Humanocracy

September 10, 2021

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On this conversation, we welcome Michele Zanini, a cofounder of the Management Lab, where he helps large organizations become more adaptable, innovative and engaging places to work. Drawing on more than a decade of research and packed with practical examples, Humanocracy lays out a detailed blueprint for creating organizations that are as inspired and ingenious as the human beings inside them.

Transcript

Living Room Conversations: Humanocracy

Rhea = Rhea Ong Yiu (Host)

Michele = Michele Zanini  (Guest)

RHEA: Hi, everyone! My name is Rhea Ong Yiu and I’m here to welcome you to episode number seven of Living Room Conversations from LIVEforward Institute, and I’m super excited for today’s conversation because this is really something that is very close to our hearts and yeah. So, but before we go and invite our guests, let me just say welcome to everyone who’s plugged into YouTube, joining us here in our living room, our virtual and global living room, right? And we just want to say thank you for joining us for the last seven episodes as well and following our engagement here. Why are we having this conversations? I think it’s important to continue to talk about why we’re so passionate about changing the way we work, the way we work forward in the future and this is our space to create that conversation so thank you. I see already someone dialing in from Lucerne, Switzerland. Hi, May! Thanks for joining us. And so, yeah, so if you are here on YouTube or on Facebook, please tell us where you’re calling in from, and we’re happy to, yeah. Hi, Maya! Thanks for joining us. 

And okay so let me, without further ado, let me welcome our guests today. I’m super excited about this I read the book as soon as it came out of the press, and it has been such an inspiration for me in the line of work that I do personally and but also what we do at LIVESciences, right? So our guest today is Michele Zanini. He is an author, a best selling author of the book called Humanocracy, and he’s passionate about organizations and strategy and he wrote the book together with Gary Hamel. Join us in this conversation to find out, you know what was the inspiration behind this and what keeps them moving forward. And if you have any other exciting questions or very controversial questions, please bring them in as well. And may I invite Michele to join me in the living room. Hi, Michele!

MICHELE: Hey! Hi, Rhea! How’s it going? Thank you for having me. 

RHEA: Yeah, thank you for joining us in our living room, and really excited to have you and to have this conversation with you. Do you have any few words for our guests today?

MICHELE: Well, I really welcome the opportunity to exchange some ideas and perspectives on how we make organizations fit for the 21st century right for people inside them, which is really the cause that has propelled me and my work and my partnership with Gary Hamel over the last decade right, because we just think that organizations today are not as capable as the people inside them, I mean it’s as simple as that. They’re just not as resilient, you know. They don’t intercept the future as quickly as they could, and they should. They’re not as creative as they could and should. And they’re just not engaging, engaging places to work, right? And if you add all that together, you end up with a picture of organizations that squandered an enormous amount of energy, of talent, of human potential. And, you know, it’s something that ought to be a real priority for everyone because at the end of the day, our societies are going to be as thriving, as resilient, as capable,  as you know the organizations inside them, right?

RHEA: Yeah.

And so to the extent that organizations are not, you know, doing the best they could to amplify all the talents, right, all the resources that they have at their disposal, then you know, we’re in trouble, right? So that’s really what propels me and I’m sure it propels many people that are part of this conversation today so I’m really excited.

RHEA: Yeah. Maybe just to give some of our viewers who have not probably picked up the book yet or have not read it. Do you want to give a little teaser about what is Humanocracy? What does it mean? What does it stand for?

MICHELE: Yeah, yeah. So let me try to do that, give you the cliff notes of that. People by the way, if you are not sure whether you wanna buy the book  if you go to humanocracy.com, you’ll be able to download the preface in chapter one, so you’ll get a pretty good overview there and there are some other videos. But basically, just go back to the premise of it, so my co-author Gary Hamel and I have observed over the last, you know decade or so or more actually, a couple of decades, is that organizations of all kinds, you know, irrespective of sector, irrespective of geography, they all struggle with the same kinds of disabilities. So they have you know a shared incompetency if you like, and they’re three in particular. So one is that they really struggle with proactive change, right. So often change is the resulting of a result of a crisis and it’s episodic, it’s quite compulsive, you know. Often when organization is transforming, you need to replace the CEO, need to put together a real catch-up program right, so organizations are not responsive to what’s happening around them. And that’s why insurgents, you know, smaller companies often went out against the large lethargic incumbents, so that’s one.

