Gary Hamel on the Future of Management

Summary

Gary Hamel emphasizes the need to reinvent management to build organizations that are fit for both the future and humanity. Reflecting on historical management innovations, he underscores the unprecedented challenges of today, such as rapid technological changes, hyper-competition, and the commoditization of knowledge. Hamel advocates for reverse accountability and employee empowerment, as demonstrated by Indian IT company HCL Technologies. By prioritizing employee needs and integrating web values like meritocracy, openness, and collaboration, organizations can become adaptable, innovative, and engaging. Hamel concludes with a call to action for becoming management innovators and champions of the future.

Highlights

• Gary Hamel insists on reinventing management for a future-fit and human-oriented approach 🧠.
• Modern challenges include rapid change, hyper-competition, and knowledge commoditization 🌍.
• Indian IT company HCL Technologies prioritizes employees, reversing traditional hierarchies 🔄.
• Embrace values of openness, meritocracy, and collaboration from web culture 🌐.
• Innovation starts on the fringe, not at the top of large companies 🎨.

Key Takeaways

• Management needs a reboot to keep up with today's fast-paced changes 🚀.
• Reverse accountability is key – hold managers accountable, just like employees 🌐.
• Employee empowerment leads to innovation and adaptability 💡.
• Openness, meritocracy, and collaboration should be core organizational values 🤝.
• It's time to look outside traditional structures to innovate in management 🌟.

Overview

Gary Hamel, in his forward-thinking discourse, beckons organizations to rethink their management structures in the face of today's rapid changes. Emphasizing a shift from legacy techniques handed down through generations, he calls for new strategies that not only face modern business challenges but also prioritize human essence and adaptability.

In a vivid illustration, Hamel details how HCL Technologies champions innovative management through a novel approach known as reverse accountability. This practice overturns conventional models by empowering employees to hold managers accountable, fostering a dynamic environment where innovation becomes a daily enterprise.

Crucially, Hamel suggests borrowing principles from the internet's landscape—openness, meritocracy, and collaboration—to inject new life into organizational frameworks. His assertive narrative inspires listeners to innovate from the grassroots, propelling future-ready and human-fit enterprises beyond conventional boundaries.

