The theory behind Sheikh Mohammed’s Dubai ‘office walkabout’

Sheikh Mohammed's 'management by walking around' echoes the style developed by Hewlett-Packard executives in the 1970s as chronicled by management guru and author Tom Peters.

American author Tom Peters speaks during the World Strategy Summit at St Regis Saadiyat Island in November last year. Christopher Pike / The National

When Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, went on an early morning walk around some government offices last week and discovered few employees at their desks, he may have been practising the art of "management by walking around", as described in the 1982 best-selling book called In Search of Excellence, written by Tom Peters and Robert Waterman. The authors profiled 43 successful American companies and found they shared eight common themes. "Management by walking around", developed by Hewlett-Packard in the 1970s, involves managers wandering, in an unstructured manner, through the workplace to check in with employees or equipment. Many of the book's other themes, such as learning from the customer and fostering innovations, have since become entrenched global business principles. But Mr Peters, 73, claims that 100 per cent implementation of his ideas is now far more important – for survival's sake – than it was 34 years ago. Here the management guru reveals what it takes to foster innovation in your firm.

How can companies best nurture an environment that enables innovation to happen?

In the 49 years I’ve been learning about management, I’ve actually only learnt one thing – WTTMSW – Whoever Tries The Most Stuff Wins. Somebody said to me “you’re a really good speaker, what can I learn from you? I said: “you can learn that the 3,000th speech is likely to be a lot better than the third”. WTTMSW sounds easy, but in most companies you don’t get to experiment very much. I advocate turning the company into a laboratory, where people go off and do little things to try to improve. Every time you try, you’ll get a little better.

Should the innovation process involve everybody in the company?

It should involve everybody, but that’s not consistent with algorithmic hiring. Call centres have done big data research and say they don’t want people with imagination, because they don’t make as many phone calls. I disagree, because I want those people to be able to develop a relationship with you in 35 seconds. They need to be able to chat a little bit and be curious about you, and even if it costs me some short-term business, it’s going to help me in the long term. Increasingly, creativity is being taken out of jobs, but even in the worst of times, a good boss can have a different way of doing things.

Is anybody anywhere capable of being innovative?

A big part is context. A lot of cool stuff is going on in Dubai because Dubai is the biggest mess of human beings from all over the planet. Diversity is essential, by which I don’t mean gender or colour, but “short people, tall people, fat people, thin people, people who went to university, people who didn’t” – to be confronted with a variety of points of view. Mixing them all up stimulates the imagination.

How else can companies encourage innovation?

Ninety per cent of [mistakes] in companies are because the finance people don’t talk to the engineers who don’t talk to the marketers, and that slows everything down. It’s important to break down those barriers. The bottleneck is at the top, on the board of directors, where we see the least diversity of thought and the most consistency of background. It’s a killer. If you hang out with more interesting people, you become more interesting, and if you hang out with the same people, you don’t learn anything. Go to lunch with crazy people who have nothing to do with you. It’s the only way you’ll learn, and create a madhouse environment with plenty of opportunities for innovation.

Are SMEs much more innovative by nature?

By a factor of about a gillion. Big companies have their uses, but the future is small – research shows that new and small companies create almost all the private sector jobs and are disproportionately innovative. The smaller companies create over 100 per cent of our jobs in the US, meaning the net employment level for our big companies is negative and the essence of success is start-ups. One of my best friends at McKinsey, Dick Foster, looked at detailed performance data stretching back 40 years of the 1,000 largest companies of the US. He found the longer the companies had been in the database, the worse they did.

But won’t we eventually reach a point where all useful innovations have already occurred?

We’re always saying that. In 1898, the US commissioner of patents is reported to have said “everything that can be invented has been invented”. I think innovation will go on ad infinitum. A 2014 Deloitte-University of Oxford study anticipates that 35 per cent of British jobs will be lost within 20 years to automation, and the only way to beat that problem is to invent our way out of it. The pace of change now is going through the roof.

Who are the next generation of entrepreneurs?

Across the world, the rate of women’s start-ups is way ahead of men’s – in the US, by a factor of 5 to 1. Instead of beating their heads against a glass ceiling, women are taking the reins. They’re getting better educated, which means that companies should be trying to employ at least the same number of women as men across the board.

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