Book Club: Gary Hamel, The Future of Management

In his new book, Prof Hamel says ‘I will outline the steps you must take to first imagine, then invent, the future of management.’ So much time and effort has been spent on the subjects of innovation in product and service, yet little focus has been given to the way in which we need to innovate the science and skill of management and leadership, he argues. Too true.

The toxic effects of our legacy management beliefs

Hamel says that "to a large extent, your company is being managed right now by a small coterie of long-departed theorists and practitioners who invented the rules and conventions of 'modern' management back in the early years of the 20th century.

"They are the poltergeists who inhabit the musty machinery of management. It is their edicts that invisibly shape the way your company allocates resources, sets budgets, distributes power, rewards people and makes decisions – the levers and dials are more or less the same in every corporate cockpit.

"But management is out of date. It’s groaning under the strain of a load it was never meant to carry. Whiplash change, fleeting advantages, technological disruptions, fractured markets, omnipotent customers, rebellious shareholders – these 21st century challenges are exposing the limitations of a management model that has failed to keep pace with the times."

Competitive success in an age of head-snapping change

It all starts with strategy. You don’t achieve the next evolution of management without changing your structures and processes, your very assumptions about what management is and how it works. And that applies at the start, with how you manage your strategic process. Most aren’t managing strategy fast enough or flexibly enough to keep ahead of change.

In the typical corporate model, CEOs are expected to drive strategy top-down. But only recently has Google, one of the most successful companies in the world at time of writing, started experimenting with a formal planning process. It’s highly consultative. CEO Eric Schmidt sets a strategic challenge and Google employees form teams to solve it. One core management principle at Google requires that all interested parties be in the room when a key decision is reached. The dogma of how strategy works in most large companies would say ‘This is not how you manage strategy’. But, it works at Google.

“Even the ‘world’s most admired companies’ aren’t as adaptable as they need to be, as innovative as they could be, or as much fun to work in as they should be. My assumption is that when it comes to the future of management, you’d rather lead than follow.� – Gary Hamel

How pioneering organizations succeed by re-defining management

Management is a conversation – over 60% of a manager’s time is spent in conversation. But, traditional management is a one-sided conversation, usually of instruction, supervision, and monitoring. Hamel says the future of management is seen in a handful of companies who show us how to use unconventional management practices to break out of ‘business as usual’ by conducting a different type of conversation.

These organizations look odd to traditional managers. What is happening doesn’t look like management. There are continuous companywide conversations in companies such as Nokia and Google, happening across units and departments, up and down, and with very little deference. Management is happening, but without an ‘up down’ perspective of management ‘up there’ and ‘do-ers’ beneath.

People often have the freedom to follow their nose in these pioneering organizations. They throw themselves into rapid, low-cost experimentation, following their passions without asking permission. The management system in these organizations "substitutes the wisdom of peers for the wisdom of the next layer up the hierarchy, and is mostly free of bureaucratic quicksand".

Root out dogma to create management innovation

Management dogma assumes it’s a managers job to supervise. Not necessarily, says Hamel. At Google, people are given twenty per cent of their time to pursue pet projects. "How do Google managers keep people from using their day a week to fool around? They don’t. They figure closely supervising everyone’s time would create a bureaucratic drag on all the Googlers who aren’t wasting their time, and that would outweigh any benefit. The payoff is that more than half the company’s new product launches trace their roots back to a twenty per cent project".

Build competitive advantage through changing how you manage

The current management model, based on control, no longer suffices in a world where adaptability and creativity drive business success. In his new book, Professor Hamel helps us take aim at the legacy beliefs preventing us from surmounting the current challenges, and explain how to turn our organization into a serial management innovator.

Some reviews of this book say Hamel has been preaching the same thing since his breakthrough books (see Backgrounder, below). So what. He's absolutely right, in my view. And his examples in this book, from companies like Google, W L Gore and Nokia, help cement what he has been saying for years by providing realworld examples of new-style management in action. If 'modern management', which began with Fordism ('scientific management' as it is often known) defined the successful companies and organizations of most of the 20th century, then the 'post-modern' management described by Hamel - or rather not described by him, as he points out you have to invent the future of your own managemeny system and practice rather than simply adopt everyone else's; he just provides guidance for how re-invent it yourself rather than telling you what the end product should be - is so obviously what comes next.

Here's a quick primer on Hamel (below). And there's a short clip of Hamel talking about the book, here (but don't get put off by his fast and furious delivery and his high-pitched voice in this clip. He takes a few seconds to settle down): Gary Hamel talking about The Future of Management"

Background: A 60 Second Primer on Gary Hamel

Professor Hamel’s landmark book, Competing for The Future, written with C K Prahalad, became the world’s best-selling book on corporate strategy. His book Leading The Revolution further confirmed his reputation for helping businesses re-think strategy, and was described as “eye-opening for any business� by Michael Dell. These two strategy-defining works have appeared on every management bestseller list and been translated into more than 20 languages.

Hamel is responsible for a number of groundbreaking concepts that have entered the language of business and changed how we think of and lead organizations; “strategic intent,� “core competence� and even “management innovation�. Before Hamel, innovation meant something that happened in the R&D department, not in the way a business is run. These ideas have changed the practice of management and leadership in companies around the world.

Over the past twenty years, Hamel has authored 15 articles for the Harvard Business Review and is the most reprinted author in the Review’s history. Gary Hamel is a Fellow of the World Economic Forum and the Strategic Management Society. Since 1983, Hamel has been on the faculty of the London Business School where he is Visiting Professor of Strategic and International Management.