Gary Hamel on busting bureaucracy for good

Ep. 23


Gary Hamel is one of the world’s leading business thinkers, Professor at London Business School and director of The Management Lab. In this conversation, we talk about how we can bust bureaucracy for good, make our organisations more experimental, and reinvent what it means to be a leader.

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Lisa Gill: So, Gary, it's been just over 10 years since your book 'The Future of Management' came out. What is your thinking about the current landscape of management? Is it what you hoped for, or do you think we still have a long way to go?

Gary Hamel: Kind of both. I'm pleased at some progress, but mindful of the challenge ahead. When I wrote that book a decade ago, it seemed to me that we were at a point in time where organisations were facing challenges that lay outside the performance envelope of the bureaucratic top down model, which we all know ofand have grown up with. And yet there were few alternatives on the horizon. I think there are more now than there were then - some rather amazing companies that have taken a lot of that to heart.

Having said that, the vast majority of humanity still works in organisations that have too many layers, too many rules, too many processes. And lots of data bears out the fact that that is depressing productivity growth. It leaves a lot of people at work physically, but without much of their emotional selves. They're not their imagination, their passion, their creativity. So we have a long way to go and I'm under no illusions of how difficult this is because as a social system, a social structure, bureaucracy is one of the most ubiquitous and deeply entrenched systems - there's a rather powerful coalition around it and so I think it's going to take a lot more effort to change that. Having said that, we've changed some other pretty big things through human history: most of us no longer live in totalitarian regimes, by and large, slavery has been banished to the fringes of society, and even patriarchy is getting a good dropping at the moment, and rightfully so. So I'm optimistic but also realistic.

Lisa Gill: Yes, I think you said once that if we can invent the industrial organisation, then we can reinvent it.

Gary Hamel: It's a human creation. There's almost nothing that is a given about it. We've always had human hierarchies on any given subject. There are people who know more than others. So that's just inevitable. But the idea that you'd have one single top down formal hierarchy as a way of organising human beings is not a law of physics. That's a choice that we made at a particular point in time when administrative skills were rare, and our organisations were growing very quickly and we needed to create this new class of individuals called managers who are experts at the administrative routines. Now, increasingly, administrative skills are a commodity. Maybe not quite yet at the level of algorithms, but, you know, there's plenty of know-how out there. And now rather than thinking about having organisations that are hierarchies of administrative capability, we need organisations that are networks of entrepreneurs. So that's a big challenge. But we've done other difficult things as a species.

Lisa Gill: It was interesting, because I was reading a piece that you wrote for Harvard Business Review recently, and you were saying that despite all of this interest in flatter organisations, actually many large organisations still have layers of management and you have this Bureaucracy Mass Index. Can you say a little bit about what that is and what the cost of bureaucracy is?

Gary Hamel: Well, I just got very curious because everyone complains about bureaucracy. Jamie Dimon, chairman and CEO of JPMorgan Chase, has said it's a disease. Charlie Munger, who's the vice chairman of Berkshire Hathaway, has said it's a cancer. So CEO's are pretty hard on it, and yet I meet very few who have any kind of a credible plan for actually killing it. And it seemed to me that one of the first things you have to do is admit what it costs.

So we've developed some measures at the level of an economy. We figured that across the OECD, the cost of excess bureaucracy is somewhere around $9 trillion a year in lost economic output and I think we have some pretty good thinking underneath that. But with respect to an individual organisation, it is hard to beat something that you can't measure. So some of the costs of bureaucracy are obvious: you can see multiple layers in an organisation that kind of shows up on the P&L, like too many bureaucrats. But a lot of the costs, the insularity that comes from having many people whose work is internally focused, the conservatism, having a lot of things that dissuade you from taking small risks, the endless politicking that goes on in organisations - which is an enormous waste of energy - those things are not so visible.

So we created this little thing, the Bureaucracy Mass Index. It's really a way of at least beginning to build a baseline and say, 'well, how much of this is there in my organisation', with a hope that now we have something at least, like a net promoter score, that we can measure against. A decade or two ago very few companies, measured their environmental impact but now many do. And our hope is that over time, stakeholders of all sorts, recognising that bureaucratic model is toxic to organisational vitality, innovation growth, are going to start to hold leaders accountable and say, 'how are you doing? Is this going up or going down?'

