The great charles handy passed away last friday the thirteenth of december twenty twenty four he was a great influence on the innovation show and he was a great influence on me. Brilliant storyteller, beautiful metaphors and a great Irish philosopher. I wanted to recognize him by re releasing the episode that I recorded a few years ago where I traveled to London to his home shortly after he'd had a stroke. I was struck by his positivity.
One of the things he said was the stroke put the part of his brain responsible for logical thinking to sleep and that enable them to be more creative. He talked about things like the white stone which was this reminder that there's a true essence inside each of us and that we need to be reminded of that he talked about citizenship with inside organizations where employees were treated like citizens. and not employees. He talked about the shamrock organization.
He talked about Davy's bar from this book, the second curve, where you always have to make changes before you think they're necessary because by the time they become obvious, it's way too late. It was a beautiful shot in the real idea of what a fireside chat is about it was a fireside chat by his fireside in london it was a very special moment and i wanted to recognize him by releasing this episode charles handy, nineteen thirty two to twenty twenty four innovation show salute you rest in peace.
today's guest is one of the giants of contemporary thought.
In the second curve he builds on a life's work to glimpse into the future and see what challenges and opportunities lie ahead he looks at the current trends in capitalism and asks whether it is a sustainable system, he explores the dangers of a society built on credit he challenges the myth that remorseless growth is essential even asks us whether we should rethink our roles in life, students parents workers and voters and what the aims of an ideal society of the future should be.
Provocative and thoughtful as ever he sets out the questions we all need to ask ourselves and points us in the direction of some of the answers. It is a great pleasure to welcome author of many many titles, but the focus of today's show the second curve. Charles Handy, welcome to the show. Thank you. Wonderful to meet you. It's fantastic to have you on the show, Charles. It's a real, real honor and thank you for welcoming me here in your home in London.
I wanted to start first with the idea of the second curve. I loved the intro to the book where you learned that history and tradition can be a prison as well as a thing to be treasured. A looming disaster is often needed to allow change. From the status quo. Well the status quo is your comfort zone. I'm a great believer in boredom, because if you get bored you really have to do something about it as i tell my children.
You're not allowed to be bored in my home, you've got to get out of it, you've got to go do something. So being bored is a great incentive. If you're in charge of anything, if people get into their comfort zone you must be Kick them out in some way, which is why I value people like you coming and asking me uncomfortable questions. I got to take up new answers. I can't just give them the same answer all the time.
I remember sitting at the Senate of the Church of England for old sake, and they were debating the possible ordination of women, which was certainly uncomfortable for most of the men there. And eventually one of the men stood up and said, Mr. Chairman, he said, addressing the archbishop. Why cannot the status quo be the way forward, as it often is in our great country, and it seems such a silly thing to say, but he really meant it.
The status quo can never be the way forward, it's only the way to stand still, and standing still doesn't get you anywhere. So you've got to, in other words, move, but saying to people change doesn't seem to help people. It's a change is a frightening word to most people so i came up with the idea of the second curve as a means of saying move on but move differently.
And that seems to resonate with people more because they all feel that i can do things differently if they were allowed to so that's my message think different, don't think more. And this is one of the big problems with success is not that we, get to this point of success and we have a difficulty of seeing a different way of being in the story of Davy's bar really resonated with me but also resonates with people as a way of thinking about the second curve.
Well, I find that stories, particularly if they're visual stories, stick in people's minds. They don't always remember the point, but they do remember the story. and yes, Davy's Bar, I run Into Trouble. People actually think there is a Davy's bar and they try to get directions to and I say, no, it's a mythical bar. But it's a metaphorical bar. But I do, I meet people a lot, a lot there who say. Oh my goodness if only i had done this or that but i can't you can't go back from Davy's bar.
What's your name is by your stuck you can only move forward and there is no forward so you have to have just a drink and wish you taking that turn earlier, i'm gonna tell us the story about what actually happened to that time in ireland you were in wicklow i believe i was in the wicklow mountains i was going to Avoca and just forgotten the way i hadn't been that way for some time, so i saw a man by the road so i, I stopped and I said to him, is this the road to Avoca? And he said, indeed it is.
He said, you just go up this long hill and when you get to the top, look down and you'll see, down above the hill, you'll see a little stream and a bridge over it. On the other side of the bridge, you'll see Davy's Bar. You can't miss it because it's painted a bright red. Have you got that? So I said, yeah, long hill, look down, bridge, Davy's Bar. He said, right.
Well three kilometers before you get there turn right and that's your road so i thought oh okay, you should tell me i can remember that so i got up and then i thought it'd be odd i saw Davy's bar so i thought well, three kilometers before i get there well i better go down there and come back and count three kilometers so i did that.
And I saw the road, but blow me down, the road was before I'd reached the top of the hill, the other side, the wretched man hadn't told me that the road would go before I could even see Davy's Bar, and that was the problem, because once you get to Davy's Bar in real life, you can't turn around and go backtracking, life isn't made like that, so you're trapped, somehow or other you've got to you're trapped, Remember that your real road leaves before you see david's bar
if you wait if you see david's bar it's too late and too many organizations that i know and too many individuals that i know they're on a track and they can't get off it because the trouble is they have to start preparing to get on this new road before they see Davy's before they reach the top of that long hill that's life but at that point when they should be changing all the messages are they're doing very well thank you very much so keep on going, you know where
you are is the right way keep in your comfort zone the status quo is okay but of course it isn't and they discover that too late when they're sitting in davis bar having a last drink before the end. Because most organizations, most individuals don't change until they really have to, when they actually see the end is nigh, and they will die or fail if they don't change. But it's too late. You've got to change before you have to leave the party where the going is still good.
