Gary Hamel on busting bureaucracy for good

Lisa: So Gary, it’s been about just over ten years I think 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: Kind of both. I’m pleased at some progress but mindful of the challenge ahead. You know, when I wrote that book a decade ago, it seemed to me that we were at a point in time where organizations were facing challenges that lay outside the performance envelope of the bureaucratic top-down model which we all know and 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 organizations that have too many layers, too many rules, too many processes, and the data—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 there—not their imagination, their passion, their creativity. So yeah, we have a long ways to go, and I’m under no illusions of how difficult this is because as a social system, as a social structure, bureaucracy is one of the most ubiquitous, one of the most deeply entrenched. 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 down 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 drubbing at the moment, and rightfully so. So I’m optimistic but also realistic.

Lisa: Yeah, I think you said once that if we can invent the industrial organization then we can reinvent it. In creation, there’s almost nothing that is given about it.

Gary: You know, 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 the way of organizing human beings—it’s 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 organizations were growing very quickly, and we needed to create this new class of individuals called managers who are experts at kind of 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 organizations that are hierarchies of administrative capability, we need organizations that are networks of entrepreneurs. So that’s a big challenge, but we’ve done other difficult things as a species.

Lisa: It was interesting because I was reading a piece that you wrote for Harvard Business Review recently, and you’re saying that despite all of this interest in kind of flatter organizations, that actually many large organizations still have layers and 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, I guess?

Gary: Well, I just got very curious because everyone complains about bureaucracy. Almost everyone—Jamie Dimon, chairman CEO of JPMorgan Chase, has said it’s a disease. Charlie Munger, who’s a vice chairman at Berkshire Hathaway, has said it’s a cancer. So CEOs know are pretty hard on it, and yet I meet very few that 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, first of all, kind of some measures at the level of an economy. We figured that across the OECD, the cost of excess bureaucracy is somewhere around nine trillion dollars a year in lost economic output, and I think we have some pretty good thinking underneath that. But with respect to an individual organization, it’s hard to beat something that you can’t measure.

Some of the cost of bureaucracy are obvious—you can see multiple layers in an organization, that kind of shows up on the P&L, too many bureaucrats. But a lot of the costs—you know, the insularity that comes from having many people whose work is internally focused, the conservatism that comes from having a lot of things that dissuade you from taking small risks, the endless politicking that goes on in organizations, which is an enormous waste of energy—those things are not so visible.

So we created this little thing, the bureaucracy mass index, really as a way of at least beginning to build a baseline and say, “Well, how much of this is there in my organization?” with the hope that, now we have something at least, you know, like a Net Promoter Score or something that we can measure against. A decade or two ago, very few companies measured their environmental impact; now many do. And our hope is that over time, stakeholders of all sorts, recognizing that that bureaucratic model is toxic to organizational 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: Do you find that when you kind of present this data or share it with executives, they’re sort of open to it? Because it seems like when we’re stuck in a paradigm, even when faced with kind of facts and data, it’s very difficult to change a kind of worldview or something that’s been ingrained for like 150 plus years.

Gary: I think it is very difficult. So I get very little pushback on our arithmetic. People, I think, admit that it’s expensive. I get very little pushback on the idea that it has to change. You know, most CEOs, having struggled now with a variety of environmental forces and change, most of them are willing to admit that the real barrier to building adaptable and innovative organizations 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 that has to change radically today. But most actually understand it’s the management model.

It takes too long to get decisions made. People feel far too disempowered. There are not enough employees who think and act like owners. There are legions of people in organizations who basically run internal monopolies in HR and finance and IT and aren’t really accountable to end-users. So very few CEOs argue the data or the need for change.

I think what holds them back is a combination of three things, which I’ll mention briefly and then we can go deeper as 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.” So I think now we have more models, but that’s been a hurdle for many.

I think secondly, even if you see a model, what’s not often clear is the path between here and there. Because you look at some of these vanguard organizations that are managing with very few layers, very little bureaucracy—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 that’s an issue, and 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’ve spent your entire life playing this massive multiplayer game we call bureaucracy and learning how to accumulate and use bureaucratic power, and one day someone tells you, “Well, now we’re going to change the game,” it’s like saying to LeBron James, you know, a basketball player, that now we’d like you to play volleyball. And you know, he’s probably not gonna 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, they didn’t start at the top—they started somewhere else. And 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 organization—you need a personal migration path to think through, “Well, what does it mean to succeed as a leader in an organization where power now is almost entirely divorced from position?” So those three things, I think—once the motivation is there, which I think in many cases it is—it is a lack of often a model, a lack of a migration path (how do we go from here to there?), and to some extent just having too much of yourself invested in the old model.