Lisa Gill: And do you find that when you present this data or share it with executives they are open to it? Because it seems like when we're stuck in a paradigm, even when faced with facts and data, it's very difficult to change a worldview or something that's been ingrained for over 150 years.

Gary Hamel: I think it's very difficult. I get very little pushback on our arithmetic - people admit that it's expansive. I get very little pushback on the idea that it has to change. Most CEOs, having struggled with a variety of environmental forces and change, are willing to admit that the real barrier to building adaptable and innovative organisations isn't the operating model. It's not supply chain, logistics, and so on. Neither is it even the business model, although most understand that it has to change radically today. Most actually understand that it's the management model - it takes too long to get decisions made. People feel, and are, too disempowered. There are not enough employees who think and act like owners. There are legions of people in organisations who basically run internal monopolies, and HR and Finance and IT aren't really accountable to end users. So very few CEOs argue against the data or the need for change.

I think what holds them back is a combination of three things, which I'll mentioned briefly and then we can go deeper if you like. First, I think historically they didn't have many models. So most CEOs wouldn't have sailed with Columbus, right? They would have wanted the TripAdvisor review before they got on the ship. And so when you say it needs to change, they say, well, show me somebody who's done it. And so I think now we have more models. But that's been a hurdle for many.

Second, even if you see a model, what's often not clear is the path between here and there. Because you look at some of these vanguard organisations that are managing very few layers with very little bureaucracy and many of those models are built over a decade, or two or three or four. And so you see the endpoint in what's been a long migration but aren't sure what the intermediate stages are for you. So we for sure have been working on that problem.

I think the hardest one though is that any alternative to bureaucracy requires a pretty radical redefinition and redistribution of power. And if you spend your entire life playing this massive multiplayer game we call bureaucracy and learning how to accumulate and use bureaucratic power, and then one day someone says to you, well, now we're going to change the game. Well, that's like saying to LeBron James - a basketball player - that now we'd like you to play volleyball. And you're probably not going to be enthusiastic about that. So I think that is probably the most difficult problem of all, because when you look at other deeply embedded social structures through history the forces of change usually didn't start at the top, they started somewhere else.

So I think it will take a certain kind of self-enlightened leader to say, yes, we're going to do this. I think it means for individuals- as well as an organisation- that you need a personal migration path to think through. Well, what does it mean to succeed as a leader in an organisation where power now is almost entirely divorced from position? Those three things - once the motivation is there (which I think in many cases it is), a lack of a model, a lack of a migration - how do we go from here to there? And to some extent, just having too much of yourself invested in the old model.

Lisa Gill: Yes, I really agree with those three challenges. What in your experience, and in your work, have been ways that you've helped people or seen people navigating those challenges or finding their own way of addressing them?

Gary Hamel: We are early on in this. So I don't want to make bold claims. But I think we've had some interesting experiments. Some successes here and there that at least point the way, perhaps, to a solution. Let me start with a couple of things that I think are required, and then I'll talk about the solution. First of all, I would argue that if the goal is to uninstall bureaucracy or move to a post-bureaucratic organisation, this is going to be a complex, multistage redesign. Bureaucracy (at least as practiced in a modern company), emerged over quite a considerable time - probably 50 or 60 years from the late 19th century into the mid 20th century. And now what we take for granted had all kinds of twists and turns and dead ends to emerge where we are. So I think the idea that you can simply install whatever comes next, like you'd do with a CRM installation, or an ERP, is naive. I think we have to start by saying that a lot of this we're going to have to invent as we go, and and it will have to evolve. But we're not at the point where you can buy some kind of off-the-shelf playbook from your consultant of choice.

