GARY’S INTRO TO CAMERA
Hi, I’m Gary Hamel, professor at the London Business School. And we’re going to start our program by talking about why management matters, why it now needs to be reinvented here in the adolescence of the 21st century and most importantly, what can you do to help that process along.
Gary: Well, it's great to have the chance to, uh, share a few ideas with you today about how do we build organizations that are fit for the future, but also how do we build organizations that are fit for human beings. And I'd like to start by asking you to reflect on a question for a moment. If you had to make a list of the greatest inventions of the last Century; the things that have changed our lives that we could hardly imagine living without, what would be the things that you'd put on your list?
I'm sure you have the combustion engine there, semiconductors, uh, all the wonderful pharmaceuticals that we enjoy today, uh, probably the Internet. A long list of things that, uh, have, have made our lives easier, have made them more fun and I think, you know, all of those things are important. Having said that, I would argue the single most important invention of the last 100 years was the invention of management. And that sounds, maybe, a little bit weird.
We don't usually think about management as an invention, but if you think about the tools, the methods that we use to bring people together, to mobilize and organize resources for productive ends, that was an invention.
00:02:13 And yet, I'm going to argue that we're going to have to now reinvent management. The way we lead, we plan, we organize, we hire, we motivate, all of those things we're going to have to reinvent because today organizations are facing a set of challenges that are truly unprecedented.
In fact, let me give you just a little bit of history here. Go back with me for a moment to 1890, about 120 years ago, and if you had been living in America, Germany, Britain and what we called the Developed World at the time, in 1890 you would have found that about 90 percent of people were still in agriculture. The average manufacturing company would have had less than four employees.
So these very fragmented, very small organizations, that was the world circa 1890. And over the next, uh, literally one generation all of that would change. By 1915, 25 years later, Ford Motor Company is making more than one-half million automobiles a year. U.S. Steel has become the first company in the world that has a billion dollar market capitalization. And in that tiny sliver of time, in one generation, almost all the tools of modern management get invented.
Pay for performance, capital budgeting, task design, [divisionalization], brand management; all the management tools and methods that you find yet today in organizations around the world, virtually all of those were invented before 1920. And most of them were invented by individuals who were born in the middle of the 19th Century. That's what we can call management 1.0.
In fact, if you were going to plot the evolution of management over this last 100 years, it would follow kind of a classic technology s-curve, right
A lot of innovation 100 years ago; a lot of new thinking and then over time slowly that pace of evolution slows down. And in our working lifetimes, indeed, if you go back 50, 60 years ago, the way we manage has hardly changed at all. So in many senses, the management principles, the tools, the methods that we find in our organizations, these are legacies.
These are hand-me-downs from gurus, from ex-, uh, CEOs, from management thinkers who are mostly long dead, long retired or long in the tooth and, yet, it is their view of management that is still driving our organizations. And I think we need to change this. I think it's time to change this and I'd like to talk a little bit about why.
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