The second is that they’re kind of incremental, right? They’re just not very good about changing the fundamental business model that they operate with and they’re much less adapted doing that than start-ups that are unencumbered by the machinery of kind of bureaucracy. And finally, organizations just as I mentioned before, they’re just not good at engaging people and letting people contribute to their full fullest extent. If you look at the Gallup data showing how few people are engaged, I think over in the globe, it’s about 17% of employees are fully engaged, which means that any 83% are not bringing their ingenuity, their initiative, you know their passion to work and you know those are the ingredients of success in the creative economy, right? And those are gifts that people bring, decide to bring or not and mostly they don’t if you believe the Gallup data and if you look at sort of, despite the hype about working from home and other things, giving people more autonomy, if you look at the little autonomy, the how few people believe that their opinions counts for, how few people feel like they can shape their work environment, they can make decisions, they share in the fruits of their productivity. I mean we’re talking about, there are lots and lots of surveys that show this 10, 20% of the workforce feels that way, which means the heat or the vast majority doesn’t. So you look at all this, and you’re like, this is just not tenable but it’s interesting that it’s shared across a group of institutions of different kinds and the culprit, the reason that is driving this kind of lack of capability we contend is bureaucracy. And bureaucracy might sound like an old fashioned term like horsepower, right, in many ways, it is, it’s kind of old fashioned, but it’s still like, if you think about like what that actually means where power is vested in positions, where the big leaders appoint little leaders, where jobs are highly prescribed, where people compete for promotion, where you know, the control consistency comes from standardization and rules that are imposed from the top down, those kinds of features, which are the hallmarks of bureaucracy, are very much in place in any organization of, you know, 100 people or more, I mean that’s how we run most organizations. Yes, there are some exceptions, we’ll come back to that. 

But we feel all these lack of capability has to do with that, you know, with taking this kind of bureaucratic approach to managing the organization right and it’s kind of a combination of Industrial Engineering and Military Command structure. And while this might model might have made sense at the turn of the last century, you know, when people were literate, where the name of the game was efficiency of scale, you know, and we’re really what you needed, the advantage came from being large and disciplined as opposed to being creative, it’s no longer fit for purpose. And we need to change that and we chose to a Humanocracy as an alternative term to bureaucracy. And, you know, people may or may not like the term, but the fundamental distinction we wanted to make is this, in a Bureaucracy, the people are the instruments or the resources that the organization uses right to be successful, to make money or to serve whatever purpose if it’s not for profit institution.

In a Humanocracy, it’s the relationship is reversed, so the people are the agents right and the organization is the instrument, right? So, and you’re in and the organization is designed so that it amplifies the capability of people to contribute to it, and to better their lives and the lives of the people they serve, so that’s the fundamental distinction. What is the reason, you know, what is the tool and what is the agent like. You know, in a Bureaucracy, the people are the tools and the agent is the organization, a Humanocracy, it’s a reverse and so like, the last thing I’ll say and then I’ll stop and, you know, take this where you want Rhea, but the goal of a Bureaucracy is to maximize conformance and control. And those are good things, you know, but they’re not the only thing you need. In a Humanocracy, the goal is to maximize contribution and then if you take it, it sounds like words right and that you know are interesting but actually if you take that to heart as a distinction, the implications for how you organize the lead advantage are fundamentally different from the status quo. And then in the book we talk about like how that happens examples and so on but that’s, but let me just stop there because I, but that’s the fundamental, you know, the fundamental distinction and premise of all of this. 

RHEA: Yeah. I love what you said that you know it’s a shift of mindset really from being like, “I tell you what to do” to actually “Hey, come on join the movement, join in building this house, this organization together”, right? That’s the whole contribution space that you create in Humanocracy. And it brings me back to this quote I read somewhere just this week about like you know, “bring a brick not a cathedral”. And I think when everyone brings their best foot forward, their best selves into the picture, you can only show much more from the organization and I’m with you there completely. I’m curious and without taking so much time from our audiences so who might have some questions, please go ahead and, you know, type it in when you’re in YouTube, just type it in and we will read it and we will try and answer those questions but I have one that’s really burning, and it’s what I, I sense is that this is such a serious call to action when I was reading the book as well. What inspired this? What sparked that idea and what triggered you to really, like, write it in this, in the sense of a call like an urgent call for action?

MICHELE: Well, I just, it’s outrageous that we are settling for organizations that are just not good enough for human beings, it’s just if morally it’s wrong. People have inherent worth then, you know, we want them to flourish, and we build organizations that don’t allow people to flourish, I mean allow some people to flourish, but not the vast majority, and that’s just like wrong. This is wrong. And so there’s like a moral kind of outrage in a way. And then there’s a practical, there’s a practical dimension to this as well because, you know, as I mentioned before, if you just don’t capture to the fullest extent the talents of people have, you’re just gonna end up with less productive organizations, and less productive societies, and less wealthy societies, less harmonious societies and so. So it’s a kind of a performance challenge for organizations and it’s kind of a moral challenge for society. So and I, you know we tried to kind of weave those things together, right, because, you know, we don’t want this to be a book about just philosophy. I mean, but you got to start there, right? You have to start with the fact that this is just like wrong and needs to be changed and we think fundamentally about the roles of people at work. 

