[audio] The Handy Guide to the Gurus of Management

. BBC English/written by Charles Handy

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Rosabeth Ross Kanter

Today's subject in my guide to the gurus was once listed by the London Times newspaper as one of the fifty most powerful women in the world. Yet she commands nothing except ideas, as I've once witnessed, and the riveted attention of her audiences when she speaks around the world. She is Rosabeth Moss Kanter of the Harvard Business School.

Not yet sixty, she's been writing books of great insight for a long time, and the latest one may be her best yet. It is called e.Volve! with a dot after the e to indicate that it's set in the world of the dot coms and the internet, and with an exclamation mark at the end of the word to make sure that you sit up and pay attention. That's just like Rosabeth. She's always topical in her writing, dealing with the issues of the day in the corporate world, while her energy is boundless. When she lectures she literally bounces with enthusiasm on the platform and is forever rushing off to investigate another organization or to inspire another audience. 'Don't laugh or I'll miss my plane!' I once heard her tell one conference. Of course, they laughed and loved her, as she doubtless knew they would.

But don't just read her latest book. There's a lot of good stuff in her earlier work. It's mostly about change, how to cope with it and how to manage it. She is a sociologist by training and it shows. She looks at organizations as communities and cultures. But her books always come back to what the changes she talks about will mean for the individuals in the organizations, and for their families and communities. That same sociological background means that her books are based on solid research and lots of evidence. 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. She also runs a successful consultancy business. Consulting, she says, is a way to create. "It is practical and I learn by applying my academic knowledge to the businesses.' She's very much a honey bee of a guru, carrying the good ideas from there to here.

For her latest book, for instance, she and her researchers conducted over 300 interviews in nearly eighty companies in North America and surveyed almost three times as many other companies world wide. She then focused down on twenty-five companies from three continents, including the fashionable ones like the Internet auction site e-Bay and Cisco the computer giant, but also lesser-known examples such as Williams-Sonoma, who make and sell kitchen equipment and Drugstore.com, the internet pharmacy. The result is a set of rich case studies, stories of real people coping with a new world, illuminated, however, by Rosabeth's' comments. It feels almost like reading a series of short novels.

So what are the main issues of her work? Her early work looked at the communes of the 1960's and the social movement that brought them into existence, but she soon moved on to the study of organizations and, in particular, to a study of the different ways in which men and women were treated by corporations. The book she wrote about it, called 「The Men and Women of the Corporation」, had a big impact. It helped to change the way in which many companies treated women, particularly women with families.

That book started her fascination with how organizations change. How does lasting change occur? What forces block change? How can resistance to change be overcome? Books with titles like 「The Change Masters」 and 「When Giants Learn to Dance」 provided inside stories of the best of the world's corporations as they faced up to what she called the post entrepreneurial age.

Rosabeth Kanter has a gift for the telling phrase and the memorable sets of axioms. She talks of organizations' desperately seeking synergy' and advocates that they should be fast, focused, flexible, friendly and fun. One chapter is headed 「Becoming Pals」, where P.A.L stands for Pooling, Allying and Linking building partnerships in other words - her recommendation for companies who need increasingly to do more with less. She's pointing out that whereas in the past companies wanted to own everything themselves and to build a fence around their operations, in the new competitive world they discovered they could no longer afford to go it alone in every area.

The new model organization, she notes, is lean, flat and athletic, rather than tall and authoritarian. The effect on corporate careers would, she predicted, be dramatic. The new key to the fast track is a flexible package of skills and services that you can take anywhere. Dutifully climbing the corporate ladder will no longer guarantee success, or even lifetime employment. That may be obvious to most managers by now, but Rosabeth was writing this in 1989, and her detailed prescriptions for success in the new sorts of careers are still valid.

For those who may have just joined us, This is the World Service of the BBC and I am Charles Handy. We are discussing the ideas of Rosabeth Moss Kanter, one of the gurus featured in the Handy Guide to the Gurus of Management.

