Gary Hamels' latest book, What Matters Now, is pretty much what it says on the dustcover: `an impassioned plea' for the development of both an entirely new way of running organisations and for a new corporate ideology, based on `freedom and self-determination'. Along the way, Hamel calls for a better calibre of stewardship, which puts the long-term interests of corporations and their communities before personal gain, and rewards the organisations' members by contribution rather than power. It's a radical agenda. This is a book that anyone interested in organisational behaviour should (and almost certainly will) read, and the quibbles that I have with it are minor. But I might as well tell you further down the page what those quibbles are.
Following on from the themes that he aired in The Future of Management, Hamel argues again that we are clinging too long to a model of management that was designed for the manufacturing revolution started by people like Henry Ford; a revolution that depended on standardisation, efficiency and control. The problem, argues Hamel, is that the efficiency that these great and hugely successful machines require rubs against the grain of what humans do best. Reminding us of the remarkable fact that in 1890 in America, nine out of ten white males worked for themselves, Hamel points out that the inevitable result of industrialisation was that `unruly and independent-minded farmers, artisans and day-labourers had to be transformed into rule-following, forelock-tugging employees.' And we are still at it today, `working hard to strap rancorous and free-thinking human beings into the straightjacket of corporate obedience, conformity and discipline.'
Hamel sells his point cleverly: it's not that corporations need to give employees a greater degree of freedom because that will be nicer for the employees, it's that rigid, command and control model bureaucracies will inevitably stagnate and die. What matters now, says Hamel, illustrating his point with the incontestable success story of Apple Inc, is innovation and adaptability. The cost of forcing people into the straightjacket of classic hierarchical management structures is the cost of lost ideas, commitment and passion - the very things that organisations most need in order to adapt and survive. Hamel quotes a sad fact revealed by a 2007-08 survey of 90,000 workers in 18 countries which demonstrated that only 21% of these workers were truly engaged with their work, while 38% were mostly or entirely disengaged and the remainder were sort of alright really. Hamel offers his own version of Maslow's Hierarchy of Needs - a hierarchy of human capabilities at work. From the most important to the least important, Hamel lists Passion, Creativity, Initiative, Expertise, Diligence and, last of all, Obedience. If you work for a large organisation, you may agree with Hamel that the most important three capabilities in this list are the ones that are demanded of you least on the average working day.
The solution, Hamel argues, is to build organisations on entirely different lines, and to put individuals ahead of institutions. His recipe for this, at its most fundamental, is: decentralise; emphasize community not hierarchy; make decision-making transparent; make leaders accountable to the led; align rewards with contribution not position; carry out peer reviews not top-down reviews; encourage self-determination. In a clever and interesting analogy, Hamel urges corporations to embrace the values of the internet, where all ideas compete on an equal footing, resources are attracted not allocated, and tasks are chosen not assigned.
My minor quibble with the book is its determinedly chirpy tone, which runs the risk of trivialising the content. If we are serious students of management and of organisational behaviour then we don't need to be chivvied along with cheery chirpiness, like a bunch of students with low attention spans. My least favourite example of this writing style: `Here, in a pistachio-sized shell, is what we learned.' `Here is what we learned' is fine by me.
My major quibble with the book is that Hamel, as a heavyweight management consultant, should be uniquely well-placed to give us a long list of case studies about companies who are trying to put his principles into practice. We don't really get that. When Hamel talks about Apple, he admits that he has not done any consultancy work for them, so his conclusions as to what they might be doing right are only those of outside observer, albeit a very-well informed observer. Apple are `redefining the basis for competition', `locking up customers with velvet handcuffs' and `extending core competencies into new markets.' Well, yes they are, but Hamel is reduced to introducing this by saying, `Ask an industry analyst or MBA student to deconstruct the company's gravity-defying performance and they would probably point out . . . ` He's not wrong, but one would like some deeper insight based on Hamel's hands-on experience of working with remarkable companies.
My heart also sank when, in the middle of the book, just as the reader is becoming desperate for a real example of how (and if) these radical and exciting ideas really can work in practice, Hamel gives us the example of an Anglican vicar in North London who devolves his church's `management structure' into a number of Mission Shaped Communities, run by his parishioners. It may be my personal problem that I care neither whether nor how any church increases its flock, but my main concern is that most captains of existing industries who are wondering how on earth to begin to turn their own supertankers around would be even less interested or impressed.
Later, however, we get good accounts of both W.L. Gore and Associates, manufacturers of the polymer fabric Gore-Tex, and of the world's largest tomato processor, California's The Morning Star Company: successful organisations built on thoroughly democratic, bottom-up principles. At Gore, colleagues choose which projects they want to work on and make a commitment to what they will deliver. At Morning Star, everyone is self-managing, committing to a personal mission statement of what they will contribute, which is guided by the broad mission statement of the independent business unit in which they work. Business units negotiate with other associates and other business units for what they will deliver and for what they need delivered in their turn. Everyone has the power to spend money to buy what they need to get the job done - but first they have to sell the idea to their peers. There is no management hierarchy to climb as the only means of advancement; career progression and higher rewards come though contributing more: mastering new skills and finding new ways to serve colleagues. In both companies, rewards are determined mainly by peer-based assessments of contribution.
We've already seen the W. L. Gore business model in Hamel's The Future of Management, so Morning Star represents the most significant genuinely new model offered for our consideration. And both of these companies were set up from scratch with their new, revolutionary business models in place from day one which, while still impressive, still feels a lot easier than taking an existing hierarchical organisation and transforming it into a new, self-determining model. We are finally given some insights into such a process via the experiences of the Indian IT service company, HCL Technologies, who have set out to `invert the pyramid' of their management structure and to make management accountable to the people at the front line. It would have been good to see some more examples of such transformations, even if they are only `work in progress.'
Throughout the book, Hamel offers guidelines as to the ways in which the management of organisations run on traditional lines can begin to empower and impassion their workforce, but I do feel that the Chief Executive of a major organisation might feel that he or she has been given an inspirational glimpse of an exciting future, rather than the map that will guide them to the final destination. Hamel's almost final word is a rap on my knuckles for this unworthy thought: `You don't need a detailed change programme to get started. Bus drivers follow maps; pioneers follow polestars.' Ouch. So much for this particular bus driver. Over to you, pioneers - follow that polestar!
Hamel is not wrong in saying that our future depends on us getting this right. I have no doubt whatsoever that the corporate structures that served us well in the nineteenth and twentieth centuries will not deliver prosperity for us in the twenty-first, and that if we do not develop nimble and adaptable organisations that allow individuals to flourish and contribute, then we will fall behind in the race. I also firmly believe that Hamel is right in saying that freedom and self-determination must be the guiding principles for this process. These are the guiding principles of our democracies; it's a bit disturbing that they are not the guiding principles of most of our organisations.