The only way to do that is to keep itchy, itchy, thinking of new things all the time, so that when you get the chance, you can move. I mean, I quote Steve Jobs. Apple is a wonderful example of a person who always thinking about the next car i gather is not a very pleasant personality and difficult to work with but goodness me must be enough setting to his fellow board members, can you imagine me started off the macintosh computer was what they sold and it was doing very well.
Hey what's in one morning and he says just when i know what do you want to use our profits to invest in a new system we're going to music we're going to an ipod, and then when that was going quite well and he came in and he said new idea today we're going to the telephone business. And they said, what are you talking about? We're in computers. No, no, no. We're in computers, but now we're in telephones. That's the future. And that's, he's doing very well.
And he comes up and he said, no, it's not an iPad. And everybody says, so what's that? He said, well, it's like a computer, but it's not a computer. You carry it around with you in your pocket. But it's not a telephone. So what are people going to use it for? And he said, believe me, By the time we've got it going in about three years time, everybody will want an iPad. They'll be walking around with them. They'll use it as a notepad, and they'll use it as a mini computer.
But they can't use it as a phone, so they should have one of our phones. And of course, he was always right, amazingly. But it was his quizzical habit of always thinking one step ahead of the present.
That must have made a very very irritating and my own life i was a very uncomfortable husband i think because i was always searching to do something else i was never comfortable just doing the same thing every week, living in the same house and i was thinking about new possibilities dreaming you might say.
Until eventually it actually happened and i resigned by mistake from my job which you would think nobody else does but it happened to me, i was working in a funny job running a little conference center in winter castle and my boss was the dean of the georgia chapel anyway, it came to me one day and he said your contracts got a year to run but we ought to be thinking about.
Looking for a successor and he said we got a general who's very interested but he can't wait for another year so i said be a kind chap i said well, you know if you are the other trustees want me to go a little early by which i've been a month or so i'm sure we can we can think about it on that evening one of the other trustee driving up and they said charles i'm terribly sorry to hear you're leaving i'm not leaving oh yes you are.
Did you just come in he said you've resigned and we've discussed a date for your leaving party and obviously the dean of my boss had taken me seriously and i thought i was actually going to leave, i had to go back and tell my wife that i'm sorry i've resigned and the children had to change school we had to leave the house and everything so she was not very pleased. And she said well now you got to live up to your own bloody books you got to start your second curve.
She said you always said you wanted to be a writer so off you go and it was very tough because changing out of your comfort zone to do something you haven't done before is uncomfortable like you don't have enough money, or your old contacts are no use anymore but anyway you struggle and it takes time but eventually you take off like any new business.
And i'm very glad in the end that i did but it wasn't very pleasant for a bit and my wife would say i hope you're not gonna have any more new ideas or more revisions by mistake so it's helpful to talk to your friends if you're going to upset their life and this reminds me of. Something you talk about, which is the contract with ourselves. It's one of the essays from the second curve and you once described your life to an Indian guru and you told him about all your adventures, et cetera.
And he said to you, you seem to be very busy going nowhere in particular. And it seems incredible to hear this now after how much you've achieved in your life, but that's the case for so many people. I mentioned to you, I lecture in Trinity college, Charles, and I tell the students not to make.
Decisions based on the opinions of others but make them for yourselves and you mentioned for example how john paul sartre, the french philosopher said the best gift a parent can do for a child is die young what's your advice for parents out there for people who are.
Encouraging their children on one hand and then also on the flip side for students people you've lectured to for example in business schools there's two sides to the coin here the parent side and then the student side about how to take charge of their own lives i also tell my students that luck is a big part and actually, knowing when to charge your luck is really quite important i say the thing is you know if anything in life, Apples fall into your lap and you shouldn't just take no notice.
You should, if they look juicy, eat them, but the problem is you can't tell when the apples are going to fall into your life. It helps a lot if you go stand in an orchard. If you want to go into the acting business, go cultivate your acting friends, go to as many theater dues as you can, stand in the, in the theater orchard world, and then apples will fall into your life.
If you want to go into technology, haunt technology conferences, and then one day somebody will say to you, you're just the kind of guy I need, and that's the apple, and bite it, you've chanced your luck because you've gone and stood in the orchard. And for parents, I would strongly advise them to get out of the way. Don't die necessarily, but don't try to influence your children too much.
their lives and they have to make their own deals with life and remember everything that you do is a good learning experience my father was a country parson in kildare in ireland, i joined shell and my parents didn't try to persuade me not to do they clearly disapprove they wanted me to be a country parson and perhaps promoting to myself to be a bishop one day, my son the bishop you know that's what they wanted but i decided by then that i wasn't going to be.
