Given a continuing climate of austerity, uncertainty and international competition, most executives are under pressure to improve their organisations through costs, productivity or revenues.
The focus for change has primarily been in how we operate: our business and operational processes. Over the years we have had waves of change including process re-engineering, outsourcing and, more recently, lean thinking. We are running out of ways to cut or optimise our operational processes, yet we still need to position ourselves for the future.
Can we make significant improvements another way: a way that involves a different type of answer? We know that our culture, our people, their behaviour and ultimately the organisation’s productivity are affected by how we manage. What if we turn our attention away from how we operate, towards how we manage?
How we manage has changed little
How we manage has changed little in the last 20 years. The 70’s and 80’s saw the introduction of structured strategy, planning and management. The 90’s saw a dramatic increase in the information available to make decisions, through analytical tools, business intelligence, and data mining. The dot.com revolution brought about superficial changes, but wearing casual clothes, installing soft cushions and playing table football did not substantially change how we managed. Despite the clothes, a manager from twenty years ago would still recognise what we do.
In the same time we have seen radical changes with the Internet, social media, technology, and the way we now engage individuals, rather than markets. We have a new generation of people coming through to the workforce: a generation exposed to the internet revolution & social media explosion, who expect greater connectivity and interaction. They want to work differently and be treated differently. Yet, we have not seen a radical change in how we manage our organisations, resources and our people.
Changing how we manage
Some time ago a Chief Executive in one of my workshops zoned out for a while. When her thoughts returned to the room I asked her what she was thinking about. She said, “It was when you said ‘It is what we believe about how we manage that matters’. I realised that how I manage today does not reflect how I feel about people and how I feel I should manage.”
That Chief Executive was starting to think about the assumptions she held about how she managed her people and her organisation. She was thinking about the beliefs that underpin how she managed, the assumptions they contain, the ‘best practice’ she had learnt. She was starting to make a significant shift in her thinking.
Examples of new management thinking
She is not alone in looking afresh at how she manages. Management writers are describing the alternative ways in which some executives are managing their organisations. The author Gary Hamel calls this Management 2.0. Julian Birkinshaw of London Business School refers to “Reinventing management”. Both cite examples of where management practices are moving away from the accepted norms and good practice is being reinvented.
You might call this ‘management process re-engineering’ but I do not think this is a significant enough shift. It suggests only improvements to existing processes, rather than the step changes that some have taken. We need to address the beliefs, culture and behaviours that underpin how we manage and perform: the culture of management and performance.
Shifts in how we manage.
Amongst the many shifts we are seeing, I want to highlight just three examples:
1) Sometimes executives realise they need to re-invent their organisation. One management team I worked with decided that the only way to respond to market changes was to discard their successful business model: to create a new one that would see them through the next ten years. In doing so they completely changed their organisation’s structure, delegation, roles and methods of working, and recognised that not all their staff would make the journey.
2) In response to continuing uncertainty, a management team shifted away from annual strategy, plans, budgets and personal objectives towards a continuous, rolling process. They recognised that even they could be wrong, or their strategy would become out of date. They recognised that they needed to execute quickly, and use the opportunity to learn, refine and correct as they went along.
3) Sometimes it is about going back to basic principles. In a National charity with £400m income, we found that the management systems, rather than empowering the managers, unintentionally removed authority and responsibility. We applied four simple principles that support effective decisions and that helped them to free up these blocked managers. Going back to first principles uncovered the solution.
As executives and managers, operating in a climate of austerity, uncertainty and competition, we can still position ourselves for the future. There is an alternative to yet more cost cutting and process improvements. If we challenge our existing approaches and reinvent how we manage, we can improve the culture we create and therefore the effectiveness of our people and our organisations.
To achieve this reinvention, we have to focus on the beliefs and behaviours that underpin how we think we should manage; first challenging our own beliefs and behaviours, then challenging those of our people. When you change beliefs and behaviours, all else follows.
The prize is available and some have already taken it. One executive describing how they worked put it elegantly, “This is how we should manage in the second decade of the 21st Century”. To understand more, have a read of our Fourth Generation Strategic Balanced Scoreacrd Approach
To find our more about re-inventing management and improving your organisation’s performance, Get it touch.