Chapters

• 00:00 - 00:30: Introduction: Fit for the Future The chapter titled 'Introduction: Fit for the Future' begins with a focus on building organizations that are not only prepared for the future but are also designed to be harmonious with human values and needs. The introduction sets the stage for exploring themes related to organizational development that balances technological advancement with human-centric approaches. The emphasis is on the dual challenge of preparing for future demands while ensuring that organizations remain healthy, engaging workplaces for people.
• 00:30 - 01:00: Reflecting on Greatest Inventions The chapter titled 'Reflecting on Greatest Inventions' prompts readers to contemplate the most significant inventions of the last century. Readers are encouraged to consider inventions that have profoundly changed our lives and that we can scarcely imagine living without. The chapter suggests that many would include the combustion engine, semiconductors, modern pharmaceuticals, and the internet among others on their lists of essential inventions that have transformed daily living.
• 01:00 - 02:00: The Invention and Reinvention of Management The chapter discusses the concept of management as one of the most significant inventions of the last 100 years. It explores how management is not only a set of tools and methods but also an innovation that organizes resources and people towards productive outcomes. The discourse challenges the common perception of management, highlighting its critical importance and transformative impact on productivity.
• 02:00 - 03:00: Historical Context: 1890 to 1920 The chapter discusses the necessity of rethinking and reinventing management practices in response to unprecedented challenges facing organizations today. It highlights the need to transform leadership, planning, organizing, hiring, and motivation strategies. The discussion is set against a historical backdrop, taking the reader back to the years 1890 to 1920, and invites them to consider the context of the developed world during that time.
• 03:00 - 04:00: Management Evolution: 1920s Onwards In the 1890s, approximately 90% of people were involved in agriculture, and manufacturing companies were small, with less than four employees. The industrial landscape was fragmented with small organizations.
• 04:00 - 05:00: Challenges of the Modern Era The chapter discusses the rapid evolution and invention of modern management tools within a single generation leading to significant market capitalization, highlighting the development of pay-for-performance, capital budgeting, task design, divisionalization, and brand management before 1920.
• 05:00 - 06:00: Exponential Change and Hyper Competition The chapter discusses the evolution of management practices starting from the late 19th century. It refers to this period as Management 1.0, a time characterized by significant innovation and new thinking. However, over the past century, this pace of innovation has slowed down, resembling a classical technological S-curve. The chapter suggests that current working practices have not seen the same rapid evolution as witnessed a hundred years ago.
• 06:00 - 07:00: Knowledge as a Commodity The chapter titled 'Knowledge as a Commodity' discusses the stagnation in management evolution over the past 50 to 60 years. It highlights that the management principles, tools, and methods in use today are largely inherited from past management thinkers, ex-CEOs, and gurus, many of whom are now deceased or retired. The chapter critiques the continued reliance on these outdated views and methods to drive modern organizations, suggesting a need for innovation and change in management approaches.
• 07:00 - 08:00: Building Adaptive and Innovative Companies The chapter discusses the need for change in the way companies operate due to the unprecedented pace of change in the current world. It emphasizes that this rapid and continuous change is a unique challenge for the current generation, highlighting the need for companies to become adaptive and innovative to thrive amidst this ever-evolving environment.
• 08:00 - 09:00: Reverse Accountability at HCL Technologies The chapter titled 'Reverse Accountability at HCL Technologies' discusses the concept of exponential change in various domains. The narrator begins by asking the reader to visualize an exponential curve and consider the rapid changes happening around the world. The chapter highlights examples such as the increase in CO2 emissions, the surge in internet connections, and the growth in data storage. This discussion sets the stage for exploring how these exponential trends impact the dynamics and strategies within HCL Technologies, particularly in terms of accountability and innovation.
• 09:00 - 10:00: Principles of Management Innovation The chapter discusses the rapid innovation in the field of management, specifically with regards to technology and competition. It highlights the exponential increase in connected mobile devices and gene sequencing capabilities, showcasing a shift from historical trends where change occurred at a much slower pace. The chapter emphasizes the concept of hyper-competition as a new reality for companies, driven by accelerated technological advancements.
• 10:00 - 11:00: Learning from the Fringe In the chapter titled 'Learning from the Fringe', the discussion centers around the impact of reduced barriers on established companies. Historically, these barriers helped protect companies from disruption, allowing them to maintain high prices and profit margins. As these protective barriers diminish, companies face intense competition and must engage in a 'bare-knuckle fight' to defend their market position. The chapter emphasizes that the only viable strategy for companies to sustain their margins and market presence is through continuous innovation, especially as the pace of change accelerates.
• 11:00 - 12:00: Inspiration from the Web In the chapter titled 'Inspiration from the Web', the author discusses the challenges facing modern organizations in a rapidly evolving digital landscape. Companies must constantly innovate to maintain their market position, as the environment demands daily justification of their status. A significant issue highlighted is the commoditization of knowledge, making it increasingly difficult for organizations to stand out by offering something genuinely novel or unique. This necessitates a high level of creativity and inventiveness to overcome the pressures of creative destruction and remain competitive.
• 12:00 - 13:00: Grassroots and Individual Initiatives In the chapter titled 'Grassroots and Individual Initiatives,' the discussion opens with the rapid dissipation of knowledge advantages in today's marketplace. Due to workforce mobility, employees often move between competitors, and global consultants actively benchmark and transfer knowledge across companies. Additionally, companies frequently share the same business partners and vendors, creating a conduit for knowledge transfer. In such an environment, the focus shifts from merely possessing knowledge to harnessing it effectively.
• 13:00 - 14:00: Aligning Organizations with Human Adaptability This chapter discusses the alignment of organizations with human adaptability, emphasizing the importance of creating new knowledge swiftly and continuously. It addresses three main challenges: building a company that can change rapidly, fostering an environment where innovation is a constant and collective effort, and encouraging individuals to contribute their initiative, creativity, and passion. These themes aim to reshape organizations to be more adaptable and innovative in response to an ever-changing environment.

