The
business world is inundated with experts from Charles Handy to Tom Peters
claiming to have answers to today’s complex workplace issues. Godfrey Golzen
identifies the top10 ideas HR should take seriously
Writing
recently about management ideas that have come to the fore in the past couple
of years, the Harvard Business Review compared the current situation to a
summer’s night: the air is full of interesting noises and fragrant smells, but
no single clearmessage is coming through.
There
has not been a "big" management book, the kind that comes up with a
new idea that somehow clarifies, at least for while, what is happening around
us, since Daniel Goleman’s Emotional Intelligence in 1998 – earlier examples
were Prahalad and Hamel’s Competing for the Future (1994) and Hamer and
Champy’s Re-engineering the Corporation (1993). Significantly, the latter has
just been updated and revised, for while there are lots of wannabe management
gurus claiming to be, or being promoted by publishers as being the next Charles
Handy, Tom Peters, Michael Porter or whoever, the actual possessors of those
big names are showing no signs of yielding their positions as leading thinkers.
Primarily,
they and a few new names are preoccupied with making sense of a number of
confusing and sometimes paradoxical issues:
–
Why is it that the various manifestations of e-business are not delivering on
their promise?
–
Is there any point in having a strategy when the business world changes from
month to month?
–
Are radical measures like outsourcing a good idea when you don’t know what
tomorrow’s core competencies are going to be?
–
How is business going to react to the changing nature of work, the issues
raised by globalisation and the demographics of ageing populations?
Idea
1. Knowledge workers are volunteers, not employeesÂ
by Peter Drucker
As
a prime example of the longevity of today’s thinkers, take the legendary Peter
Drucker who, at 92, continues to make incisive observations about management
and social issues. Much of Drucker’s recent writings have been about the
lessons to be learned from the way voluntary bodies are run. His argument is
that as power in the workplace has shifted from the bosses to knowledge
workers, they are effectively becoming volunteers, who join the organisation because
they believe in what it is they are doing. They could get a job anywhere, so
the object of leaders is to articulate and maintain the sense of purpose that
keeps them there.
Another
of Drucker’s big concerns is – not unnaturally – what society is to do about
the fact that people are living longer and retiring earlier. The rapidly
growing numbers of brain workers are not worn out when they retire, as brawn
workers used to be, but in the post-industrial economy we are still treating
retirement like we did in the mid-20th century. Apart from the fact that this
is becoming fiscally unaffordable, the bored, underutilised elderly,
increasingly still active in their 70s, and the resentful younger workers whose
taxes support them have the makings of a looming social problem. One answer, he
says, is to get away from the old economy idea of a promotion-oriented career
to one where lifelong opportunities to develop personal interests and skills
are an important aspect of reward
Lesson:
See the world upside down
Drucker
has seen more change than anyone writing about management today. It has made
him wary of assumptions about technology or markets – although he has made a
fair number of them himself. "Look at the world upside down," he
recommends. "Suppose the opposite were true? Build organised abandonment
into your system."
Idea
2. Think and act like an outsource provider
by Tom Peters
Tom
Peters, whose influence is perhaps second only to that of Drucker, has also
seen a lot of change in his 30-odd years as a guru – and has often got it
wrong, as he cheerfully admits. His answer to his critics is that change
occurred even faster than he had forecast. He acknowledges that companies read
the message of change, but says they are too slow to adapt. Mergers and acquisitions
are not the way to do it: mating two dinosaurs doesn’t produce a gazelle.
In
fact, Peters casts doubts over the whole future of organisations, as we now
know them, in the new economy. He believes that the organisational model of the
future is the professional service firm: architects, engineers, legal and
medical practices. They have projects and assignments rather than continuous
work.
Turning
to functions within companies, notably HR, he advocates that they should think
of themselves as a professional service unit and behave accordingly. They
should think of the divisions and departments in their company as clients,
identify the nature of their business and pitch for it. "They pay your
bills," he admonishes. "If you don’t perform, they can and will take
their custom elsewhere… alas, one rarely even hears the word "client"
during a visit to an average HR department."
