Management & Leadership Thoughts and Tips

"WHEN THERE IS A PARADIGM SHIFT, WE ALL GO BACK TO… ZERO"

I believe we must come to terms with a new wave of corporate reality that is sweeping the world, we are truly in a global paradigm shift and there is, no way to uncouple ourselves from events in other countries as the US mortgage crisis has aptly demonstrated. For business (and workers) if new ways of operating traditional organizations are not found (someone please tell the bankers) and our organization is still linked to old market strategies many more will fail and possibility at a rate that will make lemmings look like long-term survivors. Some 'western' organizations (though not all) understand this, however many Asian organizations are still struggling with this concept.

The reason for my concern is two-fold. For approximately twenty-five years I worked for a number of Australian finance companies. Early on in my career the Australian Government deregulated the banking industry. This was a major paradigm shift for the financiers (most of whom were bank owned) and the difficulties caused by increased competition squeezed margins (over a relatively short period) to the point where the whole industry was no longer viable. Today this industry no longer exists. Sure the recessions of the mid seventies, early and late eighties helped put the nails in the coffin however it was a paradigm shift that killed what had been a highly profitable business model.

The second experience is more current. For a period I worked as a contract consultant for a major international telecoms equipment supplier. This industry was/is also struggling with global deregulation and a redefining of its place in the world as the demarcation lines between the telecommunications and computer industries become blurred. Rapid technological advances and ever changing market preferences add to this industry’s woes. As an small example engineers in this organization often complain that they get paid less than their Information Technology colleagues.

THE NEED TO BE MORE ENTREPRENEURIAL

The chief executive of the telecommunications company, recently stated that the most successful division in their organization achieved its outstanding results because it’s ‘managers’ took an ‘entrepreneurial’ approach to business. He went on to say that all divisions of the organization would need to become more entrepreneurial if their organization was to survive, let alone remain a leader.

One author of a book on entrepreneurship goes so far as to predict that mangers will all but disappear from organizations and be replaced by ‘leaders’ that are able to manage ever-increasing rates of change and be nimble enough to capture fleeting market opportunities.

Corporate Japan’s decade or more troubles (to mention but one) are thought buy many analysts to be the result of the fact that no further productivity increases can be found in what are already highly efficient production processes. Future productivity increases will only be achieved if Japan is able to find and grasp new and different opportunities rather than continue to do the ‘same things’ better. The current crop of Japanese managers, to be honest, are not renowned for their creativity and willingness to change. Take a look at Japan’s banking industry and you will know what I mean.

If, as the growing evidence suggests, we all need more entrepreneurial ‘managers’, how many of these key players in the future success of our organization understand what an entrepreneur is, let alone, know how to be entrepreneurial in their approach to work. Try this at your next management meeting, ask your managers to write down a definition of an entrepreneur, then (if my past experience is any guide) you will need to resist the temptation to leap out the nearest window.

DEFINITION OF AN ENTREPRENEUR

Someone with the ability and willingness to introduce NEW products or services, THAT SELL, to a market where those products or services where previously either unavailable or not desired.

CHARACTERISTICS OF AN ENTREPRENEUR

Risk taker that can live with uncertainty; adaptable to change and able to improvise; can see how new innovations satisfy a market; interested in effectiveness rather than efficiency; either creative him/herself or able to utilise those who are; has a desire to lead in his/her area of operation or market; a continuous learner willing to make and or tolerate mistakes; flexible, willing to change direction as the circumstances dictate; self possessed of a sense of urgency and stimulates that sense in others; recognises his/her shortcomings and empowers others who compensate. (adapted from Mitch Mcrimmon)

WHAT ABOUT THE STAFF

The basic idea of inverting the organizational pyramid has been talked about by many (i.e. Ken Blanchard) and it is perhaps a good way to demonstrate why we need more self-reliant, better trained, empowered, responsibility accepting staff.