And you know a lot of the organizations we profiled in the book, whether it’s Haier, whether it’s Buurtzorg or whether it’s Nucor, Southwest Airlines, Svenska Handelsbanken, and there are many, many others, but they, you know, you can look and you can look at how they do things and their practices and that’s interesting. We can come back to that if you want, but all of them started with a fundamentally different premise and the kind of premise that I mentioned before, where they wanted to build organizations in which people thrive. Right, and you got to start there. So, that what really prompted us it really, you know, kind of drove us is this idea and we want, we’re kind of provocative in the book, you know one CEO of a large company who read the book recently told me, “You guys are really tough on CEOs”, yeah we are because like they have to do better, they simply do, and we hope that we challenge them in a way that prompts them to action as opposed to them just saying, “This is too hard. I’m gonna do something else” or “I’m going to think about something else”, but that’s really why we have the passion for this topic, yeah.

RHEA: Yeah. Well, I am equally as passionate as you, not able to put it together in a book yet, but we at LIVEsciences we really, we try to walk the talk right and we also build our organization around Teal principles, you mentioned Buurtzorg, you mentioned all this, how is Humanocracy connected with the work of Frederic Laloux on Teal?

MICHELE: Yeah. There’s definitely a lot of overlap, I mean some of the companies that we profile are the same, some of the practices we talked about are the same, some of the values are the same. You know we don’t necessarily have the same, you know, or at least we don’t really get into the whole like evolutionary aspect of this, I mean yes you know there are over, over the long period of time we will see some, there is some sort of arc towards these kinds of organizations. On the other hand, in a way, you know I’m focused on the here and now, and finding ways to get to accelerate this across all organizations as rapidly as possible. And building a, as I mentioned before like a very practical case because I do want in addition to kind of saying this is the right thing to do, which is an important premise, I want CEOs to read the book or you know, listen to us, or executives people in positions of power and saying, “I need to do this because there really is no other way to build advantage, competitive advantage”, you know in my industry or whatever. So, we want this to be a very kind of practical, pragmatic, kind of guide to people that are just seeking to, so they may not like even think about Teal or the evolutionary arc of society but they’re like I want to be successful the next three years because, and in the end we might get to the same kind of outcome but, so that might be the only kind of slight twist, but in general there’s quite a bit of overlap, for sure.

RHEA: Yeah. So my question to you and you mentioned a bit like conversations with CEOs, sometimes so, I mean the book is really tough on them right and you put that on a  very black and white almost context. Can you tell us a little bit like how these conversations have gone with CEOs and what is the response that you’re getting in these tough conversations?

MICHELE: Yeah, well, you know, so there’s a bit of a selection bias because the people that we talk to I have some interest in talking to us and so there may be more open minded than other people that we don’t talk to, right, who might say, “Screw this. I have better things to do”, so I’m sure there’s a percentage of leaders who think that but you know their responses being good, I mean people understand that we need change, and they need to change themselves, and because even though the CEO role might sound quite powerful, at the end of the day, even they can wilt an organization into a new kind of state,  they just can’t change on their own. And so often what you see is that you have CEOs are saying, “We’re just not as responsive as we’re not as innovative as we need to be but I don’t know what to do about it.” I’m kind of powerless and so our approach and we can get into if you want is one where you’re building these kinds of capabilities or innovation around resilience, around engagement, in a way that is very participatory and experimental. And so even though the challenge that you’re trying to solve like humanizing the organization might sound, some quite daunting. There is a practical way of getting there, and one in which there’s a lot of like positive some games that get formed so it’s not like, you know, there may be situations where you just need to get rid of certain layers of management that are just not necessary if you syndicate the work of managing to your organization more broadly.

Like at Buurtzorg you know very well and others like they don’t really have, they have 16,000 people working at Buurtzorg, they don’t really have any management layers, right? They just have two people at the center and a group of coaches and IT department, that’s it, so like less than 100 people right so So there there are areas in which manage the managerial footprint needs to shrink, for sure. But it’s not just about getting rid of people of managers but also reformulating what they do, right? And so, and you can create some situations where even a CEO or a supervisor might end up playing a role that is much more interesting, much more fulfilling for them as well. So the conversations with them is you know, the conversation is one where they might say, this is really difficult but I want to do this. And then you know we try to help them think through how that happens. And I think there is a way to, as I said be very radical in your intent but very practical in your approach, right, which is really the key here.

RHEA: Yeah.

MICHELE: Because I guess there are two ways to get to the Teal paradise or Humanocracy or whatever right, so the two ways. One is you basically say these are all established organizations are hopeless, we’ll just have to wait for them to die. And then we need to focus on is on the younger innovations make sure that the right principles so that as they become large, you they have a different DNA, right? So more and more birth source and then the like. The other approach is one where you’re really trying to transform the old organization into a new organization or like DNA level therapy on the old organization, and that’s really hard but I think there is a need for that, that’s what I’m focused on as well. 

