[audio] The Handy Guide to the Gurus of Management

A series that examines the roles and teachings of Business Gurus, with text, audio and an explanation of common management terms.   
   


Introduction
Charles Handy guides you through the lives and works of his choice of management gurus.

Charles Handy
Charles Handy was, for many years, a professor at the London Business School. He is now an independent writer and broadcaster. He describes himself, these days, as a social philosopher.

Peter Drucker
Peter Drucker is thought of around the world as the seminal thinker, writer, and lecturer on the contemporary organization.

Tom Peters
Tom Peters is not a philosopher or a social historian like Peter Drucker. He no longer has any all-embracing theories of the world of organisations nor any formulas for change but he gets under the skin of an organisation.

Warren Bennis
Warren Bennis has devoted most of his life to the study of leaders of every description.

Sumantra Ghoshal
For his popularity and influence among the leaders of business, The Economist magazine recently named Ghoshal as one of the Eurogurus.

Kenichi Ohmae
Kenichi Ohmae made his mark twenty years ago with his book on corporate strategy. It is still a collection of good sense and clear advice, even though some of the examples may now seem a bit dated.

Gary Hamel
In their book, "Competing for the Future", which came out in 1995. Hamel and Prahalad start off by pointing out that you can improve your results in two ways: by cutting your costs, or by increasing your outputs.

Rosabeth Moss Kanter
Rosabeth goes into leading-edge corporations, learns from them and then serves up what she's learnt in nicely digestible messages for the rest of us.

Bill Gates
Bill Gates is an outstanding example of another sort of guru, the guru who preaches more by deeds than by words. He revels in change and draws inspiration from a crisis.

Ricardo Semler
Ricardo Semler, author and business manager, is celebrated as a role model of a Chief Executive who breaks all the traditional rules and succeeds, massively.

Michael Porter
Porter suggested that one of the strategies managers can choose from to gain competitive advantage is to offer something special or different which would allow you to command a premium price.

Fons Trompenaar and Charles Hampden Turner
For twenty years these two academics, a cross-cultural Anglo-Dutch partnership, have been interviewing managers around the world, giving them questionnaires to answer, conducting seminars and advising their companies.

. BBC English/Charles Handy

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INTRODUCTION:

In these days of global capitalism has management become some sort of religion? Who are these gurus anyway, and what do they preach? How useful have they proved to be in the past and how much notice should we take of their ideas?

These are the questions that I shall be trying to answer in the twelve short talks in this, my personal guide to these gurus of management.

Each talk will concentrate on just one of these gurus, so I have had to select the twelve writers, academics and business professionals that I think have been the most influential. But in this first talk I』ll be discussing gurus in general and why I think they matter, as well as telling you a bit about myself and my ideas. It is, perhaps, a bit cheeky to include myself in the list of the twelve gurus, but you need to know the sort of things that matter to me if you are going to make sense of the rest of the series.

Back to the beginning, however, and the rise of the gurus. No-one knows how it happened, but twenty or so years ago the leading thinkers in the field of management started to be called 'gurus' by their publics. Some suggested that, actually, witch doctors would be a better title, because there was often no scientific basis for their ideas. To others the gurus were a sign that management was an art more than a discipline or even a serious profession. A book called 'The One Minute Manager' sold in its millions. You can't imagine something like 'The One Minute Doctor' having a market at all.

Nonetheless, management has always been the invisible ingredient of success. The pyramids of Egypt and the Great Wall of China could not have been built without good management systems. The great military campaigns of history owed as much to good management as to bravery or weapons. Great ideas lie wasted unless someone turns them into a viable activity, or into a business, by management. Economies shrivel and countries decay unless they are properly managed.

How strange, then, that management has always had such a bad press. The word itself is demeaning. In everyday usage when we say to someone 'did you manage all right today?' we mean 'did you cope?' not 'did you do all the things that the management books tell you to do, …. to Plan, Organize, Staff, Direct, Coordinate, Report and Budget?'.

If you think about it, no-one likes to be managed. It sounds a bit like being manipulated or controlled. The older professions like medicine, law and education tactfully do not use the word
「Manager」. They prefer softer words like President, Principal or Partner, or even Permanent Secretary as the titles in their hierarchies.

During the last hundred years managers have tried to make their activity more respectable by professionalising it. At the beginning of the last century Business Schools sprang up first in America, then, much later, in Europe and Asia. Now practically every city in the world has a School or Institute of Management and if you want a good start to an executive career, then get yourself an
MBA degree and become a Master of Business Administration.

Irritatingly, however, the secrets of management remain elusive. Unlike the physical sciences there seem to be no hard and fast laws. If there were we would all be rich. As it is, the ground keeps shifting beneath our feet as new technologies arrive and people find new needs or wants which management has to deal with. Just to make it more complicated, the research laboratories of management are not tucked away in universities, but are made up of all the businesses and other organizations out there in the real world, experimenting, adapting; ducking and weaving to stay alive.

That's where the gurus come in. Their role is to interpret and spread around what seems to be working. They are the honeybees of management, buzzing around the world, writing, preaching, consulting. Oddly, perhaps, you won't always find their books on the reading lists of academic management courses. That's because their books are meant to be read by busy people, not by diligent students. Their lectures have to be exciting, even inspiring, their ideas both memorable and immediately relevant, not least to justify the fees they charge. The faster the world changes the more necessary are these bees, carrying ideas from one place to another, codifying and reformulating as they go.

In this series I shall be discussing the twelve most significant of these gurus, suggesting why, in my view, their ideas matter and why they make a difference to the way we manage our organizations. In hindsight, most of management seems to be just commonsense. The trick is to glimpse the sense before it becomes common. That is what gives you the competitive edge. That is what moves the world along, and that's what the gurus are trying to do.

So who is in my list of the twelve gurus most of whom I know personally or professionally? It has to include Peter Drucker, now in his nineties but still explaining the world in inimitable prose and a guttural Austrian accent. In fact, mention any management idea that works and the betting is that Peter Drucker was writing about it before you were born. The 「knowledge worker」 was his idea; and he invented the notion of 「management by objectives.」 There will also be Tom Peters whose book, 'In Search Of Excellence', which he wrote in1982 with Robert Waterman, made history when it became the first management book to reach the national best-seller lists in America. There will be Kenichi Omae,
the Japanese strategist who, amongst other things, talks about the impact of globalization on nations; and Sumantra Goshal, now Dean of Hyderabad's new Business School, who was one of the first to herald the arrival of truly global organizations. For cross-cultural issues we turn to Fons Trompenaars from the Netherlands. And, of course, there』s me , an Irishman masquerading as an Englishman, with my ideas on organizations and culture and my socio-philosophical interest in people. An international cast for what is increasingly the major international challenge - management in a turbulent world.

So much by way of introduction.

To those of you who have just tuned in, I'm Charles Handy and you』re listening to the Handy Guide to the Gurus of Management, from the BBC World Service. There will be twelve gurus in all but, as I said earlier, I am going to begin with myself and my ideas. That's so that you can get to know me and my prejudices, my way of looking at the world, even the way I talk.

Some useful business words:

guru
a Hindu spiritual leader. Also used to indicate a respected and influential expert on something. About twenty years ago the leading thinkers in the field of management started to be called 'gurus'.

a good start
to begin something well, to have an advantage at the beginning

executive career
a job relating to the management of an organisation and to putting plans into effect

invisible ingredient
a quality which is not obvious

elusive
something or someone that is elusive is difficult to find, achieve, describe or remember

spread around
make known or available over a large area or to a large number of people

significant
important, considerable

common sense
practical good sense gained from experience, not study

competitive edge
advantage over others

insights
understanding of a complex situation or problem

. BBC English/Charles Handy

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CHARLES HANDY:

You should know, to begin with, that I grew up in a rectory in Southern Ireland where my father was the Protestant minister. I rejected a lot of his religion at the time but I am conscious that the moral underpinnings of life that I absorbed from those years still infects my thinking. I can't, therefore, support the sort of predatory capitalism that puts profits before people or the kind of
management that reduces human beings to mere statistics. Businesses can be huge levers of progress, but they need to be clear what they mean by progress. It can't only be profits for the owners, with no thought for anyone else. Management, in other words, can usefully do with a bit of philosophical underpinning.

