What Matters Now? Gary Hamel on how to win in a world of relentless change

Notes from Gary Hamel @profhamelAmcham Conference, Melbourne 8 Dec 2014

CharterMason perspective by John Phillips au.linkedin.com/in/johnphillips11kps

What Matters Now?

https://twitter.com/profhamel

http://au.linkedin.com/in/johnphillips11kps

http://au.linkedin.com/in/johnphillips11kps

This slide pack developed from raw notes taken

during conference + other readings

Who is Gary Hamel?

core competenciesinternational cross-subsidization

strategic intentcollaborative competitionexpeditionary marketing

Hamel (with Prahalad) originated concepts such

as ...

He is visiting Professor of Strategic Management at

the London Business School.

He was Visiting Professor of International Business

at the University of Michigan and at Harvard

Business School.

What has Gary Hamel written?

Gary’s Books (as of Dec 2014)● The Core Competence of the Corporation - 1990

● Strategy as Revolution - 1996

● Competing for the future - 1996

● Alliance Advantage: The Art of Creating Value Through Partnering - 1998

● Strategic Flexibility: Managing in a Turbulent Environment - 1999

● Leading the Revolution - 2000

● The Quest for Resilience - 2003

● The Why, What, and How of Management Innovation - 2006

● The Future of Management - 2007

● "Funding Growth in an Age of Austerity" - 2004

● "What Matters Now: How to Win in a World of Relentless Change, Ferocious Competition, and Unstoppable Innovation" - 2011

Gary’s Books● The Core Competence of the Corporation - 1990











Also many articles for publications like Harvard Business Review and McKinsey Quarterly

Gary’s Books● The Core Competence of the Corporation - 1990











One of these books (and an animated movie) was an inspiration for the creation and design of the company that led to CharterMasonWe’ll talk about this later...

Gary’s proposition

Management is now seriously out of date…

…Management the way we practice it right now is simply not up to the

challenges that lie ahead

… unless we can reinvent management, every bit as

dramatically as we have reinvented our products or our operating

model, companies are not going to succeed in the years ahead.

Gary’s objectives for life

"Rousing the human heart at work"

Gary’s objectives for the seminar

of what's possible

Raising aspirations

of the influence you can have

Raising aspirations

Gary’s Agenda for the Day

Gary’s Agenda for the day

Facing the FutureWhat Really Matters Now

Escaping the pastWhy Bureaucracy Must Die

Hacking ManagementThe New DNA of Success

Making a DifferenceHow to Become a Champion of Change

What Really Matters Now

Facing the future

The depressing state of engagement

Gallup survey of employee engagement: [ONLY!] 13% of employees across 142 countries worldwide are engaged in their jobs — that is, they are emotionally invested in and focused on creating value for their organizations every day.

http://www.gallup.com/poll/165269/worldwide-employees-engaged-work.aspx

The depressing state of engagement

In Australia and New Zealand we’re doing a little better, 24% of adults who work for an employer are engaged, while 60% are not engaged and 16% are actively disengaged.

So a quarter of your team want to play for you, most don’t really care and a sixth don’t even want to be on the pitch.

Who wants to be runner-up “least worst”?

[My] favourite Hamel’isms

“Change Management is an oxymoron”

“What matters now is not resources but resourcefulness”

“In 1987 60% of computing power was in hand held calculators”

“More of the same isn't

going to get us there”Management 1.0 was designed to excise irregularity

What matters now: personal “klout”Who has the highest “klout” score?Whose internal blogs are most read?Whose expertise is most widely recognised?Who responds the quickest to internal requests?Whose responses are most highly rated?Who are the “nodes” in internal social networks?Who has the most links across internal staff?Who do customers request most often?

Why Bureaucracy Must Die

Escaping the past

The German sociologist Max Weber argued that bureaucracy constitutes the most efficient and rational way in which human activity can be organized, and that systematic processes and organized hierarchies were necessary to maintain order, maximize efficiency and eliminate favoritism. But even Weber saw unfettered bureaucracy as a threat to individual freedom, in which an increase in the bureaucratization of human life can trap individuals in an "iron cage" of rule-based, rational control - Wikipedia

Innovation is irregularity

What made us successful in the past will kill us in the future - Jeff Wareing (CharterMason)

Bureaucracy was designed to excise irregularity

http://en.wikipedia.org/wiki/Max_Weber

http://en.wikipedia.org/wiki/Individual_freedom

What’s wrong with organisations?

What’s wrong with organisations

Inertia - too slow

Incremental - too short-sighted

Sterile - no (really different) ideas

“We are captives of a paradigm that places the pursuit of efficiency ahead of every other goal”

Hierarchy of needs for organisations

● Passion● Imagination● Initiative● Intellect● Diligence● Obedience

The bottom three are now commodities but remain the focus of most organisations.