Ever go to church again or is it not going to be poor again so i thought the nine industry career would be very nice anyway i was supposed to buy shell, my first job was going to be in singapore and my parents came to see me off at the airport my mother said i got out of the car she said, Nevermind yeah it will be great material for your books books but i said i'm going to be an oil executive what are you talking about books for she said i said yeah which mothers do
when they mean they don't see, she knew something that i didn't obviously that i was really going to be a writer and she was absolutely right because the stories, I picked up trying to run bits of shell were incredibly useful when i became a teacher in the london business school because they love your teachers to tell stories of their own lives, particularly if there is a disaster the most of mine where i am so basically i used to say to them you want to make your own mistakes,
my wife would take telling me every problem you meet there is behind hidden opportunity to do something different.
Turn every experience is useful it's material for your next book i had a stroke a year ago which is not ready to action but i realized that i lay there, nothing moving and no muscles left it was going to be great material for my next book so i can't really know that everything that was happening to me, at the moment and so i'm writing a new book or the dead man talking brilliant which is basically about being totally, Dependent on other people being effectively dead,
not independent in any useful way, and needing somebody else to hold on to you while you walk, needing somebody else to dress you, needing somebody else to wash you, I mean it's really quite difficult and quite humiliating at times.
What is all the interesting experience which i can write about so my second care was talking about being out of action ready, which is interesting for somebody always wanted to be an action i mean i was quite an active member of society and now i'm just a spectator i'm sitting in the theater watching the other people perform, which is very good for me because i have to keep my mouth shut so that's why it's so nice to be talking like this because basically i'm a storyteller and a talker.
It's funny because in the second curve you preempted this you said and i agree massively with you that society shuts away their elders and there's so much wisdom in the others that experience that scar tissue has so much to teach, the next generation and they can build upon that wisdom yes well you have your experiences are relevant but, It's quite good to be asked about your own experiences and what you learned from them. People ask me if I do consultancy. I say no, I do Socratic counseling.
I refuse to go into organizations. I like to see them through the eyes of their chief executive or one of their senior managers who come to see me.
So it's their organization i'm going back and i question them and i say what's your organization all about and they say it's about making a profit, i say why are you making a profit and they say to make more profit and i say why i keep asking why and they increasingly find it difficult to answer and in the end, they come to an answer this actually is beyond selfishness.
They say in order to improve society to make my customers are happy or something something that deals with something other than themselves because great organizations have a purpose beyond themselves let's talk about that purpose because, you mentioned the financial downturn was a catalyst for change when many of us and many organizations have to rethink what they stood for and i'd love to honor your wonderful wife and partner elizabeth.
With the three selves which you and her put forward and which ones we put forward first which one actually represents who we truly are in your book the new alchemist you mentioned this.
Well my wife is a photographer and a very imaginative one and she loves taking photographs but she wanted, she's very interested in identity and her photographs try to explore people's identity, she makes them try to feel good but one of the tricks she came up with was very interesting, she said everybody that i meet, she said there are at least three different selves there.
Is the public cell for the private sector for so on so she asked people to go to their home and ask them to stand in their favorite room and then act out visually the different cells so there would be the mother. There might be the, in her case, the photographer or there was the, the money earning the businesswoman and so on.
And what she discovered, she didn't tell people this, but , of the three selves that she had, the one that was nearest to the camera, which she chose, was that a photographer, because that was the one bit of herself that she most loved. But actually, the nearer you stood to the camera, the bigger you come in the picture when you get it developed. So in the picture she developed, there she was, very large as a photographer, not quite so large as a cook and the mother.
The mother hen and then right at the back she was there is my agent the moneymaker i need a little bigger so i say to people you can see how important i have in her life and, i mean she do it this is people and they will be very surprised i remember going to one man who is a banker.
Add a bank report of the back of the picture you didn't realize i was going to be right at the front, he came in a sort of casual clothes with a pile of books beside him and it turned out when we talked about it basically wanted to write a novel it was a dream dream to be a novelist.
And they hated being a banker and sure enough within a year he was a best selling novelist and had stopped being a banker so it was a way of helping people to discover what their dream is really by means of photography. And it was great fun getting people to do that. But I mean, you do, all of you have different persona or masks that you put on depending who you're with. So most of the time I'm a writer, but some of the time I'm a speaker.
And so sometimes I pretend I'm a guru or something like that.
and some of the time i'm just a visitor at an organization and sometimes i'm just a writer, but it all depends who i'm with and i can choose of course to put on a different mask or a different persona as they call it in greek, but people will find you out i remember a friend of mine, it was he in somewhere they had a in london they had to take your daughter to work day to try and persuade young people to go into business, so he took his very bright, Fifteen year old
daughter to work with him and i said to her how did you go she said well it was very strange i was this bad it turned out to be not like my father at all, he was totally different city behind a big desk at an office then the father of the cozy father she knew at home.
And she said i didn't agree with him actually, he found quite shattering, but most of us play with our different masks that we put on, i remember going to a call center head office in new delhi in india, and it was a call center that dealt with the complaints and, so on american and so all the people who are basically mostly young women would come in in the morning two hours early and i had to sit changing to american clothes, and then watch an american soap
comedy on the television and speak with an american accent while they watch it so that the customer spoke to the, the customer thought they were speaking to young americans and then they were after their stint was finished they changed back into their indian saris and go off home. The Indian ladies and gentlemen, and I said, I wonder how on earth they managed to live like that. And then I thought, but I'm exactly the same.
