Free the human spirit … Gary Hamel’s new book “Humanocracy” explores how to create organisations as amazing as the people inside them
July 1, 2020
Gary Hamel is one of the world’s great business thinkers.
Today the world is facing many challenges from Covid-19, reducing CO2 emissions, addressing income inequality, cleaning up the oceans, to overcoming political extremism.
“In a world of unrelenting change and unprecedented challenges, we need organisations that are resilient and daring” says Hamel. He argues that organisations should be rebuilt in order to get through all of this. Authoritarian power structures and bureaucratic processes are a drag on organisational resilience and a significant liability in a world of accelerating change.
Resilient, creative, and passionate – those are the qualities organizations now need, Hamel said, yet many organizations can be described with the words inertial, incremental, and inhuman. He implied that in many ways our organizations are less human than the people inside them:
- Humans are adaptable – but organizations are (mostly) not.
- Humans are creative – but organizations are (mostly) not.
- Humans are passionate – but organizations are (mostly) not.
Hamel emphasises that even though openness, flexibility, and creativity are essential, our current bureaucratic organizations are not allowing us to pursue those qualities. A change is needed.
He proposes 5 steps companies can take, in order to create resilient, innovative, and entrepreneurial organisations:
1. Count the cost
According to Hamel, we need to be honest about what the old model is costing us. Most of the bureaucracy is invisible, so leaders should see what is the Bureaucratic Mass index of their organization. You can find out how your organization is doing with this assessment tool by Hamel and his colleague.
2. Learn from the vanguard
Hamel suggested we learn from those organizations that are leading the way in new developments and ideas. He mentions Nucor, Buurtzorg, and Handelsbanken as examples of entrepreneurial and flexible organizations. When looking at these successful and profitable organizations, Hamels says, it is clear that we do not need the old bureaucratic model anymore. Even large organizations can be led with only a few layers of management.
3. Embrace new principles
Hamel stated that we cannot create new organizations with old principles, which is why in addition to new practices, we also need new principles, and even new problems to work on. Before we needed to think about how to maximize compliance, and thereby, operational efficiency. Even though those things are still important, Hamel implied that now it is more crucial to think about how to maximize human contribution and thereby impact. Instead of focusing on the traditional principles like stratification, standardization, specialization, formalization, and routinization, Hamel recommended us to rather focus on principles like experimentation, meritocracy, openness, community, and ownership.
4. Hack the management model
“Bureaucracy is not going to die in one Armageddon-like battle”, says Hamel. He suggested we need to build many hacks across the organization. A top-down reorganisation is not the best way to get rid of bureaucracy. Actually teaching and letting people hack the old model and innovate on new principles and practices is more likely to work better. Hamel further emphasized that change management is not the way to go, because the change should start from the frontline one experiment at a time. “All effective change is going to roll up, not down”, Hamel concluded.
5. Start from where you are
Hamel advised that we should go back to our team with these ideas, and take a few hours to just consider: what should we change in order to get serious about openness, creativity, experimentation, and meritocracy? He proposed that we would not try to blow up our entire organization immediately, but rather start by thinking about what small steps can we take to reduce bureaucracy and encourage innovation across our organisations.
Do these companies exist?
Yes of course they do. Just consider some of these more enlightened business, covered in my recent blogs and in my new book Business Recoded:
- Organisation made of thousands of micro enterprises, eg Haier
- Teams self organised around key problems, eg Buurtzorg, Valve
- Front line employees drive innovation, eg Intuit
- Strategy is crowd sourced, eg Red Hay
- There are no internal monopolies eg Zappos
- Teams choose their own leaders, eg Haufe, WL Gore
- Every employee thinks like an owner, eg Nucor
- Employees contract with each other, eg Morning Star
- Pricing decisions are entirely decentralised, eg Handelsbanken
In Humanocracy, Hamel and his co-author Michele Zanini make a passionate, data-driven argument for excising bureaucracy and replacing it with something better.
Drawing on more than a decade of research, and packed with practical examples, Humanocracy lays out a detailed blueprint for creating organizations that are as inspired and ingenious as the human beings inside them.
Critical building blocks include:
- Motivation: Rallying colleagues to the challenge of busting bureaucracy
- Models: Leveraging the experience of organizations that have profitably challenged the bureaucratic status quo
- Mindsets: Escaping the industrial age thinking that frustrates progress
- Mobilisation: Activating a pro-change coalition to hack outmoded management systems and processes
- Migration: Embedding the principles of humanocracy—ownership, experimentation, meritocracy, markets, openness, community and paradox—in your organsation’s DNA.
He says “If you’ve finally run out of patience with bureaucratic bullshit. If you want to build an organization that can out-run change. If you’re committed to giving every team member the chance to learn, grow and contribute. Then this book’s for you.”
Read an extract from the book Humanocracy