How to create the organization of the future: Employees first, customers next

- Entrepreneurial Skills

by Vasco Duarte

This week I stumbled upon this video by management expert Gary Hamel. I think it explains precisely why I’m here. For Hamel, the greatest invention in roughly the last hundred years isn’t the combustion engine or even the Internet. It’s management. And he explains why. In 1890 about 90% of the western world’s population worked in agriculture, the rest mostly worked in small companies. Within a generation that all changed. People started to work in massive factories and someone needed to organize all those workers who were making T-model Fords and other mass-produced items.

Pay for Performance, Brand Management, Task Design; they are management terms we still use today, but that originate from before 1920.

How to cope with exponential change

It’s obvious that this kind of management just won’t work anymore. We need to change so we can face the challenges of our time. According to Hamel, there are three of those challenges.

  • The first: we face a different kind of change than did the generations before us. Right now many, many things are changing exponentially. The Internet, data storage, the number of mobile devices connected to the Internet, they are a couple of the examples he gives. When management was invented, changes were much slower. So, traditional management doesn’t have a clue how to cope with today’s pace of change.
  • The second challenge: everything has turned into hyper competition. Hamel even talks about ‘companies fist fighting each other’. The only way to stay ahead of the competition is to be more adaptive and more creative. Hamel says, “You have to earn your place in the market every day.”

Bring your gifts of creativity

The final challenge, is the most pressing: the fact knowledge workers can easily switch jobs, taking with them everything they know to the competition. It’s no longer about what you know, but about how fast you can create new knowledge. It makes it difficult for organizations to differentiate themselves. Hamel tells us there are three questions that we need to ask ourselves:

  1. “How can you build a company that changes as fast as change itself?”
  2. “How can you build a company where innovation is the work of everybody, all the time?”
  3. “How can you build a company where people are willing to bring the gifts of their creativity and passion?”

Employees first, customers second?

You need to be adaptive, innovative and engaging. And most important (and that’s the part I like best about Hamel’s story), you need to make sure your people are happy. Because when they aren’t, you’ll loose them. Hamel tells about the Indian software company HCL Technologies. Their mantra is: employees first, customers second, which I think is brilliant. Because without the first, the second won’t get anything, let alone brilliant products or services. The role of management in our new world is different; the old structures won’t work anymore. We need new solutions. We need companies that work like Valtech where employees choose their own managers. Or like Treehouse where they don’t even have managers anymore.

Look at the small ones

There are three things we can do to adapt to this new work:

  • First: Aspiration, be innovative, be the best. It’s the only way to stay ahead.
  • Second: Challenge dogma. Think carefully about what the problem is that management should solve. As Maarten Volders wrote, “If Einstein had one hour to solve a problem, he would devote 55 minutes to figure out the right question to answer”.
  • Third: Learn from the fringe. The exciting things won’t happen in the top of the big companies, they happen at the weird start ups, the new initiatives. I like to think I’m one of those, but than again, who am I?

It’s not the tools we need

Hamel concludes his talk with the advice to look closely at the deep values of the Internet: Openness, meritocracy, flexibility, and collaboration. It’s not the smart tools we need, he says. It’s what’s behind them. “Become a champion for the future. Fully appreciate the gifts of the people that work at your place.” Darn, that should have been my line 😉

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