Rosabeth Moss Kanter's work is full of messages for the modern executive. Take, for instance, her list of the skills needed by what she calls the 'business athletes' of the modern corporation: Yes, like most of the gurus, Rosabeth is fond of lists, but this one rings true so listen carefully to my shortened version of it:

First - if you want to be a business athlete - you must learn to operate without the might of the hierarchy behind you. You are more on your own now. Next, you must learn to compete in a way that increases co-operation with your colleagues, rather than undermining them. You must operate with
the highest ethical standards

Be multi-faceted and ambidextrous. AND
Get satisfaction from the results of your work,
But, Rosabeth insists, in addition to all these high aspirations you must still keep a high dose of humility.
A tall order, perhaps, but I think she is right.


That said, you won't succeed without the feeling that you are working for something worthwhile. It's the job of the people at the top, Kanter says, to set the goals and values of the corporation, below them the middle layers design and manage the programmes and the systems, the forums and relationships that bind the whole together, while the project ideas and innovations hopefully bubble up from the bottom layers.

That sounds a bit like wishful thinking to me, and so I was not surprised when Rosabeth returned to the challenge of the innovative organization In her latest book - eVolve, which tackles the new digital world of business but also builds on her observations of innovative global companies in her book called 'World Class" with its instructive subtitle - Thriving Locally in the Global Economy.

EVolve draws together the best ideas of the best companies. Some of them underline concepts from her earlier work - networks of partners, teams rather than formal hierarchies, finding committed people with talent. But the emphasis here is different. Strategy should be like improvised theatre, you start something with an idea rather than a plan and see where it leads you. 'Create small experiments, she suggests. Don't bet the company and don't waste time, just act, simply and quickly to have something concrete to convert the sceptics.'

So what the organization needs are entrepreneurs and innovators of all types - in independent ventures or within already established organizations. Change involves shaking up the established ways of thinking, creating new patterns like a kaleidoscope. Change means staging pep rallies to enthuse the troops, communicating with internal and external audiences, building support inside and outside the organizations. She could be talking about a politician rather than a manager, but, in fact, it is the skills of a politician that the new manager needs to learn. It's a new world.

And in the last chapter of this book, the sociologist in Rosabeth Moss Kanter cannot help but return to the questions that the digital revolution poses for society.

The Internet, she says, could produce a great leap forward to a shared consciousness around the world and connect peoples everywhere in powerful ways that foster community and co-operation. But it could also go the other way, leading to the isolation of individuals and clashes between communities. Remember - this book was written and published before the events of September the eleventh in North America. Her comments are even more timely since that day. The best businesses in the digital world, she says, will be those that foster community internally and serve communities externally.

She worries, too that the Internet and all that goes with it will breed isolation, hinder real education and development and lessen our sense of responsibility to others. Computers are no real substitute for people, we need what another guru, John Naisbitt, calls Hi-Touch as well as Hi-Tech.

Rosabeth, of course, ends with a list - a list of the seven characteristics of the qualities needed by business managers if they are to succeed in the new world of digital commerce.

Business managers must have curiosity and imagination, she says the ability to find new patterns in the kaleidoscope. They have to be good at communicating near and far, to make themselves understood by others who have not shared their experiences, and to understand those who are different from themselves. They must be cosmopolitans, not confined to a single world view, but able to build bridges of thought. They must grasp complexity, finding the connections that make sense of disconnected dots, and charting a course between conflicting points of view with multiple audiences. They care about feeding their own peoples' bodies and spirits, and work with them as resources rather than subordinates, respecting what others bring to the table and listening to their ideas. In fact good business managers lead through the power of ideas and the strength of their voices rather than the authority of their formal positions.

Like myself, at times, Rosabeth ends her latest book by asking 'Am I predicting the future, or indulging in wishful thinking?' We don't know yet. It's up to us, she says, to take a stand, to choose between the lonely crowd or the connected community. We need, she says, a shared consciousness to solve social problems. We have to feel responsible to wider communities, even to those who come after us. Going back to the title of her book, she wonders whether we will continue to evolve as a race. And that's a question about us as people, about our humanity and values, and not about technology. It's our choice.

So, you see, management is much more than running a business. It is ultimately about the future of humanity.

Our next guru also worries about that, but he starts from the technology end. He is Bill Gates, author, prophet and, of course, a hugely successful entrepreneur and leader.