I don’t think we can wait for the old organizations to die and I don’t think that’s good enough for two reasons. One, there’s a chance that the younger organizations become, I think we’re all kind of like the old organization so we just shouldn’t count on the fact that they’ll stay Teal or like to Humanocratic, or whatever. But the second thing is it might take a long, long time, too long a timeframe for the older organizations to die off, we can’t afford spending another 100 years with this model. And besides, you know, they have all this talent, all this capacity, do we want that to be wasted as they die off, we think that that’s true. So my goal and what I try to do is help older organizations, transform themselves and I think there is a way to do that. And at least in the conversations I’m having with CEOs, there is a receptivity to that. As soon as we kind of show them that it’s possible to be revolutionary and evolutionary, you know that. And I’m hopeful we’re working with a few organizations that are really are taking this to heart and I’m glad to see that they’re making progress and it definitely can be done. 

RHEA: Yeah. Could you maybe elaborate a little bit? What is the impact that have seen on the ground and it’s still an evolutionary state, right? You may bring in some revolutionary thought process behind it, but it is evolving as we as it happens today. And that’s just a fact of life, that’s just a fact of any living organism as well, it continues to shift with the times. What are the major shifts that you’re seeing, based on the work that you have done on this Humanocracy?

MICHELE: Well, so I’ll just give you an example, very practical examples so you can see what I mean. So, this is a company, Adidas North America, we work with them a few years ago. The CEO was brought in from another part of the group, and the company was not doing very well in terms of growth and margin. They were kind of stagnant in the United States. They were getting hammered by other brands like Nike and Under Armour and the CEO realized we need to be more innovative, but you know innovation isn’t going to come for me, it’s not going to come from my leadership team, it needs to be something that is distributed across the entire organization. And you also realize that you know, innovation can’t just be something that is a heroic journey that Maverick undertake, but they succeed in spite of the system, but it needs to be something that the system encourages, right? Because you could have a bunch of Steve Jobs working in an organization, but if it’s like an authoritarian organization where the CEO makes all the decisions, all that Steve Jobs are not going to get very far, right? So what we did there is we invited everyone about 3000 people to help hack your organizational model, and what I mean by hack is thinking a very practically about changes that they might make to different elements of the organization. So structures and roles, the resource allocation process, the hiring process, the development process, the way points of view happens, the way interview happens, the way of planning happens. 

So these are in a way like the gears of the organization, they drive what decisions get made and how, which voices are heard, what gets rewarded, right? So, we basically ask people to reimagine your organization and reimagine these processes in these structures and roles, and as a way to kind of get them to think creatively about this. What we did is we provided them a set of principles that we talked about in the book. In the book we have seven different principles like openness, like meritocracy, likemarkets, like ownership and so on and each of these principles, we think are the kind of inspiration that drives you to think about your organization in a very different way from the bureaucratic model and a lot of the organizations I’m talking about in the book, like the Buurtzorg, Nucor, and so Haier. They all embed these principles so the idea is you know can you think of how you might apply this principle, and read to reimagine your management process. So let me just give you an example, we took one of the examples and one of the principles in the book is markets. 

So markets are great at allocating resources very flexibly, they’re great at aggregating the wisdom of the crowd and so on. They’re very seldom used in organizations, organizations are mostly command and control economies, they’re more like the Soviet Union and they’re like Silicon Valley. So the idea is, how might you take a model like, and by the way in the book we have examples of like a company like Haier  for instance in China, they use internal markets to match up different internal providers so people making refrigerator appliance maker, the refrigerator unit that makes refrigerators may contract internally with different factories, different design teams, HR teams and so on to get serviced. So, so the idea is, how do you take this principle of markets and kind of think about the intersection of this principle and a particular practice. So for instance resource allocation, can you make resource allocation more market like, can you create more like venture capital arms inside the firm, can you create a crowdfunding platform so that innovation ideas get funded by the community, everybody gets $100, $200 to find ideas that are come up from the bottom up. You create a real internal market for talent, where people can move very quickly across the company. So, through this kind of process you generate lots and lots of ideas, we call them hacks Rhea, right? And then you get the community to help you sift through them through a process of peer review, and you might go from like 1000 ideas to 100 ideas, and then 10 ideas that really, everybody’s really passionate about. And then for those ideas you run experiments, everybody’s familiar with lean start-up methodologies for business innovations, you do the prototype and you think about you try that quickly and see if it works and then you pivot. 