I go into London Business School where I was, and I'd wear a suit 'cause I was teaching that day, but then I'd come home and put on a sweater and sit by the fire reader book and I would be a different person or pretend to be a different person. Record underneath i wasn't really that different but which is a real me i had to be very clear about what my real me was what my call values where i am and what i thought was good and what i thought was wrong in life and that's quite important.
I'm a great follower of aristotle and aristotle had a list of twelve virtues which were very important and one of them was what he called courage, encourage event the courage to stand up for what you believe in no matter what you have to work out what you really believe in what you can't what's your sticking point, what people can't but you are so what are your call believes what is your sticking point what can't you be bad by, When my students used to arrive at the london
business school they had two books in front of them which were the call books for that first term what was called the meaning of company account because they had to be able to read a balance sheet, add the second was a software display add tigany translated from greek into english. And they looked at me in amazement and they said, well, I can quite see why we've got this counting book. What are we doing reading a Greek play? And I said, well, you read it, you'll see.
Because the point was, Antigone was told by her uncle, the ruler of her city, Thebes, that she was not allowed to bury her husband who had been killed in the civil war. The Greek religion said that if you don't bury your family properly, the Furies will pursue you for the rest of your eternal existence in hell. So it was very important for her to bury her husband properly, but her uncle said anybody touching her brother's dead body would be condemned to eternal imprisonment or death.
So she had this problem. Was she willing to die in order to let her brother not be pursued in hell by the Furies? very much. I said what do you do if your boss tells you to do something that you don't believe is right do you believe it because you're lost or do you believe your conscience, we tell you to go and promote more cigarettes for sale in east africa which you think is really bad for them do you do that.
Or we ask you to bribe some officials in the chinese government because that's the custom of the country do you do it or do you believe it's wrong and you stand up what you believe in you have aristotle's courage and let me tell you that's the point of this play, which are you going to be or are you going to be the boss and are you going to ask him to do something.
Did they believe it's wrong are you going to listen to them so they went away quite thoughtful and those are the key issues it seems to be about first what is the person behind these masks you put on, you may say you know you're doing frightfully well you've been promoted you're earning a million pounds of euros a year i'm not impressed it's a mask who are you and this becomes really important from.
A business dynamic perspective as well and i love you in the essay the dilemma for growth put this charles growth should always be the means to a greater purpose rather than an end in itself and unfortunately. End of shareholder value has become the purpose for businesses but that is not the way it should be and it's not the way it was meant to be to begin with. No, it wasn't that was why I keep asking people, why? Why do you make money?
And until they eventually come with a purpose beyond themselves. I mean, a business is a community with a purpose. And basically no business succeeds unless they make a profit that is a necessary condition of being a business you can't live without making a profit, just a human being can't live without making some money.
But if you if you say that the necessary condition is the purpose then you're making what philosophers called a category mistake, make a mistake made you got you're screwed up you're taking a means and making it into a purpose and so you eat in order to live, if you turn eating into a purpose you become very fat and you're known as very greedy and you will get ill and you will die because you overeat. Thank you.
And so you made a category mistake which is fatal i use when i was in hospital i used to get very angry with them because they were trying to get more efficient.
I'm trying to make sure the patient did what they were told and kept to the real time and didn't get out of bed without permission etc etc and i find it very frightening and i said today, No organization can survive unless they are efficient, but if you turn that into a purpose, you're going to screw everything up, you forgot why you're there for, you're there for to make me better, and in order to make me better, you have to be efficient, but that's not the thing that you measure, what
you measure of me getting better, I mean, school is like a great mistake. Schools have to school their children, they have to pass exams in order to get to the next layer of education, and that's a necessary condition, keeps the parents happy. But if you make it to the main purpose of the school, you forget what you're really there for, which is to make them independent human beings, with values, and knowing what they believe in, and what their core sticking points are.
So please make sure that you don't make a category error. Providence necessary, but not enough. You've got to go beyond that and have a purpose. For instance, I think schools should be measured after about 20 years by what our children are doing in life, if we could find a proper way of making sure that we could measure happiness, for instance. Hopefully they try to turn out children who will not only be successful, but also content with their lives. Be happy.
Yeah. And I loved what you said about education. In education. All the problems we are presented with have already been solved. They were closed problems were proven answers, and were not taught how to learn. Were not how taught, how to critically think, but rather just to retain information. Yes, I mean, teachers treat their children as empty computers and they're filling their memory cards. But actually, they don't actually need a teacher to do that. They can go on Google to do that, actually.
So they already know everything the teacher knows that is need to know how to go to access it but they don't know all the questions the teacher doesn't know the answer to, you could answer your mathematics teacher who you should marry but he hasn't a clue and he might just say oh well make sure they earn ten thousand euros a month but that's not going to satisfy you. So he doesn't have the answer to the important questions in life. He doesn't know who you should marry.
He doesn't know what job you should do. He doesn't know what house you should live in, what country you should live in. He doesn't know what language you should learn. None of these things can your teachers answer for you. Even if it's the best school in the world, and he's the best teacher, he could just ask, you've got to answer those questions.
So get used to answering your own questions, don't expect the teacher, just because he's got the answers at the back of his textbook, to know more than you do. He knows more than you do about his subject, he doesn't know more than you do about your subject, which is yourself. So I got to work it out.
