Bureaucracy Buster

So you think your organisation is “serious” about innovation? Professor Gary Hamel, one of the world’s most influential business thinkers and keynote presenter at HR Summit Asia 2017, sets an extremely high bar. He says truly serious innovation requires a complete overhaul of the traditional management model.

Professor Gary Hamel doesn’t look or act like the famed business disruptors that have inspired his career. There is none of Richard Branson’s upstart brashness, Steve Jobs’ geek chic, or Bill Gates’ competitive aggression. Rather, Professor Hamel looks more at home in the traditional academic setting, seemingly in line with his PhD qualifications and heavy focus on research.

But the subject of that research is anything but traditional. Professor Hamel is at the forefront of thought leadership when it comes to the innovation and creativity that organisations in the digital age are craving.

“Virtually every CEO on the planet will tell you their organisations are not changing as fast as they need to at the moment,” he tells HRM Asia. “It’s no longer about whether you have a competitive advantage at any one point in time – but how you can sustain an advantage over time.”

The problem, Professor Hamel says, is that many organisations are fooling themselves about the extent of change that is required. Instead of looking at an entire culture change and reorganisation toward innovation, many businesses simply add an innovation branch to the existing organisation chart – which, Professor Hamel says – is part of the original problem.

“When CEOs tell me they are ‘serious’ about innovation, I talk to their frontline (customer-facing) employees to find out the real story,” he says.

“I ask them three things: have you been trained as a business innovator or has the company otherwise invested in your creative ability? If you have an idea, is it easy to get funding for development? And is it clear to you that your boss feels accountable for innovation?”

Professor Hamel says these policies should be standard practice for any business looking to excel in a world of constant disruption and change, but few are willing yet to let go of their old ways.

“I often have to go back to the CEOs and ask if they really know what the word ‘serious’ means?”

Intellectual journey

Professor Hamel says he moved into the field of competitive strategy in part by accident.  After completing his PhD in International Business, he went on to accept a teaching position at London Business School – but some last minute staffing changes led him to head up the specialist strategy course instead of his then much broader field of study.

This was in the 1970s, just as a number of companies were breaking away from traditional business strategies with great success. Professor Hamel recognised businesses like Virgin, The Body Shop, and Microsoft as what would later be termed “disruptors” and was keen to research the origins and designs of their groundbreaking strategies.

“I wanted to understand why some people see opportunities where others do not,” he says. “At the same time, the other question was: how do you change a strategy once it has started to mature or reached its sell by date?”

That marked the beginning of a long intellectual journey for the three-time Thinkers 50 List member (2011, 2013, and 2015). Through it, he has researched and interviewed hundreds of business leaders and analysts, with a common theme quickly emerging.

“A lot of the companies we celebrate for being innovative – were innovative for a while,” he says. “But the company then gets to the end of the founder’s headlights and stalls.

“There are just not that many that are ‘serial innovators’.”

Who sets the benchmark?

Of the handful of entities that earn Professor Hamel’s praise, Amazon stands tallest.

From its beginnings as an online book store only to the vast cyber-retail hub that today offers everything from books and music to airline tickets and accommodation, change has been a constant.

“There is no company innovating as consistently as Amazon,” Professor Hamel says.

Google also earns his respect for its willingness to change, adapt, and test out new ideas, such as high-altitude balloons that can deliver wi-fi connections to remote areas. “They are the master of moonshots,” he says. “The vast majority of Google’s profit still comes from ads linked to search but it is willing to be bold and still has a lot of creative energy.”

In Asia, Alibaba and its web of offshoots dominates the innovation space, setting a high benchmark for organisations across the region and world. And China’s Haier – the largest appliance maker in the world – has a strategy to “turn every employee into a CEO”; something Professor Hamel describes as “entrepreneurship at scale”.

Out with the old

So what is holding the rest of the business world back? Professor Hamel draws what might be an uncomfortable conclusion.

“Organisations, particularly large ones, have an operating system called ‘bureaucracy’,” he says. “It’s pretty much the same for any organisation that has more than a couple of hundred people.”

Bureaucracy was effective at building loyalty and obedience during the 100 years following the industrial revolution, Professor Hamel says, but it also left organisations incapacitated in certain ways.

“Large organisations today actually have a set of core ‘incompetencies’,” he says. “They lack proactive change skills, and business agility.”

Today, it is creativity and innovation that set businesses apart, and these traits struggle to survive in that traditional hierarchy that organisations have developed for themselves.

“Most CEOs will tell you that they love being in a free market, but inside, their companies are being run like the Soviet Union,” Professor Hamel adds.

“Maybe, where we really need innovation is in management itself. What are the alternatives to these top-down models?

“Can you somehow have organisations that are simultaneously efficient and empowering; that can exploit the advantages of scale, but still be flexible?”

It is a difficult tradeoff but this “post-bureaucratic model” could hold the answer for organisations looking to transition to more creative and adaptable workforces.

And in with the new

It’s not only the fast-changing technology that is forcing this change on businesses today – though the digital revolution has certainly contributed.  Professor Hamel says dismantling the old bureaucratic management regimes is more critical than ever before because of the incoming generation of employees.

There has been plenty said about Generation Y in the workforce, but the biggest difference between these millennial workers and those that preceded them is a demand for autonomy even early in their careers.

“These workers want their ideas taken seriously, and organisations need to have systems in place to make sure they are heard,” Professor Hamel says. If competitive pressures weren’t already enough impetus, he says the struggle to attract and retain talent will make life very difficult for any organisation not willing or able to adapt to the new world order.

And what sort of transformation is required? Professor Hamel says tinkering around the edges will not help. Rather, he advocates traditional organisations undertake a full-scale reorganisation. Importantly, while the top leadership needs to be involved, every level of the workforce should play a role.

“You can’t reengineer the management process top down – too many people have a stake in the old model,” Professor Hamel says. “You have to open this up to the whole organisation.”

Live in Singapore

Professor Gary Hamel will be delivering a keynote plenary address at the 15th anniversary edition of HR Summit, on May 3 and 4 next year.

His presentation, Beyond the Buzzword: Innovation from Everyone, Every Day,  will make audiences rethink the legacy of traditional management practices and also shine a light on a new, systematic approach to unleashing the innovation and creativity in your organisation’s workforce.

Professor Hamel will also be facilitating a workshop for delegates in the C-Suite Symposium stream of HR Summit Asia 2017.

In Busting Bureaucracy and Building a Change Platform, he will leverage on his research and pioneering work on strategic resilience to lay out a blueprint for a unique new structure of organisational management.

Up close with: Gary Hamel

Based in: Salt Lake City, US

Academic background: PhD in International Business, University of Michigan

Mantra: “Revolutionary goals; evolutionary steps”

What does that mean: You have to be able to imagine an organisation that is fundamentally different from where you are today. And you have to know how to build that starting from where you are.

Is the glass half full, or half empty? It’s half full and getting fuller. There are so many organisations with so many creative people in the world. Anyone who says you can’t build something new is not looking in the right places.

Your presentations are complete and you have 24 hours in Singapore. What’s on the agenda?

Singaporeans are the world’s greatest shoppers. I’ll try to emulate that and find a gift for my wife.

 

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