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In his new book, What Matters Now, author Gary Hamel lays out five thorny issues facing organizations today.

Craig Ruttle/Bloomberg News/Craig Ruttle/Bloomberg News

What Matters Now

By Gary Hamel

(Jossey-Bass, 283 pages, $31.95)

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*****

The challenges facing organizations these days are limitless, but their capacity to handle them is limited. Management provocateur Gary Hamel believes we need to be clear about what really matters to organizations now.

He sees five issues as paramount: values, innovation, adaptability, passion, and organizational ideology.

For Prof. Hamel, an American who has taught for years at London Business School and has been called the No. 1 management thinker by The Wall Street Journal, these are big, thorny issues. To address them, we have to go beyond management-as-usual.

His new book, What Matters Now, is a series of interconnected essays focusing on the five key themes. He starts with values, which have withered dramatically in the business world. He worries that unless there is a moral renaissance, recent lapses will lead to an increased regulatory burden.

"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," Prof. Hamel writes.

Managers must embrace a stewardship approach, viewing the talents and treasures at their command as a trust rather than a means for personal gain. They must reclaim the values of humanity for their companies, rather than focusing on utilitarian values such as profit and efficiency.

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"Customers, investors, taxpayers, and policy makers believe there's a hole in the soul of business, and the only way for managers to change those facts, and regain the moral high ground, is to embrace what Socrates called the good, the just, and the beautiful," he argues.

We owe our prosperity, happiness and future to innovation, he writes. We need to pursue innovation by paying attention to unchallenged orthodoxies, underappreciated trends, and underleveraged assets in companies. Instead of being cautious and practical, we must learn to be passionate and aim to surprise.

"Unlike Apple, most companies are long on accountants and short on artists. They are run by executives who know everything about cost and next to nothing about value," he warns.

Prof. Hamel stresses that the most important question for any organization is whether it's changing as quickly as the world around it. He deplores the fact that in most companies there is usually only one source for employees to get support for new ventures, and suggests that all managers be allowed to invest up to 5 per cent of their discretionary budgets in any projects they see as promising.

He wonders why we aren't outraged at data showing managers are more likely to douse the flames of employee enthusiasm than to fan them, something he calls "management's dirty little secret."

He draws a pyramid of our capabilities when it comes to work, from a base of obedience to diligence and expertise, topped by initiative, creativity and passion. Obedience, diligence and competence can be bought, he argues, but organizations need to spark initiative, creativity, and passion from within.

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Prof. Hamel issues a passionate call for organizations to move away from their obsession with control (and notes that "manage" and "control" are synonymous in most languages), and the bureaucracy it demands.

"The creed of control reigns supreme. If you doubt this, ask yourself: Is your organization any less rules-driven than it was 10 or 25 years ago? Do people on the front lines feel any less controlled? … And are little cogs any less obsessed with becoming big cogs?" he asks.

He stresses that no organization can survive long without discipline, an element of control. But control's philosophical rival – freedom – must also flourish. We need smarter ways to manage the tension between control and freedom, and Prof. Hamel offers some examples.

He looks at some pioneering companies, such as manufacturer W.L. Gore & Associates and food processor Morning Star, where hierarchy has disappeared, managers are impossible to spot, employees are engaged and the companies escape what he calls "the management tax" that other organizations pay with their large, unnecessary bureaucracies.

What Matters Now is enjoyable reading, even if it feels somewhat contrived, a framework to weave together his previously published essays with new thoughts.

But Prof. Hamel has an expansive mind and heart, and pushes us to join him in rethinking the role, and the very idea, of management.

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*****

Postscript

Some provocative thoughts from Gary Hamel's What Matters Now:

  • It’s hard to think of any ideological infatuation that has cost the world more dearly than voluntary regulation, other than Nazism and communism.
  • Managers have incentives to create rules, not abolish them.
  • Any attempt to inject a spiritual note in business these days seems as wildly out of place as reading the Bible in a brothel.
  • If companies are to going to improve employee engagement “we have to start admitting that if employees aren’t as enthusiastic, impassioned, and excited as they should be, it’s not because work sucks; it’s because management blows.”

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