My early education in the language and history of Greece and Rome also infiltrated my first management contribution. That was in 1974, and it was, I believe, the earliest attempt to describe the different cultures or types of organizations. There were four possible cultural models, I suggested, developing an idea first mooted by my friend, Roger Harrison, a consultant in America. But to make the list more memorable and, I hoped, user-friendly, I gave the cultures the names of Greek Gods. So there was Zeus the all-powerful head of the gods and the Zeus Culture, an organization dominated by the personality and power of one person, often the founder or owner. Then there was the Apollo organization, dominated by rules and procedures, after Apollo the God of harmony and order. Athena, the warrior goddess, was the symbol of the project organization, the culture that dominates consultancies, advertising agencies and, increasingly, all innovative businesses. Lastly there was the Dionysian culture, one in which the individual has the freedom to develop his or her own ideas in the way they want - an artists' studio, perhaps, or a university. They are hard to manage, these Dionysian places, but increasingly necessary if you want to employ really creative people.

Does that mean that any organization has only four options to choose from for its  of management? No. I'm afraid the world isn't that simple. In fact every organization, just like every individual, is different from every other one, but what they are is a different mix of the same four basic cultures. The trouble is that some get stuck in one of them instead of mixing all four.

Apollo seems to be a very powerful God and can drown an organization in the budgets, targets and forms of bureaucracy, leaving it unable to respond to crises or changes in its environment. Government organizations are very prone to the uncritical worship of Apollo. Perhaps you can recognize the dominant culture in your own organization?

I started out wanting to make organizations more efficient. Then I began to worry about a bigger problem. That was that the world of work was changing before our eyes. The problem was that we weren't paying attention. Organizations were shrinking in their numbers even while they seemed to be growing in size. The paradox was explained by the formula I was given by a chief executive - 1/2 x 2 x 3. It meant, he said, that he planned to have half as many people employed in five years time, but working twice as efficiently and producing three times as much. Sound familiar? The way to do this, of course, was to outsource or subcontract everything that others could do as well or better than you, leaving you with the bits that really were unique to you. Easy to say, difficult to do, as many began to discover.

What interested me, however, was not the downsizing or the re engineering itself, as others began to call it, but the consequences for our individual working lives. Organizations, it seemed to me, would increasingly dispense with our services in our mid-lives as they concentrated on fewer and younger people in their cores, with only a few wise heads to keep the show on track. The rest of us would have to develop what I called 'portfolio' lives, a mix of different bits and pieces of work, some for money, some for fun, some for free. Half of the working population, I suggested, would not be full-time employees by the year 2000. The problem was that we weren't preparing people for this sort of independent existence. We had institutionalized them, letting them think that the organization would look after them until they retired and would then support them by a pension in their later days. By the end of the century, my prediction had come true in Britain and much of Northern Europe and portfolio working was commonplace. This was just one example of what I mean as a guru's role in interpreting what was going on so that people can adapt in time.

These concerns with our likely futures led to my growing interest in education. I am convinced that we need more 'why?' and 'how?' in our education and less 'what?' because the knowledge component of life is changing all the time. Anyway knowledge is no substitute for the necessary skills of taking responsibility for ones own life, for working with others, for problem-solving, communicating, innovating and risk-taking, none of which feature enough in any school curriculum that I know of.

'What has education policy got to do with management?' It's a fair question, but my interest in organizations has always extended beyond the organization itself to the influence it has on
the rest of our lives. Businesses, in particular, are more than money-making machines, or they ought to be. They infect our values, provide us with many of our friends and order our days and our weeks. A lot of my writing, therefore, is looking at what we are doing to ourselves as we pursue the idea of constant economic progress.

Unlike some gurus, therefore, you won't find a lot of 'how to..' formulas in my work. I see my role more as interpreting what is happening and where it might lead, if we don't do something to change it. What those changes should be I can only outline in broad terms. The details will always be different for each organization.

My view that the role of the guru is to interpret, explain and forewarn is one that is shared by the prince of gurus, Peter Drucker - whose work I』ll be discussing in the next programme.

Some useful business words:

earliest attempt
if you attempt something or you attempt to do something, you try to do it - the earliest attempt is the first attempt in time

rules and procedures
instructions that tell you what you are allowed to do and what you are not allowed to do

innovative
person or thing which is new or makes changes

efficient
successful, working without waste of time or resources

shrinking
becoming smaller

full-time employees
persons regularly paid by a company to work all the normal working time

portfolio
a case or collection of different work

outsourcing
obtaining services from other companies or individuals rather than employing full-time members of staff to provide them


subcontracting
signing a contract with a company for them to do part of the work for a project

working population
the number of people who work

. BBC English/Charles Handy

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PETER DRUCKER:

Think of any management idea that is fashionable today and the chances are that Peter Drucker was writing about it before you were born. He has to be at the front of any list of management thinkers, the people that we』re calling the gurus of management in this series of talks.

I've known Peter Drucker for many years. He was born in Vienna four years before the start of the First World War in 1914. He has been around a long time, so long that much of what sounded revolutionary, even absurd, when he first said it, has now become so familiar that we take it for granted. He is credited with inventing management, for instance. Before Drucker came along management was something people did, of course, but it wasn't something that people could talk about because it hadn't been defined.

Peter Drucker's first great contribution was to focus on management as a discipline in its own right. In so doing he has been credited with changing the face of industrial America. Drucker went on to invent many of the concepts that are now part of our common language. He was suggesting that government should privatize many of its functions long before any nation actually did it. The 'profit centre' and the 'knowledge worker' were concepts first used by him. He was the first to talk of 'discontinuity' the idea that the future is going to be completely different rather than more of the same. He invented the notion of 'management by objectives' and was writing about 'decentralization' at a time when most organizations were still behaving as if they were large country estates run by the owner.

Yes, writing about it, because that is how Drucker sees himself, as a writer. He has written thirty or so books which, he says, have sold five or six million copies. There are also literally hundreds of articles and essays. He also teaches, still talking to conferences by satellite from his Californian home and still, in his nineties, teaching two courses at the Business School of Claremont University. "I learn by listening" he once told me, and added, "to myself". I thought he must be joking, in his quizzical way, but he was serious. He uses his books and lectures as a way to work out his ideas.

In fact, he』s too modest, because Drucker is the nearest equivalent of a Renaissance man in our list of gurus. He sets himself out to master a new topic every year and is an expert in a surprising number of fields. For many years he lectured on Japanese Art. He』s a social historian at heart and is able to draw fascinating parallels from other ages and societies. What other management writer could slip in the fact that the word 'risk' in the original Arabic meant 'earning ones daily bread'? Or be able to mention, in passing, that the first management conference was organized in 1882 by the German Post Office -and that nobody showed up? To read Peter Drucker is to be educated in more ways than one.

Like all writers, his books are the milestones in his life. There are too many to summarize them all. They are all worth reading, and are readable because he takes language seriously. 'Language' he says 'is the cement that holds humanity together.' His prose has dash and excitement. He revels in surprising you. Do try any of them, but five of them, in particular, mark the different stages of his thinking.

The first of those milestones was The Concept of the Corporation, Drucker's account of how General Motors was organized. Written in 1945, it is not much read these days, which is a pity, because it contains much wisdom. In particular, he explained, for the first time, how and why decentralization worked. He calculated that 95 per cent of all decisions in General motors at that time were taken by the divisions, leaving only the really big ones for the centre. Drucker was keen on decentralization because of its impact on what he called Human Effort, the motivation it provided to people to work and to learn. Decentralization created small pools where people felt that their contribution mattered. Those small pools also meant that there was space for young executives to make mistakes without threatening the future of the company. They were, he said, farms for growing talent.

Ironically, General Motors didn't like the book and banned its use in the company. But the Japanese read it and learnt from it - to their great benefit. Eventually, by the mid-eighties, most of the leading companies in America had finally got the message and had decentralized. Drucker later said "eople are a resource, and not a cost. The Japanese have accepted that idea and we haven't." His idea, in that book, of the 'responsible worker' was taken up by Toyota and his call for a guaranteed annual income became the basis for Japan's lifetime employment policy.

Having invented management, Drucker needed next to tell us how to do it. His book 「The Effective Executive」 summarizes his views very crisply. He begins at the beginning with a simple question 'What is a business?' The answer that is usually given is 'It is an organization to make a profit.' That is not only false, said, Drucker, it is irrelevant. Profit-seeking is not the purpose of management decisions but a test of whether they work. He goes on "If you want to know what a business is we have to start with its purpose, which must be found outside the business itself,... in society, in fact, since a business enterprise is an organ of society. There is only one valid definition of business purpose - namely to create a customer." This is the Drucker dictum that is best known around the world. 「There is only one valid definition of business purpose - namely to create a customer.」

If you』ve just joined us, I』m Charles Handy and you』re listening to The Handy Guide to the Gurus of Management from the BBC World Service. We』re discussing the work of Peter Drucker, one of the great management thinkers featured in this series.