Lisa: Yeah, 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, you know, finding their own way of addressing those?

Gary: Well, I think, you know, we are early in this, so I don’t want to make bold claims, but I think we’ve had some interesting experiments, some success here and there that at least points the way perhaps to a solution. And let me start with a couple of things that I think are required, and then I’ll talk about kind of a solution.

I mean, first of all, I would argue if the goal is to uninstall bureaucracy or move to kind of a post-bureaucratic organization, this is going to be a complex multi-stage redesign. So if you think about it, 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 know, you can simply install whatever comes next like you’d do a CRM installation or ERP is naive. So I think we have to start by saying a lot of this we’re going to have to invent as we go, 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.

I think secondly, even when you have—and I think there are quite a few out there—progressive CEOs who understand this needs to happen, they are often stymied by the next layer or two of leaders who, as I said, 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—it took them about thirty years to really understand what the Japanese did with total quality. And the hardest thing for them in all of that was not understanding statistical process control or Pareto analysis—the hardest thing was they had pushed power from supervisors down into front-level employees, given these people the ability to stop a production line and to become problem solvers. And that was an enormous step to yield your power.

You know, 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.

And 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 apparatus, the nomenclature—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.

And 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 interest in just stalling it out because, you know, a CEO—we look at these people as being amazingly powerful, but most of them certainly don’t feel that way. Most are intensely frustrated by the slow pace of change in their organizations, even when they’re trying to get the organization to do things that are fairly incremental and not all that challenging.

So the way—and I would say just one last kind of precondition—so it has to do—whatever process has to be emergent, it has to in some sense, I would say, be bottom-up. You have to create a coalition of the willing. And then thirdly, you know, because bureaucracy works after a fashion, whatever you do, you have to be careful that you don’t blow up what is there. And so you have to have something that is revolutionary in intent but evolutionary in the doing.

You know, I often ask CEOs today, I’ll say, you know, I’ll ask them 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 20-30 years ago you had three channels, practically, and so on. And everybody can get, like, what kind of—they can get just like the sheer amount of change. And then you ask them, “Can you imagine something equally radical in how you manage, lead, organize, plan, allocate?” And they struggle.

And so, you know, to blow up what’s there, I think would kind of invite chaos. So that means that whatever we do has to be quite experimental. It has to be prudent in the doing rather than put the organization at risk.

So with those kind 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 to allocate resources through some internal Kickstarter-like thing. And generally, I urge organizations: don’t start by trying to import a practice, because you’re going to try to graft something onto incompatible rootstock, and it’s simply not going to take. It’ll be gone.

And so instead, I think you have to go back further and start with first principles and say, “Well, bureaucratic organizations are built on an internally consistent set of principles called specialization, formalization, unitary command, routinization.” So those things are deeply embedded in our processes. And so is there an alternate set of principles? I think there is. And those principles are openness, transparency, meritocracy, using markets instead of hierarchies to allocate resources.

So you have to start by saying, “Right, if we took any of those principles seriously, what would be different?” So 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 so the challenge is: all right, if we took any of those principles seriously, what would change?

So the way we’ve been trying to tackle this with some organizations—most recently we did something with the North American part of Adidas, the global sportswear company. And in that case, we went to 3,000 employees who are all eager to have an organization that is more adaptable, more innovative. And we said, “Right, well, we know these principles are important, so we put together a fairly simple little MOOC (online massive open online course), and each week we talked about one of these principles.” We’d give examples from progressive organizations, and then the question to 3,000 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 in any case, we did this over about eight weeks—each week a new principle, each week we’re asking people to kind of, in a way, 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. The ones that were most promising quickly rose to the surface, and then we built experiments around those—very low cost. “Let’s go, you have a new way of setting goals for teams? Let’s try that in one team, volunteers for 30 days, see the before and after, measure what happens.”

And so, you know, I think of it 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, I think, the management model. I don’t think it’s in one kind of Armageddon-like 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. The ones that work will propagate; the ones that don’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. And that many of the suggestions replicated what we already know works in other progressive organizations. So I think I think that’s probably the way we’re going to have to do this. And you know, the first principle of design thinking or innovation: go to the users. So if you want to build an organization that unleashes talent in an unprecedented way, go to the users, ask them what it’s going to take. And 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 reliability. I mean, 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, you know, when you have a hundred people who are saying, “This process sucks” or “Here’s a better way,” there’s no two or three EVPs or SVPs or somebody else who can say, “We’re not going to do that.” And so you’re really consolidating the power of people who in most organizations have very little power, but when you put them together, they have enough.

