Reflections of a business guru

CHARLES HANDY has been through a lot of challenges in a long career as a manager at Royal Dutch Shell, an oil giant, followed by a spell in academia and acclaim as a business writer championing more flexible, less hierarchical organisations. His latest battle is with his health. Earlier this year, the then 86-year-old Irishman suffered a stroke which meant that he had to learn to walk, talk and even swallow all over again. True to his reputation as a business guru, the experience taught him a valuable lesson, as he explained to Bartleby in a recent interview.

As far as Mr Handy was concerned, the point of his hospital stay was to allow him to recover as fully as possible. That meant he needed to be up and about. In the view of the nurses, that was a potential problem; he might fall and hurt himself. Their priority was to keep him safe. In practice, that required him to stay in bed and keep out of trouble.

The experience led him to reflect on the “curse of efficiency”. Organisations focus so much on efficiency that they fail to be effective. Instead of concentrating on their core goal, they pay attention to narrower measures like cutting costs, or reducing the inconvenience suffered by their staff. Examples of the problem can be found in many places. The purpose of education is to prepare children for later life, but all too often the focus is on getting the children to pass exams.

The drive for efficiency can also seem callous. Mr Handy argues that managers tend to like things more than they like people. If all the staff were replaced by robots, he says, running a business would be a lot easier. As it is, there is a temptation to try to turn people into things by calling them “human resources”. Call someone a resource, and it is a small step to assuming that they can be treated like a thing, subject to being controlled and, ultimately, dispensed with when surplus to requirements.

Perhaps Mr Handy’s philosophy is best summed up as “what do they know of business who only business know?” Before his stroke he wrote a book, “21 Letters On Life And Its Challenges”, which takes the form of advice passed on to his grandchildren. The focus is more on gentle wisdom than on management theory. Indeed, Mr Handy argues that most organisations whose principal assets are skilled people, such as universities or law firms, tend not to use the term “manager”. Those in charge are called deans, directors or partners. Their real job is best described as leadership rather than management. And one of the primary functions of leadership is setting the right purpose for an organisation.

Leadership also involves letting subordinates learn for themselves. When he started work for Shell, he was running the firm’s oil business in Sarawak, Malaysia. He had studied Greek and Latin at university and knew nothing about business or energy. There was no telephone link to the regional office in Singapore, and letters took weeks to arrive. No senior manager felt inclined to visit.

Mr Handy says this gave him the opportunity to learn from his mistakes in private. He argues that “education is an experience understood in tranquillity. You look back and see where you went wrong.”

Because of this, he thinks that business schools need to change. What they tend to do at the moment is encapsulate the best practices of current businesses, codify them and pass them on. But the real challenge that business-school graduates will face is dealing with the unexpected. That cannot be taught in the classroom but needs to be experienced in the outside world. So students should spend time at small businesses or community projects, and then write a report on how they coped.

Furthermore, if these students aspire to be leaders, they need the ability to tell stories and create a culture. That requires broader knowledge than only studying balance-sheets and sales projections.

Appropriately enough, Mr Handy has hopes of writing yet another book, based on the Bible, which he says is an excellent case study of storytelling. Clearly, he refuses to let illness hold him back. Looking back over his career, he believes that teaching and writing is all about creating the “Aha!” moment. That occurs when people realise that an idea the teacher or writer has advanced is both useful and something they already knew but had not articulated. Hopefully Mr Handy’s readers will be saying “Aha!” for some time to come.

This post was originally posted at https://www.economist.com/business/2019/07/24/reflections-of-a-business-guru.

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