Secondly, even when you have a CEO who understands this needs to happen - and I think there quite a few progressive ones out there - they are often stymied by the next layer or two of leaders who have a lot of emotional equity invested in the bureaucratic model. It took the Western car companies - Volkswagen, and the rest of the German companies and the US companies - about 30 years to really understand what the Japanese did with total quality, and the hardest thing for them was not understanding statistical process control or pareto analysis. And the hardest thing was they had pushed power from supervisors down into front level employees, given these people the ability to stop, production lines and to become problem solvers.

That was an enormous step - to yield your power. In a way, the job description of every manager is to control - that's the synonym, to manage means to control. And your value is demonstrated by more rules, more control, more supervision, more oversight. So when you say, well, we're going to give a lot of that away and try to build something that's self managing, you are eroding a lot of the economic value of a managerial job. So even when you have progressive CEOs, they often face what I call the Gorbachev dilemma - presuming that he was genuine about wanting glasnost and perestroika, and that the peasants wanted a better life. A lot of the folks in between the apparatchiks, the nominal Cateura, weren't so sure, and ultimately stalled out most of what he wanted to do. And here we are, all these years later, still, essentially an autocratic society.

So any approach to solving this problem first of all has to be emergent just because of its complexity and the amount of new things we have to invent. And secondly, you have to find a way of going around those who have a vested interested in just stalling. Because for a CEO - we look at these people as being amazingly powerful - but most of them certainly don't feel that way. Most of them are intensely frustrated by the slow pace of change in their organisations, even when they're trying to get the organisation to do things that are fairly incremental, and not all that challenging. And I would say just one last kind of precondition - that whatever the process, it has to be emergent. It has to in some sense be bottom up - you have to create a coalition of the willing.

Thirdly, because bureaucracy works after a fashion, whatever you do you have to be careful that you don't blow up what is there. So you have to have something that is revolutionary in intent, but evolutionary in the doing. I often ask CEOs today to think about the enormous change you see, when you look at Netflix as a model for how we consume video content, or YouTube, with terrestrial television - where, you know, 20 or 30 years ago, you had three channels, perhaps. And everybody can get the sheer amount of change. And then you ask them, can you imagine something equally radical in how you manage, lead, organise, plan, allocate - and they struggle.

To blow up what's there would invite chaos. So that means that whatever we do has to be quite experimental, it has to be prudent in the doing rather than putting the organisation at risk. So with those kinds of design parameters in mind, what we've been doing - and I'm happy to provide an example or two - is starting with not a set of practices, because you can look at some of these vanguard companies and become very enamored with a particular way they have of doing peer review, or a way that they might use to allocate resources through some internal Kickstarter-like thing. And generally, I urge organisations not to start by trying to import a practice, because you're going to try to graph something on the indisputable root stock, and it'll be gone.

Instead, I think you have to go back further and start with a set of principles and say, well, bureaucratic organisations are built on an internally consistent set of principles called specialisation, formalisation, unitary command, routinisation. So those are things are deeply embedded in our processes. And so is there an alternate set of principles? I think there is. And those principles around openness, transparency, meritocracy, using markets instead of hierarchies to allocate resources. So you have to start by saying, alright, if we took any of those principles seriously, what would be different? For me, the kind of problem-solving territory is a matrix. Not to make this sound too complicated, because it's really not. But a matrix where on one axis, you have the core management systems - how we hire, how we promote, how we compensate, how we plan, how we allocate resources, how we coordinate, and on the other axis, you have a set of principles, we need to be more open, we need to be more experimental. We need to be more meritocratic. And then the challenge is, ok, if we took any of those principles seriously, what would change?

The way we've been trying to tackle this with some organisations - most recently, we did something with the North American part of Adidas, the global sportswear company. And in that case, we went to 3000 employees who are all eager to have an organisation that is more adaptable, more innovative. And we said right, we know these principles are important. We put together a fairly simple little MOOC - an online massive open online course - and each week, we talk about one of these principles and we'd give examples from progressive organisations. And the question to 3000 people was, right, so what would you change? If we wanted to be more open, what would you change? And somebody might say - well, I think we should publish all salary information. So there's no mystery about what people get paid. Somebody else said, no, no. For me, being open means that we have open books that we share all the financial information. So we really feel like we all know how the company's doing. Somebody else might say no, openness means inviting our customers and retail partners into the early stages of our product development and opening that process up to them. So we did this over about eight weeks - each week, a new principle. Each week, we're asking people to kind of hack the management model. So we had more than 800 hacks. At the end of eight weeks. We had a simple little algorithm that asked people to review their colleagues hacks. There were almost 10,000 peer reviews, and the ones that were most promising quickly rose to the surface. Then we built experiments around those at very low cost, let's go through, you have a new way of setting goals for teams - let's try that in one team of volunteers for 30 days, and see the before and after measure what happens.