Drucker went on to get practical about the job of the manager. What kinds of things would you say a manager does? Well, Drucker - who, like many gurus, is keen on lists -says he, or nowadays she, does five things:

-A manager sets objectives
-A manager organizes
-A manager motivates and communicates
-A manager, measures results
-A manager develops people, including himself.

Obvious stuff perhaps, but new then and often forgotten now.

Drucker later elaborated on the setting of objectives in Managing by Results and many have considered this to be his most important contribution to management thinking. He shifted the focus of management actions away from the inputs to the outputs. It was management by results rather than management by supervision.

But... there』s always a but… Any idea carried too far can boomerang - bounce back in your face. Management by Objectives can turn into management by targets and quotas, with workers spending more time chasing the numbers than doing the real work. Give policemen a target of so many arrests a week and they may spend more time on parking offences rather than the real crimes. Drucker knew this. The measures had to measure what really mattered. What Drucker wanted was a workplace where workers were trusted to get on with the job without undue supervision, where they knew what was expected of them and were clear about how it would be measured and how they would be rewarded.

It was at the end of the sixties that Drucker shifted his focus from managing a business to the world outside the organization. The Age of Discontinuity was the first of a series of books on the changing shape of society and its impact on the manager of the future. That book was published in 1969 but it reads as if it was written yesterday. The shifts that Drucker glimpsed then are still reverberating today.

The first of these shifts in society was the arrival of the knowledge industries. The problem here, said Drucker, was that knowledge work needed new types of workers, people who liked new challenges, not routines. Finding them and keeping them motivated would be management's new problem. Think of graphic designers, web developers or consultants. "Knowledge workers", Drucker said "cannot be satisfied with work that is only a livelihood."

The second shift would be a move to a global economy. A global shopping centre would mean that everyone would want access to the same goods. It would, he forecast, become an age of conspicuous luxury. The global shopping centre makes brands all important. When the world is your customer you cannot afford to think locally any more. What Drucker foresaw thirty years ago is now all around us. Just think of the Internet.

Drucker's third discontinuity is a growing disenchantment with government. This worried Drucker. Never, he wrote, has strong government been more necessary in this dangerous age. Not that government should do everything. Government, he said, should legislate, regulate and provide the funds, but leave the doing to others. He called it reprivatization. It was a theme that governments everywhere picked up ten to twenty years later. It hasn't always worked that well because businesses are not
accountable to the public in the same way that governments are. Privatization can mean more economic freedom for the organization but less for the individual.

In the nineteen eighties Drucker began to despair of his first love, the big corporations. He found them stuck in the past, self centred and over-fond of paying themselves huge salaries. He turned his attention instead to the entrepreneurs of the new industries. His book, Innovation and Entrepreneurship was published in 1985. In times of stability, he remarked, organizations need to do things better. In changing times, however, we need to do things differently. It is a jaunty book,
with chapter titles like "Hit Them Where They Ain't". "But aren't new ideas risky?" he asks, "Of course innovation is risky" he answers "All economic activity is by definition high risk. And defending yesterday - that is, not innovating - is far more risky than making tomorrow."

All very true but the entrepreneurial society has turned out to be great for those who can do it and pretty awful for those who needed the security of a large organization and have found it hard to survive without it. We have begun to see the rise of a new apartheid society, divided between the rich and the poor. To counter this, Drucker has always argued for a strong noneconomic sector to make this inequality more tolerable. In his later years he has done much to boost the role of the non-profit organizations, or what he calls the 'social sector'. They, not government, he believes, are best able to deal with the social problems that a competitive capitalism throws up.

Peter Drucker's work has always moved with the times, or, more accurately, has usually gone ahead of them. But there has always been a consistent thread. Asked what effect he thought his work had had he replied "… that management is so much
more than exercising rank and privilege, that it is so much more than making deals. Management affects people and their lives."

In the next talk I will be discussing another man who puts people first - Tom Peters.

Some useful business words:

focused on
to focus on something is to direct attention to something

discipline
here, a subject of learning studied at university

decentralization
the move of government and businesses from one central office to several more independent smaller ones

purpose
reason for existence

customer
person or company which buys goods

set objectives
decide which aims need to be achieved

motivate
encourage someone to do something

measure results
judge whether results are good or bad

develop people
to help people grow in experience and knowledge

supervision
being watched to see if work is done well

rewarded
to receive something in return for doing something good

global economy
the making and using of money across the whole world

privatization
selling a government-owned industry to private owners

non-profit organizations
companies which are not run to make money

competitive capitalism
economic system where each person is free to compete in business without government interference

puts people first
puts the benefit of people before the benefit of the organization

. BBC English/Charles Handy

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Tom Peters

The Economist Magazine once wrote the following description of our next management guru - Tom Peters - [COLOR="Navy"]giving one of his lectures[/COLOR]: "Striding urgently back and forth,' it wrote, 'bellowing and bantering, he nearly achieves the difficult feat of making management seem exciting."

Tom Peters is probably the most charismatic performer of the twelve gurus on our list. He is passionate, evangelical almost, in his concern to put some sense and excitement into our organizations. He gives over 100 lectures a year and travels so much that he called his first horse Frequent Flyer.

The passion and commitment carries through to his books, which have titles like 'Thriving on Chaos' and 'The Pursuit of Wow'. Tom's writing and lecturing is rooted in everyday experience. Nowadays he creates no formal theories but lots of maxims. His stories are parables, pregnant with messages for those caught in the entrails of organizations. He elevates common sense to a principle of action. He exhorts us, pleads with us, even, to make the most of our lives and our work and to make it easier for others to do the same. He regularly lectures to packed halls of one thousand or more managers who listen enthralled for a whole day while he castigates them for cluttering up their organizations with rules and procedures that breed distrust and stop their people using their initiative. No wonder that
Newsweek magazine once described him as the best friend and worst nightmare of business.

Tom Peters is also charmingly honest about himself.

Here』s his own summary of his career: "I hate labels. OK, for a while I was "the excellence guy." But - I'd like to think - you can』t categorize me. I've done my "excellence thing" and my "customer thing." And my "women's thing." And my "design thing." And so on. Pin me down if you will. I bet you can't."

Tom Peters, in short, is a breath of fresh air in the overheated, fetid jungle of management thinking. That said, not all his ideas turn out to be right. His first big book, written with his McKinsey colleague Robert Waterman, was 'In Search Of Excellence'. It came out in 1982. Written in his breezy upbeat  it sold millions. It put a management book on the best seller list for the first time ever. Most importantly, it made management ideas a serious topic of conversation in organizations. And, of course, it made Tom a fashionable guru, the first time I heard the word used of a management thinker.

The book looked at 43 successful companies and sought to analyse the reasons for their success over twenty years. It was a neat idea. A book that sought to learn from the best rather than preach to them from theory. A book that looked for the good news rather than the bad. A book on management that relied on stories more than statistics and charts.

Peters and Waterman came up with seven checkpoints for analysis, what they called the Seven S Framework; and eight characteristics of excellence. Any ideas?

The excellent companies, they said -had a bias for action, they were do-ers

-they were close to the customer, they understood their clients』 needs
-they had autonomy and entrepreneurship, they were independent and innovative
-and believed in productivity through people, the staff mattered
-they were hands-on and value-driven, they got on with the job
-stuck to the knitting, they only did what they did best
-had a simple form and lean staff, no unnecessary divisions
-and had a tight-loose structure, light control where it mattered, loose where they gave people autonomy.

All good sense, you might say, but wonderfully new at the time. I remember picking the book up before it became famous and hugging it to myself, thinking that I had found the secrets of management and hoping that I could do something with it before it became common knowledge.

The trouble was that the 43 excellent companies did not stay excellent for long. Many, including the star of the book, the computer company IBM, faltered soon after. Some, like the cheap airline People Express, went bust. Peters apologized in his later books. 'There are no excellent companies' he said then. I told him that he was the first writer, even perhaps the first person, to make a second small fortune by apologizing for getting it wrong the first time. But, of course, he wasn't entirely wrong. The eight characteristics may not be enough to guarantee success, but they point to the way modern companies need to be managed. And the Seven S Framework that Peters and Waterman developed with Richard Athos and Richard Pascale, two academic colleagues, remains a useful tool for analysis of any organization.

