In today's organizations, particularly when we are talking of millennials, they tend to be less loyal. They change jobs pretty frequently, so how do we really go about building the kind of cohesion a citizen organization needs?
Well, they will say, we don't feel any loyalty to the organization, as the organization doesn't offer us any loyalty.
The organization says, no they just switch around, somebody's got to start the bargain, and I think it's the organization that has to say, if you become a citizen, we give you certain privileges, but that doesn't mean you can't go off be a citizen somewhere else. We've got to recreate that kind of bond. And I think it's the organization that's got to do it first.
Now this idea of the citizen organization also calls for participation from the employees in key decisions. With so many voices involved how does one maintain efficiency without risking this participation and slowing things down?
It's rather like the works councils they have in Germany. I was talking to somebody who just recently started as a manager working for a German company and he said: "I have to appear before the workers council every year to explain, give account of myself, explain what I'm doing, and they question me.” It's a ritual, but it's an important ritual and so they're not taking decisions for him. They might agree to his decisions, but they are questioning him and he says: "I feel accountable to them, I have to justify my actions to them." I think it's that kind of two-way accountability that one is looking for rather than participation in the actual decisions, which of course they're not equipped to do. That's what the manager is paid to do: to make those big decisions, but he has to explain them to people.
You've long been a critic of the idea of shareholder value and why it's given undue importance. Within the citizen organization, what happens to this notion? Because it seems like it's something that the shareholders would oppose.
They have no right to oppose. Shareholders own shares, they don't own the company in any sensible way. They can elect the directors, but they cannot tell the director what to do. They cannot even ask to see the long-term plan, they have no control over directors at all... If they don't like what we're doing, they can sell their shares…
And how should the role of leaders change for this new world?
Well, it only changes dramatically if you're a good leader. If you're a good leader, your job is to provide some kind of vision of where we're going and what the purpose of our work is and to be otherwise there to encourage and persuade. Your job as leader is not to tell people what to do, it's to tell them where you hope we're going, to encourage them and maybe to organize them in some sort of ways that helps them to do their job better. Though I would say that's more a management job than a leadership job. I mean good leaders are hardly visible really because everybody knows what they are about and what they think and so on. I talked to the CEO of a really big multinational company, and I said, "Tell me what do you do?" And he said, "I'm a missionary, I go around all the bits and branches of my organization telling them what it's all about. And converting them to my view of what it's all about."
So it's evangelism of some kind?
In today's environment, do we need to change the lens with which we view progress and growth?
We need to have a much wider focus of what progress is. I don't think growing bigger is necessary if you want progress around what an organization is. Growing better might be more interesting… Doing work that you're proud of is terribly important. I think the most motivating thing for someone here, is to be able to point at something and say, "I did that. I built that cathedral." You can't always point to a physical object these days, but you can take some pride. And of course if you can put your name on it in some way because your group did it, just as when at the end of a television program you see all the people, you could put their name on it, that's good. So pride is very important.
You once said in an interview that organizations that see themselves as seed beds of future independent business people will do themselves a huge favor. To what extent do you see organizations do that?
Oh, I think it's important that they don't have to keep people with them for the whole of their lives. You're going to live until you're 95 at least, and organizations, if you belong to one, will not be able to support you financially for all that time, but at least they could equip you to earn your own living during that time. So I like to see organizations as, often in some ways as a sort of venture capitalist, investing in your skills and your education and development, even if you do it outside the organization, because then the organization has a bunch of alumni who are in a sense its ambassadors, and they can be very valuable to them. I think organizations are in a way a school for life. Okay, you go to school, but then I think the real school is your first organization, and I think they should think of themselves like that.
In the 1970s and 1980s, you told us what the future looked like and we can see that now. What can you tell us about the next 50 years?
The author of some 20 books spanning four decades and the initiator of the Sloan Program at London Business School, Charles Handy received the Thinkers50 Lifetime Achievement Award in 2011.
It's going to be difficult. We've got to keep control of the digital world, not let it run away with us. One of the duties of an organization is to somehow give money to its people so that they can actually buy products from other organizations or from ourselves. When Henry Ford was criticized for paying over the rate for his workers, he said, "But who else is going to buy our cars if we don't give them the money?". One of the mechanisms of organizations has always been to pay into the economy in some ways. Now we've got to find a way of doing that, which still allows them to be competitive with organizations, which are largely digital, which is much cheaper. I don't honestly know how we're going to solve that problem. You have an organization like Danone, which employs I believe 480,000 people around the world. That's pushing out a lot of money, consumer buying power. If we reduce that to 100,500, or something which we could do with digital technology perhaps, that's impoverishing the society. So yes, Danone makes more money, but society loses. Now this is a big dilemma. Danone then gives a huge chunk of its profits back to society, which distributes it in welfare payments or something, or it continues to employ those people in some way.
In some way we've got to begin to redefine the purpose of a company so that it's not just making money for itself, but it's actually creating a life for its people. But I don't see any models yet of that. We've got to change the capitalist idea so that it's more human-based and less money-based.