We say we want adaptive behavior but we reward other things…

As part of my research for my new book, I’ve been revisiting many management classics, including Arie de Geus’ book “The Living Company.” It’s a gem, and reveals what can happen when we don’t treat companies as living human communities.

Building adaptive companies

My colleague Marianne Koch and I decided to partner on a topic which at the time was considered contrarian. She was studying human resource management systems, and I was studying strategic growth, two subjects that back in the day were hermetically sealed off from one another. We thought, “Well, what if we used her HR database and compared it to the strategies of various companies to see if a variable we called “human resource sophistication” would have a performance effect?”

We were quite confident that the performance implications of having a sophisticated human resource system — which included comprehensive onboarding, staff training, time for upskilling, careful interview processes, self-management, and so on — would have the biggest impact on the professional services firms in her database. After all, services firms have nothing to sell but the talent, hard work and smarts of their people, so the higher the investment they made in their people and the more they let them make decisions in context, the better…