Book review: What Matters Now, by Gary Hamel
By Simon Caulkin Wednesday, 01 February 2012
Top-heavy, narrowly focused approaches to running companies are doomed, argues this insightful author. Simon Caulkin relishes some fresh thinking on management.
Although many of the chapters indeed began life elsewhere, it would be a pity if people concluded from this that What Matters Now was no more than a collection of casual essays. True, your average business book ('a Harvard Business Review article with extra examples', as Hamel sniffs at one stage) this ain't. It is direct and conversational, finding room for golf and God, or at least the church, and the San Andreas Fault, among less obvious business subjects. A direct interview with Terri Kelly, chief executive of hi-tech materials company WL Gore, is shoehorned in. Lists abound, as if Hamel were writing memos to himself, perhaps on subjects for more conventional management professors' books. And when did you last read a management tome that uses words such as 'noble', 'sublime', 'love' and 'beauty' without causing a wince or a snigger?
But then, Hamel's point is that 'management as usual' has had it. The issue is not doing existing management better to defeat traditional opposition, pace the book's strangely discordant subtitle, it's not about winning in the conventional zero-sum sense at all. That kind of management has become the problem, not the solution: its negative externalities - trashing the natural and financial environment, corrupting the polity, enriching the few at the expense of the many, diminishing the human spirit - outweighing the material gains. What he is talking about is turning management, the 'technology of human accomplishment', into something qualitatively different: a positive-sum game which benefits everyone.
So what does matter now? For textbook staples such as leadership or vision, Hamel substitutes 'values', 'innovation', 'adaptability', 'passion' and 'ideology', each of which gets a section and five chapters. It helps that he is incapable of writing a boring sentence - humanising management, he rightly believes, can't be done without humanising the language. He doesn't shirk the challenge. 'A Shakespearean catalogue of moral turpitude', 'nosebleed leverage', 'the subprime ship of folly' ornament the chapter on the financial crisis, for example. But the vigour also derives from the unfamiliar subdivisions and the insights they generate.
In 'Escaping the Management Tax', Hamel makes the fundamental but overlooked point that all management represents a cost - and a heavy one at that. In a large company, management will account for at least one-third of payroll and probably much more. For that you get control, but, as Hamel notes, control is a depreciating asset - and, anyway, a better version comes free with self-management, as exemplified by the extraordinary success of financial adviser and investment company Morning Star ($700m revenues, 40 staff) described in the same chapter, or when values are internalised, as at WL Gore. In management, quite literally, less is more.
Inevitably, there is some unevenness. While a number of the tapas courses - much of 'values', the chapters on Apple, entropy and 'Mourning corporate failure', for example - are worth the price of the entire menu, not all are as nourishing. The price of the broad spread is that the analysis is suggestive rather than deep. And everyone will find something to argue with in Hamel's scale of mattering.
Finally, we can all deplore the ideological straitjacket of top-down 'controlism' that held management in stasis for 30 years - but where did it come from? Oddly, the 'ideological' chapters don't tackle this. The answer, surely, is the dogma of shareholder value (under which, ironically, innovation and shareholders have done worse and managers much better), which needs to be jettisoned along with so much other baggage before the 'management moonshots', or overarching ambitions, of the last chapter can be achieved.
Is it coincidence that two of Hamel's new-management exemplars, Morning Star and WL Gore, are private companies, able to develop their alternative philosophies sheltered from the short-term pressures of Wall Street?
If What Matters Now reads in part like Hamel's 2007 The Future of Management recast as a manifesto, it's a reflection of the added urgency that events since then have given to the goal of reinventing management. What matters most for managers now is not keeping the wheels turning, still less enriching shareholders alone - it is rethinking what their job is and ought to be.
What Matters Now: How to win in a world of relentless change, ferocious competition and unstoppable innovation
- Simon Caulkin is a blogger and former Observer columnist.