Gary Hamel

CEOs often claim that mega-mergers yield operational efficiencies--but the argument is usually bogus. In most cases, potential efficiency gains are swamped by the costs of integration and the increased bureaucracy that comes with a larger and more complex organization. The real advantages of a mega-scale firm are unmatched political clout and greater pricing power. These gains come at the expense of consumers and citizens. That's why I support the recently introduced bipartisan Bill to Break Up Big Medicine. thebignewsletter.com/p/senators-see…

Bureaucracy is exacerbating social inequality, and depriving millions of people of the chance to share in the benefits of capitalism. Here's how to change that. hbr.org/2025/09/the-so…

Come join the conversation! On Monday, September 29, at 12 pm ET, Harvard Business Review will be hosting a live webinar with the authors of "HUMANOCRACY: Expanded and Updated"--that's Michele Zanini and me! We'll be sharing our latest data-based insights on what can be done to build organizations that are as daring and dynamic as the times demand. You can register here:  s.hbr.org/3VkL5me. Hope to see you there!

If you haven't caught up with Aiden McCullen's "Innovation Show" on YouTube, please check it out. He interviewed me for more than 20 hours, and you'll find episodes that cover much of my work over the past many years. Here's episode #1: youtube.com/watch?v=WoTmOx…

It was a pleasure to chat with @Gallup's Global Practice Leader for Leadership Development, Vibhas Ratanjee. Here's what we talked about: forbes.com/sites/vibhasra…

We need a government that's better, not just smaller. @elonmusk didn't know how to make that happen. (Hint, you don't cure obesity with an amputation. There's a better way to reinvigorate America's federal bureaucracies, and here it is: marketwatch.com/story/musk-and…

America needs a federal government that's better, not just smaller. DOGE mostly failed at both tasks. Here's what Michele Zanini and I think needs to be done to create a federal government that's bold, entrepreneurial and fast. project-syndicate.org/commentary/gut…

One of my core tenets: "Resources are no match for resourcefulness." The June 1 Ukrainian drone attack on Russian bombers illustrates this maxim. More than 100 drones, hidden in trucks that were driven close to Russian airbases, hit 41 Russian bombers worth about $7 billion. The drones cost $2,000 each. bit.ly/4jyLoDm

Who the heck is advising @POTUS? The proposed 25% tariff on iPhones seems very ill-advised. There are 1 to 1.5 million people employed by @apple's Chinese sub-contractors. Barring some sort of moonshot, there's no way to re-create Apple's supply chain infrastructure in the US--and any attempt to do so would wipe $1 trillion+ off of Apple's market value. nytimes.com/2025/05/01/tec….

Allan Murray is @wsj's CEO whisperer. I had the chance to share a few thoughts for his latest "CEO Brief" which focuses on the recent, and long-overdue, enthusiasm for flattening org hierarchies. ceobrief.cmail20.com/t/d-e-shdklik-…

What do you think? Is the correlation between the increasing bureaucratization of government and the declining confidence in government competence mere coincidence? (With US agencies, there's now 1 manager or administrator for every 1.2 non-supervisory employees. The figure for the economy at large is 1:5). BTW, @DOGE is not the way to fix this problem--more on that later.

Though the investor class is currently taking a beating, they did extraordinarily well over the past 30+ years. Those in the top 50% of households by net worth captured 98% of the $134 trillion in gains from the booming stock market. Those in the bottom half captured only 2 percent of the gains. Whatever you think of Donald Trump (and I'm told opinions vary), the two charts below explain much of his appeal to working class Americans. Whether his policies will shrink or exacerbate wealth disparities is for now unclear.

CAN ELON MUSK DO IT? It may seem impertinent to ask whether @elonmusk is up to the challenge of remaking the federal government. He is stupendously good at building things—like Tesla and SpaceX. And with the demolition of the USAID, he and his acolytes have also proven adept at breaking things—particularly when empowered to do so by the President of the United States. No one should be surprised that Musk’s aggressive moves have provoked howls from the guardians of the status quo. (You expect an impaled pig to squeal.) Yet if you believe that many federal agencies are irredeemably dysfunctional, obstructionist, and wasteful, the only option may be to tear things down to the studs. But then what? America is facing a slew of mind-bending problems, including runaway entitlement costs, crumbling infrastructure, substandard schools, Chinese militarism, an imperiled middle class, and lackluster productivity growth. To tackle these and other challenges, America needs a central government that’s radically more capable, not just smaller. And there’s the rub: no one knows if Musk is any good at rebuilding things? Is there anything in his experience that will help him in the hard, grinding work of revitalizing America’s ossified federal agencies? (Twitter isn’t the Defense Department). Rejuvenating a moribund institution takes steely courage, but also patience and nuance. Musk might take a lesson from Bill Anderson. During his tenure as CEO of the pharmaceutical business of Hoffman La Roche, the world’s second largest drug-maker, Anderson orchestrated a remarkable metamorphosis. He sliced the number of management layers in half, dismantled insular head office functions, turned fiefdoms into collaborative communities, shifted the leadership model from command-and-control to empower-and-enable, increased the autonomy of those on the front lines, and made every employee accountable for patient impact. The moves not only saved the company $3 billion per year, they also made the organization dramatically more energetic, focused, and flexible. Insights could also be gleaned from Zhang Ruimin, the recently retired Chairman and CEO of Qingdao-based Haier. Over the course of a decade, Zhang transformed what had been a mediocre, municipally-owned appliance maker into a global, innovation powerhouse. He did so by flattening the pyramid, breaking monolithic business units into thousands of self-managing “micro-enterprises,” using open innovation to source the best ideas from across the world, and giving every employee a financial stake in the success of their team. This radical makeover spawned a slew of new products and businesses and turned a once sleepy company into a global benchmark. Rejuvenation can’t be accomplished without a certain amount of trauma. Ineffective programs have to be shuttered and seat-warmers shown the door. But the trauma needs be brief and well-aimed. If it is not, the organization will be permanently weakened—not least because the first rats off a sinking ship tend to be the best swimmers. Maybe America (and the world) can live without USAID, or even the Department of Education. But it can’t live without the US Army, the National Institutes of Health, the Federal Bureau of Investigation, and many other agencies. These institutions need to be downsized, but also rejuvenated. That will be the ultimate test for Musk and his boss. [Note @MicheleZanini and I are working on a longer piece about DOGE. Watch this space.]

