The Future of Management
by Gary Hamel with Bill Breen
London Business School management professor and consultant Gary Hamel has realised that although technology has forever changed how companies operate, they still run according to outdated management rules and conventions created by long-dead management sages. Hamel says it’s time to start managing according to the times rather than to old edicts. The single biggest factor in a company’s long-term competitive success is not a fabulous business model, unique technology or access to capital. It’s management innovation – a company’s ability to strategise, mobilise talented people, and allocate capital in new and different ways. Companies that embrace management innovation will be tomorrow’s industry titans.
Why management innovation matters
What is the problem with today’s management methods anyway? According to Hamel, it’s the emphasis on efficiency, procedures, bureaucracy and coordination, all of which have transformed economies but have also constrained imagination and stifled progress. And because most CEOs believe in being doers rather than dreamers, the word “innovation” is often relegated to sound bites and shareholder meetings.
The Future of Management argues that management innovation matters now because companies are too reliant on yesterday’s ideals of control and haste. Instead, managers should focus on the broader objective of furthering human accomplishment. As Hamel demonstrates with several case-study companies, this means funding projects with “long odds” and understanding the difference between data and knowledge. It means letting authority flow to those who add value and away from those who don’t. From these ideas comes one of Hamel’s more controversial suggestions: A company’s higher purpose should not be shareholder wealth but to motivate and inspire employees. Focusing on shareholder wealth, he argues, encourages ethical lapses rather than innovation.
How to innovate
The goals behind most management-innovation efforts generally fall into one of three categories: providing faster organisational renewal, making innovation everyone’s job, and creating engaging work environments. Ironically, argues Hamel, the biggest obstacles to meeting these goals may be the very ideas people already have about managing.
Instead of saying “Forget everything you know about management,” Hamel eases readers into the process of becoming management innovators by first explaining how “the anomalies” have innovated – that is, how certain companies have been able to “flout conventional wisdom and still run a successful business.” He explores W.L. Gore’s complete lack of an organisational chart and Google’s “20% projects”, as well as a handful of other companies that have bucked traditional management.
It’s easy to assume that the message in The Future of Management is that management is dead, but that’s not the case. Rather, Hamel stresses that management is the elixir that turns technological advances, business models and capital into prosperity. But Hamel also stresses that the management systems of tomorrow will be more like the internet – democratised, transparent, and reliant on personal integrity, financial self-interest and peer pressure to keep everyone in line. It’s not a crazy idea; in fact, enlarging the “gene pool of ideas” and letting only the most adaptable survive is nature’s way.