So what about these Seven S's - the checkpoints for analysing the health of a company? Well, they stand for Strategy, Structure and Systems, the so-called hard S's, and the soft S's of Staff, , Shared Values and Skills. These all need to be in harmony with each other. There』s no use inventing a great new strategy if you don't have the skills or the staff to implement it. Obvious again, like all important insights, but the check list helps to remind you not to get carried away without pausing to check that all the ingredients for your journey are in place. It is a tribute to the influence of Peters and Waterman that the concepts of their book have now become part of the common language of
management.

Peters, however, was finished with semi-academic check-lists and recipes. He had come to believe that the hierarchies of the big organizations were what were holding them back. His next huge bestseller 'Thriving on Chaos', preached revolution and the one after that 'Liberation Management', is a celebration of the coming death of middle management. He does not mince his words "Middle Management as we have known it since the railroads invented it after the Civil War is dead. Therefore middle
managers as we have known them are cooked geese." Peters sought to put people, creativity, technology and speed at centre stage. Crazy times, he proclaimed, call for crazy organizations.

Tom Peters, if you've just tuned in, is one of the management thinkers on my guide to the gurus of management from the BBC and I'm Charles Handy, one of the gurus myself. Tom's answer to what he saw as the deadening effect of middle management was WOW, spelt in big capital letters: W.O.W. By WOW he meant 'stepping out and standing out', both individuals and corporations, from the growing crowd of lookalikes. 'In short,' he said, 'it is crucial to be different as well as excellent, or you will
end up as an excellent corpse.' Going small was one key. Deconstruct the company, he advised, eliminate bureaucratic structures and subdivide into 'spunky units' with their own personalities and disrespectful chiefs. The recommendations pile up: hire curious people, go for youth, teach and measure curiosity, support off-beat education, give people generous sabbaticals and insist that everyone take vacations. Above all, make it fun.

It was not, however, going to be enough to re-energize the corporation and the ranks of middle managers. The whole world of work, he realised, was changing. 90 per cent of jobs, he claims, are likely to be completely transformed or eliminated in the next ten to twenty years. We shall, each of us, have to take control of our own destiny and look after ourselves. Or, as he puts it: "In a world where success depends upon brainpower and curiosity, the self-managed growth of the individual becomes paramount, and the wise corporation wittingly turns itself into a tool for fostering individuals' growth."

So Tom Peters wrote a series of books on the new world of work with titles like 'Brand You 50', 'The Professional Service Firm 50', and 'The Projects 50'. In the new Peters , there is no great theory or model here, but 50 good ideas in each book. The titles are the clue to his thinking. We shall each have to brand ourselves, to create a separate and different reputation for our work. Building on that, we need to behave like a professional service firm with our own standards of excellence, codes of conduct and values.


The firms that remain will need to turn every task into a project an identifiable job of work with a beginning and an end. They must then allow individuals to assign themselves to those projects, rather as consultancy firms already do. As giant firms like computer software company EDS have demonstrated, there is no limit to the size of the project-organized business. Peters comes back, again and again, to his message that business is 90 per cent people and only ten per cent technology. And more and more of those people are going to be women.

In the new world of work, he believes, the attitudes that most women come with will be an asset. They are better at building relationships and at the softer S factors in Peters' S Framework, the , the staff and the shared values. As a result women are often better team players than men. And that's going to matter hugely as more and more organizations become collections of projects with self-nominated teams.

Peters' most recent campaign is designed to foster innovation. His book, 'The Circle of Innovation', has his now familiar list of zany chapter titles - 'Create Waves of Lust', 'We are All Michelangelos', and 'You Can't Live Without an Eraser.' We must, he says, reach beyond re-engineering, total quality management, empowerment and other recent management fads to constant re-invention and even revolution.

Peters has this huge belief in our human capacity. He doesn』t accept 「…this notion that there's a large share of humanity that wants to come into work and face a predictable environment.」

He talks about the chain-store company Nordstrom with its many thousands of employees. What's special, he says, about that company is the ordinary people who seem to behave in extraordinary ways. ... They are given inordinate leeway... to do whatever it takes to thrill the customer.

Tom Peters is often the first person who comes to mind when anyone mentions management gurus. But, in some ways, he is very different from all the others. It isn't just his colourful , his flair for self promotion or his frenetic energy on the platform. Someone once calculated that he walked 7 miles during the course of a lecture. He is not a philosopher or a social historian like Peter Drucker. He no longer has any all-embracing theories of the world of organizations nor any fancy formulas for change. What he does have is a knack for getting under an rganization's skin. He is just as likely to interview the chauffeur as the chief executive. His book 'Liberation Management' is part-dedicated to two workers in a heavy manufacturing plant who totally changed the way they work. He earths his ideas in the humdrum reality of life and expresses them in equally earthy language.

His books and his seminars gush with ideas and froth with examples. I relish them myself and, while I discard some of his stuff as over-the-top or unworkable, I have always been inspired by his unconventional way of looking at the world and by his often extraordinary insights. Let him sum up his contributions himself. He says "I now find myself with ten books in my quiver. Some stuff is wrong. Some stuff is right. I hope all of it is provocative."

Our next guru is a good friend of Tom Peters and shares all his belief in the need to harness the talents and enthusiasms of the individual to the mission of the organization. He calls that challenge the task of leadership. His name is Warren Bennis.

Some useful business words:

all-embracing
including or covering every aspect of something

gets under the skin
understands the essential characteristics of something

fashionable
popular at a certain time

do-ers
people or organizations who do things or are active

hands-on
having practical experience, not just dealing with theory

value-driven
their main aim was to increase profits

tight-loose structure
they used tight control where necessary, and loose control where they could give people autonomy

faltered
became weak

take control of our own destiny
to decide and make things happen in one's life

shares his belief
he also believes in

harness
to use something

. BBC English/Charles Handy

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Warren Bennis:

Warren Bennis changed my life. I met him when I spent a year at the Sloan School of Management at MIT in Boston. It was 1966. I was a student. He was a Professor and already well-known for his studies of groups and the leadership of change. His ideas fascinated me then and have continued to do so ever since. Warren Bennis persuaded me that the real challenge of our future societies was to harness the talents and skills of every individual in ways that could benefit us all. That has been the focus of my own life ever since.

Warren calls this the challenge of leadership and he has devoted most of his life to the study of leaders of every description. He』s been an adviser to four presidents of the United States, including both Kennedy and Reagan, has written more than twenty books on the topic and lectured and consulted all over the world. Most unusually, he』s even practised what he preached. At the age of 42 he gave up a secure academic position at MIT to be an executive vice-president at the State University of New York in Buffalo and went on from there to spend seven years as president of the University of Cincinnati.

It wasn't to be a wholly pleasant experience but, he says, 'I wouldn't have missed it for the world. In becoming a leader I learnt a number of important things about both leadership and myself.' Warren is rare indeed among gurus in having put his theories to the test in real organizations and it shows. It shows in his understanding of the complexities of the job of the leader. It shows in his warm humanity, in his sympathy for our human frailties and weaknesses, and in his interest in everything.

He likes to quote the British philosopher, Isaiah Berlin who distinguished between the hedgehog, who he said knows one big thing, and the fox who knows many small things. Warren sees himself as a fox, with a lingering admiration, he says, for the hedgehogs of this world. As a result he sprinkles his books and lectures with stories from all sorts of people. A baseball coach has as much to contribute to an understanding of leadership, he thinks, as Jack Welch the legendary boss of General Electric.

A quotation from Sophocles jostles for a place in his pages with a verse from the poet WB Yeats and a nugget of wisdom from the hockey star Wayne Gretzky. It makes his books fun to read, his talks a joy to listen to.

Warren's seminal work on leadership is his book Leaders, which he wrote with his colleague Burt Nanus in 1985. For this book he interviewed 90 leaders in America. 60 of them were from business but another thirty were from non-profit organizations of one sort or another. They included unusual characters such as the astronaut, Neil Armstrong and Karl Wallenda, a tightrope walker. Warren says that he was looking for the common characteristics among these successful people. But initially he found more differences than sameness. 'There are some who dress for success he said and some who don't; well-spoken, articulate leaders and laconic, inarticulate ones, some John Wayne types and some who are definitely the opposite.' There were only a few obviously charismatic personalities. That's good news for most of us, I thought.