Some useful business words:

serves up
delivers, offers

communes
groups of people who live and work together as a team

big impact
had a powerful influence

bubble up
originate

great leap forward
a big result or development

shared consciousness
shared ideas, feelings, opinions

foster
help to grow or develop

. BBC English/written by Charles Handy


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Bill Gates

The next guru on my list is very different from all the others. He doesn't teach at any university - in fact he left without ever completing his first degree. He doesn't join the lecture circuit nor is he a prolific author. He has only ever written two books and very few articles. Despite all that, his views on the way the world of business is going, and what that means for all of us, are just possibly more influential than all the others in my guide put together.

His name is Bill Gates, in many ways, the richest man in the world: richest because he didn't just talk about the future, he helps to shape it, richest because he doesn't just understand how technology works, he also understands how markets work, not least by outsmarting IBM, and richest, finally, because his heart is where his voice is, he is genuinely passionate about the new world he can see emerging and the benefits it can bring.

I wanted Bill Gates on my list, partly because of his views on the future, which he can talk about with more authority than most, but partly because he』s an outstanding example of another sort of guru, the guru who preaches more by deeds than by words, who lives the theories he comes up with. We need gurus of management, I argued at the beginning of this series, to spread the good news of what works and what is new. But some of those who are creating the good news are perfectly capable of spreading it around themselves.

Jack Welch, who has just retired as Chairman of General Electric in America, is another of those who preach by example. Both Welch and Gates are great teachers - of their own staff, and that process, I suspect, helps them to spell out their views and beliefs in ways that others can relate to. In fact that's the first lesson we can learn from Bill Gates - good managers are good teachers. Literally so - they spend lots of time in front of their people, talking, listening, answering questions. Gates may not follow the other gurus around the conference lecture circuit, but, whether it be by his beloved
email or in person, inside his company or outside it, teaching is what he is doing for much of his day.

Back to his story, however. You probably know some of it already, how he got hooked on primitive computers at an early age, along with his friend Paul Allen, how he and Paul stumbled across an advert for a small kit computer called the Altair 8800, how they started to write a programme for it, how they started to dream about what it would mean if everyone had their own affordable and easy-to-use computer, how Bill left his degree programme at Harvard to try to live that dream and how, between them, Bill Gates and Paul Allen created the world's first microcomputer software company. They called it Microsoft. It was 1975 and the world was about to change.

It all looks obvious in hindsight, but back then, I remember, computers were huge machines that had to be kept in special temperature-controlled rooms with their own special languages that you had to learn before you could interact with them. So the second lesson that we can learn from Bill Gates, before we even get on to his ideas, is that it is always possible to dream the impossible and make it happen. That, I think, is what great leaders always do, in every field, but of course they then have to communicate their dream so that others can get involved and excited. No-one can do much on their
own. Bill Gates would be the first to admit that he』s no technological genius, he needs others for that. What he has is the thirst for social invention. He revels in change and draws inspiration from a crisis.

Of course, you can't build a company as successful as Microsoft has become without making enemies, and Bill has many of those, not least the bruised competitors he leaves in his wake. The US Government's anti trust action against Microsoft that started in 1998 confronted Gates with something new for him - unpopularity. He has responded by giving up day-to-day control of his firm and giving more of his attention to the gigantic charitable foundation that he and his wife Melinda have set up. As he has said, when children are dying and starving in parts of the world, easier internet access seems almost beside the point. It's another lesson for managers - remember always that there is another world out there. If you get too fixated on your immediate business problems you may get too disconnected from your public and lose their support.

If you』ve just joined us, this is the BBC World Service and I am Charles Handy. We』re discussing the life and work of Bill Gates the latest person in the Handy Guide to the Gurus of Management. And it is time, now, to turn to the explicit teachings of Gates, and his views of how the digital revolution will shape the future of business and management.

His first book, The Road Ahead, was published in 1995. As he forecast in the introduction, the book already looks obvious, so quickly has the world caught up with his vision. But it also, and he forecast this too, looks oddly wrong in parts. Gates famously ignored the Internet at first. 'We didn't see, he says, that the Internet, which was originally a network for academics and techies, would blossom into the global network it is today." Full marks to him, however, for recognizing his mistake just in time and pouring money and the energies of the firm into catching up. It is a striking example of how a failure can be the spur to new endeavours. The Internet and its implications dominate his second book, Business @ the Speed of Thought.

But we can learn as much from Bill Gates by looking at what he does, as a manager and a leader, than by reading his books. Think first of Gates as a marketing guru. He has described his method as a six-part business strategy.

