Management guru Charles Handy, who gave us the “gods of management” and “shamrock organization”, passed away on Friday 13th December 2024, aged 92. He was an alumnus of Bromsgrove School in the UK, a highly reputable IB World School since 2009.

A tribute to Charles Handy

Charles Handy (1932-2024) was an Irish author and management guru who specialized in organizational behaviour, corporate culture, and management. This short tribute highlights the life and work of Charles Handy, renowned for being one of Britain’s greatest management experts. A graduate from Oxford University, he was credited in 2001 as the world’s second most influential management thinker (after Peter Drucker) and is widely recognized as Europe’s best known and most influential social and management philosopher.

Handy’s personal life

Charles Handy was born in Clane in County Kildare, Ireland. He was educated in England, first at Bromsgrove School as a boarder and at Oriel College, University of Oxford, where he graduated with first-class honours. He was married to Elizabeth Handy, his business partner and a professional photographer, who tragically passed away following a car accident in 2018. They have two adult children. Charles Handy’s father was an Irish Protestant minister, which helped to influence one of Handy’s most reputable books “The Gods of Management” (1995) focusing on four key management cultures, and his theory of the Shamrock organization (the shamrock being synonymous with St. Patrick as a symbol of the Holy Trinity).

Handy’s career

Charles Handy’s business career started in 1956 at Shell (one of the world’s largest companies today), working on a drilling operation in Borneo, Indonesia. He progressed to Marketing Executive before leaving the petroleum company in 1965.

Charles Handy co-founded the London Business School (LBS) in 1967. He had spent a year at the Massachusetts Institute of Technology (MIT), University of Boston, before returning to the UK to help establish Britain’s first management programmes at the LBS where he was full-time Professor of Business Management from 1972. The highly selective LBS offers postgraduate programmes in finance and management, such as its Masters of Business Administration (MBA), Executive MBA (EMBA) programmes, and its 5-year Doctor of Philosophy (PhD) in Management programme. LBS is consistently ranked in the top 10 business schools in the world. Charles Handy later also helped to develop the Open University’s MBA programme.

Charles Handy had several distinguished careers, including professional economist, academia at MIT (where he met his mentor, Warren Bennis) and LBS, management consultant, author, and broadcaster.

Charles Handy on management

Charles Handy argued that trying to define a manager is less meaningful than examining what a manager actually does.  He suggested a number of common characteristics present in most effective managers:

• Managers should have a good level of intelligence, but not necessarily outstanding ability. Managers who think that they are more intelligent and/or more able than others or have poor ‘people skills’ often find that they do not get on well with their subordinates.

• Managers need to be proactive, creative, and able to take on risks in order to identify and exploit business opportunities.

• Managers must set an example for others to follow. They should also show respect for their colleagues. Charles Handy suggested that self-assured managers bring out the best in their teams.

Handy also outlined three key roles (or functions) of management:

• Managers as general practitioners - Handy compared personal health problems with the well-being of an organization, such as the level of staff turnover, productivity and customer satisfaction. If there are health problems in the business, then managers must deal with these. For example, if low productivity is a concern, then managers might hire more people, retrain staff and/or dismiss unproductive workers. If low productivity is the result of poor morale then financial incentives might be used to deal with this.

• Managers as confronters of dilemmas - Handy suggested that managers are relatively well paid because they have to deal with a constant flow of dilemmas (problems). For example, managers are required to deal with the management of change, conflict management and crisis management. Handy argues that organizations are most successful when “people are working with people, not for people.”

• Managers as balancers of cultural mixes - Much of Handy’s theories concentrated on organizational culture. He argued that it is the manager’s role to balance the cultural mix in an organization to get the best out of each individual. Whilst classical management theorists such as Henri Fayol and F.W. Taylor would have suggested a hierarchical and formal structure to shape and embrace the culture of an organization, Handy argued that organizations should become flatter. He believed this would improve communications and enhance decision-making.

Handy suggested that effective execution of the above roles requires the helicopter factor, i.e., managers need to be able to rise above situations to see the ‘bigger picture’. Ineffective management, he argued, takes place when there is micro-managing in an organization, i.e., managers get caught up or too involved in every small aspect of the organization. Instead, he advocated that managers need to be able to delegate by being generalists rather than specialists.

Charles Handy on the Shamrock organization

One of Charles Handy’s most renowned theories is the shamrock organization (1989) which suggests that businesses will gradually hire fewer core staff to improve their flexibility and competitiveness. For example, firms are increasingly outsourcing projects and using external consultants. Reducing the number of the core staff and employing more part-time workers also helps businesses such as supermarkets and fast-food restaurants to reduce their labour costs. Greater flexibility might also mean that a larger number of people work from home.

