wisdom to win

 Wisdom to Win
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Charles Handy, The Empty Raincoat (1994)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

 Charles Handy, The Empty Raincoat (1994)

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?

 Charles Handy, The Empty Raincoat (1994)

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.

 Charles Handy, The Empty Raincoat (1994)

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

 Charles Handy, The Empty Raincoat (1994)

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.

 Charles Handy, The Empty Raincoat (1994)

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:

  • do things for themselves.

  • become self-employed.

 Charles Handy, The Empty Raincoat (1994)

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.

 Charles Handy, The Empty Raincoat (1994)

6. The Paradox of Organizations

Successful organizations are a mixture of opposites:

  • global and local. 

  • teamwork and individual autonomy.

  • centralization and decentralization of decision making.

  • delegation and control.

  • quality and low cost production.  


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.Charles Handy, The Empty Raincoat (1994)


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

 Charles Handy, The Empty Raincoat (1994)

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 PrincipleCharles Handy, The Empty Raincoat (1994)

For organizations:

  • the doughnut's core is filled with essential full-time people.  

  • the outer space  has part-time and temporary employees and outside contractors.

For individuals a balance must be found between

  • work control and targets (the core) and  

  • freedom ( empowerment and autonomy, the outer space).


3. The Chinese Contract

A mutual, win-win agreement voluntarily enforced by trust, understanding and compromise.Charles Handy, The Empty Raincoat (1994)

Compromise is particularly important for:

  • choosing between two rights (like work and family).

  • sacrificing one principle for a greater principle

  • balancing idealism with pragmatism.

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). Charles Handy, The Empty Raincoat (1994)
  • 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.
  • corporate culture.

 Charles Handy, The Empty Raincoat (1994)

5. The Corporate Contract

This is based on making profits for shareholders by satisfying other stakeholders like customers, employees, suppliers and environmental groups.



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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