About Gary Hamel
Gary Hamel is one of the world’s most influential and iconoclastic business thinkers. He has worked with leading companies across the globe and is a dynamic and sought-after management speaker. Hamel has been on the faculty of the London Business School for more than 30 years and is the director of the Management Innovation eXchange.
Hamel has written 17 articles for the Harvard Business Review and is the most reprinted author in the Review’s history. His landmark books have been translated into more than 25 languages. His most recent bestsellers are The Future of Management and What Matters Now. In these volumes, Hamel presents an impassioned plea for reinventing management and lays out a practical blueprint for building organizations that are “fit for the future.” We sat down with Hamel to discuss his upcoming session at Nordic Business Forum 2018.
Speaker Spotlight Interview
Nordic Business Forum: Hi Gary, thanks for joining us today. To start, let’s define some terms. What does management mean – and how does it differ from leadership?
Gary Hamel: I think of management as encompassing the structures, tools, and methods we use to get things done as a species. So in brief, management involves all the things we do to mobilize and organize resources to productive ends. And that could be running the back office of a bank. It could be running an e-commerce site. It could be organizing a mission to Mars or anything else that requires human beings to work together to accomplish something collectively they couldn’t do individually. So for me, that is the work of managing. And that’s what management is all about. Leadership, to me, simply means, as an individual, having the skills and perspectives necessary to engage others in activity. So leaders are individuals who are able to motivate, who are able to focus, who are able to guide and mentor other human beings in productive ways. I don’t think that either management or leadership should – it often does – but should imply any sort of hierarchical relationship or any hierarchical relationships. For me, managing is not about having an organizational pyramid that distinguishes between managers and employees. Being a leader doesn’t imply that you have a higher salary grade, or that you have more seniority, or that you have a higher rank. So when I talk about management and leadership, I do so completely separate from any discussion about formal positional power and hierarchy.
NBForum: Why do people often separate leadership from management and see them as mutually exclusive?
GH: I think this distinction between managing and leading is completely artificial and not helpful. The work of managing is unavoidable, whether it is getting your children out the door to school in the morning or whether it’s running a global company. Managing involves coordinating, scheduling, planning, allocating, prioritizing. These are things that human beings do all the time, in every sphere of our lives, every day. So all of us, all of us, are constantly managing something, just by definition. And we can do it more effectively or less effectively. I would argue that the way large organizations are managed today is often very ineffective. But yet, this work of managing is something that’s inescapable. We do it all the time. And I would go even further. If you think about management as the tools, structures, skills that are involved in organizing and mobilizing people to productive ends, that makes management the technology of human accomplishment. What we can do as a species is largely related to our ability to bring resources and people together in productive ways. And so this idea that somehow managing is less important than leading, I think it’s a nonsense. Management and managing is vitally important in every sphere of human activity.
NBF: Is there any distinction between the two at all?
GH: If you want to draw a distinction between leadership and management, I think the real distinction should be made is between leaders and bureaucrats. Because both leaders and bureaucrats have to manage. Everybody has to do the work of managing in some spheres of their life. I think when we think about bureaucrats, though, these are people who don’t know how to get things done without the big stick of bureaucratic power. So I often, when I’m having a discussion with individuals, I ask them to imagine that they are at work in an organization and they have no positional power. There’s no title after their name. They have no budget that they control. And they have no ability to punish or sanction the human beings around them. Nobody, literally nobody, “works for them”. And so, with that starting point, no positional power, no budget, and nobody working for you, my question is, how much could you get done? And if you could imagine how to get things done and make a difference in your organization and your world without the accoutrements of bureaucratic power, then good chance is you’re a genuine leader. If, without the paraphernalia of bureaucracy, you would feel powerless, then most likely you’re not really a leader; you’re a bureaucrat.
And so, just as you see managing and the work of management as important and as an activity that is happening everywhere all the time, leading is an activity that is happening everywhere and all the time. Some are better at it. Some are less good at it. But leading has nothing to do with how big the organization is, with whether you have a formal title. Leading is the ability to change the status quo in a meaningful way when you can’t do it by yourself. And so I think of managing– in many ways, managing is about optimizing or running an organization. Leading is about changing the status quo. But both are equally important and you shouldn’t try to pretend that one is more important than the other.