Gary Hamel on the Future of Management Transcription

• 00:00 - 00:30 [Music] [Music] well it's great to have the chance toh share a few ideas with you today about how do we build organizations that are fit for the future but also how do we build organizations s that are fit for human
• 00:30 - 01:00 beings and I'd like to start by asking you to reflect on a question for a moment if you had to make a list of the greatest inventions of the last century the things that have changed our lives that we could hardly imagine living without what would be the things you'd put on your list I'm sure you'd have the combustion engine there semiconductors uh all the wonderful Pharmaceuticals that we enjoy today uh probably the internet long list of things that uh have have made our lives
• 01:00 - 01:30 easier have made them more fun and I think you know all of those things are important having said that I would argue the single most important invention of the last 100 years was the invention of management and that sounds maybe a little bit weird we don't usually think about management as an invention but if you think about the tools the methods that we use to bring people together to mobilize and organize resources for productive ends that was an invention and yet I'm going to argue
• 01:30 - 02:00 that we're going to have to now reinvent management the way we lead we plan we organize we hire we motivate all of those things we're going to have to reinvent because today organizations are facing a set of challenges that are truly unprecedented in fact let me give you just a little bit of History here go back with me for a moment to 1890 about 120 years ago and if You' been living in America Germany Britain and what we call the developed world at the time
• 02:00 - 02:30 in 1890 you would have found that about 90% of people were still in agriculture the average Manufacturing Company would have had less than four employees so it's very fragmented very small organizations that was the world Circa 1890 and over the next uh literally one generation all of that would change by 1915 25 years later Ford Motor Company is making more than a half million automobiles a year us steel has become the first company in the world that has
• 02:30 - 03:00 a billion doll market capitalization and in that tiny sliver of time in one generation almost all the tools of modern management get invented pay for performance Capital budgeting task design divisionalization brand management all the management tools and methods that you find yet today in organizations around the world virtually all of those were invented before 1920 and most of
• 03:00 - 03:30 them were invented by individuals who were born in the middle of the 19th century that's what we can call management 1.0 in fact if you were going to plot the evolution of management over this last 100 years it would follow kind of a classic technology eser right a lot of innovation 100 years ago a lot of new thinking and then over time slowly that pace of evolution slows down and in our working lifetime indeed if you go back
• 03:30 - 04:00 50 60 years ago the way we manage has hardly changed at all so in many senses the management principles the tools the methods that we find in our organizations these are legacies these are hand me downs from gurus from ex CEOs from management thinkers who are mostly long dead long retired or long in the tooth and yet it is their view of management that is still driving our organizations and I think we need to
• 04:00 - 04:30 change this I think it's time to change this and I'd like to talk a little bit about why so I think the first challenge that we face today which is is truly unprecedented we are literally the first generation in history that is having to cope with an inflection point in the pace of change literally change has changed and it's changed in our lifetimes we live in a world today that seems like it's all punctuation and very little equilibrium change is sedici it's unrelenting it's ever
• 04:30 - 05:00 surprising but think about this for a moment think about kind of an exponential curve imagine just an exponential curve and think about the things in our world right now that are changing at an exponential Pace just think about that for a what things are changing at an exponential Pace CO2 emissions they're going up at an exponential Pace the number of internet connections in the world on that same curve the amount of data storage out
• 05:00 - 05:30 there same curve number of mobile devices connected to the web also going up on that kind of a curve the number of of of of genes that we've sequenced also on that kind of a curve and I can tell you if you go back a hundred years ago there was nothing that was changing at an exponential Pace this is entirely new but we Face other challenges the second kind of fundamental new reality for most companies around the world today is hyper competition
• 05:30 - 06:00 right if you go back a few years there were all kinds of barriers that protected the incumbents from The Winds of creative destruction and those barriers they used to protect a company's margins they fattened up you know they allowed you to keep your prices high they fatten the margins as those barriers come down every company is in a bare knuckle fight to defend its margins defend its position in the marketplace and the only way of doing that is through Innovation so as accelerating change requires companies to be more adap
• 06:00 - 06:30 adaptable The Winds of creative destruction are forcing companies to be more creative more inventive you have to earn your place in the market every single day third challenge I think organizations face today and perhaps maybe the most pressing one we also live in a world where knowledge itself is becoming a commodity where it's getting harder and harder for any organization to really differentiate itself to bring something kind of truly new and unique
• 06:30 - 07:00 to the marketplace today knowledge advantages dissipate very very quickly because your good people go work for your competitor because you have an army of Consultants around the world benchmarking all these companies and transferring Knowledge from the fast to the slow and the smart to the not so smart because all these companies are using the same network of business partners and vendors that's a another conduit for moving all of this knowledge around so in that world it's it's much less about you know what kind knowledge
• 07:00 - 07:30 Advantage do I have right now then how fast am I creating new knowledge with the emphasis on the word create so we've talked about three kind of profound challenges that organizations are facing how do you build a company that can change as fast as change itself how do you build a company where Innovation is the work of everybody all the time every day and how do you create an organization where people are willing to bring you the gifts of their initiative their creativity and their passion I believe
• 07:30 - 08:00 the companies that thrive over the next decade and Beyond are going to be the companies that make progress on this the companies that evolve their management models faster than their competitors in ways that make them more adaptable more Innovative and more engaging places to work now the question is what do you do to accelerate that process a company that's working really hard to do it I don't know if they've succeeded yet but I know they're working really hard it's an Indian company an IT