Lesson:
Learn from Professional Service Firms
Outsourcing
is the big threat to HR departments. To avoid that fate Tom Peters advocates
that they should reconfigure themselves as professional service firms and pitch
for internal business on the basis of cost and quality.
Idea
3. Old-economy elephants and modern-thinking fleas
by Charles Handy
Peters’
ideas are not that far removed from those of Charles Handy, although Handy sees
himself as a social philosopher rather than as a management guru. Handy’s view
of the future is one of what he calls "elephants and fleas", also the
title of his latest book. The things which really count now are speed of
action, adaptability to change and creativity. These are the characteristics of
his "flea" business model. There is still room for elephants, the
big, old-economy organisations – in fact, we need elephants to preserve order
and stability – but elephants need to understand the role of fleas. He points
to the film business, where a company like Steven Spielberg’s Dreamcast hires
talent (fleas) as and when it needs it.
A
key skill of the elephant will be to know where to find the fleas and assemble
the right team of fleas, but that has little to do with the kind of human
resource management that you see in old economy companies. "It’s a new
kind of relationship," says Handy. "In the old loyalty and job security-based
organisation, employees were prepared to hand over the ownership of their ideas
unconditionally, but that is no longer the case. They know that the assets of
the organisation are largely made up of what is in the heads of the people they
employ." So the fleas are striking up new bargains with the elephants.
Lesson:
Appropriate rewards
"When
the titles of a film roll at the end, what we are seeing is the fleas visibly
being given the credit for their contribution." says Handy. They will also
expect a much greater share in the fruits of success than the arbitrary reward
structure of the old economy organisation allocated to them. Developing
appropriate reward systems for the new economy is a key task for HR.
Idea
4. Strategic innovation
by Gary Hamel
Gary
Hamel uses the same metaphor as Peters in describing how what he calls
"legacy companies" are stumbling as they deal with change through
M&As – he talks of them as "dinosaurs mating in Jurassic Park"
and doubts whether they will make it. The future, he says, belongs to companies
that are not burdened by legacy thinking and which constantly strive for
strategic innovation, by which he means innovation that changes the very nature
of competition. His critics wonder whether this is not going too far – there
have been as many failures as successes in radical innovation. Recognising
this, his most recent article in the Harvard Business Review calls for a
balance between evolution and revolution.
Lesson:
Survival of the boldest
Hamel
appears to part company with the champions of consensus and shared meaning in
organisations. He is more interested in those who go beyond its boundaries into
uncharted territories of products and services.
Idea
5. Disruptive innovationÂ
by Clayton Christensen
The
most articulate exponent of corporate radicalism is Clayton Christensen, a
Harvard Business School professor, who gave an enthr-alling presentation at the
Hay Group International Conference in Florence last May. He believes that true
innovation comes from disruption. Christensen, an engineer by training, has
been researching the puzzle of why it is that some of America’s apparently best
managed technology companies have run into trouble. The answer, he thinks, is
paradoxical. "Just because they invested in technologies that would
provide their customers with new and better products, studied market trends and
invested in innovations that promised the best returns, they lost their
position of leadership." In order to escape commoditisation, they added
all manner of bells and whistles which in fact went beyond what their customers
could use or were willing to pay for. You only have to look at mobile phones to
validate that observation.
What
they should have done is to seek out new products and markets, even to the
point of competing with their own established brand. This may mean lower
margins and markets that appear to be too small to be viable. But this is where
the competition is being incubated and where the threat to their position is
going to come from. Sandra Van Der Merwe, a South African-born professor at
London’s Imperial College Management School, suggests that companies should
think in terms of market space, rather than market share, tomorrow’s rather
than today’s customers.
