Gary Hamel is on the faculty of the London Business School and is a cofounder of the Management Lab, an organization that builds technology and tools to support breakthrough management innovation. He has been hailed by the Wall Street Journal as the world’s most influential business thinker.
Below, Gary shares 5 key insights from his new book, Humanocracy: Creating Organizations as Amazing as the People Inside Them, written with co-author Michele Zanini. Download the Next Big Idea App to enjoy more audio “Book Bites,” plus Ideas of the Day, ad-free podcast episodes, and more.
1. It’s time to kill bureaucracy.
Virtually every organization on the planet is bureaucratic at its core. Bureaucracy, with its authoritarian power structures and rule-choked processes, was invented more than a century ago to turn human beings into semi-programmable robots. It created a stark separation between managers and employees that persists to this day—only one in five employees believe their ideas matter at work, and only one in ten say they have the freedom to experiment with new solutions and products. Bureaucratic structures squander vast quantities of human capability, which limits personal growth, depresses wages, and stunts productivity. For these reasons, bureaucracy must die.
2. There are alternatives to the bureaucratic status quo.
Take Haier, the world’s leading appliance maker. Their CEO, Zhang Ruimin, once told me, “Our goal is to help everyone become their own CEO.” Haier has broken its 80,000-person organization into more than 4,000 independent micro-enterprises, or MEs. Every ME is guaranteed the freedom to set its own strategy, hire team members, and distribute financial rewards. Additionally, Haier makes it easy for employees to start new businesses, introducing would-be entrepreneurs to their network of venture capital partners. Haier functions more like a startup than a bureaucracy, so despite what you may have been told, bureaucracy is a choice, not a necessity.
“Bureaucracy is a choice, not a necessity.”
3. To bust bureaucracy, start with new principles.
Seven human-centric principles lie at the heart of humanocracy and differentiate it from bureaucracy:
- Ownership. Not everyone can work in a startup, but as we saw with Haier, team members can be granted the autonomy and financial upside to feel like an owner.
- Meritocracy. Influence and compensation should correlate not with rank, but with competence and value added.
- Markets. Big decisions should not be made only by a few people at the top. We need organizations that harness the distributed intelligence and flexibility of markets.
- Community. Our colleagues need to feel like family, not just coworkers. When we feel safe and accepted, we do our best work.
- Openness. All of us want the freedom to learn, grow, and invent, and that means building an organization that is open to new ideas.
- Experimentation. This is the way an organization stakes out the future, reinvents itself, and outperforms the average.
- Paradox. Companies like Haier have learned how to reconcile conflicting goals, like scale and agility, innovation and efficiency, and freedom and discipline.
4. Anybody can hack management.
So how do you uproot something as deeply embedded as bureaucracy? You have to run lots of experiments, and think like a hacker. To build your management hack, start by asking yourself: What management process or system most undermines initiative and innovation? Then ask, what bureaucratic principle might help us change this? How would the process be different if we took this principle seriously? Once you have a tentative hack, ask, how could I test this cheaply and quickly? Almost any manager can do this. So if you’re tired of bureaucratic BS, stop whining and start hacking.
5. Every job can be a good job.
For many workers today, dignity, opportunity, and a fair shake seem out of reach. A 2019 report estimated that 53 million Americans—44% of all workers—are in low-skilled, low-wage jobs. But a dead-end job can become a get-ahead job; it simply requires that employers teach everyone to think like business people, give employees a financial upside, and treat every individual as indispensable to collective success. We also need to increase the creative content of every role, and redesign work environments to ensure that productivity gains are equitably distributed. Doing so will help build a society and an economy that works for everyone.
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