking put it, the problems are with the system, not the performance of the required tasks.
"Every business is successful, until it's not." I know, duh, but it also profound.
"If you wring all the slack out of a company, you wring out innovation as well." Every owner of a PSF dreams of having a firm where everyone bills 100% of their time. Hamel's warning is that this dream would quickly become a nightmare.
"Rule following employees are worth zip, in terms of the competitive advantage they create." Who'da thunk it; we want rule breakers!
"The most valuable human capabilities are precisely those that are the least manageable. While tools of management can compel people to be obedient and diligent, they can't make the creative and committed." Can you say, "Trash the timesheet?"

Hamel then goes on to tell three management innovation stories: Whole Foods, W.L Gore and Google. A quick summary of each company's innovative practices include:

At Whole Foods each team on the store floor does its own hiring, not a manager the team itself. The reason is simple, compensation is at a team level and the teams naturally do not want to hire anyone who will be a slacker and impact their pay. Employees are given unprecedented access to data including salary information for everyone at the store and statistics of all store departments of their store or any store in the chain. One person put it best — For Whole Foods profits are the score, not the game.
At W.L. Gore there are few titles and no bosses. Some people have been granted the vaulted title of Leader. All leadership is elected, including the CEO. Tasks can't be assigned, only requested and accepted, but the incentive is to do more for the team not less.
At Google they only hire absolute A-level people. They call this the no bozo rule. The believe that if they let in one B-level person, that they will be jealous of all the A's and therefore want to hire a C-level person that they can feel superior too. Wow. The average manager has 50 direct reports with some have as many as 100. All Google employees are expected to spend 20% of time tinkering on what is called a pet project.

In the last section of the book, Hamel describes his thoughts on some models for the future of management. He admits he does not know for sure if this is what things will look like. His models include:

Life: In order to evolve life needs to mutate. If our DNA were digital we would soon die out as a species. We need to experiment more and standardize less. This is how we improve.
Markets: Hamel tells an excellent story about how at Best Buy, experts in company forecasting were consistently outperformed in their predictions by opening the predictions up to a few hundred people in the organization, most of whom did not have access to all the information that the experts had. However, these people had the wisdom of the crowd. In essence, they had more information in total then the handful of experts.
Democracies: It is surprising that in market-driven countries most companies use the third world dictator model for management. We need to get more power in the hands of our people.
Faith: The major religious faiths have been around for thousands of year due to a continuous focus of the mission. If we strengthen our missions and people are aligned with them we will reap the rewards.
Cities: Most modern cities are truly diverse places in terms of inhabitants. They are also hot beds of creativity. If we encourage our companies to grow in diversity we will magnify our creativity.

I hope the helps you in your decision to add this important book to your reading list.