OLD DAYS/GOOD DAYS/MONOPOLIES/LESS COMPETITION/LESS EXPECTANT CUSTOMERS

Boss [responsibility & decisions stay at the top]

Middle Management

Staff Staff Staff Staff Staff [responsiveness & support stay at the bottom]

Customers Customers Customers

TODAY/TOUGHER COMPETITION/GLOBALIZATION/MORE CHOICES/EDUCATED AND EXPECTANT CUSTOMERS

Customers Customers Customers

Staff Staff Staff Staff Staff [responsibility & decisions stay at the top]

Middle Management

Boss [responsiveness & support stay at the bottom]

WHY INVERT THE PYRAMID

Tradition has built the pyramid based on early military and bureaucratic structures where the power was with an elite group at the top. In this system the customer (enemy in the case of the military) only received what they were seeking at the whim of the people at the top. For example, not too far in the past if you wanted a telephone connection (in most countries) it could take weeks, or even months before the connection was made. A great example of a modern ‘power at the top’ based monopoly is the visa section of any embassy you wish to visit. The misuse of power, the lack of interest in the ‘customer’ and the long lines of frustrated ‘victims’ bear testimony to the shortcomings of all-powerful bureaucratic organizations.

If however alternative choices are available the power over the organization rapidly shifts to the receiver of products or services and away from the providers. Two great examples of this reality are the telecommunications and banking industries. As these industries have been deregulated, providing the customer with the power to choose, the management and staff of these industries have had to find new technologies, systems and of course methods of structuring themselves to maintain their market share.

The constant struggle for those of us working in rapidly changing markets is:

For the staff that deals face to face with this powerful ‘new’ customer the struggle has been (and still is) to expand their knowledge to be able to effectively deal with their customer’s ever increasing demands. Organizations need to provide customers with rational decisions on ‘problems’ in the shortest possible time. This has forced a process of empowerment or the need for individuals to take responsibility for their own performance (success) as well as their company’s success. In some corporate, or even national cultures is quite a challenge.

For the middle management that has time, money, status, careers, success, knowledge and their power based in the system as it was, the great challenge is to overcome their fear of change. For many of these people, being good at working the system has led to their success. In the future being good at doing business with the most important person in the equation… “The Customer”… will be the only basis for continued employment.

Senior management’s role is still to provide vision, mission, purpose and values however it is impossible for them to be ‘the technical expert’ or even the operational decision makers. The levels of service demanded by the powerful new customers make it impossible to operate effectively with only a few top decision makers.

A STORY OF LOST OPPORTUNITY

I was sitting with a chief executive of an organization that mentioned that a company to whom I occasionally consult had lost a major piece of his business. I asked why this had occurred and he advised that the staff member and middle manager he had dealt with where unwilling to negotiate on several key areas of the business. Having dealt with the particular middle manager and his senior executives (including the general manager of the organization) I was interested to find out what had gone wrong. On a review of the file by the senior executive (who became quite angered at the loss) it was found that the business was very much what they would have wanted and that if the seniors had have known about the deal and been able to intervene and 1.2 million dollars of profitable business could have been easily won.

The point is that it is impossible in traditional organizations where old style bosses are the only ones trained enough to take responsibility for critical business decisions NOT to miss many great business opportunities. The lesson for us all is that we have to prioritise issues of effective recruitment, competence development and the building/training/inspiring of effective business getting, customer driven employees… who know enough and care enough to do the right things automatically. The person who had lost the deal really did not care because he saw himself as a worker just doing what he was paid to do… send out quotes and accept orders. To make it worse his title was “sales manager”.

Those managers (leaders?) who won’t or can’t change to the new business reality face at best a bleak future in ever disappearing lowly paid manual labour, crumbling old economy bureaucracies or even worse perhaps a career in the public service, where they just might be able to hide for a few more years.

(R I S Townsend – Corporate Learning Consultant - www.orglearn.org)