Building a digital organisation

Gary Hamel and Julian Birkinshaw discuss radical change for big corporations

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Organisations are entering a new phase of the digital revolution, says Gary Hamel, Visiting Professor of Strategy and Entrepreneurship at London Business School (LBS). This demands fundamentally new ways of organising businesses and empowering those who work within them.

Professor Hamel, “the world’s most influential business thinker” according to the Wall Street Journal, says: “The sheer pace and extent of transformation that is necessary is greater than ever before, and organisations weren’t built to cope with that hyperkinetic environment so around the world you see virtually all incumbents on the back foot.”

Julian Birkinshaw, Professor of Strategy and Entrepreneurship; Academic Director of the Institute of Innovation and Entrepreneurship at LBS, asks what the digital organisation of the future will look like.

Professor Hamel, whose central belief is that power must be prised from the grip of outdated bureaucratic managements, responds: “The ability to move information and share it at almost zero cost characterises our world. All of us would agree digital technology has transformed our lives as consumers. That radical empowerment has not happened in our work lives. If we’re not careful, digital will consolidate power and reinforce the worst tendencies of the old organisational model when actually it should work the other way.”

Professor Birkinshaw asks how big corporations can benefit from the “highly informal” structures typical of start-ups and Professor Hamel explains that people on the front line need to think and behave like business owners.

“We have a deeply ingrained habit in organisations of infantilising employees and never giving them the information and it’s going to take a lot of unlearning,” says Professor Hamel. “More decisions have to be pushed down. Give employees the information and power and a short feedback loop so they can make the decisions”.

One way of doing this it to mimic the way the web works – mass information and mass participation, not unlike a project Professor Hamel has run with Adidas where 3,500 people created more than 900 management hacks, resulting in 20 live experiments. This is bottom-up strategising and will help change the way organisations hire, motivate and compensate, Professor Hamel explains.

This podcast is part of the Digital Disruption Briefings, hosted by Professor Julian Birkinshaw.

Previous podcast: Experts talk tackling digital disruption when you’re working for an established firm. Listen here.

Next podcast:

Digital Investing: the rise of the robo-investors with  Professor Narayan Naik, London Business School, who is an expert in Finance and Fintech, and James Dunne, Head of Digital Investing at Santander Bank


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How should your organisation adapt to the next phase of the digital revolution? Gary Hamel and Julian Birkinshaw discuss radical change for big corporations in this second podcast from the Dealing with digital disruption series.

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This article was provided by the Institute of Entrepreneurship and Private Capital whose aim is to inspire entrepreneurs and investors to pursue impactful innovation by equipping them with the tools, expertise and insights to drive growth.


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