Gary Hamel - What Matters Now: How to Win in a World of Relentless Change, Ferocious Competition, and Unstoppable Innovation

Table of Contents

Copyright 2012 by Gary Hamel. All rights reserved.

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Library of Congress Cataloging-in-Publication Data

Hamel, Gary.

What matters now : how to win in a world of relentless change, ferocious competition, and unstoppable innovation / Gary Hamel. 1st ed.

p. cm.

Includes index.

ISBN 978-1-118-12082-8 (cloth), 978-1-118-21915-7 (ebk), 978-1-118-21916-4 (ebk), 978-1-118-21908-9 (ebk)

1. Management. 2. Organizational change. 3. Organizational effectiveness. 4. Strategic planning. I. Title.

HD31.H253 2012

658.4012dc23

2011042387

To my brothers, Dr. Loren Hamel and Dr. Lowell Hamel, for reasons they know well.

Preface

This is not a book about one thing. It's not a 288-page dissertation on leadership, teams, or motivation. Instead, its a multi-faceted agenda for building organizations that can win in a world of relentless change, ferocious competition, and unstoppable innovation.

This is not a book about doing better. It's not a manual for people who want to tinker at the margins of their organization. Instead, it's an impassioned plea to reinvent management as we know itto rethink the fundamental assumptions we have about capitalism, institutions, and life at work.

This is not a book that fetes today's winners. It's not a celebration of companies that have been doing great so far . Instead, it's a blueprint for creating organizations that are fit for the future and fit for human beings.

Obviously, there are lots of things that matter now, including social media, big data, emerging markets, virtual collaboration, risk management, open innovation, and sustainability. But in a world of fractured certainties and battered trust, some things matter more than others. While the challenges facing organizations are limitless, leadership bandwidth isn't. That's why you have to be clear about what really matters now. So ask yourself: what are the fundamental, make-or-break challenges that will determine whether your organization thrives or dives in the years ahead? For me, five issues are paramount: values, innovation, adaptability, passion, and ideology. Here's my logic for putting these topics front and center

• Values: In a free market economy, there will always be excesses, but in recent years, rapacious bankers and unprincipled CEOs have seemed hell-bent on setting new records for egocentric irresponsibility. In a just world, they would be sued for slandering capitalism. Not surprisingly, large corporations are now among society's least trusted institutions. As trust has waned, the regulatory burden on business has grown. Reversing these trends will require nothing less than a moral renaissance in business. The interests of stakeholders are not always aligned, but on one point they seem unanimous: values matter now more than ever.
• Innovation: In a densely connected global economy, successful products and strategies are quickly copied. Without relentless innovation, success is fleeting. Nevertheless, there's not one company in a hundred that has made innovation everyone's job, every day. In most organizations, innovation still happens despite the system rather than because of it. That's a problem, because innovation is the only sustainable strategy for creating long-term value. After a decade of talking about innovation, it's time to close the gap between rhetoric and reality. To do so, we'll need to recalibrate priorities and retool mindsets. That won't be easy, but we have no choice, since innovation matters now more than ever.
• Adaptability: As change accelerates, so must the pace of strategic renewal. Problem is, deep change is almost always crisis-driven; it's tardy, traumatic and expensive. In most organizations, there are too many things that perpetuate the past and too few that encourage proactive change. The party of the past is usually more powerful than the party of the future. That's why incumbents typically lose out to upstarts who are unencumbered by the past. In a world where industry leaders can become laggards overnight, the only way to sustain success is to reinvent it. That's why adaptability matters now more than ever.
• Passion: Innovation and the will to change are the products of passion. They are the fruits of a righteous discontent with the status quo. Sadly, the average workplace is a buzz killer. Petty rules, pedestrian goals, and pyramidal structures drain the emotional vitality out of work. Maybe that didn't matter in the knowledge economy, but it matters enormously in the creative economy. Customers today expect the exceptional, but few organizations deliver it. The problem is not a lack of competence, but a lack of ardor. In business as in life, the difference between insipid and inspired is passion. With returns to mediocrity rapidly declining, passion matters now more than ever.
• Ideology: Why do our organizations seem less adaptable, less innovative, less spirited, and less noble than the people who work within them? What is it that makes them in human? The answer: a management ideology that deifies control. Whatever the rhetoric to the contrary, control is the principal preoccupation of most managers and management systems. While conformance (to budgets, performance targets, operating policies, and work rules) creates economic value, it creates less than it used to. What creates value today is the unexpectedly brilliant product, the wonderfully weird media campaign, and the entirely novel customer experience. Trouble is, in a regime where control reigns supreme, the unique gets hammered out. The choice is stark: we can resign ourselves to the fact that our organizations will never be more adaptable, innovative, or inspiring than they are right now, or we can search for an alternative to the creed of control. Better business processes and better business models are not enoughwe need better business principles. That's why ideology matters now more than ever.