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,
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:
n 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
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.
n 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.
n 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
n 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
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
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