As you may have discovered, bureaucrats hate exceptions, so as their ranks expand, exceptional performance becomes increasingly rare. Hence my maxim: "In any organization, the likelihood of exceptional performance is inversely related to the number of bureaucrats."

I understand the widespread antipathy for Germany's @AfD party, but it's telling that in Sunday's election, AfD was the leading vote winner in the 25-34 year age bracket. With each passing generation, the percentage of young people making into the middle class is shrinking. This is the canary in the coal mine for democracy. thetimes.com/world/europe/a…

"Humanocracy: creating organisations as amazing as the people inside them" is a book that's had big impact on my change practice. A new updated version is due out in August 2025. In the meantime, here's a fantastic new sketchnote on a key principle from "Humanocracy": impact multipliers for large scale change. What can we do to truly create impact & influence change in complex environments? linkedin.com/posts/tnvora_s…. Thank you @profhamel & @MicheleZanini for wisdom of your book. Thank you @tnvora for your outstanding sketchnotes.

Hey university bureaucrats, the NIH wants more for its money. Gary Hamel US universities spend nearly $80 billon per year on research, more than half of which comes from US taxpayers. It’s hardly surprising, then, that a Trumpian rule change by the National Institutes of Health has some university administrators panicking. Henceforth, the percentage of @NIH research grants that can be used to fund university overheads will be capped at 15 percent; 85 percent of funds must be used to cover direct research costs. Currently, a quarter of NIH grant money is used to pay indirect expenses, but at some universities, the administrative tax is substantially higher. Johns Hopkins University, the largest recipient of federal funds, levies a 63.7 percent overhead charge, while Harvard takes 69 percent and Yale 67.5 percent. To understand the implications of the rule change, consider that in 2023, Johns Hopkins received $843 million from the NIH. Under the new edict, the universi-ty’s overhead charge would have been $126 million rather than $537 million—hence the protests. Jeffrey Flier, a former Dean Harvard Medical School griped that “no sane government would do this.” Matt Owners, president of the Council on Government Relations, a grouping of academic medical centers and research institutes, warned the shift would “cripple life-saving research and innovation.” One can debate whether a 15 percent overhead allowance is too miserly (researchers, after all, need facilities in which to do their work); but what can’t be argued is that in recent decades universities have been piling on bureaucratic belly fat like grizzlies bulking up for hibernation. Johns Hopkins professor Benjamin Ginsberg, author of The Fall of the Faculty, describes the phenomenon well: “Every year, hosts of administrators and staffers are added to college and university pay-rolls, even as schools claim to be battling budget crises that are forcing them to reduce the size of their full-time faculties. As a result, universities are filled with armies of functionaries—vice presidents, associate vice presidents, assistant vice presidents, provosts, associate provosts, assistant provosts, dean, deanlets, deanlings, each commanding staffers and assistants—who, more and more, direct operations of every school.” Between 1976 and 2018, the number of full-time administrators employed by US colleges and universities increased by 164 percent. During that time, the number of full-time faculty increased by 92 percent while total student enrollment grew by 78 percent. In consequence, many universities now have more managers and administrators than faculty members. Within the University of California system, there are 8 students for every instructor, and 4 students for every administrator. Writing more than a century ago, the economist and social critic, Thorstein Veblen, offered a blunt assessment of university administrators: “They are needless, except to take care of needs and emergencies to which their own presence gratuitously gives rise. In so far as these needs and difficulties that require executive surveillance are not simply and flagrantly factitious …, they are altogether such needs as arise out of an excessive size and a gratuitously complex administrative organization…” Having known more than a few university administrators, including my late father, I’m inclined to be more charitable, but Veblen was right: administrators produce complexity which can only be managed by (you guessed it!) more administrators. In an article bemoaning the growth of academic bureaucracy, Bloomberg reporter John Hechinger recounts a conversation with an associate vice provost hired to oversee a cluster of committees working to revise the university’s academic calendar. “[My] job,” said the administrator, “is to make sure these seven or eight committees are aware of what’s going on in the other committees.” Sadly, examples of such administrative excrescence are legion. As is true with administrative jobs generally, university administrators are seldom accountable for improving outcomes or reducing costs. Mostly, they report to oth-er administrators, and are measured and compensated based on activity, not impact. Says Todd Zywicki, a law professor at George Mason University and the author of The Changing of the Guard: The Political Economy of Administrative Bloat in American Higher Education, “The interesting thing about the administrative bloat in higher education is, literally, nobody knows who these people are or what they’re doing.” To be fair, bureaucratic bloat isn’t just a problem for universities. Across the US economy, the number of managerial and administrative jobs has increased by 145 percent since 1983, roughly three times the growth rate of all other job categories. As Michele Zanini and I argue in Humanocracy, the costs of bureausclerosis are becoming untenable—for organizations, economies, and societies. While the NIH’s blunt attack on academic overhead lacks nuance and may disrupt the pro-cess of discovery, one shouldn’t be surprised that President Trump’s efficiency shock troops are intent on shrinking the size of the academic administerium.