So, I think in the same way, a company like Amazon or Google moves forward through just constant restless experimentation, that's the same way we have to change - evolve the measurement. I don't think it's an one kind of armageddon, massive battle to the death of bureaucracy. It's saying, right, we know there are different ways to do things. Let's try them, let's do them in a safe way, and the ones that work will propagate, the ones that won't we learned something or we stopped them. But what was amazing to me was the fact that people were incredibly engaged, they felt that they had the chance to design their own work environment, rather than these distant imperial forces that handed these things down.

Many of the suggestions replicated what we already know works in other progressive organisations. So I think that's probably the way we're going to have to do this. And the first principle of design thinking or innovation is go to the users. So if you want to build an organisation that unleashes talent in an unprecedented way, go to the users ask them what it's going to take. By and large, they are smart enough to understand that at the end of the day we still have to make the numbers, we still have to deliver five nines for reliability. These are not children - they understand that this has to happen within a real business context. But the beauty of doing it in that way is that when you have 100 people saying this process sucks, or here's a better way - there's no two or three EVPs SVPs, or somebody else who can say like, we're not going to do that. And so you're really consolidating the power of people who in most organisations have very little power, but when you put them together, they have enough.

I love that idea of not starting or installing practices first, but looking at principles and exploring those and what would it look like if we really believed in openness or transparency. Do you also think that there's some unlearning that we have to do from this kind of bureaucratic industrial model that we've all been conditioned into? Both if we're employees, and if we're managers?

Yes. I think just as bureaucracy in a way undermines our organisations - it infects them with maladies that make them inertial and incremental - I also think it doesn't make us very good human beings. The game that you have to play to get ahead in bureaucracy - I mean yes, part of it is competence. Good people do get ahead. But it also values a lot of skills that a lot of us are not that proud of every day. You know, in a bureaucracy there's often a zero-sum competition for promotion. So it's quite easy - almost mindlessly - to just suddenly undermine a rival and not be very supportive. Because at the end of the day, one of you is going to get promoted and not the other. In bureaucracy, because budgets tend to be fairly inflexible, and it's a kind of a ritualistic process once a year, there's a temptation to shade the truth or argue for more than what your team might need because you don't know when you're going to get another chance. Your career is often largely controlled by one boss- so it's very easy to shade the truth or to swallow an objection and play to your boss's ego and their prejudices. And so in many ways we behave at work in ways that we would never behave with friends or with family, but we find ourselves in a game where those skills are required. So I think there is unlearning and relearning that has to take place.

Most of all, we have to relearn what it means to be a leader. More books are written about leadership than any other business topic, there are more blogs on it - every organisation has some leadership development program. But I think mostly the word we use - leader - is complete bullshit in organisations. Because the only way you can be sure you're having a conversation about leadership is to start with an assumption that you have no positional power. You have no authority, you have no title, you have no resources, and you have no power to sanction. And if you start with that, then you can ask - alright, what can you get done? Because now we're talking about your capacity to lead, to inspire, to bring a coalition together, to vision cast or whatever you need to do to move a group of people from A to B.

But as long as you confuse bureaucratic power with leadership, it's very difficult to know, are we having a conversation about your capability as a leader or your ability to wield the big stick of bureaucratic power? As anybody can tell you who's been in organisations at all, there are a lot of people in leadership positions who are really not leaders. And they would be voted off the island if people had the choice. And so companies - like Haier in China is one the world's largest domestic appliance maker, or WL Gore is another famous material science company that makes cortex and a thousand other things - these companies give teams the right to choose an unchoose their own leaders. Because the thinking is that the only way you really know whether there's a leader in this job is whether people get to tell you that or not. Otherwise, you'll have people who have power, but really have never developed the skills of leading.

