What Matters Now: Post #9--Ideology~No Hierarchy

Ideology: Managing Without Hierarchy: W.L. Gore & Associates, the makers of Gore-Tex, among other performance fabrics, is considered by Fast Company as one of the world’s most innovative companies. Founded by a chemical engineer from Du Pont, Bill Gore, in the late ‘50s, the company was to be a “skunk works,” an innovative place to work. Today, unlike most companies, Gore has no formal hierarchy, no bosses, and no titles. To call it a flat organization is almost an understatement. Gore is a lattice organization (not hierarchical), where employees go anywhere in the company when they need to get things done (not through a boss); they self-commit to whatever they’re passionate about (instead of being locked in by a position description); and, promotions come from the bottom up. You get to lead ONLY if people are willing to follow you; you’re not promoted from the top. At Gore, leadership is about how the leader makes others successful, not him/herself. The leader goes from being the custodian of power to being the custodian of culture. They ensure a healthy culture where all employees have a voice, not just the powerful. The big question: How do you get the best ideas to surface? Each new employee gets a sponsor, not just a boss. The role of a sponsor is to help each new hire reach full potential. Moreover, peer evaluation becomes the key way for evaluating leaders. All leaders get forced ranked based on the impact they’ve had across the enterprise. Gore finds strong consistency in how managers are ranked from top to bottom. This process drives accountability and discipline. No slackers here.

What Matters Now: Post #8--Ideology

Ideology: The way we think about something becomes our ideology (philosophy, belief system) and affects our behavior. If we think that employees are lazy and irresponsible (Douglas McGregor’s Theory X), then we watch them closely and treat them like prisoners. On the other hand, if we consider them productive, responsible folks, we treat them like colleagues (Theory Y). The author suggests management ideology comes from a healthy tug of war between yin/yang-like theories, such that it’s not one ideology vs. the other, rather a blend that makes sense. He uses the role of a parent as both nurturer and disciplinarian as an apt analogy. Within organizations, there’s a real tension between competing ideologies of bureaucracy and innovation. The discipline and stability of bureaucracy can be a real advantage and yet become a snag to innovative or creative thinking. The new organizational reality mandates bold and focused ideas, demonstrated by progressive companies.

What Matters Now: Post #7--Passion

Passion: Managers are more likely to throw a wet blanket over innovation and enthusiasm than not. A Towers Watson survey (Global Workforce Study in 2007-08) showed that companies that scored higher in engagement have much better earnings growth and fatter margins than those that do not; however they found only 21% of employees were engaged! Hamel, restates the Hierarchy of Human Capabilities at Work (from his book, The Future of Management). While obedience, diligence, and expertise are still critical to an organization, the capabilities that have the most value are initiative, creativity, and passion. Managers today need to create a work environment that inspires employees to bring initiative, imagination, and passion to the job. Hamel thinks that rather than an organization-centered business, we should focus first on an individual-centered organization. He suggests decentralization, community focus, transparency, servant leadership, peer review, and self-determination.
•    A fascinating example of passion and leadership offered by Hamel: “Mission-Shaped Communities” (MSCs) were developed to help stem the drain of membership at the Church of England. One church had 500 members but was losing 10% of its membership a year—very common among western churches. The minster formed mission-shaped communities of up to 50 people specifically focused on a mission of passion—the elderly, youth, disabled, etc. With a modicum of rules and leadership training, the groups grew and the church thrived—engagement grew the church from 500 to 1,000 in a period of decline among its peers.
•    The “Facebook Generation” (Gen F) will expect a different place to work. The Industrial Revolution changed people from independent farmers and artisans (nearly 90% of white males in 1890 were self-employed) to rule-following employees. A similar change is afoot with Gen F—the digital natives who expect Web-based knowledge and access, much like a fish expects water. Thus, ideas compete on an equal footing, contributions count more than credentials, hierarchies are bottom up (not the other way around), leaders are servant leaders, groups are self-defining and self-organizing, and so forth. This is an important chapter for managers with new Gen F employees entering the workforce.

