future of management

Gary Hamel – The Future of Management Dr. Liano Greybe, 10 September 2010

OVERVIEW

Context

A few statements

Gary Hamel

Contents of the book

Challenge for you

WHY MANAGEMENT?

• Why are students and authors interested in “management?”

– Mystery/Mysterious

– Sinister

– Romantic

– Human Sciences

– Inquisitive

– 100 years

OBSERVATIONS

• Everything regarding management –

8 180 000 results

• Management styles – 2 190 results

• News – 1 110 results

• Books published since 2 000

STATEMENTS

• …..the laws of management are neither foreordained nor eternal

• The 21st century challenges are testing the design limits of organizations AND are exposing the limits of a management model that has failed to keep pace with the times

STATEMENTS

• Great breakthroughs over the last decade or two, such as the personal computer, digital music, e-mail and online communities

• A breakthrough in the practice of management?

• Management is outdated!

THE FUTURE OF MANAGEMENT ( Gary Hamel)

GARY HAMEL

• What constrains the performance of your business?

– Not its operating model

– Nor its business model, but

– Its management model

GARY HAMEL

• Visiting professor of Strategic and International Management at the London Business School

• Cofounder of the Management Innovation Lab

• Coined management concepts such

as “strategic intent”,

“core competence” and

industry revolution

• Authored 15 articles HBS

• Numerous articles for Wall Street Journal,

Fortune and the Financial Times

GARY HAMEL

• Management innovation has a unique capacity to create a long-term advantage

• Outline the steps you must take to first imagine, then invent the future of management

• The future of management? We should rather lead than follow

• The book about dreamers and doers

THE FUTURE OF MANAGEMENT

Why management innovation matters

Management innovation in action

Imagining the future of management

Building the future of management

WHY MANAGEMENT INNOVATION MATTERS

Chapter 1

• End of Management

Chapter 2 • Ultimate advantage

Chapter 3

• Agenda for MI

WHY MANAGEMENT INNOVATION MATTERS

• The end of management?

• The ultimate advantage

• An agenda for management innovation

TRANSFORMING THE ORGANIZATION (Gouillart and Kelly, 1995)

• RESTRUCTURE • REVITALIZE

• REFRAME • RENEW

SPIRIT MIND

BODY WITHIN

BODY AND E

END OF MANAGEMENT?

• How will tomorrow’s most successful companies be organized?

• What new and unorthodox management practices will distinguish the vanguard from the old guard?

• What will managers be doing or not doing?

END OF MANAGEMENT?

• Management – a maturing technology

• Transcending old trade-offs

• Surmounting new challenges

• Limited by our CAN

• The revolutionary imperative

END OF MANAGEMENT?

• Could the practice of management change as radically over the first two or three decades of this century as it did during the early years of the 20th century? G Hamel says: I believe so

• Innovators of management are not bound by what is; instead they dream of what could be

• First imagine, then invent the future of management

THE ULTIMATE CHANGE

• Why should we take on the challenge of reinventing management?

– Because management innovation pays

– It has unmatched power to create dramatic and enduring shifts in competitive advantage

THE ULTIMATE CHANGE

• Management innovation?

– “..anything that substantially alters the way in which the work of management is carried out, or significantly modifies customary organizational forms, and, by so doing, advances organizational goals

THE ULTIMATE CHANGE

• Why should we take on the challenge of reinventing management?

– Because management innovation pays

– It has unmatched power to create dramatic and enduring shifts in competitive advantage

THE ULTIMATE CHANGE

• Management innovation?

– “..anything that substantially alters the way in which the work of management is carried out, or significantly modifies customary organizational forms, and, by so doing, advances organizational goals”.

THE ULTIMATE CHANGE

• Synthesis of a century’s worth of management theories suggests that the practice of management entails, e.g.