So I think we're going to have to rethink our leadership curriculum. It's just ironic to me that many companies will have a stratified Leadership Development Program. So if you're at this level, you go to the Emerging Leaders Program, and then you go to the Advanced Leaders Program. But it's like, no - anybody can exercise that. And so teaching people a new set of leadership skills - how do you create and own your own personal point of view about the future that is compelling for other people? How do you learn to build a coalition and bring people together to do something new? How do you get really good at connecting people and building a network? How do you get good at clearing bureaucracy out of people's way? And so there's a whole new set of skills that are pretty much under under taught and under practiced. So yes, there's a lot of unlearning and relearning. That's going to go on. And so we're working right now on what I would kind of call Twelve Steps for Bureaucrats or Detox for Bureaucrats. Because if you've spent a lot of time in a large organisation, a lot of these old behaviours are reflexive to you.

Lisa Gill: Yes, absolutely. Can you share some of the insights from your Twelve Steps program or what advice you would give to leaders who are trying to detox?

Gary Hamel: I think the first thing in any recovery program - one of the steps - is that you have to do a fearless moral inventory. What is my part in wherever I've ended up in life? Because it's always very easy to blame somebody else for where you ended up. So I think there's something similar and just like we have a Bureaucracy Mass Index that we use to measure bureaucracy in an organisation, we have kind of a little tool - am I a bureaucrat? Where you can start to ask yourself, is there something I've done in the last month to suddenly undermine a rival? Did I take refuge in parochialism, at some point, when another part of the organisation asked me to help? Have I sometimes spend less than completely forthright with the superior because it was easier to kind of just agree with them. So we have about a dozen of those things. And, you know, we ask people to go through that and try to be honest, and do that together. Because I fall into these traps - everybody does. And so there's no shame in it, but it's being honest. And then it is giving the people around you permission to say, "hey, I think right now, you're kind of falling into that trap, you know", and then trying to change accordingly.

Lisa Gill: And in terms of employees then - because I often find I hear stories from leaders when they tried to initiate a transformation in their company to exaggerate and they declare self management - and people sort of lay in wait, and they're still not stepping into their new authority or initiative. And leaders tell me how frustrating this is. So I also feel like there's some unlearning to do from an employee perspective, because we've been so trained to be sort of passive and compliant.

Gary Hamel: Everybody says I want more power. But I'm not sure that's always the case - because with power comes accountability. So I think of - for example - this Chinese company, Haier - where they take an organisation of 70,000 people, and they divided it into 4,000, micro-enterprises - little teams, every one of which has its own P&L. And a lot of your compensation depends on how you do - the profit of that little micro-enterprise. You have enormous freedom.

They call it the three freedoms. I may not fully remember. But you have the freedom to set strategy, you have the freedom to hire and fire the people on your team including the leader, and you have the freedom to decide on how you distribute rewards. So that's a lot of freedom. Having said that, more than half of their compensation is at risk. So if you do well as a little unit, you have enormous upside, but if you don't, you don't. And so, I think a lot of us, we kind of like to be protected from reality by the organisation. Let me just go on, not too much pressure. I will call you on your mediocrity if you don't call me and so on. So yes, I think it's very easy - particularly the front lines to talk glibly about wanting to be more empowered - but I'm not sure that's true.

The reality is that under the right conditions, I think it is true for most people. Because most of us in our private lives are not willing to give a lot of power to somebody else. We don't let somebody else choose what clothes we wear, or what cars we drive, or what movies we see. And couples and partners will negotiate that through, right. So it's not that most of us do what some CEOs say, which is well they just want to show up and leave their brains outside. No, I don't think that's true. But there's also a pretty big change that has to happen there. And people have to believe that you're equipping them with the tools and the skills to succeed, that you're not throwing them in the deep end, that at least for a time there's there's a safety net. I was talking to a leader in local government in the UK, and this individual wanted to do something as simple as increasing the discretionary spending limit for frontline folks from a few hundred pounds to a few thousand pounds, and most of them refused. Because you're just going to come and whack me if I make a mistake.

