Business Innovation Opportunities and the 7 Toxic Beliefs in Management
Back from the MIXMashup in New York City where I had the great pleasure to experience a collective Re-Programming on how management is done. Opened by Professor Gery Hamel: „This is a conference from the vanguard, by the vanguard, with the vanguard”. Here’s the bad news upfront: Forget about what you learned in Business School.
And change cannot be engineered. The good news: Organizations are about to be reinvented for human beings. And new management models are converging work at a global tipping point. What is in for you? You don’t need to be an Apple, Zappos or Y Combinator, every Organization is able to do the transformation into a purposeful organization.
In times of digital disruption, where the speed of innovation is getting faster every day, the most critical resources for any organization are information, ideas and talent. And the management models from the industrial age seem to reach their limits as study findings – also referred to as “The Shame of Management” revealed: Only 13% of employees are engaged at work. The question arises: How does a company think to stay relevant, when their employees are disengaged and kept into their box as a unit of production? The MixMashup unleashed a new wave of – mind shifting – management practices, where people in an organization are not any more considered as human resources but resourceful humans.
Corporate Strategy: Innovation on the Wrong Axis
Challenged by the globalized digital marketplace, corporations are confronted with saturated markets and decreasing market shares. Research data by McKinsey has shown, that in 90% of the cases the lost shares could not be made up. So when it comes to corporate strategy, companies are often focused on efficiency, that they are blind to effectiveness. An important question every manager should ask: How much money do you invest to higher the clock speed compared to new markets and product innovation. And what outcome is more predictable? With that in mind a new field of innovation opportunities are arising from the What to the How (Graphic by strategiemakers).
An illustrative example came from Vineet Nayar with HCL Technologies, where he had to make a decision in the event of an arising economic downturn: To save costs by letting people go, or to activate the employees in finding solutions to significantly outplay the market by turning the hierarchical pyramid upside down by making management accountable to the employees, and not the other way around.
An Organization built on Trust
A key driver to transform into a human-centric organization is building trust through transparency: “Pushing the envelope of transparency. It is not about how…you are. It is about how others perceive you”. An important element that was consistently shared by John Bunch from Zappos, Jay Simons from Atlassian and Mário Kaphan from Vargas.com: The management processes must reflect your views. If your core values build on trust, every document, every meeting minute and every discussion should therefore be shared with the employees as a consequent behavior.
“Control is good, but trust the future.”
– Kelly Max, Haufe
Zappos for example uses technology to store and track tactical & governance meeting results. A Value Based organization can start with a constitution as a starting point to roll out. Zappos for examples has the strong believe, that if employees follow the core values it will be all right.
The No-Management Leadership
And is even saying goodbye to bosses with no job titles, no managers, no hierarchy. Redefining the role of the management as a liberating act. Vineet Nayar for example defined his new leading role as the “Head of the I don’t Know Department: “’I don’t know’ enables those ‘who do’ to volunteer and help”. In the No-Management organization the time for command and control is used to win the best talents with shared values, to enthusiast, encourage and enable employees.
— Jay Goldman (@jaygoldman) 19. November 2014
A paradigm shift in teaching managers – not to solve their teams problems, but to empower them. Give employees skills to solve their problems; not playing hero may feel awkward, but will ensure success.
Self-management Organizational Structures
Some readers might think now, yes – for those technology freaks this ‘kind of approach’ might turn out well, but you don’t know us: We are a serious organization. Frederic Laloux researched the question. Can the pioneers provide not just inspiration, but a template for those aspiring to create more soulful types of organizations? His answer, clearly, is positive. These pioneer organizations didn’t know about each other and experimented on their own; they work in radically different sectors and locations; some have hundreds, others tens of thousands, of employees. Despite all this, they have – after much trial and error – come up with strikingly similar structures and practices.
In his book Reinventing Organizations. He identified patterns the pioneers are having in common and explained, how every time humanity has shifted to a new stage of consciousness, it has also invented a radically more productive organizational model. After Laloux three archetypes of self-organization corporates structures are emerging:
- Small autonomous parallel teams
Buurtzorg’s is a case for the new coherent organizational model, where 7’000 nurses are clustered in hundreds of teams of 10 to 12 colleagues.
- Networked nodes as a web of individual contracting
Morning Star is an example of a company that is built on individual freedom, with the expectation that employees would take responsibility for holding their peers accountable and address performance failures directly.
- Concentric circles with Nested teams
Holacracy is a self-management approach first pioneered at Ternary Software, a Philadelphia- based company, which has now turned into a fully documented operating model. A Holcracy Pionieer is Zappos, that has engaged over 75% of the company by now into a transition to self organization.
The more complex an organization, the more the need to skip hierarchy for distributed leadership. No hierarchy management doesn’t mean the end of hierarchy, but the end of power hierarchies. Hierarchy cannot cope with truly complex systems. The solution is coordinating systems and processes. Not a boss!
Self-management does not mean that there are no rules or procedures
In self-managed organizations you need to have clear paths for decision-making, ways of resolving conflicts and clarity of roles. And the Know-how to do meetings, organize information flows, collaborative strategic planning, participative Goal-setting, value-based budgeting and success metrics.
In the next post we will dive deeper into the self- management governing models, practices and systems.
Contribute to the discussion by sharing your thoughts on what the most dangerous beliefs in management are by using the #mixmashup in your tweet. This is mine:
— Patrick Hofer (@hoferlink) 24. November 2014