What Matters Now: Post #6--Adaptability

Adaptability: Great quote by Hamel, “Every organization is successful until it’s not.” As such, the watchword of today has evolved to “Exponential Change.” In mobile computing, for example, there have been four leaders in four decades: Motorola, Nokia, Research in Motion (Blackberry), and Apple—the reality of competition in a changing world. Companies will either adapt or falter. Resilient organizations keep pace with changes and survive. An adaptable company is one that takes advantage of new opportunities, redefines its core business to encourage growth, and actively addresses evolving client needs. Some caveats offered by Hamel: Gravity Wins (over time things settle down, and then down further); Strategies Die (no such thing as a perfect strategy—they get replicated, superseded, or eviscerated by competitors); Success Corrupts (we get fat, dumb and happy with success…and our competitors sneak up and steal our cheese!). Hamel provides a cheat-sheet to “Future Proof” your company (p.119). To be ready for the future, your company needs to embrace the following:
•    Anticipation—face the inevitable, learn from the fringe, rehearse alternative futures
•    Intellectual Flexibility—challenge assumptions, invest in genetic diversity, encourage debate and dialectic thinking
•    Strategic Variety—build a new strategic options portfolio, build a magnet for ideas, and minimize the cost of experimentation
•    Strategic Flexibility—disaggregate the organization, create real competition for resources, and multiply sources of funding for new initiatives
•    Structural Flexibility—avoid irreversible commitments, invest in flexibility, and think competencies and platforms
•    Resilience-Friendly Values—embrace a grand challenge, embed new management principles, and honor Web-inspired values

What Matters Now: Post #5--More About Innovation

More Innovation: Innovators pay attention to four areas: unchallenged orthodoxies (challenge what people take for granted, like salesforce.com—software as a service from the cloud); underappreciated trends (notice even small harbingers of change—50% of people now bidding with TV carriers for lower costs); underleveraged competencies and assets (redeploy assets to another part of company—like Disney that produces live shows on cruises); and, unarticulated needs (listen carefully for customer needs and amaze them with innovation—think TiVo). Be sure to read the chapter, “Deconstructing Apple,” which explains Apple’s values (passion, leadership, surprise, innovation; see p. 80 for others) and how those values are innovative and customer centric. To become more innovative, companies need more pro-innovation initiatives.

What Matters Now: Post #4--Innovation

Innovation: “Hunkered down is the new normal!” Potentially stagnant economies and deer-in-the-headlights CEOs lead many companies to sort of ‘shelter in place.’ Hamel reminds us that we owe much to innovation, such as: Prosperity (just consider all the tech advances in recent decades); Happiness (we were born to create and get pleasure from it); Future (whether climate change or global competition, innovation is at the heart of our survival). Hamel provides a list of the most innovative companies. Topping both Fast Company’s and BusinessWeek’s lists are three companies—Apple, Google, and Amazon. Then he specifies several other groups of companies.
•    Rockets—companies propelled by quirky business models…Hulu, Spotify, and Gilt Groupe. Hamel notes that in 2006 Starbucks and IKEA were innovator rock stars, but today both are part of the establishment.
•    Laureates—companies that innovate routinely, like GE, Intel, Novartis, Microsoft and others. Laureates are great at maximizing R&D.
•    Artistes—companies squarely inside the creativity business like IDEO and Grey New York.
•    Cyborgs—companies like Google and Amazon that were “built to innovate.”
•    Born-Again Innovators—companies like P&G and IBM. Hard to believe after all this time IBM has continued to be the leader in patents for 18 years.

What Matters Now: Post #3--Values

Values: In light of Bernie Madoff, Enron, BP, and other corporate scandals, the author sees little stewardship going on in business today. A Gallup poll shows that only 15% of people regard business as having high standards—being faithful stewards. Note that nurses came in first at 81%.  Hamel then describes such good stewards with 5 words: Fealty (protecting interests of people who work for you); Charity (putting others’ needs ahead of your own); Prudence (safeguarding the future instead of the present gain); Accountability (being responsible); Equity (being fair to all contributors). According to Hamel, the most recent economic downturn in 2008 came about as a result of a moral crisis, shared by just about everyone. He recounts the roles of many, including the Fed, bankers, politicians, insurance execs, and a raft of others who participated in the moral booze party that left America with a terrific, expensive hangover. [See pp. 11-24 for an artful (and terrifying) description of the near collapse of our economy.] Hamel calls us to emulate “Farmer Values” focused on honest sweat and hard work, and urges us not to focus on how to make a quick buck. He harkens readers and businesspeople to adopt a noble purpose, not a financial goal or arbitrary % of profit. Examples: Disney is in the joy business. People can rally around the noble purpose of Whole Foods’ CEO John Mackey, who cofounded his company based on love—a word rarely heard in corporate America.