Well, the same thing can happen with management practices so take this crowdfunding idea, you can start that in one part of the company with 100 people, you give everybody $200, it’s not a big investment and you do this in a low-fi way and you see what happens. And that’s exactly what I just did, they created these teams, they experimented with these ideas, and everybody was kind of part of the conversation so even though you may not be driving an experiment you were following along, you’re participating, you’re supporting them in all sorts of ways. So, in the end at Adidas what happened was the organization model evolved through a process of experimentation and constant iteration of ideas that bubbled up from the crowd, but it was also quite disciplined. And so, you know the organization started migrating to a different model and as it did that so did like the culture. Because people felt like, not only were changes happening to the way the organization work, but they had a voice, they could play a role in shaping the organization and how it worked. And they just made a fundamental difference because people felt like it was their organization, it was their change, it wasn’t someone else’s change that was being cascaded down. And so the culture started to evolve, the leadership behavior started to differ, and it created this kind of virtuous circle that continues. And not all the experiments are successful, they’ve hit that end to be sure, but to me that’s the kind of change I’m seeing and I would love to see more of, right? So kind of this very participatory, very experimental way of changing the organization but also quite disciplined. That is in stark contrast to the typical kind of top down, programmatic change program that’s like  a consulting firm I might propose which sounds appealing and it sounds kind of easy you know, relatively straightforward but it often doesn’t really work. Because as you say organizations are very complex social systems and so the idea that you can kind of just engineer, a future state from the top down in a very prescriptive way is just like a recipe for failure. So anyway, very long answer to your question but I hope it provided you with some kind of tangible, kind of sense of the changes that I’m seeing and that I’d like to see more of. Rhea, I’m not hearing you.

RHEA: Sorry I muted. Yeah, so experiencing this from a brand that is very popular, right? It’s also setting the tone of how culture is so important to actually drive changes in the organization. I remember reading into one of the SEMCO toolkit and reading between how Ricardo Semler also what he did with his father’s company where he said “Okay, you have a problem with the system. Let’s talk about it and tell us what solutions you have” and then you become part of the solution not like, you know, the people who are whining on the side. And I love how this is so part of their organization culture as well, right? And we could totally learn, yeah.

MICHELE: Yeah, yeah. Sorry to.

RHEA: Yeah, go ahead.

MICHELE: No, I was just gonna say that culture, people talk about culture, but it’s often this kind of like amorphous concept but it’s so high level, but culture in a way is the product of a system that you created. And so you really if you want to change the culture, you change the system. You don’t change rhetoric, you don’t change platitudes, you don’t change mission statements, you just don’t gin to stop on your own in a room, you know, at an off site, you got to do the work of retailing the organization. So, and you know the wonderful thing Ricardo has been doing it for forever. But you know when we did this with Adidas and we’ve done it with even more people, we’ve done one similar kind of engagement with over 10,000 people, is that social technology now allows us to aggregate contributions from people all over the world in very, very quickly, very efficiently. So, you know this kind of approach to change in the organization might have been really difficult 20 years ago, and now it’s within our reach, right? And you know, if you think about it, the CEO has a lot more like power than an individual to frontline, but there are more people at the frontline than the CEO, obviously. And if you’re able to aggregate the power units of all these different people and create horizontal coalitions that are enabled through a social platform, you can concentrate power in a way that could propel the organization to radically reimagine itself and so that’s really my hope, because if we just wait for the CEO or the C level suite to get religion, you know, we might have to wait a long time.

RHEA: Yeah, well thank you so much for that really thoughtful sharing there. There’s a question from some of our guests online and I thought this is really interesting. You know having conversations with CEO, it’s always like “Okay, well change needs to happen”, but it’s too big I don’t know where to start. What would be your advice?

MICHELE:Yeah, well, I mean that’s kind of hinted at some of this in the previous answer but the way you start is by syndicating the question to the organization, involving everyone in that process and then, you know, thinking very experimentally about solutions. The worst thing you can do I think is just saying, well we’re gonna go from zero to one. We’re gonna overhaul this compensation system or whatever, budgeting system, we’re gonna do that from scratch. We’re gonna all the way, new way, we’re going to flip a switch and we’re going to have that change, and we’re going to do it like with a few experts at default. You know, that’s just not going to work because first of all the executives at the top may not have all the perspectives they need. And they’re like, lots of unintended consequences that they just haven’t thought about or it needs that they haven’t really considered. And second of all is well, it’s just like it could go badly, could backfire because you’re just implementing all in one fell swoop and that’s why I think most change programs, transformations programs fail. I think the track record is like 75% fail, or don’t meet their objective, I mean that should tell you something, right? So it’s much better to say, let’s try this, maybe in a part of the organization, or let’s just try to experiment, let’s involve everyone in the process so that I’m not selling it to people. They’re part of it, it’s their process, not my process that I’m selling to them and I’m trying with a few experiments. 