Lisa: 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?

Gary: Yeah, you know, I think just as bureaucracy in a way undermines our organizations—it infects them with maladies, it makes them inertial and incremental—but I also think it doesn’t make us very good human beings. You know, the game that you have to play to get ahead in a bureaucracy—yes, part of it is competence. I mean, good people do get ahead. But it also values a lot of skills that, you know, 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. And because at the end of the day, one of you is going to get promoted. And in bureaucracy, because budgets tend to be fairly inflexible and it’s a kind of ritualistic process once a year, there’s a temptation to kind of shade the truth or argue more than what your team might need because you don’t know when you’re going to get another chance.

You know, because your career is often largely controlled by one boss, it’s very easy to shade the truth or to kind of swallow an objection and play to your boss’s ego and their prejudices. And so in many ways, you know, 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, yeah, there is unlearning and relearning that has to take place. And most of all, we have to relearn what it means to be a leader. You know, there are more books written about leadership than any other business topic. There are more blogs on it. You know, every organization has some leadership development program. But I think mostly the word we use—“leader”—is complete garbage in organizations 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, “All right, 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 conflate, 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? So, you know, as anybody can tell you who’s been in organizations 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 a choice.

And so companies like Haier in China is one—the world’s largest domestic appliance maker. W.L. Gore is another, you know, famous materials science company, makes Gore-Tex and a thousand other things. These companies give teams the right to choose 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, whether they kind of vote or not. You know, otherwise you’ll have people who have power but really have never developed the skills of leading.

So I think, you know, we’re gonna have to rethink our leadership curriculum. I don’t think the leadership—I mean, it’s just ironic to me that many companies will have stratified leadership development programs. So if you’re at this level, you go to the emerging Leaders program, and then you go to the advanced leadership program. It’s just like—no, no, leadership is 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 with people and build 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-taught and under-practiced. So yeah, 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 “12 steps for bureaucrats” or “detox for bureaucrats” because, you know, you’ve spent a lot of time in a larger organization, a lot of these old behaviors are reflexive to you.

Lisa: 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: Well, I think the first thing is, you know, in any recovery program, 12-step program, one of the steps—I don’t know which one, but one of the steps is that you have to do a fearless moral inventory. You know, what is my part in wherever I’ve ended up in life? You know, because it’s always very easy to blame somebody else for where you ended up.

So I think there’s something—and just like we have a bureaucratic mass index that we use to measure bureaucracy in organization, 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 subtly undermine a rival? Did I take refuge in parochialism at some point when another part of the organization asked me to help? Have I sometimes been less than completely forthright with a 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, you know, all of us—I mean, I fall into these traps, everybody does. And so there’s no shame in it, but it’s being honest and then giving the people around you permission to say, “Hey, I think right now you’re kind of falling into that trap.” You know, then try to change accordingly.

Lisa: And in terms of employees then? Because I often find—I often hear stories from leaders when they try to initiate a transformation in their company. You know, to exaggerate, they declare self-management, and then people sort of lay in wait, and they’re still not stepping into their new authority or initiative. And it and me just sort of 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: What we’re saying, you know—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, I think of this Chinese company Haier where they’ve taken an organization of 80,000 people, they’ve 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, and I may not remember them all, but you have freedom to set strategy, you have the freedom to hire and fire the people on your team, 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’s at risk. So if you do well as a little unit, you have an enormous upside, but if you don’t—and so I think a lot of us, we kind of like to be protected from reality by the organization. Let me just go on, not do much, pressure—“I won’t call you on your mediocrity if you don’t call me on mine”—and so on.

So yes, I think it’s very easy, you know, particularly at the front lines, to talk glibly about “We’d like to be more empowered,” but I’m not sure that’s true. Now, the reality is, under the right conditions, I think it is true for most people because, you know, most of us in our private lives, we’re 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?

And so it’s not that most of us—it’s sometimes CEO say, “Well, they just want to show up and leave at 5.” No, 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, you know, at least for a time, there’s some safety net.

You know, I mean, 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 five thousand pounds, and most of them refused because “You’re just going to come and whack me, right, if I make a mistake?”

So building a culture that’s fault-tolerant, equipping people with the information and 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 need people who are willing to give power away, and you also need people who are willing to take that power.