So building a culture that's fault tolerant, equipping people with the information, the skills, they need to be able to use their freedom wisely, all of this is important. Otherwise, you may say you're free and people are going to say, I'm not so sure. You meet people who are willing to give power away. And you also need people who are willing to pick up that power. Now, there's a very interesting experiment that's been going on over the last couple of years at Michelin - you know, the 100 year old industrial company, a world leader in tyres. It started as a very experimental thing with one upper level leader - Bertrand Batterman is his name. He had run a factory in China, he had an ex military career in the French military. But he started wondering, why can't we give more authority to frontline people? Why can't we better use their skills and their gifts? So literally, as kind of a one person crusade he went around Michelin talking to supervisors and factories - these are people who might have 10 to 20 people working for them - and he said, 'would you be willing to do a year long experiment where you're going to give your power away?' And he found 39 individuals who said, 'yeah, let's try that'.

And purposely, they didn't start out with some very detailed model. It wasn't a top down program, because we don't really know how to do this. And for the first year, they had very little communication across these 39 leaders because they really wanted them to struggle and find their own way, rather than try to prematurely converge on one model. And what was very interesting is that leaders had variety of approaches to this. Many leaders ended up having people on their team shadow them for a day or two or three and said, 'tell me what are you doing that the team could do better?' And the team would come back and say, 'why are you worrying about vacation scheduling?' or 'why are you worrying even about production scheduling? Why are you worrying about calling the maintenance crew?' And so on. And very quickly, they found there are a lot of things they could do better than the leader and the leader found that his or her job got better because now they are really there to support people, to build them, to solve problems. I am not being a babysitter to people who are perfectly capable of managing themselves. And so that's now spread. They're doing it at a much larger level. But it started with learning on both sides - the individuals saying yeah, we can take this power. And if we sometimes screw it up, that's fine - we're going to learn our ways with this. And same with the leaders themselves. So, in any organisation, this is going to take a while. And anybody who tells you that you can accomplish this in less than a year or two, I think is being naive.

Lisa Gill: On that note, what do you think about some of these pre-designed models for organising like holacracy? What are your thoughts about that?

Gary Hamel: I don't have enough experience to comment on any particular model. But I'm very dubious that we're at a point in the evolution of management - two dot zero, or whatever we might call it - that you can just layer in a new model. Because what I see - and I think my colleagues have done as much deep search in as wide a variety of vanguard companies as anybody - is companies that are amazingly successful, but with enormous variation in their practices. Some of that variation is just coincidental because of how they happen to develop, and some of it is a product of their industry. And yet it tells me that you really can't start with a highly prescriptive set of practices - not least because if those practices don't grow out of a deeper set of principles, by definition, practices will get out of date, the world changes, or you're going to discover some problem and you can't solve it. You can't change the practice by referring to the practice itself - you have to have some higher order thing.

The analogy I sometimes use is a very famous biblical passage that's often read at weddings. I think it is in the second book of Corinthians, 13th chapter. It talks about what love is - but it talks about it at the level of principles. It's long suffering, it looks not after its own, its kind, it's gentle. And if you internalise those values, I think you will be a loving person. And at the end of every day, you think, 'well, how did I do?' And so on.

On the other hand - and I'm thinking about things between two partners - if you reduce that to a set of recipes, which is like, always bring flowers on Friday, put the toilet seat down, cook dinner - that's kind of sterile. And pretty soon your partner is going understand that you're going through a set of motions, there's not the creativity, there's not the authenticity. So I really do think you have to start with the principles. Now, can you look across a menu of practices and say, 'well, that might work - that's really clever what they've done'. Of course you can. And that's why we're trying to document these practices. But to do a particular collage of a particular set of practices and say okay - let's install that - I have a hard time believing that's going to work.

