Charles Handy’s second curve and how organisations are evolving

Published by matt on

11th August 2016

In my last post (14 July) I recommended Charles Handy’s recently published ‘Second Curve’ (2014). Below is a review that I wrote of this book, with some thoughts for leadership coaches added at the end.


In ‘The Second Curve’ Charles Handy (doyen of management thinking for the last 40 years) shows how the ‘Sigmoid Curve’ provides a useful metaphor for thinking about initiating change in our lives (as well as in our businesses and society), at the point when everything appears to be still going well (i.e. on the up-curve of our past creativity) rather than waiting for evidence of decline before acting.  He cites Apple’s successive initiations of the iPod, iPhone and iPad as the classic example of successful second curve thinking in business and ponders whether this will continue without Steve Jobs at the helm.  He reminds us that the average life of a business has reduced from 40 years to 14 years as a symptom of the speeding up of change cycles and the consequent need to keep reinventing ourselves, individually and collectively.  This metaphor also explains why most business books about the success stories of great businesses or leaders are already past their sell-by date by the time they are published (although of course we can still enjoy the stories).  Handy is seeking to help us grasp the principle of second curve thinking and encourages us to apply it to a whole range of issues, including; the way that technology and data is changing work; our assumptions about markets, growth and capitalism; the shape and size of our organisations and the way they work for people; innovation, education and investment in the future; and the very nature of democracy and the kind of society we want to live in.  Rather than making bold predictions or proposals, he is nudging us to take responsibility for our futures and to engage in a new type of thinking that ‘requires imagination, intuition and instinct rather than rational analysis’.

Sometimes Handy stretches the second curve metaphor a little too far to and maybe he isn’t as transparent about how his ethical worldview informs his opinions as he might be, but overall these essays deliver a healthy shot of humanity, sanity and perspective on a changing world in which we seem all too happy to let our way of life change in ways which may not be for the better.  Handy illustrates this with the increasingly common scene of people gathered together (e.g. at meal times) but looking at their smartphones and even sending each other messages, rather than talking to each other.

The underlying message here is that we need to take more responsibility for ourselves and our destinies, and adapt and evolve to become more complete human beings. This means developing and harnessing all our psychological capacities or core intelligences – not just cognitive brilliance but our emotional, social and ethical intelligence too.  Handy suggest that our educational system needs to help develop people who can be creative and innovative problem solvers, able to respond to new work horizons and take effective action in the world (because all the old jobs will be going to robots). This has significant implications for our learning technologies in the workplace environment – people need to stay on top of the current curve and prepare themselves for the next one.

Several of his articles address the changing nature of work and organisations.  In The Workplace he describes new varieties of the physical workplace such as ‘club’ environments where people can meet, eat and rub up against each other to “encourage serendipity and a shared culture” but otherwise work from home or where their projects or clients are. Other organisations are going the other way to create all-encompassing “campus type centres for work and recreation a la Google”.  But for more and more people our laptops (or tablets or phones) are already our offices and physical location is becoming secondary factor. He goes on to describe how “the big organisations are discombobulating into bundles of semi-autonomous grouping”.  In The Citizen Organisation he describes how organisations are becoming shamrock-shaped; with a small core workforce representing the core competence of key intellectual and management skills (leaf one), most subsidiary functions are outsourced to contractors or semi-autonomous subsidiaries (leaf two) which is complemented by a flexible army of ‘fleas’ (leaf three), the higher value specialist individuals or small partnerships who sell their skills and expertise to organisations but are not employed by them.

In The New Management Handy goes further in describing what the second curve might look like in terms of the shape and size of organisations. He describes a trend towards what he calls “Doughnut management” (small core, large semi-autonomous surrounding), which requires “a major investment in the development of the staff.  This “may be expensive in the short term but, ultimately, trust is always cheaper than control.  In a doughnut culture people are judged on results, not on their methods, on effectiveness rather than efficiency.  Efficiency should be the servant, not the master.  The new technologies can work both ways.  Technology can be used…to eliminate discretion and control, or… it can facilitate individual initiative.”

These doughnut organisations are also smaller; “How big is big? Robin Dunbar of Oxford University came up with a number.  After examining studies of village communities and army units going back over time Dunbar suggested that one individual can only keep track of around 150 people at any one time.  More recent evidence from Facebook communities supports this number, which I would suggest, provide the maximum size for a doughnut (project team or business unit).”

You might want to reflect upon some of themes I’ve touched on in this review.  How do you see your relationship with work changing over your career?  Are you full time employed now and do you see this continuing for ever, or can you imagine yourself as a self-employed contractor, specialist or portfolio worker?  How do you want to engage in continuous or periodic learning and development to keep increasing your value to organisations as you make career shifts?  What does your ideal place of work look like, e.g. your home, a networking hub or a campus?  What does the type of organisation you want to work in look like?  We need to think about these questions because the world of work is changing faster than we realise.

How can Handy’s ideas inform leadership coaching?

In addition to the questions above, here’s three ideas:

  1. Handy’s thinking links with Frederic Laloux’s notions of evolutionary organisations and provides ideas on what the shape and size of evolutionary organisations might look like. Leadership coaches can help leaders think more radically about how organisations are designed or allowed to evolve in response to emerging needs and opportunities.
  1. The strategic challenge of senior leadership in organisations is often about second-curve thinking – the what, when and how of initiating the next strategic shift or transformation. Leadership coaches play a valuable role in helping leaders access their deeper intuition and inner wisdom (in relationship to external data or signs) to successfully distinguish passing fads from paradigmatic shifts. They can also help them disidentify from ego-based attachments to the way the organisation has been in the past and let go of projects, products or ideas which are past their sell-by date.  Coaches can guide leaders to recognise when it might be time to empower others to step up to leadership roles or even take over from them.
  1. Second curve thinking also helps make sense of the interplay between our inner and outer lives. As coaches we can support leaders to separate out the inner and outer aspects of the challenges and crises they face. As human beings, we naturally make a series of S-curve shifts throughout our lives, for example from adolescence and dependence to adulthood and independence (although we seem to lack the rituals to mark these transitions). As described elsewhere on these pages, we can continue to make significant shifts in the way we see and relate with the world throughout our lives; for example, between egocentricity and responsibility; between dedication to an established way and finding your own path to success; between success-orientation and engagement with meaning, values and purpose.  Alongside these inner developments, leaders also make external shifts in their careers; sometimes between organisations, or between roles within organisations or even between professions and careers. Coaches can help leaders make sense of these inner and outer shifts and more consciously choose when to stay or go, whether to build or transition. As Handy reminds us, previous generations might have expected to stay in the same profession for their entire working lives; my generation expects to make have a multiplicity of careers during our working lives; some of the next generation is getting used to to portfolio working or multiple roles from day one.

Hope this post interests you in reading Handy’s book for yourself.

Best wishes