How management fashions can change the world
Ten years ago, I interviewed fast-talking management evangelist Gary Hamel. “I am willing to stake my reputation that we will see more dramatic change in the way management is organised in the next 10 years than we’ve seen in the last 60 or 70,” he told me.
That was bold. Not for nothing did Harvard Business Review in 2012 crown the preceding 100 years “The Management Century”, a tribute to the transformational power of now standard management techniques.
A decade has passed. What has changed? On the surface, I would have to say, not a lot.
Take a middle manager from 2011, or 1991, or even, frankly, 1961. He — and it would probably be a man — could still walk into a building belonging to a large company, find a desk, an org chart, a reward system, a hierarchy, and a bunch of sociopaths with high-sounding titles giving orders.
He would look a trifle overdressed, might struggle with the latest software, and would definitely have to adjust some of his 1990s behaviour and language, but, if really lost, he could still navigate to the largest room, with the best view, and find the boss.
One reason is that a few elements of this 20th-century system still work. Hierarchy helps provide structure to complex, fast-growing organisations. Offices provide a hub and shelter for productive, face-to-face interactions.
But stifling systemic inertia is mainly to blame for the slow pace of change. Even after the potentially galvanising shock of the pandemic, organisations are defaulting to the people, places, and ways of managing that prevailed beforehand. Covid-shocked workers may even prefer the familiarity of those old options for now. Few fragile convalescents want to project-manage the building of a new house, after all.
Happily, though, the assumption that nothing has changed in the past decade is mistaken. Those changes have, however, taken root behind the old bureaucracy of management.
In a recent book Power, for All, Tiziana Casciaro of Rotman School of Management and Julie Battilana of Harvard Business School, point out that org charts have never been an accurate guide to where true influence lies. Instead, power networks form independently of formal rank. The best organisations have become better at identifying and encouraging such networks.
Examples include Buurtzorg, the self-organising, nurse-led Dutch healthcare network, or Haier, the Chinese white goods company that decentralised into myriad small enterprises competing for resources to innovate. Cryptocurrency advocates claim decentralised autonomous organisations (DAOs), whose consensus rules, governance and mission are enshrined in code, are true “managerless” enterprises.
I remain sceptical. Rigid hierarchies can become “bloated, timid, complex, insular, arthritic, and highly politicised”, to quote Hamel, talking at a workshop held ahead of this week’s Global Peter Drucker Forum on management. But a dearth of structure can also be destructive, as the disintegration of cultures that outgrow their start-up origins, from Uber to WeWork, has shown.
A second trend is running alongside that of decentralisation: the restoration of the human side of management. “Big data and the rise of new technology have dominated . . . now we are moving to a more human-centred focus,” says Stuart Crainer, co-founder of Thinkers50, a resource for new management ideas. He cites how Harvard’s Amy Edmondson has explored the importance of “psychological safety” in allowing workers to speak out, and teams to flourish, take risks and innovate.
Take these strands and combine them and large-scale transformation is possible. At Microsoft, chief executive Satya Nadella’s empathetic style, plus decentralisation, helped it to surpass Apple recently as the world’s most valuable listed company.
Catching up with Hamel, I found him unworried about his reputation. Over the past decade he says “there has been more radical innovation than I expected, and less diffusion or large-scale change than I might have hoped”. Management advances through a mix of “revolutionary goals and evolutionary steps”.
The process is similar to that described by magazine editor Meryl Streep in the film The Devil Wears Prada. She lashes style-innocent Anne Hathaway with a monologue about the origin of her “lumpy blue sweater”, which filtered down to her from designers’ choice of “cerulean” gowns for their collections.
Few big companies may look like Buurtzorg, or Haier, let alone a DAO. But when the middle manager of 2031 logs on, she will find some of their most radical ideas have percolated into her working life. Aim for cerulean; hope to get a wearable blue.