Handy argued that workers will have to be more flexible as there is no such thing as a ‘job for life’, but that short term contracts were more appropriate so people have to be prepared to move between occupations and perhaps industries to maintain employment. The trend in the number of businesses that subcontract business activities supports Handy’s beliefs. He argued that non-essential work (i.e., jobs that can be done by others) should be contracted out to specialists who can do the work more productively and more cost efficiently.

Furthermore, a multi-skilled and flexible worker will be highly attractive to potential employers. For example, students in part-time employment and mothers with young children would have more choice over the hours that they work.  Handy believed this helps to improve the well-being and morale of workers.

Due to these changes, Charles Handy came up with the concept of the shamrock organization. This model gets its name from the shamrock plant (a three-leafed clover). Handy suggested that within a shamrock organization there would be three groups of staff:

• Core staff - This group consists of full-time professional workers, such as managers and technicians, who handle the daily operations of the business. They are crucial to the organization's operations, survival and growth. The core staff are becoming an increasingly smaller group fuelled by developments in e-commerce and teleworking. This has led to downsizing and restructuring of the workforce in many organizations.

• Peripheral workers - The second group (also known as the insourced workers) consists of part-time, temporary, and portfolio workers who are employed as and when they are required. They tend to be paid by piece rate for short periods of employment, thus helping to reduce labour costs for the firm. The peripheral group forms the flexible workforce for an organization and constitutes a greater proportion of the workforce for large companies. For example, supermarket chains such as Walmart, Tesco, and Carrefour employ far more part-time staff than full-time workers. This was, essentially, the prerequisite for what became known as the gig economy.

• Outsourced workers - This group consists of individuals or businesses that are not employed by the organization but are paid to complete particular and specialized tasks. Freelance workers, sub-contractors, agencies, and the self-employed are examples of outsourced workers; they are hired by an organization for their skills and expertise. For instance, most large firms use marketing agencies to design appropriate promotional (marketing) campaigns.

The three components of the shamrock have their own advantages and limitations for an organization. The core workers, vital to the organization, must be well paid and remunerated. They are likely to enjoy some degree of job security, be well motivated and highly productive. The insourced workers will suffer from a lack of job security thereby negatively affecting their morale. Indeed, Charles Handy suggested that portfolio workers would be expected to work for free in some cases to establish themselves. However, they present flexibility for an organization and are easier to ‘hire and fire’. The peripheral workers are able to develop numerous careers simultaneously (hence the term portfolio working).

Although Charles Handy introduced the idea of the shamrock organization back in the early 1990s, time has shown that organizations are indeed restructuring to become more flexible, reducing their core staff and using more peripheral workers. The trend in modern businesses that use increasingly more part-time workers, teleworkers, and workers in the gig economy further supports Charles Handy’s foresight.

Charles Handy on the “Gods of Management”

Back in 1974, Handy attempted to describe the four different types of cultures that he believed existed in every organization. He named these cultures after Greek gods:

• Zeus (power) culture – named after Zeus, the Greek king of the gods, this represents a powerful head of an organization dominated by the personality and/or power of one person. This individual is often the founder or owner of the organization. Many organizations run such power cultures where major decision-making power remains in the hands of only few people.

• Apollo (role) culture – named after the son of Zeus, the god of harmony and order, this represents a culture dominated by bureaucracy (rules, regulation and procedures), such as government organizations and life insurance companies. Teams are formed to achieve the organizations' objectives.

• Athena (task) culture – named after the goddess of warfare and wisdom, this represents an organizational culture dominated in consultancy firms, advertising agencies and innovative organizations.

• Dionysus (person) culture – named after the god of liberation, this represents an organizational culture in which individuals have the freedom to develop their own ideas in the way they wish, such as those working in the theatre and the arts. Employees are delegated roles and responsibilities based on areas of interest, specialization and qualifications.

Charles Handy pointed out that effective managers are those who are fully aware of the four cultures that exist in their organizations. Whilst there may be a particularly dominant organizational culture, such as a power culture in large government organizations, sub-cultures do exist and should not be ignored. For example, a common characteristic of a person culture is that individuals are often more concerned about themselves than the organization. Handy pointed out that senior managers need to realize the organization always comes first and everything else (including the interest of individuals) comes later.

Conclusions

Charles Handy’s work draws no solid conclusions about what makes a ‘good’ manager. However, he does show that good organizations are passionate about what they do and that money (or the pursuit of profit) should not be at the forefront of what they stand for. As Handy pointed out “creating more wealth doesn’t necessarily make everybody happier.” More importantly, he argued, trust must be embedded between managers and employees for organizations to be successful. This is ever more important as organizations downsize their core workers. Handy had predicted the emergence of portfolio workers would reduce the number of full-time workers by 50% within 10 years (by the year 2000). In his own words, “my prediction had come true in Britain and much of Northern Europe and portfolio working was commonplace.” His visionary thinking reinforces the view that he was indeed one of the greatest management gurus of our time.

RIP Professor Handy 🙏