[INDENT]1. Concentrate your effort on a market with large potential but relatively few
competitors.
2. Get in early and big.
3. Establish a proprietary position.
4. Protect that position in every way possible.
5. Aim for high gross margin
6. Make the customers an offer they can't refuse.[/INDENT]

Right from the beginning he practised what he preached. In 1980 IBM approached the fledgling company that was Microsoft looking for software for its new secret product, the PC. At that stage all that Gates and his partner Allen had to offer was their version of the computer language called BASIC.

But when IBM asked if they could also supply an operating system, Gates and Allen said yes. Actually they didn't have one at that moment, but they thought that the product of a local firm, Seattle Computer Products, could perhaps be used. When IBM went away, Gates and Allen bought this product for $50,000 and then agreed to give IBM a licence to use it for ever for only $80,000 with no royalties. It was an offer IBM could not refuse and it knocked out two other competitors, but what IBM didn't notice, or didn't mind, was that Microsoft retained the right to licence their system to any one else. You see, IBM didn't think that the PC was going to be much more than a household toy, but Gates saw the huge market potential and wanted to get in early and first on the back of the biggest player in the business. As he says in his first book 'Getting in on the first stages of the PC revolution looked like the opportunity of a lifetime and we seized it.'

It's one thing to have the right idea. Creating the organization to deliver it is something else again. Here, too, Gates, with no previous experience, no MBA, and no mentors, set about creating a new sort of organization, what he called a knowledge company. The knowledge company's raw material is brainpower. You hire the best and best trained brains, create an environment in which they can do their best work, and build systems so that the knowledge that results is woven into the fabric of the organization. Then it can be packaged and sold. The company headquarters at Redmond, near Seattle, has often been compared to a university campus, but if so, it is a very hard-nosed university indeed, with one overriding and very clear purpose - to put a PC on every desk and in every home (using Microsoft software, of course, even though Gates leaves this bit unsaid nowadays).

Here is Bill describing how they work - "we read, ask questions, explore, go to lectures, compare notes and findings...we consult experts, daydream, brainstorm, formulate and test hypotheses, build models and simulations, communicate what we're learning, and practise new skills." Vital to it all is what he calls the DNS - the Digital Nervous System, the e-mails and computer systems that allow everyone to learn everything they need to know.

It sounds wonderful, but it doesn't tell you how decisions are taken, and at first they all got taken by Bill Gates himself, or Paul Allen. Incredibly bright though they both were, there was no way that they could personally control the huge sprawling giant that Microsoft was becoming. Besides, too many mistakes were creeping in, as when Windows NT flopped disastrously in the marketplace. So, in 1999, Bill Gates set about re-inventing the company. He called it VV2, for Vision Version 2. It set out to switch the focus from personal computers to all forms of information software and hardware and to build the company around the needs of customers. The company was divided into eight separate and autonomous business groups, along the lines originally adopted by Alfred P. Sloan, the legendary boss of General Motors in its great days, and a personal hero of Gates, who discovered, rather late in the day, that traditional management theory had its uses.

Behind the structures , however, there are some very clear people policies, which are the things that give the company its extraordinary vitality. Gates summarizes them as five 'E's:

Enrichment, Empowerment, Emphasis on Performance, Egalitarianism and E-Mail.

Enrichment is the lure that attracts the young talent to the firm. Gates has created many millionaires through the stock options he provides for successful performance. And that performance is rated twice a year with marks from one to five. Four means exceptional, one means you're out. Egalitarianism is evident in the laid-back  of the place, hectic though it is underneath, and e-mail, of course, is everywhere. Nevertheless, in Microsoft it is still clear who is boss, who takes the really big decisions and who charts the long-term future of the company, and that man is still Bill
Gates.

The next guru on our list has also used his business as an example of how to manage in modern times, only this business makes pumps and dishwashers, not software and it's in South, not North, America. His name is Ricardo Semler from Brazil.

Some useful business words:

outstanding
very good

deeds
action

revels in
gets pleasure from

proprietary position
a position where you own legal, eg. intellectual rights

gross margin
difference between the manufacturing cost and the selling price

mentors
persons who give advice to others over a long period of time

egalitarianism
the belief that all people are equal and have equal rights