Words corporate strategies never seeJoyTruthHonorFidelityEqualityWisdomBeautyJusticeLove

What matters then and nowThenPlanning BudgetingAllocating MeasuringEvaluating OrganisingCoordinating SupervisingStructuringMotivatingRewardingTrainingHiring

NowWhat do you think?

What matters then and nowThenPlanning BudgetingAllocating MeasuringEvaluating OrganisingCoordinating SupervisingStructuringMotivatingRewardingTrainingHiring

Now according to GaryBlogs HacksPodcasts FolksonomiesSocial Networks Opinion MarketsCrowd Sourcing Social curationOnline forums Peer ratingsMash-ups WikisTags

The New DNA of Success

Hacking Management


Management 1.0● Formalisation● Standarisation● Specialisation● Hierarchy● Unity of command● Conformance● Extrinsic rewards


Management 1.0● Formalisation● Standarisation● Specialisation● Hierarchy● Unity of command● Conformance● Extrinsic rewards

Management 2.0What do you think?

Management 1.0 vs 2.0

Management 1.0FormalisationStandardisationSpecialisationHierarchyUnity of commandConformanceExtrinsic rewards

Management 2.0ExperimentationDisaggregationMeritocracyCommunitiesMarketsOpennessFreedom

Gary’s stories about the company’s that he admires most right now

Companies that Gary admires

“Create useful products people lust after”

Atlassian

Atlassian

12 Year Old Australian Software Company2010 USD 60m Investment by Accel Partners valued the company at ~ USD 3.5bn2014 revenues ~ USD150m800+ employeesMakes software tools to plan, collaborate, code and serviceOffices in Australia, US, Netherlands

Atlassian’s Values

Open Company, No Bullshit

Atlassian embraces transparency wherever practical, and sometimes where impractical. All information, both internal and external, is public by default. We are not afraid of being honest with ourselves, our staff, and our customers.

Build with Heart and Balance

Every day we try to build useful products that people lust after. Building with heart means really caring about what we're making and doing–it's a mission, not just a job. When we build with balance we take into account how initiatives and decisions will affect our colleagues, customers, and stakeholders.

Don't #@!% the Customer

When we make decisions we ask ourselves, "How will this affect our customers?" If the answer is that it would screw them over, or make life more difficult, then we need to find a better way. We want the customer to respect us in the morning.

Play as a team

We want all Atlassians to feel like they work with Atlassian, not for Atlassian. We think it's important to have fun with your workmates while working and contributing to the Atlassian team.

Be the change you seek

We think Gandhi had it right when he said, "We need to be the change we wish to see in the world". At Atlassian we encourage everyone to create positive change. We're constantly looking for ways to improve our company, our products, and our environment.

Atlassian Structure

Based on an extended Agile model where all offices in all locations are organised as small teams.Performance Reviews turned into weekly coaching sessions with a simple 2 dimensional scale (no grid) with assessment of performance every 6 months.

“The coolest company in Australia”? BRW

Morning Star

Morning Star is serious company

Largest US Grower and Processor of tomatoes (40% of US market in paste and diced tomatoes).Processes 1100 tons+ of tomatoes per hour.Several processing plants and farms400 full-time plus 2400 harvest time employees

Operating in an industry renowned for poor industrial relations and worker conditions

Yet this is a company where...

● No one has a boss● Employees negotiate responsibilities with their

peers● Everyone can spend the company’s money

without limits● Each individual is responsible for acquiring the

tools needed to do his or her work● There are no titles and no promotions● Compensation decisions are peer-based

Morning Star – a libertarian mission

All professionals will be self-managing professionals, initiating communications and coordination of their activities with colleagues, customers, suppliers and fellow industry participants absent directives from others

The Morning Star Model• Make the mission the boss - at a personal level

• Let employees forge agreementsColleague Letter Of Understanding (CLOU). Every Year. Also between Units (processing plants, logistics, farms etc)

• Empower Everyone - Truly. Not trickled down but built in

• Don’t force people into boxes

• Encourage competition for impact, not promotions

• Freedom to succeed [this is libertarianism, not communism]

• Conflict resolution and due process

• Peer review and the challenge process

W.L. Gore & Associates

Gore

Gore is significant global force

Makes innovative, technology-driven solutions, from medical devices that treat aneurysms to high-performance GORE‑TEX® fabrics. Privately held, annual USD 3 billion+ annual sales.10,000 employees, called associates, with manufacturing facilities in the United States, Germany, the United Kingdom, Japan and China, and sales offices around the world.

Four principles for Associates1. Fairness to each other and everyone with whom we

come in contact2. Freedom to encourage, help, and allow other associates

to grow in knowledge, skill, and scope of responsibility3. The ability to make one's own commitments and keep

them4. Consultation with other associates before undertaking

actions that could impact the reputation of the company

How does Gore make it work

Associates are hired for general work areas. With the guidance of their sponsors (not bosses) and a growing understanding of opportunities and team objectives, Associates commit to projects that match their skills.

