Analysis: Executives line up for guru's radical prescription

Charles Handy, the UK's answer to American management guru Peter Drucker, predicts the world is about to experience a decades-long 'economic earthquake' which will topple old centralised, machine-age ways of doing things.

Charles Handy's best-seller “The Empty Raincoat” levelled a blast at the dehumanising impact of the '90s corporation and its tendency to reduce workers to the status of replaceable parts. The author of eight other books and a founder of London Business School left a lucrative career in business decades ago to become "just a thinker", who today is coveted as a consultant by the top brass at the biggest of companies. His ideas are radical, even frightening, but ultimately humanistic.

It would be easy to dismiss Charles Handy's view of the future of the business enterprise as being Utopian or quasi-Marxist or even just plain nuts. In a day when corporations around the world are lopping off employees like scythers mowing a hay paddock, it is hard to envisage a time 10 years out or so when both senior and junior employees will act as a voting block on major business issues such as "cost-containment re-engineering".

That's a euphemism for mass layoffs.

But the heads of some of the world's biggest companies don't think Handy is nuts at all. In fact, they devour his books--which they must do as a prerequisite to meeting with him. They must also meet him at his home outside London before he'll see them on their turf. And they do, quite willingly, thank you.

Then, after listening to this apostle of business federalism, the chief executives of international behemoths go home and ponder just how they will approach their boards with Handy's unorthodox ideas about organisations. Because he touches them deeply, he probably frightens them, at a level no one else can.

"It's either a major rethink about the new types of work and property and all their implications, or it's waking up in the morning to a scene of devastation," Handy says. We're already getting a peek at this devastation, he says, in the form of knowledge workers and their managers who are either burned out or utterly lacking in the values that used to bind them to the old paternalistic companies of yesterday.

For IS, Handy's views hold forth a world of possibilities at a time when the IS profession is under siege in many quarters. Witness the continuing and increasing turnover of CIOs at US companies, as evidenced by the recent annual survey of top information executives by Cambridge, Massachusetts-based CSC Index.

The world, according to Britain's answer to management guru Peter Drucker, is about to experience a decades-long "economic earthquake", which will forever topple all the old centralised, machine-age ways of doing things.

Replacing these companies that today are driven by short-term, often quarter-to-quarter financial statements, Handy says, will be companies run on a federalist model. Is Handy an apostle of Thomas Jefferson, too?

Perhaps. In Handy's federal model, a small, central-core organisation--headquarters-- monitors the performance of highly autonomous business units. IT not only will provide the vehicle for speeding information out to the business units and, thence, to the knowledge workers, but will itself also be organised as a federation with a centralised core. Core IT may establish and enforce standards, but most of IT's functionality will be concentrated heavily in the outlying units.

Instead of devaluing workers, Handy insists, the successful and, therefore, the only surviving 21st-century companies--the federalists--will be those that grant more power to the real assets of the company--its workers. That includes giving senior, and even some junior, employees a voting voice in corporate strategising. If you think the Marxist in Handy is beginning to show, keep listening. Part of Handy's vision of the next century sounds like capitalism with a capital C.

Organisations must continue to be ruthless in their search for efficiency if they want to survive, he says. Specifically, companies must halve their staffs every five years, paying the remaining half twice as much to be three times more productive. "It's a harsh but inescapable calculation," Handy claims.

Great deal for the half that gets its pay doubled. But what happens to the corporate castoffs? That's what's nice about Utopia. There's a place for everyone. The surplus staff becomes the core of 50% of the working population who, Handy says, by the year 2000 will be working outside the traditional organisation. Doing what?

Why, handling the increasing load of chores outsourced by the company.

These outsourced chores should not include mission-critical IS, though, he is quick to add. Handy says IS plays a pivotal role in the 21st-century corporation. "The information architecture is the nervous system of this new organisational model, and so the design and functions need to be finely tuned to allow the business to run smoothly," he maintains.

Which is precisely why Handy stands in steadfast opposition to the wholesale outsourcing of IT or critical elements of it. The 21st-century corporation will outsource those activities "that do not give the company a competitive edge", he says. "One of the few things that pulls the corporation of tomorrow together is the information and communications system."Thus, information is a key competence that must stay firmly at home, within the company. "In my view, it is crazy to outsource IT," Handy declares. "Why give the design of the information architecture to someone else? They can't possibly know the organisation as well as you do."

(Ron Condon is a freelance journalist based in Bromley, England. Bill Laberis, former editor in chief of Computerworld US for 10 years, is principal of Bill Laberis Associates, a custom publishing and media consulting firm based in Holliston, Massachusetts.)

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