Hacking the Management Model: Q+A with Dr. Gary Hamel (Part 2)

February 19, 2016 Sarah Payne

 

Adaptability. Innovation. Inspiration. All too often, these traits are entirely missing from modern organizations. What can we do to change that?

In Part 2 of our Q&A series with WorkHuman speaker Gary Hamel, we talk about how organizations can overcome their “core incompetencies.” Gary believes that by taking a very systematic approach to building new capabilities, and by learning how to “hack” core management processes, we can accelerate the pace at which we build future-capable organizations.

Read his Q&A below.

 

  1. Are there any common mistakes you see organizations and leaders making?

I believe that organizations of almost all types and sizes suffer from a common group of disabilities.

First, most organizations are still much less adaptable than they need to be. That’s why the future is so often created by the newcomers rather than the old—it’s the Uber, not the taxi companies; AirBnB, not the hoteliers; Netflix, not the networks.

Second, most organizations are still far less innovative than they need to be. Innovation still happens mostly in pockets in R&D or new product development. And often it happens despite the system, rather than because of it.

Third, most organizations are really quite uninspiring. They don’t create a sense of purpose and a sense of opportunity that truly energizes people.

My work is focused on trying to help organizations overcome these ‘core incompetencies.’


How to overcome your organization’s “core incompetencies” #workhuman @profhamel
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When I talk to CEOs and HR leaders, they tend to put a lot of focus on individual competence. They say, “We need people who have better digital skills or who have better emotional intelligence.” In other words, they’re thinking about the capabilities of individuals, rather than the capabilities of the organization as whole. Problem is, you can have highly capable individuals, but if they work in an organization where the core management processes work against adaptability, innovation, or customer care, all those individual capabilities won’t count for much. To build organizations that are fit for the future, we have to individual capabilities and institutional capabilities.

Let me take innovation as an example. Every CEO I meet tells me they’re serious about innovation. But I often test that commitment by asking a few, simple questions to employees on the front line—people in call centers, in warehouses, administrative assistants, and tech support staff.

First I ask, “Has your employer invested in your own creative capital? Have they taught you how to think like a business innovator?” 99% of the time the answer is no.

Then I ask, “If you have an idea, do you know how to get experimental capital to test that idea? Is there a clear path for getting something started quickly with a minimum amount of bureaucracy? Do you have an internal equivalent to Kickstarter?” Again, the answer is usually no.

Finally I ask, “Is it clear to you that your boss and your boss’ boss is being held accountable for innovation? Are there innovation metrics that measure number of ideas created, quality of ideas, how quickly they’re commercialized? Are there innovation metrics that directly influence your boss’ compensation? Does your boss talk to you about these metrics, and how your unit is doing?” Once again, the answer is no.

So then I’ll go back to the CEO and say, “Well that’s very interesting. You told me you were serious about innovation, but you haven’t taught people how to do think like entrepreneurs, you haven’t made it easy for them to get something started, and your leaders aren’t held accountable for innovation. So let’s start from the beginning—what will take to make innovation a genuine capability rather than a wanna-have?

Building the 21st century capabilities that our organizations are going to require us to look at everything we’re doing as leaders, as managers and administrators.  We have to ask, “Are these systems, tools, and processes helping us to be more adaptable and innovative, or are they getting in the way? Are they engendering passion and initiative, or are they squandering these things?”

A few organizations have taken innovation seriously—with amazing results. One of them happens to be Whirlpool, the 100-year-old appliance maker. These organizations have systematically re-tooled every element of their management models—hiring, promotion, planning, budgeting, training, resource allocation, etc.—so they facilitate rather than frustrate innovation.

Still, I find relatively few CEOs today who think systematically about organizational capability. This needs to change. For most CEOs it’s easier today to launch another round of cost cutting or make an acquisition than it is to do the hard work of transforming organizational culture one key management process at a time.

 

  1. Can you give an example of this systematic approach to change?

We’re doing some innovation work right now in the North American division of Adidas. They’re led by a very progressive CEO, Mark King.

The first step was to very rapidly upgrade the innovation skills of several thousand people. We built an online curriculum that takes everything we’ve learned about how you teach people to be business innovators and made it available to everyone through an e-course. The course was very demanding—30 or 40 hours—and it was optional. Despite that, nearly half of those we invited completed the course, and in the process they generated thousands of ideas for new products, services, and businesses.

So that’s the first step: You have to upgrade human capabilities and skills, and you have to do it fast—there’s no trickle down

The second step is to go back to those same individuals, and ask, “Given what you’ve learned about innovation, what are the barriers you see to innovation within your company?” One answer might be, “I don’t have time to for innovation,” or “I have a great idea but I don’t know how to find a mentor,” or “Innovation isn’t built into our rewards system,” or “My manager doesn’t seem to regard innovation as important.”

What we’re doing is inviting everyone in the organization to hack the company’s management model—to look at all the systems and processes that shape and influence behaviors and ask, “If we want innovation to be both instinctive and intrinsic, what would we need to do differently?”

The suggestions have to be vetted, of course, but the key is this: You can’t build 21st-century capabilities from the top down.  There’s too much vested interest and too little creative thinking. Instead, you have to syndicate the challenge to the entire organization. I believe that in the future, every change program will need to be socially constructed. Change programs need to roll up, not down. Change programs that cascade down are too slow. They’re too incremental.  They’re not sufficiently nuanced—they don’t take account of local subtleties.  They feel imposed, and therefore illegitimate. This is why 70% of change programs fail.


“In the future, every change program will need to be socially constructed.” -@profhamel #workhuman
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The challenge I’m tackling is this: “How do you dramatically accelerate the pace at which we can build future-capable organizations, and how do we do it cheaper?”

Successful transformation programs often take 3-5 years and the vast majority fail. We need to build capabilities 3x faster and 3x cheaper than we have before—and that requires a collaborative approach.

Many companies have embraced the idea of hacking—where you bring people together in a focused, non-hierarchical way to solve a tough problem. We can take these same methods and bring thousands of people together online and have them work collectively and effectively to re-imagine and re-design the core processes by which the organization is run—and which bound its capabilities.


Hacking the Management Model > Q+A w/@profhamel (cont.) #workhuman
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