I spent today at the CIO Council; the session was devoted to Enterprise Architecture, a subject on which I am most definitely not an expert, so I stayed relatively quiet much of the day.
But the first speaker, Gary Hamel, wasn’t focused on Enterprise Architecture (I won’t abbreviate it, because when I see “EA”, I think of “Extended Attributes” and OS/2). His talk was on the need for “Management 2.0”; the basic premise is that management, as it evolved at the end of the 19th Century and the first part of the 20th, is no longer delivering significant improvements in organizational performance. Like many other technologies, its development has been in the form of an “S” curve, and it’s reached the flat part of the “S” at the top.
If this were a “normal” technology, you might expect a disruptive innovation to surface, probably courtesy of a small start-up company (see Clay Christensen for much discussion of this), but that’s unlikely in this case. Instead, management needs to transform its own practice.
Gary mentioned three challenges to management in the 21st Century:
1. How do you build a company that can change as fast as change itself?
In particular, he asked a rather pointed question: how easy is it for a first-line worker to get a small amount of money and time to experiment with an idea? Some companies make experimenting everyone’s responsibility (Google’s famous “20% time”), but most companies don’t — instead, they’re monopsonies, organizations where there’s only one buyer/funder for innovation, and “no” is the default answer.
2. How do you build a company where innovation is everyone’s job?
Knowledge is becoming a commodity — creativity is the differentiator. How do you encourage creativity throughout the company, and speed up the process of bringing innovations to the market?
3. How do we build organizations which inspire extraordinary contribution?
He posited a hierarchy of employee contribution:
passion
creativity
initiative
intellect
diligence
obedience
and noted that the bottom three are becoming commodities, and that the top three are “gifts” — they are not something an organization can compel.
Management was originally invented to turn people into semi-skilled, programmed robots who fit into the org chart and the assembly line, but this is no longer the problem that organizations need to solve. Instead, we need to get employees to commit to organizational goals, and that’s a voluntary activity. Open Source projects are a common area where we see this kind of voluntary commitment, but there are for-profit companies which make it explicit, too, such as Gore and Associates, where employees are explicitly empowered to say “no” to any request, and there are no “managers” (just leaders of self-organized teams). He noted that Gore and Associates hasn’t had a losing year. Ever.
Gary finished by talking about the two dimensions of improvement that management provides: amplifying individual human flexibility and ability and aggregating individual contributions at scale; he claimed that social networking will make it possible to do both more effectively than existing models (the market, which majors in improving flexibility, or bureaucracies, which major in aggregating at the cost of flexibility).
Definitely an interesting talk, and worth the price of admission (which, for me, was the loss of a day at work and four meetings).
The rest of the day was much more focused on the problems of Enterprise Architecture and organizations, and, while the discussions were of interest, I didn’t find myself writing down nearly as much as I did for Gary’s talk. The hallway discussions were, of course, best of all!
And I must say I could get used to the food and drink at the Four Seasons.
It was definitely an informative and interesting day; I’m hoping to be invited to another session.