Management expert, Gary Hamel, urges companies to realize that their power lies in their people, not just in the organization itself.
“Building a business that’s fit for the future means a business fit for people,” said Gary Hamel when he spoke at the AmeriQuest Symposium last month. Hamel, an acknowledged thought leader in the world of management and business, is an author and renowned speaker. He’s been on the faculty of the London Business School for more than 30 years and is the director of the Management Innovation eXchange.
According to Hamel, there are three very important realities that companies must recognize in order to innovate and succeed: (1) Humans are adaptable; organizations are mostly not; (2) Humans are creative; organizations are mostly not; and (3) Humans are passionate; organizations are mostly not. That’s why companies must realize that their most important assets are not their processes; their hardware and software; or their bureaucracy. Their most important assets are the people who make up the organization. As Hamel notes, “resources are less important than resourcefulness.” So encouraging those assets to think creatively and innovatively is vital. To acknowledge them as important to the success of the enterprise should be an ongoing practice. To not do these things will lead to inertia and stagnation.
Businesses now understand that innovation is the lifeblood of a company, yet 94% of CEOs are unhappy with their enterprise’s innovative performance. That may be due to the fact that many C-suite occupants don’t adhere to the fact that everyone is, or should be, part of the innovative process.
With this in mind, Hamel related some troubling statistics that those in management should heed. According to Gallup, 63% of employees don’t feel engaged in their companies vs. 13% that do. And those percentages have held about the same for almost sixty years. When you look at where growth in employment has been, managerial and administrative functions grew at a rate more than three times faster than any other positions. And that leads to another issue that Hamel feels stymies the growth of business…bureaucracy.
Back in 2014, Hamel wrote an article for the Harvard Business Review, entitled “Bureaucracy Must Die.” As he wrote in that piece, “It is the unchallenged tenets of bureaucracy that disable our organizations—that make them inertial, incremental and uninspiring.” Or, as Hamel said at the Symposium, bureaucracy leads to “Bureausclerosis.” The attributes that bureaucracy values, intellect, diligence, obedience have all become commoditized. Now, what leads to growth are the attributes of innovation, imagination, and passion.
In the age of Millennials, a group that’s grown up watching innovation all around them on a heretofore unheard of pace, change is a fact of life. Unfortunately, many businesses steeped in inertia only change when a crisis occurs and that often leads to a wrong, crisis-driven response rather than a thought-out, growth-oriented reaction.
What do companies need to do first and foremost? Regard every member of the enterprise as a valuable asset with potentially great ideas. Businesses also need to recognize and correct their own myopia. In a time where disruptors can find themselves disrupted as well (think iTunes vs. Spotify), keeping an open mind, encouraging innovation, and having the long vision are the recipes for success.