What Matters Now by Gary Hamel
GARY Hamel has been teaching at London Business School for nearly 30 years. He is the author of five books and articles that have been published in first-rate journals and newspapers.
In his latest book he offers some of the soundest general advice for business leaders I have ever come across. Yes, there are excellent books on specific issues - economics, marketing, investing and the rest - but no general advice of this quality.
It is not a summary of profound research, or an analysis of what made companies great. Rather, it is the insight of a very thoughtful man who has spent his working life thinking about business and teaching leaders.
The Wall Street Journal ranks him the most influential business thinker.
The book addresses the following question: "What are the fundamental, make-or-break issues that will determine whether your organisation thrives or dives in the years ahead?"
The answer lies in five issues: values, innovation, adaptability, passion and ideology. His take on each one is fresh, challenging and profound.
I think it is fair to say that trust in organisations and their leaders is at an all-time low. A 2010 Gallup study showed that only 15% of Americans rate the ethical standards of executives as "high". Nurses came in at 81%.
This clearly cannot be extrapolated to South Africa but to get to the point, simply ask yourself how much you trust the key elements of your business and civil and governmental structures to act in your best interests.
In the last session of his second-year MBA course at London Business School, Hamel tells his students that when they take their first post-MBA job they should assume the following five matters are true:
Assume your widowed mother has invested her life's savings in your company; it is her only investment. Then the idea of sacrificing the long-term for a quick payout would never occur to you.
Assume your boss is your older sibling and while you will be respectful, you won't hesitate to offer frank advice when you think it is warranted.
Assume that your employees are childhood friends so you will always give them the benefit of the doubt and make things easier for them. When you need to, you will remind them that friendship is a reciprocal responsibility. You will never treat them as a human "resource".
Assume that your children are the company's primary customers so you want to satisfy and delight them. You could never deceive or take advantage of them.
Assume you are independently wealthy so that you will never sacrifice your integrity for a promotion or a great performance review.
This is a useful thought experiment to nourish the idea that leaders are stewards of their organisations and what matters now, is what has always mattered.
At a broader level, he asserts the moral superiority of capitalism, the economic theory that by all objective criteria has done the most to better the lives of so many.
Capitalism has been let down by those who should support it, and the consequences are most serious. We are already seeing that those discontent with the current situation are calling for CEOs to be answerable to civil servants who are busy designing ever-tighter regulatory straitjackets to protect the broader population.
The first issue in ensuring the long-term prosperity of an organisation is the commitment to upholding values. And just in case you are not convinced, remember there is the megaphone of social media available to all and naming and shaming has never been easier.
His third issue is adaptability, a capacity that really matters now. In industry after industry it is the insurgents, not the incumbents, who are winning. It is Google not Microsoft, Hyundai not Chrysler, Amazon not Barnes and Noble, Apple not Nokia.
Why does a company have to lose tens or even hundreds of millions in market value before getting serious about change? The need for a turnaround is surely an indictment on the leadership, a timely transformation is not.
If an adaptable company is one that captures more than its fair share of new opportunities, then this definitely is a requirement for thriving in the future.
Our management style and philosophy in the past was built on the assumption that managers need control and we designed our organisations, our systems, our rewards and more to bolster this belief. It no longer has currency.
To thrive in turbulence, Hamel asserts, organisations need to become a bit more disorganised and unmanaged – less structured, less hierarchical and less routinised.
This requires adherence to a different set of principles based on the obvious, but not always acknowledged fact – it is impossible to build an adaptable organisation without adaptable people.
Whirlpool, a 100-year-old manufacturing company, was ranked among the world's most innovative companies. It did this by training everyone in finding new ideas and adapting to change, and then making it everyone's job, every day.
Each of Hamel's five issues - values, innovation, adaptability, passion and ideology - is given both a theoretical and practical treatment. Hamel's guidelines for achieving success in each area is what makes this cognitively satisfying book so practically valuable.
To deal with adaptability he notes that you cannot outrun the future if you don't see it coming. Not seeing what is coming is not because the future is unknowable, but because it is disconcerting.
As such, the discussion of where to go next should be dominated by individuals who have their emotional equity invested in the future rather than in the past.
The future usually starts at the fringes, not in the mainstream, so a good rule of thumb is to spend an hour a day, or a couple of days a month exploring new trends, lifestyles, technologies, and so on. It is hard to see the future from behind a desk.
If you lead an organisation, whether it is for profit or not, and you are only going to read one book this year, this must be it.
Read it slowly, make notes, think about his insights and apply them. You will be glad you did.
Readability: Light ---+- Serious
Insights: High +---- Low
Practical: High -+--- Low
* Ian Mann of Gateways consults internationally on leadership and strategy.