Please, Hamel, Don’t Hurt ‘Em

On March 24, Gary Hamel posted to his Wall Street Journal Management 2.0 blogThe Facebook Generation vs. the Fortune 500,” an entry in which he spelled out:

“12 work-relevant characteristics of online life. These are the post-bureaucratic realities that tomorrow’s employees will use as yardsticks in determining whether your company is “with it” or “past it.” In assembling this short list, I haven’t tried to catalog every salient feature of the Web’s social milieu, only those that are most at odds with the legacy practices found in large companies.”

I encourage you to read the post, which showcases Hamel’s enviable ability to distill a phenomenon and explain it to executives without oversimplifying. I don’t think I’ll be doing him any disservice if, in the interest of concision, I list the 12 characteristics here without including his explanations:

  1. All ideas compete on equal footing
  2. Contribution counts for more than credentials
  3. Hierarchies are natural, not prescribed
  4. Leaders serve rather than preside
  5. Tasks are chosen, not assigned
  6. Groups are self-defining and -organizing
  7. Resources get attracted, not allocated
  8. Power comes from sharing information, not hoarding it
  9. Opinions compound and decisions are peer-reviewed
  10. Users can veto most policy decisions
  11. Intrinsic rewards matter most
  12. Hackers are heroes

Hamel writes that “If your company hopes to attract the most creative and energetic members of Gen F, it will need to understand these Internet-derived expectations, and then reinvent its management practices accordingly.”

I’m not so sure about the ironclad “will need to” part. Back when there was a thriving finance industry many of my students, including some incredibly bright, talented, and ambitious young people, wanted desperately to work in it. They would have put up with paleolithic technology and caveman bosses (neither of which were rare) in order to be part of that sector. Hedge funds, investment banks, and private equity firms have had to make wrenching adjustments recently, but not because of the preferences of the millennials they employ or want to hire.

In general, though, I believe Hamel’s right: most organizations do need to take into account how millennials work, and how they think about hierarchy, expertise, collaboration, decision making, resource allocation, and many other aspects of organizational life. Gary has been a longtime advocate for reexamining these aspects, and for moving us past what he describes as the “mid-20th-century Weberian bureaucracy” that characterizes most large organizations today.

But how should companies do this? How should they reinvent their management practices? One school of thought argues for something like a corporate anti-neutron bomb —  one that leaves the people there but obliterates the existing structures, hierarchies, and edifices. A company taking this approach would try to become entirely Weblike, and to exhibit all twelve of the characteristics Hamel lists.

Of course, few if any organizations are actually going to do this, and based on my conversations with Gary I don’t think this is what he’s advocating. But a fully Weblike company is a useful strawman because it sets up the question “Why not?” —  why would it be bad (in addition to difficult) for a company to adopt these characteristics?

To answer this question, let’s take a look at a prototypical large corporation and concentrate on two of its employees: a brand new millennial hire, and an experienced, competent midlevel manager (the truths of Dilbert aside, such people do exist).

To me, it makes no sense at all to:

  • Have these two compete on equal footing to get their proposed projects approved and funded
  • Give their ideas equal weight
  • Let the two of them (and all other employees) decide who should work for whom
  • Let the newbie veto the graybeard’s decisions
  • Let the millennial decide what he wants to work on all day, each day

Doing such things simply ignores the fact that the more senior employee has greater experience and institutional knowledge. It also ignores the fact that a predefined hierarchy, even an imperfect one, provides certainty and clarity over decision rights that are very difficult to replicate in a purely emegent or egalitarian structure (see the debate over inclusionism and deletionism in Wikipedia, or the great story in The Onion — “Marxists’ Apartment a Microcosm of Why Marxism Doesn’t Work.”).

The Web works in strange and wondrous ways, and has a lot to teach any of us who are interested in making companies work better. Enterprise 2.0, my shorthand for how companies can and should become more Weblike, is the subject of much of this blog’s content. And my work on Enterprise 2.0 tells me that adopting the 12 characteristics listed above is going way too far.

In fact, fully adopting any of them is, I think, overdoing it. A better idea than entirely replacing predefined corporate structures and practices with emergent ones is figuring out how to blend the two approaches to organizing work —  how to overlay emergent systems on predefined ones.

Another good idea is to reinvent current management practices not by replacing existing hierarchical routines with emergent ones, but rather by using emergent systems, communities, and processes to lead the way —  to show how existing practices can and should be changed. This could mean, for example, not having all ideas compete on equal footing, but instead ensuring that all ideas are open to scrutiny, commentary, and improvement, and that the ones that come from high up in the hierarchy aren’t treated as if they’re fully formed or free from error.

Here are some initial thoughts on how to start blending Hamel’s characteristics of online life into current management practices:

  1. All ideas compete on equal footing. No ideas are above review or commentary; there are no sacred cows within the organization. For an example of this in action, see this blog post.
  2. Contribution counts for more than credentials. Credentials are not necessary for making contributions. Bo Cowgill was working in customer service at Google when he proposed the creation of a internal prediction market for the company; he then became the ringleader of the team that built it.
  3. Hierarchies are natural, not prescribed. Some hierarchies are allowed to form naturally.
  4. Leaders serve rather than preside. Leaders expand their toolkit by using 2.0 technologies and participating in the resulting communities. They blog, tweet, join social networks, and use 2.0 technologies to show why they’ve ascended to high positions. Paul Levy, CEO of Boston’s Beth Israel hospital, is a prime example of such a leader.
  5. Tasks are chosen, not assigned.
  6. Groups are self-defining and -organizing. Just as with hierarchies, some tasks and groups are self-organizing.  Cisco decided on its current set of 20+ corporate priorities via a largely emergent process, and employees selected themselves into groups to work on them. All this, of course, was in addition to the ‘normal’ work of the company.
  7. Resources get attracted, not allocated. This is a tough one. Current resource allocation processes are highly hierarchical. Even when initiatives arise from emergent work, they get funded officially from the top down. It’s hard to see how to effectively change this.  Ideas, anyone?
  8. Power comes from sharing information, not hoarding it. One way to become powerful is to share information, refine and improve it, and/or use it to connect people with each other.
  9. Opinions compound and decisions are peer-reviewed. Decisions are subject to peer scrutiny. In other words, the crowd has the ability to weigh in on the direction the company is taking. This is very different than giving all crowd members veto power, or even a vote. Enterprise 2.0 does not mean setting up a corporate democracy (even Wikipedia is not a democracy).
  10. Users can veto most policy decisions. See #9. I think and hope that individuals will have greater voice within organizations in the future, but not greater veto power.
  11. Intrinsic rewards matter most. Companies use 2.0 tools and approaches to tap into a wider mix of motivations —  both intrinsic and extrinsic.  One note here: it’s important not to confuse intrinsic vs. extrinsic with small vs. big, or monetary vs. non-monetary. Many of the traders in Google’s prediction market are extrinsically motivated. They want external rewards for good work, but seem to be much more interested in t-shirts than cash prizes.
  12. Hackers are heroes. Dissenters are valued as long as they do two things: justify their arguments with logic and facts (or at least lay out how to test their hypotheses), and strive to be helpful to others and productive for the organization. “Everything sucks and this place is run by morons” is the stance of a sullen adolescent, not a courageous truth-teller.

What do you think of Hamel’s characteristics and my attempt to blend them with current organizational practices? Are we correct, at least on the right track, or badly kidding ourselves? And what have you observed about how millennials want to work, what technology makes possible, and how companies are adjusting to these trends? Leave a comment, please, and let us know.