What Matters Now: Post #2--Five Elements of Survival

Hamel  lays out five key areas where companies must challenge previous assumptions to ensure future survival:
1.    Values: With all that has happened in business regarding shifting values and standards, Hamel calls for a “moral renaissance” in business.
2.    Innovation: Global competition, the Internet, and consumer accessibility to products have all put competition on steroids! Without constant and fundamental innovation embedded in our corporate DNA, success will be as fleeting as yesterday’s news. Hamel emphasizes that innovation is everyone’s job, not something delegated to a few lofty corporate leaders in the company.
3.    Adaptability: We’re all familiar with the evolutionary mantra, “adapt or die.” It’s as true today as at any time in our history. With hyper-accelerated change, any company [or individual] that can’t innovate and adjust to the strong winds of change will get blown away.
4.    Passion: It’s hard to change and adapt without deep passion. Consequently, things become mediocre and finally fall prey to innovative competitors. Unfortunately, many companies are geared to perform the same task over and over, ever more efficiently. It takes passion to ask “Can we do something else?” 
5.    Ideology: Businesses need not only better, more innovative practices but also better principles—a coherent ideology. Bureaucracies have long held sway, with central control, regulations, and top-down leadership. This model is DEAD! Hamel offers a clear vision of the future of management with in-depth discussions about such new-model leaders as W.L Gore, Morning Star, and HCLT.

What Matters Now: Post #1--Overview

Overview: Professor, author, and thought leader about the future of management, Gary Hamel has written his smart management manifesto for now and the coming years.  Gary Hamel is a BIG thinker—one to whom CEOs and leaders at every level should listen and heed his words. Technology and communication have joined together in a “perfect storm” to accelerate change at warp speed. Adapting to change is a fundamental tenet of competition for survival. Hamel has given us the ‘holy grail’ for leadership. Essentially, he’s asking us all to rethink the fundamental assumptions and ideas that got us to where we are. He lays out five key areas where companies must challenge previous assumptions to ensure future survival:Values, Innovation, Adaptability, Passion, Ideology.

What Matters Now (Jossey-Bass, 2012) by Gary Hamel, reviewed by Steve Gladis, Ph.D. November 2012

Other Side of Innovation: Post#11--Conclusion

Conclusion: To be successful, innovative initiatives need to start off well—avoid making the PE resistive by looking like a rogue upstart. Also, select a leader for the DT who has status and power in the company, broad experience in the PE, and serves the long-term interests of the company. In this final chapter, the authors address the following myths, among others: Innovation is all about ideas, the great leader never fails, effective innovators are subversives fighting the system (see p. 179 for a more complete list). In what amounts to an appendix, the authors offer several assessment tools worth looking at. I especially appreciated their Scholarly Foundations section that serves as a comprehensive annotated bibliography for anyone interested in doing further inquiry on the subject. This

Other Side of Innovation--Post#10--Truth

Seek the Truth: Love this chapter (p. 143) because it recognizes how many of the biases we all have: Over-investment in an idea, ego, pressure of “results,” familiarity, recency, and much more. Innovators should not only be accountable for results, but also for actions and learning that takes place—all of which can only happened with close disciplined effort.

Other Side of Innovation: Post#9--The Hypothesis

The Hypothesis: The starting point for any experiment is the hypothesis—the basic observation or question you’re trying to answer. Because the Dedicated Team will have such a varied number of points of view, it’s important to establish a hypothesis of record so the whole team can proceed forward on the same track. Establish a cause and effect map and then question all assumptions rigorously.

Other Side of Innovation: Post#8--The Experiment

 Formalize the Experiment: First, look at the change process as an experiment. As with all experiments, start with a hypothesis and test it, record the results, and learn from the experiment. Intuition fails us for a number of reasons, so stick to a scientific process. And test every initiative separately. Continuously experiment and evaluate. For a good comparison between Performance Engine vs. Dedicated Team (innovators), see p. 116.

Other Side of Innovation: Post#7--Managing the Partnership

Manage the Partnership: One key relationship is between the Project Team and the Shared Staff. Remember that it’s a cultural fit and respect of people in the Performance Engine, especially the shared staff, that makes or breaks a viable innovative partnership. Personal persuasion, respect, clear agreements up front, and a dose of humility (especially among the Dedicated Team) are essential. The Dedicated Team members are the “new kids on the block” and must respect the culture or get bitten by it!