I think you're more likely to provoke a backlash, because the irony is, if you want to build a self- managing organisation, and you want to empower people, I don't think you can start by empowering top-down a new model. You have to create a process of discovery where people can find that they can engineer it themselves and adapt it as necessary. And one of my deep beliefs is that, going forward, every change program is going to be socially constructed. And that the idea of a rollout or a cascade is just going to be nonsense. We'll have roll ups, but we're not going to have rollouts. And so I think - there's English expression, begin as you mean to go on - and I believe that if your goal is to start that way, give people a voice and design with them, educate them, show them what else is out there, let them borrow as they will. But I don't think there's a single model that we're even close to as a one size fits all.

Lisa Gill: Where are you getting your inspiration from at the moment? Are there any organisations or stories that are particularly exciting to you?

Gary Hamel: I get it in all kinds of places. I'll give you a couple of the sorts of things that inspire me. And a lot of it comes from outside of business, though not all of it. For example, the most recent brain studies using functional MRI scanning - we're now able to start to get a level of detail that we've never been able to get before, where you can actually see synapses, you can see the connections between neurons in the brain. And what's amazing is it turns out the brain is not hierarchically organised. And for years we thought it was. Our experience tells us it's not because if I see a piece of chocolate, my limbic system immediately takes over right, now it's in control. And it says we want chocolate or whatever appeals to us in those ways. And so we can see that the brain has this incredible lattice that has all these connections running laterally. So that's very inspiring. Because if you think about - well, if our goal is to produce highly evolved organisations, well let's start with a model from biology, and the most evolved thing on the planet, which is the human brain. So that's a place of great inspiration - looking at what's what's going on there.

And right now there's a lot of stuff that's going on in social media - once you get rid of all of the clickbait and all of the hate speech and all the garbage. But underlying it is a lot of interesting things about how human beings can organise in the absence of centralisation. Reddit - the online community of communities - they did something interesting about a year ago. And I would have never thought this thing might work. They created 1000 by 1000 grid of pixels. And you could go in as a Reddit user, and you could change the colour on one pixel across six, yes, a palette of 16 colours. And you could change one colour. And then it was twenty minutes before you could change another colour. So they ran this thing - I don't remember if it was 48 or 72 hours - over a finite period of time, where they invited anybody come in and change a pixel. When you think about that and think you're just going to end up as a completely random something - like, what could happen? Well, of course, that's not what happened.

Reddit communities started connecting with each other and saying, 'listen, I'm going to do pixel at this coordinate, right now - will you line up and do the next, and the next', and so on. And what you have over this period of time is you have this amazing global competition to create shapes. And if you go and look at this thing - you can find it online - you have the Linux Penguin, in one corner, you have any number of different flags from around the world, you have people's favourite online video, characters, you have a certain amount of profanity, but what you don't have is disorganisation. There's no part of that canvas that just looks like it was random. Isn't that amazing? In a very short period of time, with very simple controls, human beings can collaborate in ways that produce meaningful images and structures. So why do we need a hierarchy again? So I guess it's almost a truism that you can't change something fundamentally, as long as you're inside it. So if you pick up a business book today - and every reference is about business - and they go in, and you can tell the author's mental model is that forever, we're going to have these formally arranged hierarchies. I mean, just put it down. Because you're not going to learn anything new there. You have to start with a broad problem. And then look for analogies. Are there other places completely outside of a business organisation where you can find inspiration?

Lisa Gill: Yes, I mean, that's how most of the world's greatest innovations occurred, right? By people connecting random things and learning something new.

Gary Hamel: And by trying things that didn't work. One of my one of my great frustrations - so I now live in Silicon Valley and I've spent quite a bit of time living in London and I live for quite some time there - and when I hang out with people from Stanford, let's say in the computer science department, you have people who are trying to teach machines, how to emote, or you meet people in engineering who are trying to master nanoscale manufacturing or graphene or you know, other esoteric materials. Then you go - and I guess I'm going to be critical - but then you go to the business school. And it's not clear what problem people are trying to solve. Is it like, we're a little more efficient or a little bit, whatever. But there doesn't seem to be any nobility into what they're they're trying to do. And neither is there any experimentation.