Now, there’s a very interesting experiment that’s been going on over the last couple of years in Michelin, you know, 100-year-old industrial company, world leader in tires. And back to my earlier kind of meme, it started as a very experimental thing where one kind of upper-level leader, Bertrand Bannerman is his name—he had run a factory in China, he had had 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 it began so little as kind of a one-person crusade. He went around Michelin talking to supervisors in 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 purposefully, they didn’t start out with some very detailed model. It wasn’t kind of a top-down program because we don’t really know how to do this. And they also, for the first year, 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.

Well, what was very interesting is leaders had a 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? Why are you worrying about production scheduling? Why are you worrying about calling the maintenance crew in?” and so on. And very quickly, they found there are a lot of things they could do better than a leader.

And the leader found that his or her job got better because now, “I’m really there to support people, to build them, to solve problems. I am not being a babysitter. These people are perfectly capable of managing themselves.” And so that’s now spread. They’re doing it at a much larger level. But it started where learning on both sides—individuals saying, “Yeah, we can take this power. If we sometimes screw it up, that’s fine. We’re gonna learn our way in this,” and same with the leaders themselves.

So in any organization, this is going to take a while. Anybody who tells you that you can accomplish this in less than a year or two, I think, is being naive.

Lisa: I know. What do you think about some of these pre-designed models for organizing like Holacracy? What are your thoughts about that?

Gary: I don’t have enough experience probably to comment on any particular model, but I’m very dubious that we’re at a point in the evolution of management 2.0 or whatever we might call this that you can just layer in a new model.

Because what I see—and I think I’ve done and my colleagues, we’ve done as much and deeper search in as wide a variety of vanguard companies as anybody—and what I see is companies that are amazingly, most amazingly successful but with enormous variation in their practices. Some of that variation is just coincidental because of how they happen to develop. Some of it is a product of their industry.

And yet, you know, it tells me that you really can’t start with a highly prescriptive set of practices, not least of which 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 kind of solve it. You can’t change the practice by referring to the practice itself. You have to have some higher-order thing.

The way I sometimes analogize—sometimes I use, you know, there’s a very famous biblical passage that’s often read at weddings, and I think it is in the second book of Corinthians, 13th chapter if I remember, but 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, it’s kind, it’s gentle.” And if you internalize those values, I think you will live—you will be a loving person. And if at the end of every day, you think, “Well, how did I do?” and so on.

On the other hand, I’m thinking about 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,” whatever—you know, that’s kind of sterile, and pretty soon your partner’s gonna understand 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, you know, we’re trying to document these practices. But to do a particular collage of a particular set of practices like, “Okay, let’s install that”? I have a hard time believing that’s gonna work. And I think you’re more likely to provoke a backlash because, you know, the irony is if you want to build a self-managing organization and 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 themselves and adapt as necessary.

And what, where my deep belief is that going forward, every change program is going to be socially constructed, and that, you know, the idea of a rollout or a cascade is just going to be nonsense. Well, that rollout—so we’re not gonna have rollouts. And so I think, you know, there’s an English expression, “This is beginning as you mean to go on,” and I think I believe that if your goal is to create—like, start that way. Give people a voice in design, educate them, show them what else is out there, let them borrow it as they will. But I don’t think there’s a single model that we’re even close to kind of a one-size-fits-all.

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

Gary: You know, I get it in all kinds of places. So yes, 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 that.

I mean, 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 organized. And for years, we thought it was. Our experience tells us it’s not because, you know, if I see a piece of chocolate, my limbic system immediately takes over, right? Now it’s in control and says, “We want chocolate,” or whatever it feels to us in those ways.

And so we can see that the brain is just this incredible mesh. It 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 organizations that are capable—well, let’s start with a model from biology, the most evolved thing on the planet, which is the human brain. So that’s a place of great inspiration, looking at what’s going on there.

Right now there’s a lot of stuff that’s going on in social media that I find—you know, once you get rid of all of the clickbait and all of the hate speech and all of the garbage, but underlying it is a lot of interesting things about how human beings can organize.

In the absence of centralization, the Reddit online community—community of communities—they did something interesting about a year ago, and I would have never thought—well, I might have thought, but it’s still surprising to me this thing worked. So they created a thousand by thousand grid of pixels, and you could go in as a Reddit user, you could go in, and you could change the color on one pixel. There’s a palette of 16 colors, and you could change one color, and then it was 20 minutes before you could change another color.

