Thursday 6 June 2019

More from Gary Hamel and Humanocracy @WOBI #WBFLON (part 2)

This is the second part (part 1 is here) of a review on Gary Hamel's session discussing Humanocracy at WOBI's first conference in London. I've been trying to be really appreciative, as I do think Hamel makes a lot of sense (the fact that I've felt the need to do two posts on one session is evidence of this), and also critical, where I do have other views.

But one of Hamel's points which I really, really agree with is about the importance of principles (for any problem, you need principles, processes and practices to provide performance). Hamel suggests that the principles of bureaucratic organisations get in the way of change and innovation, and in people bringing their passion and creativity to work. We therefore need new principles for post-bureaucratic, humanocratic organisations. I completely agree with this - principles are part of the secret sauce of organisational transformation and are generally much more useful in gaming traction that organisational value.

(However, Hamel talked a little about Ray Dalio from Bridgewater who is probably most famous, in OD circles at least, for his list of what is it, a hundred and something principles. Don’t do that - 10 is quite sufficient. But I did like Bridgewater’s use of ‘dots and polls’ where people give their colleagues a rating against 7 or 8 criteria during the normal course of work. The average person gets well over 2000 ratings during a year. This helps separate competence and entitlement, and supports the development of different hierarchies for different things.)

But whilst I support the idea of meritocracy, I don’t see the problem with using hierarchy to get it. Hamel suggested bureaucratic organisations, the bigger the title the bigger the decision but this doesn’t need to be the case.

Hamel talked about one organisation which sent out a competency framework to 70,000 employees, therefore telling them that 95% of the organisation doesn’t need to worry about new business models or unmet customer needs. But that’s actually much more about the challenge in fitting something meaningful into one slide. All employees need to do strategic thinking but the organisation doesn’t expect the same level of competence it does from executives.

Hamel also suggests that by the time an organisational issue has captured attention at the top it’s often already too late to take advantage of it. But there’s nothing in hierarchy which says all decisions need to be taken by the CEO.  Plus these days there are ways of getting that information shared around quickly. And hierarchy doesn’t stop everyone acting as leaders, or the top team acting as a team.

And there’s an article by P&G’s former CEO AG Lafley in HBR suggesting that there are some opportunities only CEOs can see, some calls only they can make. Which Hamel calls horseshit. So who are you going to ask about whether you should acquire another company or another big strategic issue  in the business then? For me, bigger titles will generally take broader decisions because they have a higher level (strategically, not just hierarchically) perspective, and this will often correlate with bigger decisions too. But that’s not the intent of logic of the allocation. Anyway, I’m going to ask Michael Porter about this today and will report his view back to you to.

I do, however, particularly like the inclusion of community in Hamel’s post bureaucratic principles. The UK is undergoing a loneliness epidemic (I spoke about this on a webinar last week). You would imagine that organisations are a place that people can find connection. But it turns out not. Only 2 out of 10 employees have a close friend at work.

Today’s problems cross functional boundaries and we need to build up social capital - employees who care about each other, trust each other, are emotionally invested in each other and are therefore more prepared to go the extra mile. Without this, businesses can’t solve these new problems.

I also liked the suggestion that moving to humanocracy needs to be human and social too, about building a coalition of the willing by starting with the people around you. People who have power are often reluctant to give it up. Don’t expect change to come from the CEO or HR (ahem!).

There was a lot more but I’ve summarised more than enough. My final and very small point would be that whilst I’m a great fan of Hamel’s work, particularly The Future of Management which I still think is brilliant, and I’m eagerly looking forward to reading Humanocracy as soon as I get a review copy, I do wish he wouldn’t talk about humanocracy in such a hierarchical way (non stop, no questions, no interaction). Both Susan Black and especially Simon Sinek actually demonstrated humanocracy in practice much, much better.

Read more on the need for principles, community, and social capital and network based change in The Social Organization. I do write about reducing hierarchy too but for me, modern organisation design isn’t as simple as moving from hierarchies to networks. Instead, we need to supplement (not replace) traditional functional design (which I don’t think has to be inhuman or bureaucratic) with horizontal teams, communities and networks, but tend to be less hierarchical. Delayering or moving to self management is often a result not the objective of good design.

And often, it’s no organisation design which is required. We just need more of that emotional, social and prosocial perspective Hamel, David and Sinek all talked about - Sinek probably the most clearly. I’ll be posting on that next...

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