Gary Hamel is one of the foremost management professors and business thinkers of the century. He made his name with CK Prahalad in the mid-1990s with their book Competing for the Future, which introduced the term 'core competence' to the world. He founded Strategos consultancy in 1995, retiring as Chairman in 2003. He has been a professor at London Business School for over 30 years. His co-author, Michele Zanini, was a co-founder of Management Lab with Hamel in 2009, and remains as Managing Director of that initiative.
'Making Organisations More Human' has been the theme of Ideas for Leaders since our inception, and it has been a core theme of Hamel and Zanini's since 2015 too. We see that the pendulum has swung too far in the direction of transactional activity at the expense of relational activity, and that leads to an over-focus on process and an under-focus on the magic that happens when people work together in a trusting, open and mature environment.
Hamel and Zanini recall that in April 2017 United Airlines staff forcibly dragged a passenger off a flight which was over-booked. The incident caused disastrous PR for the company and in the subsequent internal review they acknowledged they had not given the staff sufficient training or empowerment to handle the situation. The CEO commented "we have not provided our frontline supervisors and managers with the proper tools, policies and procedures to use their common sense" – as the authors note, you don't need tools and procedures to use common sense. The transactional control obsession of management is pervasive and hard to eradicate.
"In an age of upheaval, the quantities of foresight and ingenuity required to run a large organization exceeds the capabilities of any single individual or small team….bureaucratic structures ask more of leaders than they can deliver…. what we need are not extraordinary leaders, but organizations that mobilize and monetize the everyday genius of 'ordinary' employees."
The authors acknowledge that the transactional/measure-everything approach that has created the top-down bureaucratic structure of most organizations today, has led to an increase in productivity and wealth of unimagined success, but its time is running out. The marginal gains from paring this process ever further are debilitating productivity not enhancing it now.
Bureaucracy according to the authors 'grants excessive credence to the views of precedent-bound leaders, discourages rebellious thinking, creates lags between sense-and-respond, frustrates the rapid deployment of resources, discourages risk-taking, politicizes decision-making, undermines frontline capability and blinds silo-dwelling leaders to new opportunities,' and yet it is very firmly embedded. So how do you get rid of it?
The authors explore two companies in depth that exemplify the decentralised, low-management, human approach they advocate – Nucor, the US industry-outlying steel maker, and Haier, the Chinese white good manufacturer that transformed itself from sluggish, collectively-owned enterprise into the entrepreneurial micro-enterprise confederation it now is. However, they make clear that integral to the Humanocracy approach is that it is not constructed by silver-bullet nor strictly applied solutions, as that would be anathema to the concept. So you do not create a Humanocracy by copying what other organizations have done, but studying how they think, and adapt a best fit from that.
Zhang Ruimin, Haier's transforming CEO, believed in the power of 'human agency', while Ken Iverson at Nucor was focused on the parallel concept of 'everyday genius' – either way they realised that the real value in the business was in its people, not as a glib phrase to be trotted out by CEOs, but as an inviolable truth, and so built their businesses to enable that potential. The authors' note that to do this requires a wholesale re-imagining and rebuilding of an organization, not just some consultants' tweaks. They compare most innovation processes in bureaucratic organizations to holding a treat above a dog to get it to walk on its hindlegs, remove the treat and it stops doing it. To truly change the dog's/organization's behaviour you have to fundamentally change its structure and mindset (which is not possible with a dog, and still very difficult with an organization!). In a human-centric organization the goal is to maiximize contribution not compliance.
The bulk of the book is a deeper analysis of the seven principles of Humanocracy – ownership, markets, meritocracy, community, openness, experimentation and paradox. In short though, it is about trying to keep the frontline as empowered as possible, ensuring decisions are local and responsibility for change held as much by those who will implement it as those at the top. The key to this seems to be a continuous focus on keeping things from being sucked centrifugally to the centre, and ensuring transparency in the process which not only encourages everyone to join in the endeavour but shows how the best (and worst) ideas and actions perform so people can learn from that.
Ultimately the authors stress that for all the clarity of purpose and tips and practices they espouse in turning your organization from a bureaucratic one to a human-centred one, none will work unless you commit to be an activist in achieving it. As they point out if Malala and Greta can, then why not you? Without the passion and energy nothing much will change. To do that they highlight five 'impact multipliers': Credibility – make sure you can walk the talk, debureacratise your own domain first; Courage – this takes guts, and only those prepared to face the challenge will win out; Contrarian Thinking – look for the positive deviants, borrow ideas from unlikely places and rigorously challenge your assumptions; Compassion – put others first to overcome scepticism, and bring people on board with you; Connections – build that community!
This is an important book. Many of the themes are well-rehearsed by others previously, but Hamel and Zanini not only bring many disparate threads together to weave this comprehensive appraisal of the problem, its effects and routes to a solution, but their high-profile should surely ensure that more people will listen this time.
A cautionary note however, in the 25 testimonials for the book from the world of management's great and good, only one of them (Jos de Blok, founder of Buurtzorg), mentions the benefits of making the organization more 'human', everyone else focuses on the act of eradicating bureaucracy – transactions over relations still gaining the attention!
Title: Humanocracy: Creating Organizations as Amazing as the People Inside Them
Author/s Name/s: Gary Hamel and Michele Zanini
Publisher: Harvard Business School Publishing
Publishing Date: August, 2020
Number of Pages: 303
Author Knowledge Rating: 1-5 (based on their years of experience, academic expertise in subject areas, and exposure to cross-functional thinking in the area)
Readability: 1-5 score(1=dense and v academic; 5=frantic; page turner)
Appropriate Length: (1=could have been written in 25% of the length;5=could have been longer)
Core Idea Value: (1=nonsense (or entirely esoteric); 5=game-changer)