Gary Hamel, #Capitalism, #Censorship and resistance to change

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I read a great article by Gary Hamel the other day titled: Capitalism is Dead. Long Live Capitalism. Every time I read one of his articles, I am amazed to see how he is able to write everything I think about just better and with more compelling examples.

Here is my favorite quote:

I am an ardent supporter of capitalism—but I also understand that while individuals have inalienable, God-given rights, corporations do not. Society can demand of corporations what it likes. That’s why self-serving beliefs are also, ultimately, self-limiting.

Of course, as consumers and citizens, we must acknowledge that companies can’t remedy every social ill or deliver every social benefit. We must also face up to our own schizophrenia. We can’t expect companies to behave responsibly if we blithely abandon our own principles to save a buck.

I wrote in the comments to the article. For some reason, my comment still does not appear on the site. Maybe I am being censored. Well, in the age of the internet, I don’t need the Wall Street Journal to publish my comment. I can do it myself. Time to adapt. Below is what I wrote.

Seth Godin wrote a while back: “And almost without exception, organizations are run by people who want to protect the old business, not develop the new one”. Larry Lessig has repeated this lesson many times: “1. Creativity and innovation always build on the past. 2. The past always tries to control the creativity that builds on it.  3. Free societies enable the future by limiting the past.  4. Ours is less and less a free society“ (See more on this issue here: http://tinyurl.com/3yr6wcd).

Gary is absolutely on the point. While Capitalism, in its current form, has done much good for society, we start to see its limitations as the world progresses. The problem is, like any faith or religion, Capitalism tries to protect itself by becoming more fundamentalist and more resistant to change. When religions start to behave like that, you know the end is near or you are approaching dark ages. Instead, Capitalism should be developing with the times. This is hasn’t been happening enough. This last crisis and other processes the world is going through is a great opportunity to start changing that and raising question marks regarding some of Capitalism’s assumptions and we can all make it better.

One example: Shareholder value. As I have written elsewhere (see: http://tinyurl.com/3xekuut), this concept needs a wide redefinition, aligned with some of the ideas Hamel is writing about here in this post. Unless we act and make sure that concepts and ideologies go through evolution and do not stagnate, we have nobody to complain to, but to ourselves.

Elad

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Shorts: Gary Hamel on Humanity in management

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Gary Hamel writes in the February 2009 issue of the Harvard business review under the title Moon Shots for Management – What great challenges must we tackle to reinvent management and make it more relevant to a volatile world:

This is a daunting challenge, but take heart. The first management pioneers had to turn freethinking, bloody-minded human being into obedient, forelock-tugging employees. They were working against the grain of human nature. We, on the other hand, are working with the grain. Our goal is to make organization more human – not less.

So true. A few weeks ago, I argued here against Daniel Pink’s claim in his book Drive that management does not emanate from nature:

Management does emanate from nature. In fact, the problem with management today as I see it is that we stopped doing what is natural and human and started using artificial methods to deal with people.

Being empathic, creating connections and socializing, talking and listening and even respecting our fellow human beings are not unnatural things.

When you start treating management as a race for productivity you get an unnatural phenomenon. When you start using carrots and sticks like people are jackasses you get an unnatural phenomenon. When you rely only on measurement of only the things you can measure to fuel management you get an unnatural phenomenon.

Elad

From homogeneity to heterogeneity through loss of control

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I was reading Jon Gordon’s blog yesterday:

We had a good laugh but Cary’s customer service was no laughing matter. I go there all the time and have bought hundreds of meals because I know when I go there I’ll get what I want. It’s no wonder that Aqua Grill has been open for 20 years while every week it seems another restaurant in my area has opened and closed.

Success is simple. Give customers what they want and they’ll come back. You don’t have to give away the house. In fact Aqua Grill and Pappasito’s cost a little more than their nearby competition but they are busier and more successful.

If it is so simple, why is it so hard? Why is it so hard to give people what they want? One word. Control.

Control is a way to deal with heterogeneity. To produce homogeneity. If I only give one type of dish, I can make more of it, faster. It is based on yesterday’s world of thinking – where productivity was king and we standardized everything in order to produce more.

Those days are gone.

We are slowly but surely moving away from a world of productivity and mass production, to a world of creativity and customization. And trying to use the same mechanisms of control that were used to stifle heterogeneity in a world where heterogeneity needs to thrive, is crazy.

But we still do. Maybe it is our human nature. Maybe it is just bad habits or our resistance to change. It does not matter. The rules, regulations and other forms of control, all these things that deny people their autonomy and freedom in the work place have an expiry date. We don’t that date yet, but they do.

Read this example Gary Hamel’s post in the Management Lab about unshackling employees where he explains how by letting local employees set the opening times of their bank branches (at night, during the weekend or whenever), a bank created not only engaged employees, but more business. Here is a little excerpt (read the whole thing, it’s worth it):

Blair summarizes the changes at BNZ with a telling anecdote. “I was walking by one of our stores on a Sunday morning with my kids, and my son said, “Dad, the doors on the bank are open.” And I thought, crap, someone forget to close the doors. But then I looked in, and saw that the entire store was open. No one is forced to roster on Sunday, but team members had come in from other branches in order to swap their hours. One mom was there working on Sunday because she wanted to take Wednesday off. And it hit me: no one at head office even knows when the stores are open.” Adds Chris, “The freedom to open when you want may not be the biggest thing we’ve done, but it’s the most symbolic in terms of telling our people, ‘we trust you, and we’re serious about empowering you.’”

It is the same process. Same hours for all branches. A mechanism of control that is supposed to create homogeneity that is supposed to lead to productivity. However what the bank realized is that by losing control and succumbing to the heterogeneity they enable creativity that leads to the customization that customers wanted.

Elad