And one of the things you talked about Charles, and you grew up in claim in Ireland, near the Jesuit school of Klongos and the Jesuits say it's the first seven years where the mind is formed and you say for about education and about parenting, that a lot of the onus lies with the parents, the parents need to take responsibility to help the children and stop blaming the education system, but remember that there's an onus and responsibility on parents as well.
Well, they mustn't interfere basically children are born with curiosity unfortunately we lose curiosity as we grow old because we think there are answers, i will think the teacher has them so we listen to what the teacher says, we get on but actually what you have is even more value is curiosity which is the start of creativity if you're curious for things.
You go out and try to find an answer and that's it that's wonderful and the trouble is you get older you lose curiosity because you feel naked if you don't know the answer to things and so you look for authority i know when i started off in my career as an oil executive in malaya.
Malaysia i was very curious i couldn't work out why they did things in the way they did and why they didn't for instance use big, rail wagons to bring the oil up the railway to the middle in the middle of the country and where they sent it by road in smaller, lorries with drums and i thought they must be mad so i wrote a little paper explaining how much money they save by sending big rail wagons. My boss looked at me and he said how long have you been in this company?
Handy . And I said a year, sir. He said, how long do you think this company's been in this country? And I said, 20 years, sir. He said, no, 75. Do you really think that you know more in your six months than this company knows in 75 years? And I said, no, sir. Sorry sir. He said, well, next time, just ask someone who knows.
Well i tell you within seven years they were using rail wagons I was right after all but my silly boss wouldn't allow me to prove my curiosity and work something i can try it out he thought he knew better and he didn't and parents are the same they don't always know better than their children.
And the children are often very wise i asked my children when the british had a referendum about the european union i said what are you going to be leave or remain, and they both they were age ten and six and both said they wanted to remain and i said why and so the ten year old boy said, Well because i might want to go to university in europe and then and so i get a free if i remember the european union, the daughter said because we could have croissant for breakfast i
thought that they were absolutely right from the modes of babes, but neither would have occurred to myself or my wife.
I remember very good for them to work that out absolutely right yes, the rest of the program is great and yes indeed french food is remarkably more interesting than english food so i gave the top mark, they were very pleased to have got rewarded by us i thought, did that self confidence a lot of good absolutely and one of the things you said there but your time in malay and malaysia the, Versus leadership conundrum these two words get confused quite a bit and you
dedicate a lot of the book to this and a lot of your work overtime has been about the difference between the two i'd love if you share your thoughts on this.
Well i used to find that people love to manage to be managers but didn't like to be managed and i began to wonder why it wasn't right and eventually i discovered that, i went into intellectual organizations the ones which basically did intellectual work like universities are like law firms or consulting firms even, who are people for their brains really and that they were professionals and the hospital to the same.
Basically the word manager apply to people who are in charge of things things like the catering of things like the communication system or things like the technology. All things like the structure of the organization and you can manage things and leaders are the people who are in charge of people so you had the leader of teams and they had the leader of projects.
Not the manager of teams you have the leader of things and so i came to the conclusion that, yes you should only use the word manage when you're dealing with things or systems and lead when you're dealing with people because the trouble is that people think you can manage people and if you call people, human resources it sounds as if they are things so you think you could boss them around and tell them to do this and that.
They don't have to follow you unless you can persuade them and excite them and give them a common purpose. So leadership is basically an art, which not everybody has. A manager is a technique and a skill. But don't try applying managing and treat people like objects. Which is what they wanted to do to me in the hospital. They would find it much easier if I was a robot, curled up in bed.
And programmed to get up at six in the morning, but not later and not before and to go to the loo at certain hours of the day. And they found it very annoying when I was a human being with a will of my own. That they had to give me an explanation as to why I had to not get, not wake up too early and so on. And they should try and persuade me and excite me and get me to agree with them. Which is what leaders have to do, because we have the choice to follow them or not.
And i remember once celebrating the fiftieth birthday of a friend of mine and he does all the friends to go with them visit the place and then go on a walk and we'd end up at the pub by a river which should be very nice, not davis bar of course so we set off for the cost of a new way to go but eventually one chap, who just retired as governor of hong kong and therefore i was used to commanding me, and he said i know the way follow me.
So he trudged off, a brisk face being a sort of military man, . And and when he'd gone for about 10 minutes, he looked around and none of us had moved , okay? He hadn't persuaded us that we should follow him. He thought he was a manager, and that we would automatically follow him, otherwise we would be disobedient. So please, if you're a leader, you are not a manager. You've got to persuade people. You've got to excite them. You've got to understand that they.
I don't really understand why they should follow you. If you're a manager, well, if it's a lot of lorries you're managing, you can actually program them, or if they're computers, you can put programs into them, so they will do exactly what you want. But if you try to treat human beings like that, you may be disappointed. They may not be following you. So there is a difference, so please.
be a leader not a manager but management is important and you do emphasize this in your beautiful concept your analogy of the shamrock organization where the stock itself is management and it's ultra important, well the shamrock organization is one of my little inventions i like having visual symbols because people remember visual things, and you should remember that the only slides i ever showed my talks are visual slides. Not powerpoint, no words, only images.
On the shamrock, as you well know, three leaves, and I say the modern organization is three leaves, the first leaf is the core group who are absolutely vital to the organization. They hold all the core skills of the organization needs and the leaders there and some of the managers the second leaf is the contractors every organization has a group of people who are outside the organization but provide vital services for usually cheaper than the organization can provide yourself.
