Friday, November 2, 2007

Professor provides road map to management 2.0

A road map to management 2.0

By Stefan Stern, Financial Times October 28, 2007

Peter Drucker, the 20th century's preeminent management writer, famously said, "Most of what we call management consists of making it difficult for people to get their work done." The ambitious challenge Gary Hamel has set himself -- and largely met -- is to provide a new road map for 21st century managers. How can organizations be more adaptable, innovative and resilient, and what do managers need to do, or stop doing, to help promote these qualities?Although Hamel is full of admiration for the great names of management theory from the past -- Frederick Taylor, Max Weber, W. Edwards Deming and Drucker himself -- his point is that it is time to move on.Some of these greats, still hugely influential today, belong to "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."Just as we are now living through the "Web 2.0" era, Hamel contends that we need "management 2.0" to deal with our new surroundings. This is a neat idea, and a fitting one, because in a sense the "The Future of Management" by Hamel with Bill Breen offers us a vision of Hamel 2.0. The London Business School professor was as energized by the "new" economy as anyone and, with almost evangelical fervor, wrote "Leading the Revolution" in 2000. Although it might have gotten much of its analysis right, it is also remembered for its euphoric praise for Enron Corp. A bit older, and much wiser, Hamel offers an intriguing account of what managing in the future is going to look like. It is time for some innovation in the way we organize our work, he writes. Where should we look to see the future in action -- as Drucker always urged us to do? Hamel focuses on three examples: Whole Foods Market Inc., W.L. Gore & Associates and, predictably enough, Google Inc.Whole Foods, the organic food retailer, has annual sales of $6 billion and more than 30,000 employees. It is an open, relatively nonhierarchical organization. The pay of every employee is known, and even senior executives receive no more than 19 times the average wage. Recruits are voted in through a process of peer appraisal after a four-week probationary period.W.L. Gore has annual sales of $2 billion and employs 7,500 people producing high-quality specialized clothing and fabrics. It has no management layers and no organizational chart. "We vote with our feet," one employee tells Hamel. "If you call a meeting and people show up, you're a leader."Google has more than $10 billion in annual revenue and 10,000 employees. It is a company, Hamel says, "that is capable of evolving as fast as the Web itself."Here too hierarchy and position count for little. "Command and control isn't an option when your 'employees' are some of the smartest people on the planet," Hamel writes. After flirting with a conventional corporate hierarchy, Google's middle management is now kept to a minimum because "an excess of oversight was putting a damper on innovation."It is pretty clear what Hamel thinks the future of management needs to look like. It should be far more democratic and less hidebound. Genuine empowerment and decentralization are required. Organizations will become more human, because to adapt and survive they will need a creative contribution from everybody.Consider the traditional management cry: "How do we get more out of our people?" It is "loaded with industrial-age thinking," Hamel says. It "virtually guarantees that a company will never get the best out of its people. . . . Vassals and conscripts may work hard, but they don't work willingly. . . . An enthusiastic workforce will consistently outperform one that is merely industrious."Ambitious and imaginative managers have little to fear from the brave new world that Hamel describes so well in this book. Bureaucrats, careerists and control freaks, on the other hand, should be worried. And Drucker? He would, I think, have loved it.

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