Let me give another example, one of my favorite cases in the book is Michelin, they’re the tire maker, they’re the largest tire maker in the world and over the last 10 years they’ve gone through a process that they call a restaurant civilization. It’s a better word, it’s like straight from French, but it’s better than empowerment, because empowerment means like you’re giving, it’s probably the closest translation to English is empowerment but empowerment is not quite right because empowerment almost thinks like you’re giving power to someone else. Responsibilization means you’re giving people authority but also the accountability, right? And, this started, about 10 years ago when they had gone through a rounds of Six Sigma and Lean and you know, all kinds of like optimization processes in their factories, and they found that people were basically no longer thinking as and when they did the work right they just basically were so disempowered, they just were checking out. And they thought well, and they also found like the productivity in fact was kind of plateauing like they just couldn’t get beyond that and they felt like we could do better than this. So what they did is they said, let’s just get more responsibility in our front lines, but this is how they did it, which is I think very, very clever. They have about 70 plants across the world, and they went and said, what we want is production teams so each plant has different production teams to focus on different parts of the process. Some are like assembling the tires, some are like curing the tire, whatever I mean, we don’t have to get into the weeds but they have, it’s a chain, and they’re different teams working on different, different parts of that process of production. So, what they said is that we’re seeking teams within a factory that are willing to experiment, over the course of a year on different aspects of autonomy. 

So maybe it’s planning, maybe it’s staffing, maybe it’s dealing with suppliers maybe, whatever, so there were there was kind of a set of topics. And they said we just want volunteers, we want normal teams, we don’t want your best teams, we just want very typical teams, and you know the catch is they need to do this while they’re not taking offline, they just need to still do their work over the course of the year, they need to meet their targets. But, you know, we want them to experiment and so they said we want supervisors and teams are willing to join this experiment with us and so they they ended up finding 38 teams in 17 different factories so about 1500 people. So that’s a very small slice of the 70,000 people that work in production but it was interesting was very kind of widespread like different specialties, from different geographies and whatever. And so they ran this experiment and they tracked two things, are we getting productivity gains from this and are we getting engagement gains, are people more passionate? And then they let them like do their own thing for a year and then they converge at the end and they said out of all these experiments, what can we learn other commonalities and whatever. So they came up with like a playbook, based on the work that these people did, which wasn’t disruptive at all like no one basically, there was like no resources that needed to be invested in it, you know the organization still needed to meet targets. 

So yeah, like why not do this and then it was such a successful experiment or set of experiments. Then what they did the next year they said okay, we’ve done this at the level of a team, now let’s do a level of factory like a whole plant. So they said okay, which plant is willing to volunteer and be part of this journey with us, and again, they got plants. And then they’ve kind of scale, so they scale from the bottom up, but in a very disciplined way in a way that really relied on volunteers on experimentation and so on. So you look at a process like that and then you get the confidence that this can be done right and it can be done in a way that isn’t disruptive to the organization, and then it just unlocks. So, it’s examples like that that I hope the CEOs will look at because they do show as I said before, that you can be revolutionary in your goal, but very evolutionary in the way you get there, right? 

It’s easy to confuse those two but they are distinct like means and ends and separating those two. 

RHEA:Yeah, definitely. I could totally envision what you’re talking about when you said revolutionary or aspirational in the goals, but also evolutionary or more pragmatic in the approach of how you actually engage your organization but take people along in that journey of change. And it’s an emotional journey, it’s not like you have a hard cut line in the sand and then tomorrow there’s a new organization, doesn’t happen that way because when you deal with human beings, it’s always complex, right? So you’re always having different, let’s say facets to look at in this change process. I think that leads to a question from Tin over in Facebook, and she’s asking a question like, is there a time, is there an approximation that we can think like a medium-sized organization can radically change within this timeframe? Have you have you seen anything like this? Because it’s pretty interesting like a lot of people see like, “Oh yeah, we are going to become an agile organization or we are going to become a humanocracy” but does that stop some point, or does it continue to evolve, right?

MICHELE:: Yeah, two thoughts, First, realistically if you’re starting from a very traditional kindi of paradigm, it will definitely take years not months, to feel like you know the organization has meaningfully transformed, which is not to say that you’re not going to be able to see changes happening in three months or six months. So again, let’s separate out the progress from sort of reaching the end state because you can definitely get, you can actually feel tangible differences, very quickly. But realistically, I’ve never seen organization, do this so where they end with a much more stably and qualitatively different model in less than three to five years to be honest, right? Again, it’s like occupying a country that was an authoritarian country, and saying “Okay, we’re gonna drop a new constitution, the constitution is beautiful and as soon as we do that the organization, the country is going to operate like Jeffersonian democracy”, no it doesn’t work like that. There are all these underlying social dynamics and tensions and vested interests inside so you can change the surface level kind of description of what the company or the country looks like in this case but you’re not gonna change the underlying features. I think the same thing works in our organization, we often fall prey to this notion that we can kind of change things in six months and we can just cut and paste someone else’s model. We can take what Spotify does and just apply, cut and paste it or we can start calling people scrum masters or whatever instead of supervisors, you can call them scrum masters but if they’re still like, if their accountability and their incentives and everything else is like old school, they’re sitting there, they’re gonna behave like old school supervisors. So you gotta take a long frame, timeframe to be realistic but on the other end as I said, it doesn’t mean you can’t make meaningful progress in the short term. And whether the journey ever ends, I really don’t think so, I really don’t. I mean, which is why one of the things Gary and I focused on the talk about this, I mean we basically have a set of practices and we which we mentioned very briefly in one part of the book that says these organizations we pull on the book have these kinds of practices. Strategies and open conversation, resources are allocated through market-like mechanisms. There are very few layers of management. 