But they have to be part of the organization. They must be not regarded as totally separate. And then they're all held together by the stalk, which is the sort of communication system, but also the management system, which knows what each person is doing, so that they are linked by an information system, which in turn is managed. But of course, it has to be led. You have to persuade people that they are all part of one whole.
Because if they don't belong to that stem, then they're not a shamrock, they're just a bunch of leaves, which is not much use. And so the great trick, if you're a leader, is to help decide who goes into what leaf.
I'm happy to call should be on to find a way of linking the people who are outside the organization with the people who are inside it so they all belong to the same camera, add to one of the things the leader has to do is to design the shamrock perfectly made up of lots of little shamrocks.
I love that idea of a team of teams in a way and one of the things you talk about is a shift from headcount like you said which means people are things and you talk about this idea of the citizen organization. Yes i mean it's very funny i think that we pray to pride ourselves on being great democracy in britain and everywhere really.
What is very funny that the organization provide the beans for our living and the money that we pay we pay the taxes that fund our public services are organizations are undemocratic there is no like monarchy or tyranny.
Who is the boss who tells everyone to do not democratic at all so i say suppose if we regard them as citizen organizations that we are employees were citizens, now the point about being a citizen is that you are ultimately the people who own the organization only i say the point about ownership, We're using the wrong word citizenship doesn't mean you own Ireland or you own Britain it means that you have certain rights.
Because you belong to this community and i want to talk about the language not of ownership but of rights i'm saying that if you are a shareholder if you bought shares of the organization that you have certain rights as a shareholder you have the right to elect a, the leaders of the organization you have the right to earn a dividend from the profits of the organization.
I'm saying that if you are a citizen of an employee you also have some rights and one of those rights i think it's to have a vote just like the shadow of the road you should have the right to vote for the directors of the company you have a right to share the dividends. Not because you are a part of the organization but because you are a citizen and people get refused to talk about co operatives in which people are co owners.
But i think that's a mistake, they're not their citizens, and as a citizen you have a vote for certain purposes, and you have a right to earn a dividend, but so do the financiers of the organization. And to call them owners is wrong, they don't own the organization, they only own shares, but they're shareholders, they have certain rights, so i want to change the language from language of shareholders and owners, and employees, to the language of citizens.
I'm financiers each have different rights and in my organization the employees are citizens and citizens they have a right to a dividend which is a full profit sharing and they have a right to vote for the directors of the company.
I never write if the company wants to sell itself to have a right to vote for that as citizens not as employees by using different terminology and different metaphors i try to change the focus away from money, who actually writes to me a company is a group of companions who have a common purpose.
i'm the all have different rights according to their contracts when an employee is a contract of the citizen of finance here the contract of the shareholder, what does not the same in trying to send citizens to the shareholder doesn't work because they start thinking in terms of money and it's not about that it's also about the conditions of work and so on, i love that concept charles and you mentioned earlier on about the hospital and their drive for efficiency, and you
talk about this, There's a big difference between efficiency and effectiveness and i love how you put this efficiency starts from the input while effectiveness works back from the end result which also highlights how leaders, need to sell that vision and be great story tellers within the organization in order to sell the end result but efficiency is often the scourge of the second curve, it's so easy to improve efficiency you know get rid of a hundred people, tighten up the
target, reorganize, it's very easy to do.
Actually it makes no difference to the end product really it is before it is that this is the condition to be efficient, what really need to do is look at the end product which is called effective, no good being efficient if you're not effective at the two different concepts, efficiency is about how the resources you put into them and how, how you manage those things and effectiveness is about the outcome and you work backwards to make things more effective and efficiency is
part of that of course but it's not all of it a lot of it is knowing what it is you're trying to achieve, i kept saying in the hospital what you're trying to achieve is to make me more independent so i can manage my own life and they said no no no no no we're not interested that we're trying to keep the cost down i said, well it's no good keeping the cost down if you don't cure me.
Don't help me to get better and they said oh wow i don't know that's how we're judged and i said well that's terrible, you shouldn't be judged on keeping the cost you should be judged on how many people you send out able to walk from the stroke and i'd be delighted to help you with that but they didn't like that very much.
And because their bosses were judging them on how they kept the cost down and i said quite often in order to make your boss work more effective you have to increase the cost a little investment here maybe we'll make it much better results.
And that's the right thing to do even if it pushes up the cost so please start with what you're trying to achieve and work backwards to what resources you need to do that and cutting those resources may often be you don't achieve the results you want efficiency can be the curse of effectiveness.
Okay that's mine start with what you're trying to achieve and never forget it and find a way of measuring that or at least observing it, i'm charles here you introduce another beautiful image which is the idea of the donut shape projects, what are my favorite images is a donut i say i believe in the donut terrier organizations and management, leadership and people look at me in the basement.
And i said we don't worry it's an english donut is the jam in the middle of america does gonna hold in the middle of that's no good at all but i said every job, don't you think i was too overlapping circles is a call the jam and that's what you have to do or you have failed, you know perfectly well what the call promise is probably.
written down for you in the job description but that's not the whole of your job you think it isn't but no that's what you have to do and if you don't do it you failed and you got sacked but the job is bigger than that, does a ring around the doughnut a space and that space is there to be filled and actually. Because you're actually doing the job.