– Setting and programming objectives

– Motivating and aligning effort

– Coordinating and controlling activities

– Accumulating and applying knowledge

THE ULTIMATE CHANGE

• These tasks are central to the accomplishment of human purpose

• Anything that dramatically changes how this work gets done can be labelled as management innovation

• Management innovation also encompasses value-creating changes to organizational structures and roles

THE ULTIMATE CHANGE

• Operational innovation focuses on the business processes

• Management innovation targets the management processes, e.g. – Strategic planning

– Capital budgeting

– Project management

– Training and development

THE POWER OF MANAGEMENT INNOVATION

• What propelled the great companies in the 20th century to positions of global leadership?

• Management innovation

– Managing science

– Allocating capital

– Managing intangible assets

– Capturing the wisdom of every employee

– Building a global consortium

FROM INNOVATION TO ADVANTAGE

• Management innovation yield competitive advantage when one or more of three conditions are met:

– Challenging long-stand-orthodoxy

– Is systemic, encompassing a range of processes and procedures

– Part of an ongoing program

• Auto industry

• Whirlpool

MANAGEMENT INNOVATION IN CONTEXT

Management innovation

Strategic innovation

Product/Service innovation

Operational innovation

MANAGEMENT MYOPIA

• Leading business magazines over the last 70 years:

– 52 000 articles on “technological innovation” and “technical innovation”

– 3 000 articles focused on “product innovation”

– 600 articles on “strategic innovation”

– Less than 300 articles on “management innovation”

MANAGEMENT MYOPIA

• Three explanations why CEOs have a blind spot to “management innovation”?

– Managers don’t see themselves as inventors

– Doubt that bold management innovation is actually possible

– Most managers see themselves as pragmatic doers, not starry-eyed dreamers

MANAGEMENT INNOVATION IN ACTION

Chapter 4

• Creating community of purpose

Chapter 5 • Building innovation

democracy

Chapter 6

• Aiming an evolutionary advantage

MANAGEMENT INNOVATION IN ACTION

• Creating a community of purpose

• Picture it, if you can, a company that doesn’t think of itself as a company, but as a community of people working to make a difference in the world, where the mission matters as much as the bottom line

• An industry revolutionary

MANAGEMENT INNOVATION IN ACTION

• A contrarian management model

– Freedom and accountability

– Trust

– Equity

– Purpose

MANAGEMENT INNOVATION IN ACTION

• Lessons from management innovators

– Principles matter

– The bigger the obstacle to manage innovation may be what you already believe about management

– Inspired management innovation can help to resolve intractable trade-offs

MANAGEMENT INNOVATION IN ACTION

• Building an innovation democracy, e.g.

– Bill Gore: Management Innovator

– A lattice note a hierarchy

– No Bosses but plenty Leaders

– Sponsors instead of bosses

– Free to experiment

– Commitments, Not assignments

MANAGEMENT INNOVATION IN ACTION

• Essential Lessons

– One: Management innovation often redistributes power

– Two: In the short run, the costs of management innovation may be more visible than the benefits

– Three: Revisiting our management innovation agenda

MANAGEMENT INNOVATION IN ACTION

• Aiming for an evolutionary advantage: Google, e.g.

– A new management model

– A formula for innovation

– A company that feels like Grad School

– The chance to change the world

– The Bozo-free Zone

MANAGEMENT INNOVATION IN ACTION

• Revisiting (Tentative) Lessons, e.g.

– One: The internet itself may be the best metaphor for the 21st century management

– Two: Experienced managers may not make the best management innovators

– Three: Management innovations that humanize work are irresistible

MANAGEMENT INNOVATION IN ACTION

• Revisiting our management innovation agenda, e.g.

– Management innovation challenge

– Google’s management practices

WHY MANAGEMENT INNOVATION MATTERS

Chapter 7

• Escaping shackles

Chapter 8

• Embracing new principles

Chapter 9

• Learning from the finges

IMAGINING THE FUTURE OF MANAGEMENT

• Escaping the shackles – need a methodology for breakthrough management thinking, e.g.