People are like all have meaningful ownership in the firm and whatever. So there are a set of practices but what’s more important to us are the principles, right? That is basically more like less what you do but how you think and those principles will drive you to continually rethink and evolve your model. So, fixating on a set of practices and thinking “I need to get to those practices once I get to those practices, I’m done”, I don’t think that’s very productive. I think it’s better to think about it like “How can I become more human”, you know, “How can my organization become more human, how can I becone more capable”, and there are different ways you can do that, there are different ways you can think about applying these principles. I mean, I’ll just give you an example really quick, Haier is again one of the companies we talked about, we’ve just been being into interviewing because they’re continually, you know, like our write-up of Haier from a few years ago that appears in the book misses on some of the things that they’ve been working on over the last 18 months and we’re gonna do an update, but they’re just continually changing the way they do things. And so I think that’s the spirit, right? You’re going to be driven, I mean in the case of Haier they want to make everyone in the company an entrepreneur. And so with that kind of a quest that really propels you, you’re going to be stretched continually to get there because it’s so aspirational. You’re never quite gonna get there right and so you’ll always be seeking new ways of approximating it. And so to me that’s the goal or at least that’s the approach I would take. As I thought as I think about kind of transformation.

RHEA: Yeah. Thank you, Michele. There’s one more question on the chat, and I’m holding on, I’m really burning with one question that I have for you but let me bring to the screen Mariana’s question. She’s interested to know is it better to just start a new company from scratch or is it still possible to work on an existing one?

MICHELE:Yeah, it’s a good question. Sometimes like when I’m discouraged, I just think that maybe you should just go doing start a new one and that’s definitely an option. But I do think that there is, as I mentioned before sometimes we are fall prey of this kind of learned helplessness, we just think that the system is the way it is and we can’t change it, but we can. You can be an internal activist and you can create internal coalition’s for change. And you can make progress in within your perimeter, you don’t have to change the organization from the outset but rather and I get the CEO to allow that, but rather start in where you are. We have a whole section of the book which is really about that, how to be think like an internal activist and we have some examples, one of my favorites, some of the audience may know her as Helen Bevan, she’s at the National Health Service of England, it’s an organization with millions of people working there, physicians, nurses, and administrators. She has been able to catalyze change in that you know, it’s like a super bureaucratic organization and she’s not like the CEO or anything like that, but she has been able to catalyze meaningful change in patient quality and different work practices by tapping into this collective intelligence, collective commitment to change. So you’re not powerless, you can you have agency and you can get people but the way 

I would say it’s like you gotta work laterally not vertically. So before you go to your boss or someone boss’s, your boss’s boss or whatever, who issues your your idea down, work to create a coalition, work to get a bunch of people that share your passion, try something out, and then go to the hierarchy. And at that point and I think Helen’s example, I won’t get into time constraints but we mentioned in the book and there lots of other places where you can read about. If you look up NHS Change Day, you’ll see it just Google that, but that’s what she did right, she worked laterally and then work vertically and then and then the kind of the elites, the manager elite gets on board because they think this is an unstoppable movement so they’re rather, you know, ride the wave as opposed to try to counter it because it’s almost like too vague, right? So that’s my advice and as I said I’d refer you, even if you go to humanocracy.com for slash tools or you look up the tools tab, you’ll see some practical ways in which you can get that, stoke the fire of manager innovation in your part of the organization. So, don’t lose hope!

RHEA: Yeah, that’s really inspiring. Yeah, so I guess it’s time for my question for you and it’s probably more of an invitation to inspire the leaders who arewatching us, but more so the people who are going to be impacted by the change, and who reap the benefits if we do it right. What would be the one thing that you would say, for the leaders and also for the people?

MICHELE:Yeah. Well for the leader, I think you have to, if you’re a person with positional authority in a way you have to come to terms with the fact that you need to share your power. There’s no way you can create this kind of change without letting go of some of your prerogatives and trade, you know the old coinage, which is sort of control and formal authority for new currency. Mentorship, support, supporting coaching, facilitating and so on. And you know it might sound threatening at first, but in the end of my experience is that people that have gone through this kind of transition feel they should have done it sooner. They feel like they’re more fulfilled human beings, they’re less miserable. I mean, I’ll just give you one quick example there’s a supervisor at Michelin in one of their American factories, these are factories where the operating 24 hours a day so they have three shifts, including the night shift that just works in the middle of the night when everybody else sleeps. And the supervisor basically told me, now like the team knows what to do so they’ve encountered a problem, I don’t get calls at 3am in the morning anymore. So, like they deal with it and I get to sleep, and then when I go back to the office I get to think about different things. I’m not dealing with these kind of issues anymore and like my life is so much better. So it’s just an example, so it can be a win-win transition for most people in positional authority but you need to kind of commit to it and get some accountability personnel and get other people to help you. 