You are the best person to fill it, to use your imagination and your curiosity to fill the donut, to improve on the bit in the middle, the jam in the middle, so that you fill the whole donut. If you try to do it as the boss, then you what effectively you making the whole donut. We all jam. And then as you can imagine, that doesn't work very well.
For instance, if you're a train driver if you got an instruction you got to drive it at a certain speed so that you arrive at different stations at the scheduled time and please, make sure that you are on time because otherwise you will disappoint people and don't get arriving early so don't use your initiative to arrive early that doesn't work.
What are you doing the right way but actually in the end if you just confine yourself to doing the job at the corporate it gets very boring you want to use your imagination and if you don't leave space for that in the end of the job don't not, people will get very easily bored i remember when i came back from shell to head office. I had a very big sounding job. I was coordinator, regional marketing, Mediterranean region, excluding
France, which is always a bit difficult, . And I had a long job description of all the things I had to do, and at the bottom of it said a authorities authority to initiate. Expenditure on your own account up to a maximum of ten pounds so that was my discretion that was my space of the donut well that wasn't enough to keep me happy i have to tell you so i discovered that, they forgot that i had actually something called negative power i could stop things even though i couldn't start things.
So one day my job was basically to take requests from the operating converts around the companies in Shell, around the Mediterranean, and forward them to the right department and head office to implement them. And one day I got a, a message from the Italian company to build a refinery in the Bay of Naples. Well, I've been to the Bay of Naples. It's one of the most beautiful places in Europe, and I tell you honestly.
The thought is one of my sticking points you don't ruin the environment and the thought of building a refinery in bay of davis i thought it was really against all my principles which i believed in, so thinking of my message from suffocates and then i'm taking a i was being asked to do something i thought of fundamentally immoral and wrong, well i wasn't in authority so i couldn't tell them now. But what I could do is tear it up, which I did and I threw it in the wastebasket.
Of course it didn't stop it because there's something wrong with the italian postal system and they send more copies and make a lot of other people's, so in the end i'm afraid to say it got built but i stopped it for about three weeks.
So i was upholding my principles with my negative power and the interesting thing about organisation cinema no matter how low you are you have negative power even if you don't have positive power, so if you are the bus conductor it's a wet day you can stop people getting on.
And there's nothing they can do about it and anybody who's low down in an organization can lock the door and stop getting in, that's why you must make sure that even the lowest people in the organization believe in what the organization is doing because they have this negative power. I mean the most important person in many ways is the receptionist in the outer office.
They are the first people that the visitor sees when they come in and they represent, they are an ambassador for the organization. And if they're rude or standoffish, Unhelpful that's the opinion that people will immediately fall of that organization so you better make sure that your receptionist believes in what the organization does it is charming and courteous and polite and leaves a good impression because of a ten people away.
Would you get to say that when they agree with a very bad impression of your organization because they have negative so please please even if they have no positive power or authority in there do not make sure they're happy with what they're doing i believe in the organization, it's very very important and all that i learned actually from tearing up a proposal to build an oil refinery in the bay of naples so you never know what you learn.
If you have curiosity and it's always useful if you work out why.
Please don't use your negative power because you have quite a lot of that charles one last story i thought to share is you talk about self empowerment and self responsibility being so important in this world where it's more and more d i y society but one of the things you do to remind yourself of your values, is you keep a white stone on the desk in your study and i think it's a lovely lesson i think it's something we can all learn from. Well, yes.
You just reminded me that on front of my desk, I have a white stone. And why? Well, because one day I was reading the Bible, which I don't do as often as I should, I'm sure. But the book I like most is the Revel Book of Revelations, which is very peculiar. It's all magical book, and you can lose yourself into the images. It comes up and one verse says. One who to the one who prevails or say succeeds. The angel said, I will give a white stone on which should be written. A name.
A name that will be known only to the one who receives it. Now, that's a lovely image and I don't know what was intended by Saint John who wrote the, the book Revelation, but I had tested it my own way. That there is a, there is a sort of ideal Charles Handy, that's me, inside me, who embodies all my values and my beliefs and my purposes in life, and so has my name written on it, nobody else's name, just me, and I keep it on my desk.
Just remind me that i must be true to myself and hopefully that's my better self not my worst self and so i sit there and look at it and i think well what do i really believe in and what do i really want to achieve and how am i going to in some way make the world just a little bit better.
Not hugely better i mean i can't run the country but i want to make sure that at least i what i do should contribute in some way to making somebody happier somebody better even if it's only my wife or my children, just myself actually let me for goodness sake but i feel that i haven't wasted all the time i've had on this earth let me live up to my white zone and what is the best image of me.
Well, you've certainly made me a lot happier and there's a line I pulled as a kind of a closing comment for me, and perhaps it will tee you up for your closing message for our audience today. The line I pulled that I absolutely love from the second curve is we need to challenge orthodoxy dream a little.
Think unreasonably and dare the impossible if we are going to have any chance of making the future work for us all not just the favorite few i love that line charles, what about you what about your closing line in your closing message to our audience in this world of rapid change. Always be hungry, never leave the table satiated, in other words, have unachieved ambitions, dream a bit, don't take yourself too seriously.