So they ran this thing—I don’t remember if it was 48 or 72 hours, a finite period of time—where they invited anybody to come in and change a pixel. What do you think about that? You think you’re just gonna end up with a completely random—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 one next?” And what you had over this short period of time was this amazing global competition to create shapes. And if you go 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 favorite online video characters, you have a certain amount of profanity, I mean—but what you don’t have is this disorganization. There’s no part of that canvas that just looks like it was random.

Think about it—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 like, why do we need hierarchy again?

So I think, you know, I guess it’s almost a truism that you can’t change something fundamentally as long as you’re inside it. So, you know, if you pick up a business book today and every reference is about business, and they go on and on, and you can tell the author’s mental model is that forever we’re going to have these formally arrayed 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 business organization where you can find inspiration?

Yeah, I mean, that’s how most of the world’s greatest innovations occurred, right? By people connecting two random things and learning something. I try things that didn’t work. You know, one of my one of my great frustrations—so I now live in Silicon Valley, and I’ve spent quite a bit—I’m living in London and now 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’m sorry, I don’t mean to be critical, but I guess I’m gonna be critical—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 trying to do. And neither is there any experimentation.

Right, 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 the fundamental problems. And, you know, now there is more experimentation going on of a sort. There’s a lot of behavioral economics where, you know, we put MBA students in a room and concoct some experiment or miss—and there’s a certain amount you can learn there. Most of it we already know. But very few faculty are actually inside organizations 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, you got an anomalous result, and you said, “What the hell? Where did that come from?” And that forces you to go back into your theory. And I think we almost completely lost that kind of experimental vibe in management research. And we also have kind of lost, like, real nobility in what we’re trying to accomplish.

And, you know, I sometimes tell my colleagues who wish managers would pay more attention to their work, I said, “You know, if when you write your journal articles and so on, if you’re neither profound nor practical, don’t give them traction Monday morning, why are they going to pay attention?” And, you know, we have amazingly wonderfully interesting problems to solve in the world of management and organization, but I think most of us just are still playing at the fringes.

Lisa: So on that note, what do you think we all could do in order to make the next sort of 10 years of management innovation more fruitful or, you know, to move in the right direction?

Gary: Well, I think the first and maybe easiest thing to do is if you work at any level in an organization, start to see yourself as an experimenter, somebody who can try something. You know, one of my favorite organizations is an Australian company that develops web-based tools for large companies. It’s called Atlassian. They look at every single process they have—HR and finance—every single process is forever in beta, and they’re just constantly evolving it. And others, they’re evolving their management model at least as fast as they’re evolving their business model.

I think, you know, and that’s not like one person at the top thinking all of this thing up. It’s just ethos that, “Well, you know, what can we try? Like, for next 30 days, a new way of doing performance reviews? Let’s put it all on mobile devices, and let’s just ask people simple little questions to create a coaching opportunity between colleagues or colleagues and boss, and let’s just try that.”

And so, you know, I think most people work in organizations, they think about the processes by which the organization runs as like, “Those belong to somebody else,” like, “Well, that’s HR’s process.” It’s like, right? Just like, you know, you want to be careful. Don’t blow up what’s already there. Make sure you ask, you know, for volunteers, but don’t ask for permission. You know, be prudent, don’t boast, but I think that idea of starting where you are and experimenting—

You know, my favorite examples of this 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 a long time ago, 2013. And her name is Helen Bevan. And like a lot of people who work in the NHS, she was frustrated how often patient care took a backseat to everything else.

So in 2013, which is 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 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 said, “Let’s just do this as like a 60-day experiment.” And using whatever tools she could, she got the word out and said, “Come make a pledge. We can change this. We do not need to wait for a new mandate, a new organization 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, you know, pediatricians saying they wouldn’t prescribe medicine for children without tasting it themselves, to—you know, 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 the School for Health and Care Radicals to teach other people how to do it. But it started with one person who said, “I’m not going to be helpless. I’m not gonna wait for somebody else.”

You know, and so I think the spirit that is almost entirely lacking in our organizations is a spirit of activism. And it’s kind of ironic because every corporate leader will say, “We all need to change faster.” So my question is, “Okay, well, have you taught people how to be activists? Like, you know, 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, you know, whether it’s Me Too, whether it’s environment, you know, whether it’s—you know, whatever. It starts with somebody saying, “I’m not going to be afraid. I’m not going to ask for permission. I’m not a terrorist. I love my organization, I love the people around me, but I’m gonna do something.”