Wednesday, January 20, 2010

25 Stretch Goals for Management

I was surfing the internet when I found an interesting article about management, in the Harvard Business Review site, written by Gary Hamel. I am a fan of Hamel's work, since I read his books Competing for the Future and Leading the Revolution. In the article, entitled 25 Stretch Goals for Management (a preview Gary Hamel's February 2009 article in the Harvard Business Review, Moon Shots for Management), Gary tells of a meeting of business leaders, held in 2008, with the goal: to lay out an agenda for reinventing management in the 21st century.

According Hamel, the two-day event, organized by the Management Lab with support from McKinsey & Company, brought together 35 attendees (management experts, social commentators and CEOs), such as: CK Prahalad, Henry Mintzberg,Peter Senge, Kevin Kelly, James Surowiecki, Shoshana Zuboff, Terri Kelly from WL Gore, Vineet Nayar from HCL Technologies, and John Mackey from Whole Foods.

Before arriving, each of the attendees participated in an hour-long interview, and once together, they shared perspectives in large and small groups.

What drew the participants together was a set of broadly shared beliefs about the importance of management, and a sense of urgency about reinventing management for a new age. These animating beliefs briefly are:

First, that "management" - the tools and methods we use to mobilize resources to productive ends - is one of humankind's most important social technologies.

Second, that the "management model" that predominates in most large organizations is now seriously out-of-date. This model has its roots in the late 19th century, and was invented to solve one overriding problem: how to get semi-skilled human beings to do the same things over and over again, with perfect replicability and ever-increasing efficiency. This was, and is, an important problem, but it is not the most important challenge for today's organizations.

Third, that we must, therefore, reinvent management in ways that will make large organizations fundamentally more adaptable, more innovative and more inspiring places to work -- that will, in short, make them as human as the individuals who work within them.

In the end of the event, they described the challenges, they called "moonshots for management", summarized below (and described in full in the February 2009 issue of the Harvard Business Review):

1. Ensure that management's work serves a higher purpose. Management, both in theory and practice, must orient itself to the achievement of noble, socially significant goals.

2. Fully embed the ideas of community and citizenship in management systems. There's a need for processes and practices that reflect the interdependence of all stakeholder groups.

3. Reconstruct management's philosophical foundations. To build organizations that are more than merely efficient, we will need to draw lessons from such fields as biology and theology, and from such concepts as democracies and markets.

4. Eliminate the pathologies of formal hierarchy. There are advantages to natural hierarchies, where power flows up from the bottom and leaders emerge instead of being appointed.

5. Reduce fear and increase trust. Mistrust and fear are toxic to innovation and engagement and must be wrung out of tomorrow's management systems.

6. Reinvent the means of control. To transcend the discipline-versus-freedom trade-off, control systems will have to encourage control from within rather than constraints from without.

7. Redefine the work of leadership. The notion of the leader as a heroic decision maker is untenable. Leaders must be recast as social-systems architects who enable innovation and collaboration.

8. Expand and exploit diversity. We must create a management system that values diversity, disagreement, and divergence as much as conformance, consensus, and cohesion.

9. Reinvent strategy-making as an emergent process. In a turbulent world, strategy making must reflect the biological principles of variety, selection, and retention.

10. De-structure and disaggregate the organization. To become more adaptable and innovative, large entities must be disaggregated into smaller, more malleable units.

11. Dramatically reduce the pull of the past. Existing management systems often mindlessly reinforce the status quo. In the future, they must facilitate innovation and change.

12. Share the work of setting direction. To engender commitment, the responsibility for goal setting must be distributed through a process where share of voice is a function of insight, not power.

13. Develop holistic performance measures. Existing performance metrics must be recast, since they give inadequate attention to the critical human capabilities that drive success in the creative economy.

14. Stretch executive time frames and perspectives. Discover alternatives to compensation and reward systems that encourage managers to sacrifice long-term goals for short-term gains.

15. Create a democracy of information. Companies need holographic information systems that equip every employee to act in the interests of the entire enterprise.

16. Empower the renegades and disarm the reactionaries. Management systems must give more power to employees whose emotional equity is invested in the future rather than in the past.

17. Expand the scope of employee autonomy. Management systems must be redesigned to facilitate grassroots initiatives and local experimentation.

18. Create internal markets for ideas, talent, and resources. Markets are better than hierarchies at allocating resources, and companies' resource allocation processes need to reflect this fact.

19. Depoliticize decision-making. Decision processes must be free of positional biases and should exploit the collective wisdom of the entire organization.

20. Better optimize trade-offs. Management systems tend to force either-or choices. What's needed are hybrid systems that subtly optimize key trade-offs.

21. Further unleash human imagination. Much is known about what engenders human creativity. This knowledge must be better applied in the design of management systems.

22. Enable communities of passion. To maximize employee engagement, management systems must facilitate the formation of self-defining communities of passion.

23. Retool management for an open world. Value-creating networks often transcend the company's boundaries and render traditional power-based management tools ineffective. New management tools are needed for building complex ecosystems.

24. Humanize the language and practice of business. Tomorrow's management systems must give as much credence to such timeless human ideals as beauty, justice and community as they do to the traditional goals of efficiency, advantage, and profit.

25. Retrain managerial minds. Managers' traditional deductive and analytical skills must be complemented by conceptual and systems-thinking skills.

During the event, they also recorded a video, where the Google CEO Eric Schmidt talks to Gary Hamel:

For those interested in management, the Gary Hamel's latest book is: The Future of Management

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