Lesson:
Sustaining and disruptive technologies
The
innovator’s dilemma, says Christensen, is that strong first mover advantages
occur in disruptive technologies with low margin products and/or in marginal
markets. Sustaining technologies are based around data on established markets,
careful planning and predictable costs and revenues. To survive companies need
to be active in both and encourage appropriate HR policies in recruitment and
reward.
Idea
6. Ethical policies: the new competitive advantage
by Michael Porter
Another
guru whose ideas have been evolving is Michael Porter, recently described in
Wired magazine as the most famous business school professor in the world.
Pre-eminently noted as an economist and business strategist, in which role he
has been a consultant to big corporations and governments all over the world,
he found the whole notion of strategy being challenged by the dotcom revolution
of the 1990s. What was the point of having a strategy, asked the sceptics, when
the world was changing so quickly that a strategy was out of date as soon as
you came up with it?
Porter
says that this confuses operational effectiveness with strategy. Ideas like
total quality and speed to market are not strategies, they are things companies
should be doing anyway. Strategies are things that make them different.
Difference is important because pursuing operational effectiveness, worthy
though it is, ultimately leads to competition on price.
Strategy
has a more interesting outcome, which Porter outlined in a lecture at the
London Business School last winter. He believes that how a company is perceived
by its stakeholders – who include the general public – is emerging as a source
of competitive advantage. Therefore policies on ethics, governance and
corporate responsibility will fall into this category.
Lesson:
Leadership and strategy
Porter
sees the role of the CEO as that of the chief strategist. Thousands of ideas
pour into a company every day from all sorts of sources and interest groups.
The CEO is the person who makes the choices on the basis of his vision of what
makes the company different – the source of its strategic advantage, in other
words.
Idea
7. Today’s poor; tomorrow’s customersÂ
by CK Prahalad
Disruptive
technologies and the thinking related to them can get companies looking at
markets in an entirely new way. C K Prahalad, co-author with Gary Hamel of one
of the landmark books of the nineties, Competing For the Future, has been
turning his attention to India, where most of the population live far below the
poverty line. Not an interesting commercial proposition, therefore but Lever
Hindustan has made an important discovery. People in rural areas can’t afford a
couple of dollars for a bottle of shampoo, but they can afford 5 cents for
small sachet of the stuff. Selling 5 cent sachets is much more profitable than
selling bottles, and they can be marketed through an existing distribution
network of small wholesalers and tiny village stores.
One
of the banks has made a similar discovery. It has found out that extending
microcredit for amounts as small as $25 can be good business, provided that a
repayment ethic is in place – which is the case in many developing countries.
And once an economy gets moving these tiny sums soon get larger.
Lesson:
Search for new markets
The
growing disparity between the world’s rich and poor is caused not by lack of
skills, but by access to goods and services. CK Prahalad says that India is
bursting with intellectual capital which cannot be developed because bright but
poor people cannot afford computers. The answer is to provide access to
technology, maybe through something similar to automatic teller machines
outside banks. The big new markets are in the developing world, but it needs a
shift of mindset to see this.
Idea
8. Organisational learning –
by Peter Senge
Peter
Senge, who made his name with The Fifth Discipline, an influential but somewhat
cerebral book on organisational learning, is not a regular on the guru circuit.
He was, however, attracted to the Florence venue of the Hay Conference because
of the resonance between the direction his own ideas have been taking and what
was happening in Florence in the 15th century. There are parallels between the
impact of technology on the business environment now and the huge leap forward in
painting triggered by the rediscovery of perspective, but equally significant
is the fact that the Renaissance put human values at the centre of the way
people viewed the world. Senge too thinks that we have to re-order our values,
not necessarily in a religious sense, but in line with what is necessary for
the sustainability of the planet.
The
world, he says, is not a mechanism but a set of interdependent systems. The
natural order of things is: produce, recycle, regenerate. With the appearance
of the industrial economy it has been: sell, use, discard. That cannot continue
and it need not. For instance, BP is shifting its perspective from oil
exploration and production to finding sources of renewable energy, expressed in
the reworking of the BP logo: Beyond Petroleum.