I mean, there's a reason that companies today throw millions of dollars at Cambridge and Stanford and MIT in biosciences and genetics and engineering. Nobody is throwing millions of dollars at business schools, because they don't think we can help them solve these fundamental problems. And now there is more experimentation going on - there's a lot of behavioural economics where, you know, we put MBA students in a room and concoct some experiment events. And there's a certain amount you can learn there, though most of it we already know. But very few faculty are actually inside organisations experimenting with new systems and processes and so on.

And yet, when you go back, and you look at how most breakthroughs happen in science, they happen when somebody did an experiment, and you got an anomalous result. And you said, 'What the hell? Where did that come from?' And that forces you to go back and do your theory. And I think we've almost completely lost that kind of experimental vibe in in management research. And we also have kind of lost, like real nobility in what we're trying to accomplish. I sometimes tell my colleagues who wish managers would pay more attention to their work, that if, when you write your journal articles, you're neither profound nor practical, and you don't give them traction on Monday morning - why are they going to pay attention? And, we have amazingly, wonderfully interesting problems to solve in the world of management and organisation. But I think most of us just are still playing at the fringes.

Lisa Gill: So on that note, what do you think we all could do in order to make the next ten years of management innovation more fruitful, or to move in the right direction?

Gary Hamel: I think the first and maybe easiest thing to do is if you work at any level in an organisation, start to see yourself as an experimenter, somebody who can try something. One of my favourite organisations is an Australian company that develops web based tools for large company that's called Atlassian. They look at every single process, they have HR and finance - and every single process is forever in beta. And they're just constantly evolving. And other's - they're evolving their management model at least as fast as they're evolving their business model. I think there's not one person at the top thinking all of this up. It's this ethos that, well, you know, what can we try for next 30 days as a new way of doing performance reviews - let's put it all on our mobile devices. And let's just ask people simple little questions that create a coaching opportunity between colleagues or colleagues and boss, and let's just try that.

I think most people who work in organisations - they think about the processes by which the organisation runs as, like, those belong to somebody else. Like, that's their process. But like, bullshit - right? You want to be careful - don't blow up what's already there, make sure you ask for volunteers. But don't ask for permission,. I think that idea of starting where you are and experimenting is key. One of my favourite examples of that is a woman who works in the NHS. And this has now been reported. It's a well known story, but I think I was one of the first. I don't know how she found me, but it happened a long time ago in 2013 and her name is Helen Bevan. And like a lot of people who work in the NHS, she was frustrated at how often patient care took a backseat to everything else. So in 2013 - which was the 65th anniversary of the NHS - without anybody's permission, she somehow hijacked a little social site. And she put up a little template where you could make a pledge to something you would do as an employee at the NHS to improve patient care. And she was working in a unit that she thought might be disbanded in a couple of months. So she set this up just as like a 60 day experiment. And using whatever tools she could she got the word out and said come and make a pledge. We can change this, we do not need to wait for a new mandate, a new organisational structure, new metrics - let's just try to do better.

Well, by the end of a couple of months, she had 187,000 pledges from paediatricians saying they wouldn't prescribe medicine for children without pasting it themselves. 187,000 pledges. They did it the next year, and they had 800,000. The next year, 1.1 million. And this has now been replicated across a number of countries. This woman with a couple of colleagues built something called a school for helping care radicals to teach other people how to too - but it started with one person who said I'm not going to be helpless. I'm not going to wait for somebody else. And so I think the spirit that is almost entirely lacking in our organisations is a spirit of activism. And it's kind of ironic, because every corporate leader will say well, we need to change faster. So my question is, okay, well have you taught people how to be activists? How to have an idea, build a coalition, run an experiment, make something happen? And, you know, I think the idea almost fills them with horror. But if you look at how change happens more generally in our society, that's how it happens. Whatever the issue - whether it's me too, whether it's the environment - it starts with somebody saying, I'm not going to be afraid, I'm not going to ask for permission. You know, I'm not a terrorist. I love my organisation. I love the people around me. But I'm going to do something.