Warren started his analysis of these leaders by stating what he saw as the difference between a leader and a manager: 'Leaders, he said, are people who do the right thing; managers are people who do things right.' Both roles are crucial, he says, but profoundly different. Like most of us he has seen too many people in top positions doing the wrong thing superbly well. America, in the was, he felt, over-managed and underled.

Warren's research was impressionistic rather than statistical. He didn't get his leaders to fill in questionnaires or tick boxes but to sit and talk with him, usually for four or five hours, but sometimes for days on end. He says that the process was rather like drilling for oil, prodding here and there in the hope of a sudden gusher. In the process he came up with some intriguing findings, such as the fact that all the 60 corporate leaders were still married to their first spouse and seemed enthusiastic about the institution of marriage. But the real joy of this method of research is that it results in a huge number of stories, stories that often mean more than the analysis that the authors impose on them.

It was encouraging to find that there is no one right way to lead, that we each have to find our own best , but Warren did come up with some common characteristics or competencies. He called them

-the Management of Attention
-the Management of Meaning
-the Management of Trust, and
-the Management of Self.

I find it intriguing that having made an important distinction between leaders and managers, Warren Bennis finds it necessary to describe the job of the leader in managerial language. It suggests that leadership is a skill that can be developed if the leader is willing to put in enough effort. Leaders, in other words, can be developed as well as born.

But to get back to his four competencies, which do need a bit of explaining.

By the management of attention he means the need to find a compelling cause or vision that will focus the minds and the energies of everyone involved. The leader needs a dream, in fact, and the determination to live that dream. Warren tells how he was once giving a talk about the leadership of institutions while he was still president of the University of Cincinnati. He thought the talk was going down rather well, until someone asked a question. 'Warren', this man said, 'do you enjoy being president of the university?' Warren paused, then said, 'I don't know.' 'I realised then,' he said later, 'that I had wanted to BE president, I hadn't wanted to DO president.' He didn't want to live his dream. The story is a nice example of Warren's ability to use his own experience to illuminate his theories.

By the management of meaning Bennis means an ability to communicate the dream so that it has meaning for others.

The management of trust requires that a leader be consistent and honest in all that he or she says or does, while the management of self means that the leader must be aware of his weaknesses as well as his strengths.

Leaders also need to be strong enough to accept criticism when it is valid, to know when to change and when to plough on regardless. Warren tells how he asked Harold Williams, then president of the Getty Foundation to name the experience that did most to shape him as a leader. Williams replied that it was being passed over for the presidency of Norton Simon, a big corporation. When it happened he was furious and demanded reasons, most of which he considered idiotic. Finally, a friend told him that some of the reasons were valid and that he should change. He did, and a year later became president of the Getty.

If you have just joined us, I』m Charles Handy and we are discussing Warren Bennis, one of the gurus in the handy guide to the gurus of management, from BBC World Service.

The book, 'Leaders', established Bennis as the leading authority in this field. It was written in a very accessible  and came out at a time, in the mid-eighties, when America was worrying about her competitive strength compared with the rising tigers of Asia. In the nineties, Bennis turned his attention to the leaders in these countries and came away convinced that the key was going to be a leader's ability to create an environment that generates intellectual capital. Leading and managing talented and creative people was, he said, like herding cats, because these sort of people were independent spirits, artists of a sort, who resented authority yet needed to work together to produce anything of substance. To find out what this sort of leadership involved, Bennis once again went on the trail, this time to investigate the Great Groups of the past and the present. He called the book that resulted 'Organizing Genius'.

Here he looked at the Manhattan Project, the group that produced the first atomic bomb, he went to Xerox' Palo Alto Research Center to meet the computer revolutionaries there, to the Walt Disney studios, and the Apple Mackintosh team and other famous groups. Every great group, he concluded, is extraordinary in its own way, but once again he was able to identify some common principles. They have a shared dream, for instance, and are ready to sacrifice personal egos in the pursuit of that dream. Their members are usually young, see themselves as winning underdogs and are prepared to put up with long hours and spartan conditions to achieve their dream. They do, however, need protection from the 'suits' who run the main organization and who see them as dangerous rebels, so one job of the leader is to provide that cover.

The leader has other tasks too. Leaders constantly remind people of why their work is important -- 'you are changing the world' Steve Jobs told the people at Apple Computers in the early days, and in a way they were. The leader has to create an atmosphere of trust so that people can disagree, argue and even quarrel but still work together. There has to be a culture where curiosity, experiment and risk-taking is encouraged, not punished --and this must be the responsibility of the leader. Finally, perhaps most importantly, leaders create hope, because without hope it can be difficult to go on when everything seems to be going wrong, as at times it inevitably does.

After studying these great groups and pondering the way the new organizations were working Bennis began to worry that he had been guilty of concentrating too much on the role of the individual leader. Leadership, he now believes, is increasingly a shared task and he talks now of partnership rather than leadership. Organizations, he notes, are increasingly going to be federations, collections of semi-autonomous groups, with power spread round rather than centralized. The new leaders, he says, understand the Power of Appreciation, they can no longer make things happen, but they can fertilize and encourage anything good that does happen.

In typical Bennis fashion he relates a story from British history about the two nineteenth century political leaders, Gladstone and Disraeli. It was said that when you had dinner with Mr. Gladstone you felt that he was the most brilliant and intelligent person that you were ever likely to meet. But when you dined with his opponent, Mr. Disraeli, you felt that YOU were the most brilliant and intelligent. You can guess which of the two Bennis thinks would make the better leader in today's world.

Nevertheless, the dream and the trust are still vital. Without them all is mere mechanics. But the dream and the trust can no longer be imposed by one person from above, they have to be coaxed out of the group as a whole. Ultimately, perhaps, the most important role of the new leader may be the choice of who goes into the group. You need a Rolodex in the sky to find the people you need, is the way Warren puts it.

I can't help ending this talk by quoting from a poem by Bertolt Brecht that Warren Bennis uses to make his point about shared leadership, it is called 'Questions from a Worker':

Who built the town of Thebes of Seven Gates?
The names of kings are written in the books.
Was it the kings who dragged the slabs of rock?
And Babylon, so many times destroyed,
Who built her up again so many times?

Young Alexander conquered India.
All by himself?
Caesar beat the Gauls.
Not even a cook to help him with his meals?
Philip of Spain wept when his Armada

Went down. Did no one else weep?
Frederick the Great won the Seven Years War. Who
Else was the winner?

[You get the point, I hope!]
In my next talk, we discuss the ideas of Sumantra Goshal, who
adds an Indian dimension to the study of organizations.

Some useful business words:

leadership
the position of leader

colleague
someone who works in the same place as someone else

encouraging
causing feelings of courage, hope and confidence

competencies
skills

vision
wise understanding of how the future will be

focus
direct the attention of

consistent
following a regular pattern

aware
to have knowledge or understanding

to plough on regardless
to continue in spite of difficulties

to sacrifice their personal egos
to forget about their own interests to achieve a common goal

to work long hours
to work more than the usual working hours

'suits'
people who wear a suit - jacket and trousers or skirt - here, investors

remind
to help someone to remember

risk-taking
actions which may lead to loss or defeat

shared task
responsibility of more than one person

partnership
organizations where members share risks and profits

. BBC English/Charles Handy

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Sumantra Ghoshal:

Think of Calcutta on a July afternoon, Sumantra Goshal tells the executives at one of his seminars. "That's where my parents live" he explains, and that's where I go to see them every July. Imagine the heat, the humidity, the noise, the dirt. It sucks up all your energy, drains your brain, exhausts your imagination.」 He goes on 「Now compare that with the Forest of Fontainebleau, near where I used to work - the smell of the trees, the crispness in the air, the flowers, the grass underfoot, how ones heart lifts up, how the energy and creativity bubble away. Where would you rather be?"

It's a vivid image which he then applies to organizations.. You can smell it, when you go through the doors of any business, whether it has the atmosphere of Calcutta or that of Fontainebleau...

The challenge, of course, for management, is to turn Calcutta into Fontainebleau, and that has been Sumantra's personal mission for the last ten years or so. To start the new millennium he has decided to pursue his mission in the land of his birth and has accepted an appointment as the founding Dean of the new Indian Business School at Hyderabad, whilst still keeping a foothold back in Europe where he was Professor at Insead and, later, at the London Business School.

