It seemed to me that the message brought to us by the several international business leaders during HSM's "International Insights" segment of the World Business Forum provided an interesting counter-position to the heavily pessimistic views of both Jeffrey Sachs and David Rubenstein, yesterday afternoon. The other bloggers and people I talked with all agreed, that it seemed these business people, when they were talking about the future as it looks now, were fairly optimistic about their own prospects for growth. They each acknowledged the challenging environment, and the fact that margins are still under pressure, and the economy is still sluggish, but they each also felt that the worst was now behind us, and prospects are decent. Not super, but decent.
Dennis Nally, CEO of PricewaterhouseCoopers, gave a talk first to expound on the need to restore lost trust in the financial markets and in the economy in general. This is, of course, something Martha and I are constantly going on about, and in fact we just published a "Face to Face" piece for our 1to1 Magazine on this topic a couple of weeks ago. The other CEOs in the morning, who headed a bank, a mining company, a chip manufacturer, and an oil company, were more or less in unanimous agreement that business was in process of getting better, but that there was still real work to do.
Highlight of the morning, however, was Gary Hamel, who is always an entertaining and informative speaker, and a world-class authority on business strategy. Hamel's primary point was that our physical and IT capabilities have now evolved to such an extent that our "management technology" needs to be re-invented. He posed several examples of firms, like WL Gore, that have crafted unique and different ways to handle the conflicts inherent in today's traditional hierarchical organizations, both empowering people to act on their own initiative and holding them accountable to their peers for their success or failure. There is a direct analogy between the kind of online rating system for reader reviews that you see at Amazon.com and the requirement at Gore, for instance, for employees to rank twenty of their peers from 1 to 20 each year in terms of the value they create. I think this "wisdom of crowds" approach is likely to become more and more powerful as our society becomes more accustomed to being connected and networked, 24/7.
There are a few requirements for such new management models to work, however, that Hamel didn't mention - perhaps he'll talk about them in tomorrow's full-day special session (for select attendees), when he has more time. But while research clearly shows that harnessing diverse and different perspectives can solve problems and make predictions much more accurately (as Hamel said Best Buy found when they harnessed employee inputs to do a better job of sales forecasting), an important caveat is that the people whose perspectives are being tapped like this must all share a fairly common fundamental perception, which amounts to a common sense of mission or purpose for the organization. Instrumental preferences (i.e. problem solving ideas) can vary widely - in fact, the more diverse the better - but fundamental premises (i.e. values) must be more closely aligned.
What this means is that in order for Hamel's idea of network-based management decision-making to work at its best, an organization must also be characterized by a unifying and trust-based employee culture - a culture built around everyone's explicit buy-in to the mission, the why of what is to be done. Only in this way can dissent and disagreement be tolerated and resolved into better solutions
Don - thanks for sharing your experience. Couldn't attend the WBF, so this was the next best thing.
Fascinating subject. Management must change - from chasing quarterly numbers to thinking about the future - a radical shift. A subject i know both you and Martha have championed for many years.
I pieced together a few more thoughts on my blog. Check them out and thanks once again.
Tom: I don't think Gore operates a similar business model to 3M, actually. They are both companies that have succeeded by being highly innovative, but their models for stimulating innovativeness are quite different. 3M is publicly held, Gore is private. 3M has large, traditional departments, not just for R&D but for productions, logistics, etc. Gore is tightly organized into self-contained units of no more than about 200 employees each, which allows every person at each unit to know every other person, personally. And there are other differences.
I do think Gore's approach could work elsewhere, but it is a very radical approach, and not something any company can easily copy.
Jody: All good points - and most important single quality for implementing these new, more collaborative business organizational models is the level of employee trust found in the company.
I think you are quite right to consider how cohesive a company is before initiating a rating system of this sort. If there is a lot of dissension due to personality clashes, people preferring their own ideas to the exclusion of others, and similar behavior, asking such a team to rank one another would be an exercise in futility. And it would likely drive even more of a wedge between team members.
Of course this all goes back to hiring the right people in the first place and having the backbone to admit a mistake and let someone go who is not performing as expected.
I was at the WBF today as well Don and completely agree with your account Hamel was the highlight of the morning. I am completely aligned with his theory about the role that social networks will play in every aspect of business - including management. The Gore case was fascinating, but I wondered if this approach could work in every type of organization. From my understanding, Gore is similar to 3M in terms of its business model. I wonder how the empowerment-accountability model would work in other organizations such as traditional manufacturing - or is there a continuum where Gore is just at the one end?