Thanks to our friends at SEAC, we had the opportunity to learn from one of the great business thinkers.
Gary Hamel, co-author of Humanocracy, was the special guest on a webinar called “How to create a truly resilient and engaged organization through the application of rendanheyi principles”.
We learned a lot from Gary during the seminar. But in the interests of time we’ve condensed the findings down to three key takeaways.
Let’s dig in.
We need a revolution…
Everything has changed recently.
How we watch and consume media has completely changed with the advent of mass adoption of streaming (and the pandemic closing cinemas).
How we move has changed. Electric and autonomous vehicles are now a reality, not the preserve of big budget science fiction films.
How we communicate is now completely different to how we communicated even a decade ago. Social media has exploded. Newer forms of social media, like TikTok, were also born.
But Gary raised an important question in the seminar. Can you imagine a shift in how we lead, manage and organize that is as radical as how we watch, move and pay?
Gary stated that “we need a revolution in management. We need to re-imagine how we run organizations. We don’t often think of management as a technology but it is. The problems with most organizations are the problems with the technology of management.”
Organizations are wasteful
Gary has advised and spent time with many organizations. But a huge number of these organizations revert to what they know by the time he returns.
Many businesses have the same core “incompetencies”. They are inertial, incremental and inhuman when they need to be resilient, creative and caring. They are not engaged organizations.
Organizations because of their inertial and bureaucratic nature waste far more human capital than they use. And this is a big problem.
A recent Gallup global workplace survey found that only 15% of employees felt truly engaged at work. With a huge 67% saying they felt disengaged.
This is a huge waste.
Gary mentioned that this kind of problem, which leads to waste, happens to nearly all companies at some point. Many young ambitious companies start out bold, simple, lean, open, flat and free. But as they grow they become bureaucratic. They become bloated, timid, complex, insular, arthritic, politicized.
But Gary highlights the fact that it doesn’t have to be this way. There are models around that avoid this.
Humanity over bureaucracy
Haier’s Rendanheyi model might just be the most radical management model in the world. Haier is a highly engaged organization.
In contrast to the bureaucratic bloat described above, the rendanheyi model hands more control to employees. Which creates a more engaged, more creative and less wasteful organization.
It’s useful to use Rendanheyi as a model for how things could be because, as Gary describes, a lot of managers suffer from “ambition deficit disorder”. So they need a model to look at to really see what’s actually possible if an organization can migrate to a new way of doing things.
There’s a lot of information on the Rendanheyi model around and it goes into a lot of depth, but here is a snapshot of some aspects of it.
The goal of the Haier model is to make every employee feel like an entrepreneur. So the Rendanheyi model from Haier suggests business units should be viewed as microenterprises that sell services to other microenterprises.
This helps people that work at Haier to feel that the business belongs to them. It also shrinks bloat and moves middle management roles around so they can be more effective.
The Rendanheyi model has no time for internal monopolies. Everyone has to earn their living by satisfying a customer.
Markets can realign resources in an organization much quicker, and better, than hierarchies.
Users become more connected with employees. And those same employees know that their compensation depends on their customers.
Haier’s open innovation approach means they actually talk to their customers on social media. And they are very open about their R&D. This means that while others work in secret with a narrow focus, they can mine the world for ideas.
One of the most important parts of the model, this gives employees real decision making freedom and autonomy.
Part of the Rendanheyi model is a venture studio model. This means that there is capital there to work on new projects and businesses if great ideas come from within the organization.
Gary was at pains to give other examples of management models at work and that Rendanheyi is just one example of a better way of managing an organization. He specifically raised the example of Buurtzorg, the largest home help service in the Netherlands.
What makes them unique is that they have organized into small teams of 12 nurses each. Each of those teams then runs like a mostly independent business. It’s a model that helps to create a highly engaged organization.
It was amazing to learn from a leading authority like Gary Hamel. He touched on so many different aspects of management that it was impossible to fit them all in here, so come back soon for part two where we’ll look at how to hack management.
How MAQE can help
MAQE has been offering organizations strategic advice for quite some time. And we know that all transformation starts with people. Get in touch via email@example.com to find out more.