Sumantra is a star of the lecture hall and the conference seminar.. His evocative images excite the imagination businesses are spinning tops, he says, let the momentum slacken and the top will fall..

For his popularity and influence among the leaders of business, The Economist magazine recently named him as one of the Eurogurus.

But Sumantra also more than holds his own in the academic world.. He holds two doctorates, from MIT - Massachusetts Institute of Technology - and Harvard Business School, and has written a string of big books, all co-authored with Chris Bartlett, a professor at Harvard Business School. The books are serious stuff, less accessible than his lectures or popular articles. But they provide the intellectual foundation for his mission.

They』re based on a long acquaintance and deep knowledge of a range of big organizations, most of them American and all of them businesses. They include familiar names like General Electric or Hewlett Packard, McKinsey, Disney or 3M. Ghoshal believes that big corporations like these have emerged as perhaps the most important social and economic institutions in our modern society. They are much more than money making machines. They are what holds society together and provides it with the means of progress.

The problem is that their managers don't understand this bigger role and, if they do, they don't always like all that it implies. Ghoshal thinks it is crucial for our societies that the managers wake up to their new role and, more than that, that these giant organizations learn how to reinvent themselves so that they can go on producing wealth and driving progress for us all. We need, he believes, to learn from the best of them so that we can pass on the lessons to the rest. Take, for instance, the jute industry in India, which uses a substance from the plant to make rope and cloth. It is a very old industry and going out of fashion fast. Jute mills are closing everywhere and jute businesses are failing all over India. But not Hastings Jute of Calcutta.

Hastings Jute, says Ghoshal, has escaped from what he calls the logjam of owners versus employees to build a partnership with its workers and is now building new capacities in new fields. It is able to reinvent itself because it has reinvented the social contract with its workforce.

Only bad companies blame their industry for their troubles. Ghoshal says that only six to ten per cent of the difference between good and bad businesses can be explained by the industry they are in. The rest is all due to management. Good businesses escape from their industry sector or find ways to redefine it, by moving it upmarket for instance, or by keeping the more profitable bits for themselves. Too many of them, however, are trapped in their past..

Even if they see what they should be doing they don't know how to do it. Ghoshal and Bartlett came up with a graphic phrase to describe the problem. There are too many first generation managers, in second generation organizations, trying to operate third generation strategies.

What did they mean by this neat phrase?

Well, by second generation structures they were talking about the multi divisional firm, the structure that Alfred Sloan first developed in General Motors and that Peter Drucker, another of our gurus, described so well. It was, at the time, a great advance on the first generation design which was the family firm, run by one man or one group at the top. The divisionalized structure was designed to allow managers to get on with their job without passing all disagreements and conflicts up to the top. It meant that the different functions could co-operate at the lower level of the business unit. Managers were still, literally, executives, as they had been in the old model, carrying out the strategies given to them from above, only now they had more control over the things they needed to get it done.

This design worked well in an age where growth meant more of the same, but it left all new initiatives to the people at the centre. At this level in a big corporation new initiatives needed to be big ones with large price tags. As Ghoshal puts it, the entrepreneurship could only be played for home runs. Or for those who prefer cricket metaphors you could say they had to go for boundaries not singles. In other words - big hits! In practice that meant that new initiatives either expanded existing
operations or entered new businesses by large acquisitions.. These were easy enough to buy but harder to manage or to integrate into the existing organization. Money, it seemed, didn't solve everything.

What happened was that the multi-divisional companies then got too big and sprawling. The independent units didn't co-ordinate or co-operate as well as they should have. More and more coordinating committees only made things worse, and much more expensive. These problems came to a head in America in the 1980's. The following ten years were a time of slash and burn as companies took the axe to layers of bureaucracies and shed many of the acquisitions they had earlier bought. But, said Ghoshal, cutting costs and people changes little..

To remind any of you that have just joined us, I am Charles Handy and I am discussing the work of Sumantra Ghoshal, the fifth guru in the Handy guide to the gurus of management. Now, having explained why things got into a mess in the big traditional organizations, Ghoshal has to offer some ways out of it. He goes first to the leaders of two of the biggest corporations who have led a revolution in our way of thinking about the management of these beasts. These were Jack Welch of General Electric and Percy Barnevik of ABB, the Swedish-Swiss engineering giant made up of some 1,300 companies spread around the world. These two men created what Ghoshal calls the entrepreneurial organization.. Where the initiative is spread right through the organisation.

The important thing about the entrepreneurial organization is that it concentrates on process not structure. As Ghoshal describes it there are three different processes that companies need to concentrate on. The entrepreneurial process, the integration process and the renewal process. Boring words, I feel, for what are important notions - it is the stories that bring them alive when Ghoshal talks about them.

He talks, for instance, about Kao a traditional soap company in Japan which has successfully expanded into cosmetics and even floppy discs and is now recognized as one of Japan's most creative companies, ahead of even Sony. It operates by what its chairman calls 'biological self-control'. Lots of small units pursue aggressive targets on their own initiative but if one part of the company feels pain the rest of the body responds with help almost automatically.. The company code is based on the absolute equality of all human beings, on individual initiative and the rejection of authoritarianism.. The chairman talks of his paperweight organization, in which all information circulates horizontally not vertically. It is, apparently a very open-space organization in which everyone can drop in on any decision-making process.. The Kao company is held together by a collection of coaches, called the priests, who help to integrate the ideas of the front-line entrepreneurs and to keep everyone exploring, sharing and learning.

It』s all part of what Ghoshal sees as the emerging new philosophy of management, one focussed not on the management of financial [or physical] capital but on human capital. Human capital is not just the knowledge and skills that individuals bring with them, it also means what he calls 'social capital' the relationships in the organization, and the 'emotional capital', the motivations and emotions that govern so much of what we do. We have to get rid of the engineering mindset that saw organizations as machines with human parts and think of them as social institutions. This is all discussed in detail in the book he called The Individualized Organization.

But he has since moved on, with one later book and one in preparation, to try to be more specific about how this new sort of organization actually works.

He and Bartlett now talk of the three new management processes of Accumulating - that is getting the right people to start with - of Linking, building relationships that encourage individual development, and, thirdly, a process of Bonding, trying to connect individuals' activities and beliefs to the core vision of the organization. It all adds up, says Ghoshal, to a new paradigm or philosophy of management. It won't be enough, for instance, to think of employees as assets. Perhaps we should think of them as volunteer investors, choosing to invest their talents in the organizations they have joined.

It is all a brave new world, this third generation company that Ghoshal is talking about. So far we can only begin to glimpse its implications. If, for instance, we really do start to think of workers as volunteer investors it will change the whole balance of power in a business.

Just think about it. Traditionally investors own the company and ultimately call the shots. If the new resource is really talent and not money then it is the workers who will increasingly hold the power and companies will be devices that help them to make the most of that talent, for everyone's benefit. It will be a very different world.

As one of the youngest of our gurus, Sumantra is more likely than most to be able to track his ideas as they get taken up by organizations. The role of the guru, as I said at the beginning of this series, is to spread ideas.. Sumantra's first big book was called Managing Across Borders: The Transnational Solution. Of all our gurus he is perhaps the most international, the one best equipped to carry ideas across borders. I hope he will, because there may well be as many insights to be found in his native land of India as in the countries of the West.

Our next guru is also international, although Japanese by birth and residence. He is Kenichi Ohmae.

Some useful business words:

emerged
become known

implies
means, translates into

crucial
very important

wake up to
start to pay attention to

driving
here, moving something forward

being focused
paying attention to

govern
control, direct

assets
property that has value

across borders
into many countries

insights
clear understanding

. BBC English/Charles Handy

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Kenichi Ohmae:

Kenichi Ohmae, the latest guru in my guide to the gurus, is a man of many parts with a finger in lots of different pies. Business consultant, social reformer, author and journalist, adviser to governments and business entrepreneur, he has, for good measure, a doctorate in nuclear engineering from the Massachusetts Institute of Technology - and is a motor cycling enthusiast.

Kenichi Ohmae is Japanese and lives in Tokyo but he is instinctively global. He holds a Professorship in Public Policy at UCLA in California, lectures all over the world, advises businesses and governments in every continent and he writes regularly for Western journals.