Senge,
who has a master’s degree in engineering, is far from being a technophobe, but
he is concerned about technology getting out of control if it is not seen as
part of an interdependent system. He is worried, for instance, about the disenfranchisement
of those who are not up to speed on technology and even more about what
technology is making possible. Bionic man, a creature put together from
transplants and genetically engineered spare parts, is no longer a figment of
science fiction but we have not thought through the consequences of that. In
the words of the Harvard Business Review – its tongue only partly in its cheek
– "Get ready for the ultimate in luxury goods; a whole new version of
you."
Lesson:
Beware of implications
In
The Fifth Discipline, Senge advanced the idea that organisational learning
could only take root if therelationship to everything else that was going on
within it – the whole system – had been thought through. In his new work, he is
extending the idea of systems thinking to the planet as whole. All our actions
must take their wider consequences into account.
Idea
9. The networked economyÂ
by Don Tapscott
Don
Tapscott is the author of Becoming Digital and is widely regarded as the
leading guru of the Internet economy. Tapscott draws some interesting parallels
between this and the pre-industrial economy. He talks, for instance, of agoras,
a word in ancient Greek for a market where buyers and sellers interacted
directly and bargained for prices. He points out that this is very similar to
what happens on Internet auction sites.
The
Internet economy has profound implications for customer relationships and for
marketing in general. In the context of Senge’s systems, it also has
far-reaching effects on government. How will taxes be collected and public
expenditure funded if an increasing number of transactions take place on the
Internet?
Lesson:
HR in the new economy
Tapscott
shares the view of current management thinkers that we are moving towards a
networked economy of alliances, projects and ad hoc relationships of various
kinds. But he does not see this as the end of HR. On the contrary managing
networks and an adjunct workforce is a key challenge in the digital economy.
Idea
10. Successful e-strategiesÂ
by Rosabeth Moss Kanter
In
her most recent work, notably her book Evolve! Succeeding in the Digital
Economy of Tomorrow (Harvard Business School Press), Professor Kanter has been
examining the circumstances under which companies fail or succeed to meet the
challenge of e-business. They turn out to be remarkably like some of the
principles of "make a little, sell a little, make a few more" put
forward by Peters and Waterman in In Search of Excellence, published over 30
years ago. Writing about one small domestic appliance company, she says,
"When in doubt, create small experiments. Pick one loaded for success that
doesn’t require much change and one that demonstrates the virtues of changing.
Don’t bet the company and don’t waste time. Just act, simply and quickly, to have
something concrete and positive to convert sceptics."
Lesson:
Maintaining good relations
Success
in the digital world, says Professor Kanter, is not a technological problem,
it’s a human one. "Without good relationships and diplomats who can
negotiate across all parts of the organisation, obstacles will never be
confronted or overcome." Her research throws new light on the puzzling
problem of why B2B is not catching on to anything like the extent forecast even
a year ago.
Tribute
to author
This
article was the last piece Godfrey Golzen wrote for globalhr before he passed
away this summer at the age of 71. He had a great talent for spotting trends,
especially in the field of management. He was one of the few management
journalists who could get beyond the jargon, and explain what was going on with
great clarity and wit.Â
Godfrey
helped publisher Martin Leach launch the UK’s first strategic HR magazine Human
Resources back in 1991, and was also the brains behind HR World in 1997.
Although Godfrey stepped down as editor of both magazines in 1998, he continued
to contribute to globalhr (formerly HR World) under the ownership of RBI. He
also contributed to The Times and authored several management books.
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Godfrey
was not only a source of inspiration for the globalhr team, but for the HR
profession as a whole. He will be sorely missed by us all.
This
article first appeared in the September 2001 edition of Training magazine. To subscribe click here
