HR’s Superlinear Challenge For The 21st Century
by John Raddall
The industrial revolution spawned the machine age driven by coal and darkened dust-filled skies. People were drawn in their thousands from the farmlands into a noisy world that must have looked and sounded like hell itself. But there was a problem. The factory barons soon discovered that if they paid their workers too little, they fainted at work. If they paid too much they got drunk and stayed at home on Monday. The solution? The birth of the HR department!
Fast forward to the twentieth century and the full evolution of the machine age driven by ruthless efficiency, cost reduction and the drive for economies of scale. The concomitant organisational structure became one of bureaucracy, hierarchy and silos, stitched together with a culture of authoritarianism and submission and compliance from employees.
The twenty-first century however, is seeing the birth of a totally new landscape driven by artificial intelligence, technology and the internet. Companies such as Google, Apple, Amazon, Facebook and Netflix (the FAANGS) have changed the world at a fundamental level to the extent that national boundaries are becoming less relevant, traditional cultures are being challenged, and even our brains and neuronal pathways may be evolving in new and unexpected ways.
We even have a new language emerging focusing on disruption and agility.
And herein lies the dilemma and challenge. Our landscape is changing rapidly and irretrievably and organisations are in trouble. Just like the sailing ships of yore, when faced with the challenge of steam ships, what did they choose to do? They tried to make faster sailing ships.
The challenge is clear. Organisations cannot manage in the twenty-first century with the structures and cultures of the twentieth century. Leadership requires a revolution and HR is well placed to take the lead.
THE POWER AND DANGER OF THE META-RULE
In our work with organisations over the past two decades we have viewed organisations as dynamic and complex systems that develop specific energy levels driven by a uniquely evolved DNA. Every DNA is driven by conscious rules (this is how to dress here, these are your tasks etc.) and sometimes very powerful and potentially destructive meta-rules. The most common such meta-rule we have uncovered in virtually every large organisation in every industry is the “Don’t change!” meta-rule.
Paradoxically this is akin to a heart transplant patient rejecting a new heart and in organisational terms is the same as signing your own death warrant.
SUPERLINEARITY – THE SECRET LIES IN THE CITY
Geoffrey West, in his excellent new book Scale, has opened the door to a potential leadership revolution and a golden opportunity for HR professionals. He uncovered the following information generally ignored by management scholars. Firstly analysis of an exhaustive study of thousands of organisations over a period of decades showed that every organisation is on a half-life curve of only ten years.
This means that of one hundred new companies half will disappear in the first decade and only three will survive the first five decades. And the secret of this longevity is to be found in the city.
Most organisations struggle to survive twenty years these days and the average CEO is fortunate to stay in the job for longer than a McDonald’s burger flipper. But cities such as Rome, Paris, London and Athens manage to survive and flourish for thousands of years. Their secret is superlinearity. As they grow they become more efficient, promoting further organic growth. For example per capita income increases as a city grows.
The challenge for organisations in our new century is to unravel the superlinear secret of the city and to convert it to apply successfully in our organisations.
In essence we need the courage to leave the sailing ships of twentieth century management behind us, and to embrace a brave new world where game changing becomes the core skill for success, effectively ditching authoritarianism, submission and compliance, and putting to the sword the global meta-rule of “Don’t Change!”
THE SUPERLINEAR CHALLENGE FOR HR
This is the real challenge for HR. Close the traditional HR department, steeped in historical coal dust and keeper of the “Don’t Change!” meta-rule and open a new department called Performance Architecture, the new home of game changing superlinear thinking and action.
What do you think creates and sustains a superlinear team? And are you ready for it?