So what can we learn from this many-sided man? He has, I am told, written over one hundred books, many of them on Japanese public policy issues. Only half a dozen or so have made their mark in the West but these have been hugely influential, not least in explaining Japan to the rest of the world. Only recently he was outlining how the new Japanese government is determined to deal with the huge amount of unsecured debt in the Japanese financial system. A good thing, you might think, but Ohmae
explains that that will mean attracting back much of the money, half a trillion dollars in fact, which Japanese investors had placed in America. That may be good for Japan but it could be bad news for the American stock exchange and for the dollar.

Kenichi Ohmae made his mark twenty years ago with his book on corporate strategy. It is still a collection of good sense and clear advice, even though some of the examples may now seem a bit dated. Successful business strategies, he says, do not come from rigorous analysis but from a thought process which is basically creative and intuitive rather than rational. Hence the title of the book, which he called 「The Mind of the Strategist.」

There's one chapter in this book which should be essential reading for anyone in charge of a business. It is a list; things to avoid, things to concentrate on. Tunnel vision is one of those things to avoid - don't get too fixated on the road you are on; there may be better alternative routes. Then there is the peril of perfectionism - sometimes it's better to do something that's almost right rather than wait for the perfect solution and miss the strategic opportunity. Focus on the key factors, he says, and don't be distracted by minor complications. All businesses are simple - once you get to know them. Banking, for instance, looks horribly complicated to the outsider, but, boiled down to its core, it is nothing more than getting in money cheap and lending it out at as expensively as you can. Always challenge the constraints, he goes on, and think 'what can we do?' not 'what can we not do?' Strategy, Ohmae insists, is a question of attitude more than numbers.

The Japanese, he said, concentrate on the fit of three factors when deciding what to do next. They look at what they think their customers will want, whether the company has the competence to meet these customer demands, and whether they can do so profitably once their competitors get in on the act.

All rather obvious, you might say, but Ohmae contrasts this approach with the American way at that time, which he said was over-concerned with analyzing the numbers for the different possible options. He called it 'spreadsheet doodling.' He's right, as I found out myself once when talking to a Japanese company in Britain about their future plans. They talked only of what they hoped to deliver to their customers and of the build-up of their market and production. They never once mentioned profit. Their assumption was that if you get the product right and produce it at a level of quality and cost effectiveness that your competitors can't match, then, in the end, the profit will come in. Profit should be the result, not the purpose, of the business.

If you've just joined us, I'm Charles Handy and we are discussing the ideas of Kenichi Ohmae, the Japanese guru of strategy and one of the people featured in the Handy Guide to the Gurus of
Management.

Having written what many people regarded as the bible of corporate strategy, Kenichi Ohmae moved on to wider issues, nothing less than the changing shape of the world of business. Books with titles like 「Beyond National Borders」, 「The Borderless World」 and 「The End of the Nation State」 spelled out the
direction of his thinking, although he always related his thoughts back to the implications for the leaders of the corporations.


His thinking on these issues has been nicely brought together in his latest book, which he has called The Invisible Continent. It's a nice title because it encapsulates what he's talking about, namely that the world in which business now operates is so different from the past that it is like discovering a new continent.

Kenichi Ohmae goes on to spell out the distinctive features of this new continent. There are four Dimensions, as he calls them.

The first is the Visible Dimension of this new invisible continent. There will still be physical things to buy and physical things to make. We should be relieved. Not everything will happen in
cyberspace. Bakers will still bake bread, he says. Delivery trucks will still pound the streets. Much that is familiar in our daily lives will still be there. It will, in fact, increase, if we manage to explore and cultivate the new continent in the right way. What may change, of course, is the way these things are made and distributed as the other dimensions of the new world come into play. Those delivery trucks might be driverless, perhaps, controlled by satellite navigation systems, or run on hydrogen.

The second of those four dimensions is Kenichi's old love - the Borderless World. The concepts of America Inc. or Japan Inc. will be, already are, irrelevant. E-commerce knows no boundaries. When you get an e-mail there is no indication of which country it comes from. These days knowledge workers can and do work anywhere, in any country. Financiers will switch their funds to whichever place pays the best rates. There is no use in a government trying to persuade corporations to keep their money at home for patriotic reasons. Even individual workers will, if they are shrewd, spread their savings over a range of companies in different countries. Workers in Japan are quite likely to want some of their pension to be invested in General Electric or Microsoft and will see nothing disloyal in so doing.

Globalization is inevitable. If you think about it, even the opponents of globalization use its technology to fight it, organizing themselves across borders with e-mail and mobile phones to create global protests against global companies. No country or company can shelter behind its own borders anymore, not even North Korea, the last of the closed territories.

The third dimension of Ohmae's invisible continent is the Cyber Dimension. So much has been written about this elsewhere that he hardly bothers to spell it out. We all know what it means. The Internet, the World Wide Web and the mobile phones are going to be part of all our lives as they get cheaper and easier to use. No business, no matter how small, can expect to survive if they disregard this cyber dimension.

The fourth dimension is, I feel, more questionable. Ohmae calls it the Dimension of High Multiples. He means the way the stock market in recent times has put exaggerated values on some stocks which have yet to produce their promised earnings. Because their shares are so high these new economy companies
have been able to buy up old economy companies which were in every way bigger than themselves. AOL, America Online, merged with Time Warner this way, and by doing so put an activity that you could see and touch behind its own virtual cyber business.

The high multiples allowed the growth of what Ohmae calls Godzilla companies - Godzilla was a Japanese monster in a series of movies, a monster that swallowed all before it because it had a different genetic base than anyone else. He describes Microsoft, Oracle, Dell and Cisco are other Godzillas. The old Titans, like IBM, Hewlett Packard, Sony and Walmart can't compete unless, like General Electric under Jack Welch, they try to enter this new continent and grow like Godzillas. We will have to wait and see, but it may be that the time of the high multiples has passed, if not forever, then for the foreseeable future, with the decline of stockmarkets everywhere and, in particular, the crash of the new technology stocks. I don't, myself, see this dimension as important as the other three. Maybe today's Godzillas will end up as tomorrow's dinosaurs.

Ohmae goes on to make some general points about this new invisible continent of business.

It's everywhere, anyone can enter it, but it's risky as new continents always have been. Its infrastructure is still being worked out. Now, however, is the time to stake your claim, before the rules and laws are too fixed, and before others see the possibilities. As Ohmae points out, what others saw as Florida marshland, Disney turned into a hugely successful theme park.

Most interestingly, I think, is his point about what he calls the platforms of the new continent. In order to talk and do transactions across boundaries we need ways to communicate. In 1887, Ohmae points out, a Polish eye specialist called Ludovik Zamenhof invented a language called Esperanto which he hoped everyone would learn as their second language so that we could all talk together. He was one hundred years too early, and now we have the emergence of English as the common second language. I recall how the Chinese Premier, on a recent visit to Britain, commented that there are more people now in China learning English than all the native English speakers in the rest of the world.

But there are other platforms, by which Ohmae means recognized standards for doing things. Visa and Mastercard, for instance, Federal Express and UPS, The World Wide Web. These are not things put in place by governments but by the explorers of the new continent themselves.

But Ohmae has bigger concerns on his mind than business. He worries about the governance of the new continent, about a new sort of Cold War, fought by businesses rather than governments, and about the education of our citizens for this new world. We are just beginning the journey, he says in conclusion. But even he did not and could not have forecast the events of last September in New York and Washington, one of the most horrific and frightening aspects of his new invisible continent.

Kenichi Ohmae, these days, is much more than a corporate strategy guru, but his wider concerns set the context for anyone trying to chart their way to the future.

In my next talk we will meet another strategy guru with a different but related agenda, this time an American. His name is Gary Hamel.

Some useful business words:

made his mark
became successful and influential in an activity or in a place

dated
old-fashioned, belonging to a former time

rigorous analysis
thorough and exact examination

the bible of corporate strategy
here figurative, the main text guide to business planning

globalization
movement towards global or worldwide scope

bigger concerns on his mind
other more important things to worry about

. BBC English/Charles Handy

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Gary Hamel:

Gary Hamel, the next name in this Handy Guide to the Gurus of Management, once took the members of Nokia's management team for a walk down the King's Road in London. They were window-shopping, looking at all the new fashions displayed in the windows. Why would he want to do that? Well, Kings Road in London is one of the places where the young and trendy people hang out and Gary wanted to suggest to Nokia that the mobile phone was now as much a fashion accessory as it was a telephone. Sure enough, a few months later Nokia produced a trendy range of coloured phones.