• 08:00 - 08:30 services company one of the fastest growing most Progressive IT services companies in India tens of thousands of employees and and and their whole management model is built on the principle of reverse accountability now a lot of companies talk about you know turning the pyramid upside down like I that's mostly rhetoric but these guys are really trying let me give you a few things they're doing this is the company by the way where every employee rates their boss and their boss's boss and all those ratings are published online when it came to of updating reviewing their
• 08:30 - 09:00 strategy they took all those like secret corporate strategies they distributed them out across the employees 8,000 people got involved in helping to Comon on and build their strategies that's kind of reverse accountability uh also they have an interesting little ticketing system in this company if you're a first level employee or at any level and you disagree with a decision from your boss or or you know you think you've been treated unfairly by HR it's taking too long to process your expense claim you know any one of those internal departments that you don't think is
• 09:00 - 09:30 serving your yourself very well you can fill out a ticket on them and so here's my complaint these tickets by the way are visible they're transparent across the organization and that ticket can only be closed by the employee so the manager has to come back to say like what's your concern let me understand it see if I can fix it or at least tell you why it's this way and then you can say okay I get it thanks very much you close the ticket any ticket that doesn't get closed in 24 hours gets escalated to the next level of management that's reverse
• 09:30 - 10:00 accountability right people holding their managers accountable are you really helping me succeed in my job and the reason this company they think it's so important is in that business they will tell you that all of the value is created at the interface between the employee and the customer Management's job is to encourage the Innovation there but they they explicitly say to employees you are more important than your managers in fact the Mantra of this company HCL Technologies their Mantra is employees first customer second how
• 10:00 - 10:30 often have you heard somebody say that and in fact the CEO of anit naer he stood in front of his his customer group CIO from big companies around the world and told them I'm sorry for me you don't come first because unless I take care of my employees they're not going to do the right thing for you so whatever difference you want to make aim high and start working but don't be content to Simply imitate somebody else's best practice because I just don't think it's good enough anymore so that's number one Innovation always starts with that kind of aspiration it's true when you want to
• 10:30 - 11:00 innovate around management like everything else number two to be a management innovator like any other sort of Innovator you have to be willing to challenge management Dogma right you have to challenge the embedded unexamined wallpaper beliefs that simply you know surround us and limit our our our degrees of freedom because you think about it I mean go go back to the kind of fundamental question what problem was management invented to solve 100 years ago what problem were those people trying to solve
• 11:00 - 11:30 I can tell you it wasn't it wasn't the problem of being adaptable and Innovative and an inspiring place to work the problem they were trying to solve is how do you turn human beings into semi- programmable robots how do we take the farm hands and the housemaids and the crafts people give them to show up on time to tend to that machine to do the same thing over and over again that's what we and and by Godly we succeeded so that's kind of you know all these this this this DNA in our organization that's that's what that's the goal that
• 11:30 - 12:00 was supposed to serve so now we have to go back and challenge some of those fundamental beliefs so number one you have to have aspiration number two you have to be a contrarian number three you have to be willing to learn from The Fringe Innovation and management again like every other sort of innovation you know it starts out on The Fringe it doesn't start with the mainstream if you're looking for you know big Fortune 500 companies to really drive this it's probably not going to happen there might
• 12:00 - 12:30 happen three or four levels down but it's not going to be coming from the top of those big organizations right whether it's art music literature fashion the future happens on The Fringe if you want to really see the future of management you have to look in some really unusual places and I would tell you one of the best places to look right now is on the web I mean kind of management that's pretty much a feudalistic system if you think about the web not so much right the web is kind of the global operating system for
• 12:30 - 13:00 Innovation so I have I have a feeling that the the the kind of values that today characterize the web we're going to have to bake those into our organizations the values of openness meritocracy flexibility collaboration all those deep values forget the technology those have to also become the values of our our organizations why because the web already is adaptable already is innovative already is amazingly engaging it has all of the characteristics our organizations lack so if you want to be a manal innovator
• 13:00 - 13:30 the question you want to start asking is how do you take not just the tools because come sometimes they're kind of superficial but how do you think about these deep principles on the web and how do we bake them into our organizations right we' have been told that we really can't change the organizations we work in that we don't have that chance you know that's the head of HR that's the vice president for planning or that's the CEO nonsense it's probably not going to happen there it's going to happen with people like uh Jeff
• 13:30 - 14:00 SS at at at Best Buy it's going to happen with folks like Ross Smith in the middle of Microsoft who've created this wonderful Grassroots movement around trust it's going to happen with a guy like Jordan Cohen at fizer who created a way that ordinary employees can Outsource the boring Parts their job off their desktop without getting anybody's permission that's where it's going to happen because I think for the first time since the Industrial Revolution you cannot build a company that's fit for the future without building one that's
• 14:00 - 14:30 fit for human beings and we should be grateful we've been given this chance CU those management Pioneers a 100 years ago they were trying to work against the grain of what it means to be human we're not the fact is human beings we're amazingly adaptable there are people sitting here today that have changed careers that have gone back to school in midlife maybe that have changed continents that have had to deal with enormous personal tragedy challenging circumstances says
• 14:30 - 15:00 we are just enormously resilient as human beings so in many ways human beings already have the qualities the essential qualities our organizations lack because those organizations have inside them a management model that was built to serve another purpose it's not one versus the other we have to do both but my hope for you is that in some small way in whatever organization you work that you become a champion for the future and that you become a management innovator who's dedicated to creating an
• 15:00 - 15:30 organization that will fully utilize and fully honor the gifts of every single person who comes there every day thank you so much [Applause] [Music]
• 15:30 - 16:00 [Music]