In today’s rapidly evolving business world, a multitude of forces are converging—shifting how we work and lead. Technology and mobility inform real-time decisions and allow us to share information in ways never before possible. Meanwhile, Generation Y professionals have been promoted into senior management, and their expectations of business and life are vastly different than those of their Gen X and Baby Boomer bosses. Clearly, organizations are changing. Yet management of these organizations and their employees is not—and it’s showing. We are prisoners of the traditional way of working. It’s time to break free and find a better way forward.
Management was invented in and for the industrial era, and it has thrived for more than 100 years. But today’s organizations look nothing like the Ford Motor Company of the 1900s, which required automation and vertical integration on a massive scale. Industrial-age organizations were formal hierarchies that assigned specific roles to employees. The power was in the hands of managers, who governed by planning, organizing, and controlling work. Over-engineered, top-down, command-and-control management is no longer effective; neither is managing for short-term financial goals.
What’s the alternative solution? Purpose-driven management. It’s a different approach to defining objectives, focused on a longer-term, values-based vision for both the organization and its people. Think of it as a “third way”: not conventional, yet not radically different for modern managers. Simply put, organizations that don’t involve their people in figuring out how best to achieve the company’s purpose—and how their role contributes to it—will struggle to get their employees to bring their minds to work and go beyond the minimum. And that’s critical, particularly considering that nearly 70 percent of U.S. workers are not engaged or enthusiastic about work, according to a new Gallup poll.
At the heart of a successful organization are individuals who choose to bring their whole self to work. If you just do what you’re told, the organization will never get as much out of you as when you are inspired by your work. Getting employees more engaged is vital. We want and need highly engaged employees, and the best way of doing that is to think about the organization—the structure, the culture—and essentially figure out ways to lighten the bureaucratic load.
A Framework for Reinventing Management
Reinventing management requires a transition from “same as it ever was” toward more meaningful methods of engaging and empowering. The framework involves a healthy balance between traditional and alternative principles for coordinating activities, making decisions, motivating people, and defining objectives.
Relinquish some control. A certain level of bureaucracy is necessary to run an effective organization, but often, organizations get bogged down in it. Developing what we call emergence —within your team and organization—is important, and it can be done in several ways. Start by reviewing processes and procedures, and eliminate unnecessary steps. Ask for feedback—and incorporate it. Share as much information as possible. Empower your people. These efforts all contribute toward building a culture of trust.
Promote collective wisdom. Some level of hierarchy is essential for most organizations to function. However, we must recognize that 90 percent of good ideas don’t come from the executive suite. It’s not the senior leader’s job to have all the answers; it’s his or her job to create a context where others have confidence to assert their ideas and solutions. The principle of collective wisdom generates an environment of trust that encourages your team to communicate with one another and speak freely without fear of judgment. This spurs creativity and collaborative decision-making. Leverage social networking tools—blogs, intranet forums—for knowledge sharing.
Move beyond financial performance. In many situations, goals are best achieved indirectly. By pursuing a higher-order goal, such as improving the lives of their customers or investing in the communities in which they work, many companies have ended up making greater profits than they might have done if they had focused directly on financial goals. This requires establishing a clear mission and then giving flexibility in working toward that mission. One approach, famously used by Google, is offering dedicated time during the work week to “follow hunches.” You and team members should review these projects regularly, backing those that exhibit the strongest potential.
Motivate in varied ways. Every person is inspired and encouraged by different things; it’s important to understand what motivates him or her individually and then leverage a combination of extrinsic and intrinsic motivators. Where possible, allow people to craft their jobs to suit their strengths and give them a say, when appropriate, in organizational decision-making.
It takes courage to break free from the command-and-control mandate of our industrial forefathers, but our organizations are more resilient than we believe. The reality is they’re not china shops. It’s essential to take risks and invest in change. In the words of Mark Twain, “Sail away from the harbor.” But perhaps the biggest part of this paradigm shift is remembering that people are the product, and reinventing management requires redefining our perspective about employees. They’re not simply hired hands. We can’t retain people, but we can attract them, and inspire and support them. We can enable them to learn and give them opportunities to develop. If we change our thinking and our approach, we’ll deliver on purpose—and on our promise to shareholders and stakeholders alike, now and well into the future.
Julian Birkinshaw is a professor of Strategy and Entrepreneurship, Chair Strategy, and Entrepreneurship Faculty at London Business School. His main area of expertise is in the strategy and organization of large corporations—specifically subsidiary headquarters relationships, corporate entrepreneurship, innovation, the changing role of corporate headquarters, organization design, and knowledge management.
Richard Jolly is an adjunct professor of Organizational Behavior who teaches at London Business School’s “Leading Change Program” and “Senior Executive Program.” He focuses on courses that cover managing change, power, and politics. Jolly’s primary consultancy interests are designing and delivering executive development workshops; coaching senior managers; and facilitating senior management teams, with an emphasis on leadership and change management agendas.