Another big idea

From
natural laws to neuro-science…Carol Kennedy explores some of the latest
management thinking

TEXT:
What has people management got in common with the study of natural living
systems? How does the Internet affect the valuation of "human
capital?" In a world of freelance brains that contract themselves to the
most rewarding outlet, how will big corporations manage their global pool of
talent? What have the Rule of St. Benedict, the workings of the brain and the
concept of non-authority leadership got to say to those responsible for
managing the company’s human assets?

New
ideas on management are emerging from unexpected sources, many of them outside
business, such as the research being carried out at the Santa Fe Institute in New
Mexico on the complex adaptive systems found everywhere in nature – from the
cosmos to the garden pond. The eminent management thinker Richard Pascale
devotes his most recent book to this subject, analysing case studies of global
companies such as Shell and Hewlett-Packard that have adapted living systems
principles to their organisations. (Surfing the Edge of Chaos, Texere, 2000)

Ultimately,
what living systems are all about in HR terms is self-organisation; independent
agents acting on each other under simple laws that end up creating a large,
constantly adaptive structure. This, as Pascale points out, is particularly
suited to the way the digital economy works – computer networks behave in
similar ways – and he predicts it will be the big idea of the 21st century, a
theory that will last "at least 30 years and maybe a hundred".

On
a wider horizon, living systems are also about destroying equilibrium every so
often in order to renew species and advance evolution. "For any big
company, equilibrium is death," says Pascale, pointing out that Jack
Welch, recently retired chairman of GE, is a master of deliberate
disequilibrium. "He knows on a very large scale how to cause an
organisation to question itself."

Pascale
is an admirer of Professor Ronald Heifetz of the John F Kennedy School of
Government at Harvard University, whose theory of adaptive or
"non-authority" leadership also rests on managing disequilibrium so
that intelligence is released and distributed throughout the organisation.

Society
cannot entirely do without authority, Heifetz concedes, but leadership can
emerge without it, and it is a model that he believes fits the new, volatile
e-enterprise age. He points out that history is studded with examples of
individuals without formal authority who went on to change the world, including
Jesus Christ and Mohammed, and in the 20th century Gandhi, Martin Luther King
and Nelson Mandela.

Has
the Big Idea – or, more cynically, management fad – had its day? The most
recent example, re-engineering, was so counter-productive – failing to reach
its targets in up to 70 per cent of companies – as to devalue the magic bullet
approach to performance improvement. Re-engineering, process-driven at the
expense of people, was often used as a cloak for savage downsizing; companies
"let go" key knowledge workers, demotivated thousands of survivors
and fatally damaged trust.

The
big ideas in HR have not been hyped as magic bullets. They have been much
slower to work through into practice – many would say far too slow. Most originated
in the 1960s with industrial psychologists and motivational researchers like
Abraham Maslow, Frederick Herzberg and Douglas McGregor; later on the
formidable Rosabeth Moss Kanter of Harvard-pioneered empowerment. Yet the
number of big companies where empowerment is truly practised remains pitifully
small: as Robert Waterman, co-author of In Search of Excellence and a respected
guru in his own right, says sadly, most managers remain Taylorists at heart,
seeing people as units of production, hands rather than brains, not to be
entrusted with responsibility or initiative.

What
is new today, in many cases reinforcing the old arguments for Theory Y, the
hierarchy of needs and the rest, is the emphasis on the development and
potential of the individual. Here is a sampling of some of the ideas that may
help shape future HR thinking:


Human capital. "The way we think of human capital and the way we manage
people is changing," says Don Tapscott, the Canadian cyber-guru who has
identified a fundamental shift caused by the Internet – that companies now have
global access to skills and talents without having to own them on the payroll.

Corporate
human capital is now much more elastic. Amazon.com, for instance, could include
readers and reviewers in its human capital because they help its marketing by
posting opinions on its website. Individuals can also control their own human
capital, even putting themselves up for auction to the highest bidder on
websites such as eBay, bid4geeks.com and talentmarket Monster.com.


A new moral contract. This is a theory proposed by Sumantra Ghoshal, professor
of strategic and international management at London Business School who is now
involved in setting up a new institute of management in his native India. He
thinks that the most sustainably successful companies respect their key people
as creators of value and believe in helping employees to develop their best
potential.

Such
a "contract," he suggests, is the way to capture and retain the
footloose Net Generation in corporate work. Out of 148 students he taught on a
management course in 1998, only six wanted corporate careers.


Fair process. Trust in decision-making. A key component of Ghoshal’s moral
contract, this has been the theme of research over 10-15 years by a pair of
rising gurus at INSEAD, the international management school in Fontainebleau,
France. W Chan Kim and Renee Mauborgne studied 35 manufacturing companies in
the US in which a culture of trust had been built up and found it had
contributed substantially to increased productivity and innovative ideas.

Kim
and Mauborgne label this a "fair process" and claim it reaches into
areas of human psychology that are little explored in conventional theories of
people management. They discovered that people in an organisation release their
fullest creative abilities only when they completely trust the processes by
which corporate decisions are made and carried out. Unlike the Japanese belief
in consensus, this does not necessarily mean agreeing with decisions, but understanding
how they were reached.

One
of their case studies is Gerhard Schulmeyer’s management of change at Siemens
Nixdorf Informations system AG. Schulmeyer, a former ABB manager under the
remarkable Percy Barnevik, chose culture change ahead of process change at the
German software company when he arrived as CEO. From the start he involved
thousands of staff in explanation and consultation about what the company was
doing and the tough decisions that would have to be faced. The dynamic of the
change programme came entirely from the employees and it was accomplished in
months.


Empathy and self-awareness. Emotional intelligence or EQ, a concept meaning the
ability to empathise with others, and popularised by the psychologist Daniel
Goleman, is now established as a key quality of leadership. Hard on its heels
came the idea of "spiritual intelligence" or SQ, in which the
psychiatrist Danah Zohar argued that part of the human brain is naturally wired
to be receptive to vision and values.

Other
right-brain attributes are competing for attention in the ideas market.
Intuitive skills are being taught in business-school courses, some of them on
the verge of self-parody, such as UMIST’s executive course in horse-whispering
and Cranfield’s Praxis Centre retaining a couple of professional psychics.

The
Praxis course also features a former catering manager and MBA turned
Benedictine monk, Father Dermot Tredget, who is attracting a growing number of
managers and change management consultants to his own weekend retreat-seminars
on spirituality at work, heldat Douai Abbey near Reading, UK.

The
courses are based on the sixth-century Rule of St. Benedict, which teaches that
work should be an extension of spiritual values and sets out how a community of
monks should be led; a system that Tredget says can be applied to business
organisations.

Tredget’s
aim is to encourage more "soul-friendly" working environments, not so
much through faith-based spirituality – the courses do not require religious
belief – as through a greater understanding of people’s longing for deeper
meaning in their work. It is one of several strands of inner development
training, not all spiritually based, currently on offer to executives in search
of themselves, from the Findhorn community in northern Scotland to something
called "Inner Leadership," which teaches its students how they
perceive themselves and are perceived by others. As the veteran leadership guru
Warren Bennis has been saying for years, to be an effective leader of others –
or an HR manager, for that matter – you first have to know yourself.  

John
Seely Brown, the charismatic chief scientist of Xerox PARC and philosopher-king
of Silicon Valley, has a simpler prescription, but one that he admits is rarely
followed. "I would argue that one of the greatest skills today is
listening. That is why the learning organisation doesn’t work because
management is very bad at listening. We expect to talk, we expect to lead, but
we don’t understand that the essence of the thing is to listen, learn and lead."

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