I'm very lucky at the moment, part of the stroke results in my, my right side of my brain, which is the creative bit, has been given free reign, I think. The boring bit of my brain, which makes my body work.
is came down but my imagination is leaping away and i have amazing dreams about five o'clock in the morning, transport me all over the world we talk to strange people and doing strange things, i find that very exciting because it stimulates my imagination and i come up with new ideas and new theories just because, I start off with a dream i mean there's an organization in china called Haier which makes kitchen white good for kitchens refrigerators and
cookers and so on dishwashers, what is this idea and play a thousand people in china and some more in america.
Divide the board into little groups self managed groups and he said if you can some way find a new customer improve the product i'll give you a share of the extra profits or the savings that you make, i had a dream that i was transported there in the stream to give a talk to them, hello to the talk which they applauded very nicely in english and all these chinese speak perfect english of course a lesson for us. Somebody said, how big should these groups be?
And I said, well, I tell you what, these groups are really little families and families are very special things because they know each other very well, they may not always like each other very well, they may not even approve of them each.
They know each other very well and as a result they trust each other a lot because they know each other's feelings and they know what they can rely on you for and i say but i'm talking of course about the core family, record piece of the shamrock like so i mean your parents and your brothers and your sisters.
So let me ask you right now think of your own family think of families of your friends how many people in that call counting the parents and your brothers and your sister but not your cousins, what you don't have enough to trust them i'm trying to people that you are close enough to be able to smell them so you know the very well how many are in the core of your family and let me know what the sun is.
And they wrote it down and they thought for a bit and they ended them up and I said, well, what are the numbers?
And they said, Between eight and eight and twelve and i said that's the size of the group you need to have the funny strange way i invented a new kind of theory, family groups of the great organization not more than twelve people and, I think it's quite a good rule of thumb you must only trust people that you can be close enough to smell them is the other rule of thumb and you can you know how to do you know what your family smell like where you like to watch you know
where you can trust and where you can. I'm so curious to take imagination and boredom itchiness, itchy, believe that you can be better, believe that you can dream and let yourself imagine what it could be like if you had total freedom to do something, i mean your life, your life is a very precious thing, it's only going to happen once. Unless you believe in reincarnation, but then you might be reincarnated as a frog. So that's not quite as much fun.
So this is your, probably only your life as a decent human being. What are you going to do with it? What are you going to leave behind? What's your legacy? Some of my Jewish friends tell me that Jews have two wills. One is their financial will, and the other is their value will. What they want people to remember about them when you die.
Okay. What were the key values that your children will remember the fact that you were a very jovial fat, full of dirty jokes, or they remember that you were a brilliant rugby player, or they remember that you were really excellent company, or they were where they, what will they remember and think if they, if you were a really good father, what will your children remember about you? I have to leave you with Aristotle though.
But Aristotle was asked what the point of life was and he said, URI, E-U-D-A-I-M-O-N-I-A. Looks like you do ammonia, but it's Nia. And when asked what it was, most people translated even then as happiness. But Aristotle was an activist. There was a philosopher like me, and loved asking difficult questions. He was a, he believed happiness was active, happiness, what he called self-fulfillment. I translate that as saying, doing your best at what you are best at for the good of others.
Do your best at what you're best at for the good of others now philosophers like me are very irritating people when they give you an answer it turns out to be another question to aristotle's answer as i translated is a question because only you know what you're best at.
How do you know how to do your best at what you're best at it only you know how that can help others in some way but that is what your life is about happiness of an active soul, so i'd like to think that what i'm best at is writing books and giving a talk in a concert hall if i do it well i hope it gives people, some idea of how to make the most of their lives.
which will make them happy and fulfilled so in a funny way you get happiness by making other people happy and so that becomes a sort of chain reaction to society, everybody wants to be happy guys are making other people happy or doing what they believe to be their best people and suddenly you have a wonderful society, which sort of glows in the dark with everybody helping everybody else to make the most of themselves.
with their white stones it's very interesting as a preface to the constitution that the aim of the American state, life, liberty, and the pursuit of happiness, and it was written by Thomas Jefferson.
Who is a follower of Aristotle, and in the library of congress, his copy of Aristotle in ancient greek, is covered with his notes, and he underlines this passage, Life, liberty, and the pursuit of happiness, now he didn't guarantee them happiness, he guaranteed the pursuit of happiness, by that he meant, The chance to fulfill the best of themselves in other words proper education the chance to be what they are best of themselves, life liberty and the pursuit of happiness
not happiness that's what he wants the american constitution to deliver that's what i think every organization should aim at, every organization in his own purposes should try to make the most of his assets, to make other people benefit. If it's only the customers, that's fine. Perhaps it should be the employees as well, the citizens.
i think the ideal organizations a lot employees life liberty and citizenship and the pursuit happiness the ability to find the best of themselves and pass it on to others, set up a recital and he was beside me in my head do your best at what you're best at for the good of others in some way, in a while makes them happy and then they'll make other people happy and the whole world will grow.
So good luck and thank you very much thank you so much thank you charles charles handy, author of the second curve thoughts on reinventing society it's been an absolute pleasure joining you here in your house in london and i look forward to talking about your next book and many more dreams, that will be written in that book i'm sure to come thank you so much for joining us well thank you very much i loved your questions, i surprised myself with some of my answers. But that's very good.
That's very good. Surprise yourself. I'm sure you will and have a great life.