All of this takes place in an environment that combines freedom with cooperation and autonomy with synergy.

How does leadership work?

Everyone can earn the credibility to define and drive projects. Leaders may be appointed, but are defined by 'followership.' More often, leaders emerge naturally by demonstrating special knowledge, skill, or experience that advances a business objective.

Choosing the new Gore CEO

When Chuck Carroll retired in 2005, the board polled a wide cross-section of Gore employees asking who they’d be willing to follow, they could nominate anyone in the company. One of those employees was Terri Kelly, who had joined Gore as a graduate in Engineering in ‘83. To Terri’s surprise, the new CEO turned out to be her.

Followership in action.

Gary’s stories on how to become a Champion of Change

Making a Difference

Example: UK Health Service5th largest employer in the world (after the US DoD, Red Army, Walmart, and McDonalds)A million patients use its services every day.Not known for its agility

In mid 2012 a small group of trainee doctors started a conversation on twitter. By March 2013 189,000 people had pledged to projects to make a positive difference to patients.

The biggest ever collective action to improve healthcare (so far…) . Read more here

http://www.managementexchange.com/story/biggest-ever-day-collective-action-improve-healthcare-started-tweet-0

Some tools of the revolutionaries trade

How to run an innovation marketThere are three markets: Spazdaq, Bow Jones and Savings Bonds.Any employee can “IPO” a new idea by preparing a “budge-it”.Every employee gets $10,000 in Mutual Fun money to invest in an internal stock marketA ‘market maker’ periodically values each security based on “compound interest”Ideas that make it into the top twenty by valuation get a formal allocation of funds.The IPO team gets a 25% dividend from the profits or savings of a successful idea

A call to arms

Past CEOs have often been narcissists, flattered and thrilled by their EVPs. Head office staffers are the leprosy of our organisation. A top down model ignores the world around it and I will do everything I can to change it.Gary Hamel(adapted from Pope Francis…)

! Warning ! This is a bureaucracy free zone

Pettifogging desk jockeys, butt kissing suck-ups, meddling head office stoolies, half-witted bean counters, self important staff weanies, sadistic bosses, and pencil pushing blowhards will be named, shamed and run off the property

Which book inspired the creation of the company

that led to CharterMason?

Which book inspired the creation of CharterMason?● The Core Competence of the Corporation - 1990











This is the book that was a key inspiration for CharterMason’s original creation and design

Which film character inspired the initial company name?

In the 1998 film by Dreamworks, Ant ‘Z’ voiced by Woody Allen was the freedom seeking individual who dared to challenge convention

The lead character ‘Z’ from Dreamworks’ “Antz”

What’s Gary’s latest endeavour?

Management Innovation Exchange “MIX”

http://www.managementexchange.com/Website designed to allow management “hackers” to share ideas, content, stories, and recognise award winning hacks.Lots of good content, including the stories told today, in full, from their original authors.Worth checking out.

http://www.managementexchange.com/

http://www.managementexchange.com/

What do you think?

What do you think?

Do you agree with Gary about what matters now?

Is CharterMason ready for what matters now?

Are our clients ready for what matters now?

Are you ready for what matters now?

Could we be a poster company for Gary?

What would Gary do?

What will you do?

End

Extra material

The Hackathon ProcessPhase 1 Phase 2 Phase 3 Phase 4

Why adaptability matters now

The enemies of adaptability

The design principles of adaptable organisations

Investing in mini hacks

Developing and initiating management hacks

What did we discover

Challenges of Management 2.0Tougher AdjustmentSelf-management doesn’t suit everyone. Employees who’ve worked all their lives in hierarchical organizations may not be able to cope.

Accountability ChallengesIf employees fail to deliver a strong message to colleagues who don’t meet expectations, self-management can become a conspiracy of mediocrity.

Longer InductionIt takes time to fit in. New employees may need a year or more to become fully functional in the system.

Growth IssuesWithout a corporate ladder to climb, employees find it difficult to evaluate their progress relative to peers. That can become a handicap when someone wants to switch companies.

Moonshots

Mend the SoulUnleash Capability Foster Renewal Expand Minds Distribute Power Seek Balance

Focus the work of management on a higher purpose

Increase trust, reduce fear

Make direction setting bottom-up and outside-in Enlarge the frame of

management education

Build “natural” flexible hierachies Develop holistic

performance measuresReinvent the means

of control

Experiment more often and more cheaply

Redfine the work of leadership

Embed the ethos of community and citizenship

Amplify imagination Create internal markets for ideas talent & resources

Retool management for an open and borderless world

Create a democracy of information Transcend

traditional management trade-offsEnable communities

of passion Expand the scope of employee autonomy

Humanize the language of business

Capture the advantages of diversity

De-politicise decision making Rethink the

philosophical foundations of management

Stretch management timeframes and perspectivesTake the work out of

workDisaggregate the organisation

Encourage the dissenters

What needs to be done to create organisations that are fit for the future?