Again I’ll refer people, if you go to Humanocracy website I think there’s a tool for how you share your power and getting the peer to peer accountability so your team could help you, keep you honest in that journey. So anyway, that’s what I would say to them. To people who are like maybe you know, don’t have that much positional authority, I would kind of go back to what I said earlier which is don’t feel helpless. You can have a voice, you can mobilize, you don’t pitch, don’t moan, mobilize you know, just mobilize yourself, mobilize other people, try to make things happen. If Malala and Greta are able to catalyze more like movement around amazingly important causes like you could do something within your organization, right? You have the power and you need to persist, you need to be clever but there is a way to do it, and the time to start is like now, don’t wait. And you can catalyze meaningful change, even though your CEO may not be on board, even though your organization may be kind of old school, that’s not an excuse. You should give it a go and I think you’ll be surprised by how much progress you can make and how many other people in the organization, share your concern and your passion.

RHEA: Thank you so much, Michele. I think those are very powerful words and food for thought for our listeners. So don’t be afraid to make the change and don’t be afraid to drive the change because when you do it and you put your heart into it, I think it can happen, it can work for your benefit. So, this has been a really, really exciting hour and I had a lot of things that I could reflect on after this conversation. Thank you so much for that Michele and I hope you, our viewers and our listeners, you also had really interesting insights from this talk. And, yeah, as we move to wrap up, I just want to say thank you Michele for joining us and invite if you would like to invite our watchers or viewers to your events or to check out your website.

MICHELE: Okay yeah, thank you. Thank you and thanks for your thoughtful questions and for the engagement from the audience and their perspectives as well. I had a lovely time, and I hope we can continue the conversation in some way. Yeah, I’ve mentioned the website a few times so humanocracy.com, that’s where you’ll find a bunch of content, there’s also a course called Hack My Org which is free if you get the book, it’s pretty good deal. I would think it’s about four hours of video content from Gary, from myself with tools, examples. It’s basically a MOOC that is based on the course but with even more, more depth in a way, and more interactivity. You can take it by yourself, you can take it as a team. So I think if you’re interested in trying to hack your organization, it’s where I would point you to. And then, you know the other thing I’ll just say to be on the lookout for it. We’ll be starting in about, about a month, a to publish a set of interviews with some of the world’s most progressive thought leaders and practitioners around management because, they’re going to be focused on the creating a movement around this topic right because, yeah, you can change one person at a time, you can change one organization at a time that’s hard enough. But there are systemic reasons and barriers to this change becoming more widespread, their institutional issues, the way we teach people business schools, the way we measure things, performance, the tools that we have at our disposal and so on. 

There are lots of different barriers and levers that we used to think about if we wanted this to spread beyond an organization at the time. And so those series, they’re called the New Human Movement, there’ll be up on the website and on YouTube and podcasting platform in about a month, the first episodes. So I’m very excited by that because in a way that’s the next challenge for me. You know we’ve written a book about organizations and individuals inside, but it is a system level problem. Organizations are embedded in us, in a system that encourages the status quo and so what do we need to change at the system level? And so that’s the sort of my next project and I encourage you to check it out in about a month and you know I’ll be promoting it, or pointing people to it once everything is up so. So that’s just one preview of what’s to come, that your audience may be interested in hearing about.

RHEA: Yeah, very very much looking forward to that. Maybe it’s another option for another conversation, a little later so really looking forward to that as well. And yes, to our viewers, thank you for joining us for this hour, and we hope you had fun, you had good insights. I just wanted to bring you a little screen share and maybe Ken, you can pull up our upcoming events from the LIVEForward Institute. There’s a Teal Safari on Performance Management coming up on the 23rd. So, why don’t you grab your phones, scan the QR code and then just sign up for these events. Our next Living Room Conversation with the SEMCO Style country partners, so this is a global movement of SEMCO Style where we will have them all in our living room, having fun and talking about the same, exact same things you’re so passionate about, it’s the people in their organizations and how we drive change in there. 

So, looking forward to that conversation as well. And the next course that we would like to invite you is SEMCO Style Institute Agile Culture Experience, and we’d love to invite you there because this one is really one of the new courses where we talk about agility and the culture as a baseline for agility so now the methods and the culture there. And of course SEMCO Style Fundamentals, so we hope to see you in one of these programs and these courses, just scan the QR code and join us there. So thank you so much, again thank you for joining us today and we hope to see you again next time. 

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