Charles Handy, The Empty Raincoat
(1994)
(called The Age of Paradox in America)
Irish oil executive who became a London Business School professor and renowned
business philosopher (pictured right).
See also...
Charles Handy in the Management
Gurus section.
Book summary
What is the empty
raincoat?
It comes from a sculpture (Without Words) by the American Judith
Shea in Minneapolis, USA (pictured right)
The empty raincoat shows that people have money but no
soul.
How should you
respond?
1. Repair your
soul
(with philosophy, love and reflection).
2. Improve the quality of your time
a) focus more on the 4 F's - family, friends, festivals and fun.
b) give less time to the 4P's - profit, performance, pay and productivity.
3. Fight fear and anxiety
Cast off the burdens of your past through love.
4. Deal with paradoxes (or conflicting opposites)
This is the Age of Paradox (see below).
Nine paradoxes
1. The Paradox of Intelligence
Knowledge application is vital to wealth creation.
But, unlike other resources, knowledge isn't owned by the organization but by the
people who possess it (via education and lifelong learning).
So business success depends on motivating these knowledgeable people.
2. The Paradox of
Work
Some people have work and money and not enough time.
Others have no work, little money and lots of time.
3. The Paradox of Productivity
If economic growth is low, higher productivity (production per head) means fewer jobs
This forces people to:
4. The Paradox of Time
We never have enough time despite time saving machinery and longer
lives.
5. The Paradox of Riches
Economic growth requires more spending, but we have fewer babies
So extra demand must be found from luxury spending and exports.
6. The Paradox of
Organizations
Successful organizations are a mixture of opposites:
7. The Paradox of Age
Every generation sees itself as different from its predecessor but insists that the next generation will be the
same as theirs.
8. The Paradox of the Individual
We value individualism and creativity but enforce conformity through organizations and teams.
9. The Paradox of Justice
Justice under capitalism demands that the best receive the most, but this creates inequality.
How to deal with these paradoxes
1. The Sigmoid Curve
An S-shaped curve illustrating the rise and ultimate decline of, for example, a product or organization.
The product or organization must be rejuvenated by replacing the decline stage of the original curve with the
growth section of a new one (from, for example, a new product or strategy) - pictured right.
But this is difficult to achieve because success breeds complacency.
2. The Doughnut Principle
For organizations:
For individuals a balance must be found between
3. The Chinese
Contract
A mutual, win-win agreement voluntarily enforced by trust, understanding and compromise.
Compromise is particularly important for:
But don't compromise for the wrong reasons such as an easier life.
“There are some principles worth dying for”, says Handy.
4. The federal organization
This is a mixture of centralized and decentralized decision making based on:
a) twin citizenship
Being a member of both the whole organization and a business unit.
b) subsidiarity
Giving individuals, teams and business units the power to make decisions.
Subsidiarity requires:
- tough trust (mixing sensitivity with ruthlessness against incompetence).
- a strong centre (see next point).
- inspired people (from inspired leadership).
- clearly understood responsibilities and success criteria.
- common purpose and shared values (based on integrity and corporate social responsibility)
- empowerment (taking responsibility for results)
c) central activities serving the rest of the organization
The centre must be responsible for;
- strategic vision (for inspirational purpose).
- organization-wide activities.
5. The Corporate Contract
This is based on making profits for shareholders by satisfying other stakeholders like customers, employees,
suppliers and environmental groups.
Conclusion
Your happiness is your responsibility, so save your soul.
Key quotes on success
There has to be more to life than winning or we should nearly all be losers.
There must be more to life than being a cog in someone else's great machine.
Key quotes on organizational objectives
The principal purpose of a company is not to make a profit, full stop. It is to make a profit in order to
continue to do things or make things, and to do so ever better and more abundantly.
It is easy to lose ourselves in efficiency, to treat that efficiency as an end in itself and not a means to
other ends.
Key quote on business ethics
The market is a mechanism for sorting the efficient from the inefficient, it is
not a substitute for responsibility.
Key quotes on ethics
What we are can be as important an aspect of purpose as what we
do.
There are some principles worth dying for.
Key quote on business success
It is better, then, to be tough than sorry.
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