It's a story that illustrates two things about Gary Hamel. Firstly, there』s his concern with what he calls "Business Concept Innovation" or the ability to think about your business in radically different ways. But it』s also a clue to what he might call the "Strategic Intent" of his own life, his burning desire to help companies around the world shape new futures for themselves and for us. Gary is a man with a mission.

He didn't start off with that mission. In fact when he left the University of Michigan with a doctorate he first went to teach at the London Business School for ten years. "I loved teaching MBA students," he said later and he revelled in the intellectual challenge of the Business School environment. But he knew, he said, that if he was really to going to help companies build new capabilities, he would have to become more than an "armchair theorist." His heroes, he said, were no longer Peter Drucker and Tom Peters - and others of our own list of gurus - although he has a lot of admiration for their profound insights. Instead, he wanted to follow the examples of Joseph Duran and W. Edwards Deming - the pioneers of the quality movement. These men were more than gurus, Gary said, they were builders.

So it was that in the summer of 1993 Hamel flew to Palo Alto, in Silicon Valley, where it was all happening, and founded Strategos

-his consulting company. He also became a star of the lecture circuit, enthralling audiences around the world with his incisive analyses, his wit and his fund of examples drawn from the leaders and the laggards of the business world. He still keeps a couple of toes in the academic world, with Visiting Professorships at London and Harvard, but his attention is now focussed on the leaders of business, rather than those who study it.

His exciting ideas are summed up in a series of articles which have always captured the imagination of his corporate readership. As far as I know, Gary is the only man to have won three McKinsey awards for the best articles in the Harvard Business Review. His book, "Competing for the Future", which he wrote with CK Prahalad, another guru, sold a quarter of a million copies in hard-back in America when it came out in 1995 and was reckoned by many to be the best business book of its time.

This was the book that first introduced the idea of "Core Competence" to the corporate world, along with the concepts of "Strategic Intent" and "Industry Foresight". We』ll talk in a moment about what each of these means, but Hamel and Prahalad start off by pointing out that you can improve your results in two ways: by cutting your costs, or by increasing your outputs. Obvious, of course, but too many companies focus on the cost-cutting, even if they dignify it by calling it re-engineering or downsizing. Yes, you have to be efficient, but efficiency on its own, say the authors, won't be enough in a changing world.

So why don't people concentrate more on the output than the costs? Because their strategic vision is too narrow. It is defined by what the competition is doing. Pepsi wants to out-do Coca Cola, Ford tries to beat General Motors and so on. Most people in an industry are blind in the same way. They』re all paying attention to the same things, and NOT paying attention to the same things. There is, says Hamel, a dividing line between companies who worship the past and those who want to invent the future. It is, says, Hamel, important to think about what is NOT there. That done, you need a strategy for doing something about it.

A "Strategic Intent", however, is more than a strategy, it is a stretching ambition. President Kennedy's famous goal of putting a man on the moon by the end of that decade was a strategic intent, as was Canon's ambition to outflank Xerox by producing a copier ten times cheaper. Kennedy had no idea how his goal was going to be achieved, but ambitious aims like his mean that organizations have to invent whole new ways of doing things, to explore the possibilities of new technologies and to scout around for new talents and new partners. A strategic intent forces one to think beyond the present and to contemplate new worlds. It is, in some ways, the essence of leadership.

Nevertheless, it would be folly, wouldn't it, to dream of things that lie beyond your capability? That is why it is crucial to work out what your real core competencies are. These are what the firm knows, its skills and its unique capabilities. They may not be quite what you thought. You have to ask yourself what is unique about you? What is valuable to your customers and what new opportunities does it open up?

Barnes and Noble, the big American booksellers, to take just one example, were never going to beat Amazon.com in virtual bookselling, because Amazon got there first. But Barnes and Noble had one thing that Amazon did not have - they had stores, places in the heart of towns and cities. They started to fill these with comfy sofas, coffee bars and childrens' toys, redefining themselves as leisure outlets with books galore. In other words, don't try to be better than your competitor, try to be different.

To remind you, I am Charles Handy and we are discussing the latest guru in the Handy Guide to the Gurus of Management for BBC World Service. His name is Gary Hamel. Being different is really the theme of Gary's latest book, called "Leading the Revolution", this time written without a co-author. It』s a book that reeks of Gary, if you have ever been lucky enough to listen to one of his lectures or see one of his videos.

The book bubbles with encouragement for everything that is new. Can you dream, create, explore, invent, pioneer, imagine? he asks Are you the voice of opportunity in your company? Are you the champion of the unconventional? Do you know how to brake through the hard, parched soil of ignorance and dogma to find an opportunity? Are you a revolutionary?

Hamel recounts in detail how the courageous activists in the middle of companies, people like John Patrick in IBM, helped their firms to find new futures that were hidden from their leaders. He recounts impossible tasks that were achieved by rethinking the old processes. How the Building Industry Association in San Diego challenged two building firms to rethink the time it took to build a house. Not in the years or months that most of us are used to, but in HOURS. The winner, by a careful rethinking of all the processes and by allocating every little job to a named individual, actually built and landscaped a three-bedroom bungalow in three hours!

Most importantly of all he talks about the "grey-haired revolutionaries" - the companies that reinvent themselves time and time again. Anyone can have one great new idea or vision, very few can keep on doing it. One of them is the online stockbroker, Charles Schwab. This firm started off as a conventional stockbroker. Its first innovation was to invent discount brokerage, much to the disgust of the rest of the industry. Then it created what it called "One Source" - a supermarket of over one thousand mutual funds which the customer could mix and match and pay only one bill. Then it switched the fee from the customers to the funds, in return for putting them in its supermarket, so the customer now paid nothing. Next it went online, allowing customers to buy and sell stock over the internet, and to tempt them in, Schwab cut the standard commission in half. It soon had 3 million customers, ten times more than E*Trade, its nearest competitor. Then, most adventurously, it went into bricks and mortar to compliment its online activity. Schwab built a network of branches because it discovered that people liked talking to real people if it was advice they were after, not just trading. And, Schwab decided, help and advice was what people now wanted. Schwab had redefined itself as being in the Age of Advice, not just broking.

It is crucial to note that every one of these reinventions initially cut Schwab's profits, and caused some anguish among the senior members of staff. You have to have both faith and courage. So what kept them so revolutionary? Gary says that Chuck Schwab goes to a Salvation Army kitchen once a month to serve soup to the old people. Chuck said - of the old people he met there - 'If they would have started early and planned they could have avoided this, and it just breaks my heart. We have to have better products and reach more people."

I』ve told you the Charles Schwab story in detail to give you a flavour of Hamel's way with examples. There are many more of them. He then sums up his formula for endless revolution with ten essential requirements. You won't remember all of them now, but you need to hear them. And you can always visit our website later to remind yourself. Listen out for the address at the end of the programme.

This is how Hamel』s 10 requirements go:

1. Have Unreasonable Expectations, as President Kennedy did.
2. Make your business definition elastic, don't get fixated on one vision.
3. Have a cause, not a business, like Schawb.
4. Listen to other voices: young people, newcomers, outsiders.
5. Keep an open market for ideas, don't shut anyone up. And,
6. Have an open market for capital, allow people to bid for funds to support experiments. Likewise,
7. Have an open market for talent, so that people are allowed to work in areas that excite them. Number...
8. is Encourage low risk experimentation, which is related to Number...
9. The principle of cellular revolution: breaking the organization down into small groups so that a failed revolution won't damage the whole organization. Finally, there is Number.
10. Allow personal wealth accumulation. Successful ideas should make money for the people who came up with them.

I can't quarrel with any of these ten commandments, and in my experience the companies that I know that practise many of them are the most exciting, and usually the most successful. Nevertheless, as Hamel agrees, you need both revolution AND luck to succeed in an uncertain world.

Hamel speaks and writes for everyone, not just the managers at the top. It doesn't matter whether you're a big cheese, he says, or a cubicle rat. All that matters is whether you care enough to start from where you are. Do you care enough about finding meaning and significance in the eighty per cent of your life that you devote to work; that you're ready to start a movement in your company? Do you care enough to lead a revolution? If you do, Hamel's message is, you can.

In my next talk we will meet the only woman on our list - the guru of change management - Rosabeth Moss Kanter.

Some useful business words:

outputs
something that a company produces

narrow
limited

time and time again
lots of times

keep on doing it
continue doing something

get fixated on
concentrated too much on one thing ignoring other possibilities

to bid for funds
to attempt to obtain money to do something

breaking the organization down
separate into different smaller parts

who came up with them
who first had the idea