– A disciplined process for unearthing and challenging the long-standing management orthodoxies that constrain creative thinking

– New management principles with the power to illuminate new approaches

– Insights draw from organizations with eccentric, yet effective management practices

IMAGINING THE FUTURE OF MANAGEMENT

• Going to war with precedent

• Questioning our inheritance

• Temporary truths

• Uncovering shared beliefs

• Contrarian to the Gore

IMAGINING THE FUTURE OF MANAGEMENT

• Embracing new principles

– The power of a new principle

– Unravelling the management Gnome

– Reinventing the management gnome

– Life: Creating variety

– Putting the principles to work

IMAGINING THE FUTURE OF MANAGEMENT

• Learning from the fringe

– New vantage points, new perspectives

– Positive deviants

– Finding the fringe: Problems and challenges

• Challenges, e.g.

– Creating a democracy of Ideas

– Amplifying human imagination

– Dynamically reallocating resources

WHY MANAGEMENT INNOVATION MATTERS

Chapter 10

• Becoming a management innovator

Chapter 11 • Forging management

BUILDING THE FUTURE MANAGEMENT

• Becoming a management innovator

– Past decade almost every company worked hard at reinventing business processes

– Few companies devoted a similar energy and imagination as the challenge of reinventing their management processes, e.g.

• General Electric

• Procter & Gamble

• Whirlpool

BUILDING THE FUTURE MANAGEMENT

• Building a growth engine at IBM

• Lessons learnt:

– To tackle a systemic problem, you need to understand its deep roots

– It’s often easier to augment than supplant

– Commit to revolutionary goals, but take evolutionary steps

– Metrics are essential

– Keep at it

BUILDING THE FUTURE MANAGEMENT

• Exploring collective wisdom at Best Buy

• Lessons learnt:

– Minimize your political risks

– Start with volunteers

– Make it a game, Keep it informal

– Run the new processes in parallel with the old

– Iterate

BUILDING THE FUTURE MANAGEMENT

• Recap our rules for management innovators

– To solve a systemic problem, you need to understand the systemic roots

– At least, initially, it’s easier, and safer, to supplement an existing management process than supplant it (Run the new in parallel with the old)

– Commit the revolutionary goals, but take evolutionary steps

BUILDING THE FUTURE MANAGEMENT

• Recap our rules for management innovators

– Be clear about the performance metrics your innovation is designed to improve

– Start by experimenting in your “own back yard,” where the political risks are the lowest

– Whenever possible, rely on volunteers

– Diffuse potential objectives by keeping your experiments fun and informal

BUILDING THE FUTURE MANAGEMENT

• Recap our rules for management innovators

– Iterate: Experiment, learn, experiment, learn

– Don’t give up: Innovators are persistent

• Forging Management 2.0

– From inspiration to capability

• The courage to lead

• An inescapable conversation

• A focus on causes, not symptoms

• Accountability

BUILDING THE FUTURE MANAGEMENT

• Forging Management 2.0 – Working from the future backward

– Management 2.0 - Dimensions of managerial effectiveness

• Effort – relative contribution of human capabilities makes to value creation, the scale would look like this:

BUILDING THE FUTURE MANAGEMENT

• Effort – relative contribution of human capabilities makes to value creation, the scale would look like this:

– Passion 35%

– Creativity 25%

– Initiative 20%

– Intellect 15%

– Diligence 5%

– Obedience 0%

BUILDING THE FUTURE MANAGEMENT

• Why is the Internet so adaptable, innovative, and engaging? E.g.

– Everyone has a voice

– The tools of creativity are widely distributed

– It’s easy and cheap to experiment

– Capability counts for more than credentials and titles

– Commitment is voluntary

– Power is granted from below

BUILDING THE FUTURE MANAGEMENT

• Fit for the future

– Purpose not to invent the future of management, but to help you to invent it

– Technology of management must be reinvented and will be reinvented

– Who’s going to do it?

– YOU can

BUILDING THE FUTURE MANAGEMENT

• Fit for the future

– This is your opportunity – build a 21st century management model that truly elicits, honours, and cherishes human initiative, creativity and passion

– Built an organization that is fully human and fully prepared for the extraordinary opportunities that lie ahead!