NBForum: How do management strategies look to you? We often hear that business strategies have had to undergo a paradigm shift to adapt to new, modern practices. Do you think the same will be true of management moving forward?
GH: I think there are certainly some things that will stay the same, but I think it needs to change in a very profound way. The management model that we have today is bureaucratic at its core. And in virtually every large- and medium-sized organization around the world, every organization conforms to the bureaucratic template. So, in virtually every organization, power trickles down; big leaders appoint little leaders; strategy is set at the top; resources are allocated top-down; managers assign paths and assess performance; human beings compete for the scarce resource of promotion; and financial rewards are the primary way of aligning incentives.
And yet, the world around us has changed profoundly. 150 years ago, the bureaucratic model was invented. 150 years ago, change was very gradual. Most employees were illiterate. Information was hard to move. And the easiest way of aggregating information was to have a few people report to a boss, have those bosses report to a bigger boss, and so on. Now, everybody can share the same information instantly. So even though the world has changed profoundly around us, the underlying management model has stayed rooted in the past and with some substantial negative consequences. Today, and we have a lot of data on this – this is not conjecture, it’s a fact – but most large organizations have struggled to keep pace with change. It’s why we now expect new business models will be created by newcomers. And it’s not because those new business models are especially complicated or difficult to understand, it’s because large organizations are inertial at their core. They tend to overinvest in what is. They tend to be run by individuals who have their emotional equity invested in the past. All of those bureaucratic rules and structures make it very difficult to move quickly.
So yes, I think the old model has to die. You can look to vanguard companies like Svenska Handelsbanken in Stockholm; like the Chinese appliance maker, Haier, in Qingdao, China; at the US steelmaker, Nucor. So there are an increasing number of post-bureaucratic organizations who enjoy enormous productivity advantages and demonstrate that there really is an alternative to the management status quo. Having said that, I think that managers often suffer– managers, CEOs, whatever you want to call them, they often suffer from a kind of ambition deficit disorder. And so even though they know their organizations are not as adaptable, not as innovative, not as inspiring as they need to be, they are unwilling to really change anything until somebody else gives them a roadmap or shows them a model. And I understand that, but back to the question about what does it mean to be a leader.
Think of when the team at NASA had to design a Martian Rover that is as big as a car but could land safely on the Martian surface. They had to develop a completely new set of technologies for bringing that Martian Rover out of its trajectory, slowing it down, and then putting it gently on the surface of Mars. There was no best practice to follow. And so I think we’re at a point in business history where we not only need better practices, we need fundamentally new practices. And the question is who are the leaders? What are the organizations that are going to have the guts to pioneer these? And many others will sit down on their heels, and wait, and be timid, and they’ll be behind the curve. But I’m hoping that I can inspire some leaders to be in front of the curve rather than behind it.
NBForum: And last but not least, what’s one thing you want people to learn from you?
GH: I want them to learn that when you’re up against a very complex, deeply embedded system – and that’s what bureaucracy is – you can still change it. That you don’t have to be a CEO or a senior executive to profoundly change your organization. That you can have an impact that is all out of proportion to your existing role, and all out of proportion to your formal power. That impact is not related to formal authority. Impact is not related to your job description. Impact is related to your ability to inspire and motivate others, and every human being has that capacity within them.
About Nordic Business Forum 2018
Nordic Business Forum will host its 9th annual business and leadership conference by the same name in Helsinki on the 26th and 27th of September 2018 for 7,500 C-level executives and business owners. Our 2018 main event will bring to the stage some of the world’s preeminent experts on strategy, artificial intelligence, and peak performance for two action-packed days.
NBForum 2018 is a place where you will uncover strategic success principles, discover how to apply new technologies to win in business, and learn how to drive and sustain personal performance. It’s also THE place to network and drive business development. The networking opportunities presented by our guests are unparalleled in the Nordics. You’re getting more than just a conference ticket — you’re getting access to some of the greatest business minds on the planet!
Nordic Business Forum is Europe’s leading conference organizer with events in Finland, Sweden, and Norway.