Most companies operating in mature markets have similar
value chains with limited sources of competitiveness – in these markets the
employees become the key differentiating factor. Unfortunately many companies
are experiencing that traditional models of motivation, such as financial
reward and personal achievement is suffering in the post financial crisis era.
The misalignment between the organisational goals of corporations and the
individual aspirations is increasing. Business performance, risk management,
efficiency, cost control, uniformity, lean is colliding with greater autonomy,
variety, meaning, challenge and growth.
“Management is undoubtedly
one of humankind’s biggest inventions“ Gary Hamel
A large group of employees are satisfied and stay with the
corporation but they are not inspired to go the extra mile and create
productivity gains. Gallup and other organisations have demonstrated a significant
performance gap between engaged and disengaged employees. This is now making
corporations increasingly interested in Employee Engagement.
As Employee Engagement is often seen as tactical task, is
becomes the ownership of the HR department that has to fix the issue with
Compensation & Benefits, Training and Recruitment peppered with some
leadership training of middle managers. This is ignoring that most people, be
it customers, employees and other stakeholders distrust and are demotivated by
the current mainstream management philosophy.
Gary Hamel together with other prominent thinkers and business
leaders has outlined 25 points that needs to be addressed in order for corporations
to evolve to management 2.0:
Management 2.0
1: Ensure that the
work of management serves a higher purpose. Management, both in theory and
practice, must orient itself to the achievement of noble, socially significant
goals.
2: Fully embed the
ideas of community and citizenship in management systems. There’s a need
for processes and practices that reflect the interdependence of all stakeholder
groups.
3: Reconstruct
management’s philosophical foundations. To build organizations that are
more than merely efficient, we will need to draw lessons from such fields as
biology, political science, and theology.
4: Eliminate the
pathologies of formal hierarchy. There are advantages to natural
hierarchies, where power flows up from the bottom and leaders emerge instead of
being appointed.
5: Reduce fear and
increase trust. Mistrust and fear are toxic to innovation and engagement
and must be wrung out of tomorrow’s management systems.
6: Reinvent the means
of control. To transcend the discipline-versus-freedom trade-off, control
systems will have to encourage control from within rather than constraints from
without.
7: Redefine the work
of leadership. The notion of the
leader as a heroic decision maker is untenable. Leaders must be recast as
social-systems architects who enable innovation and collaboration.
8: Expand and exploit
diversity. We must create a management system that values diversity,
disagreement, and divergence as much as conformance, consensus, and cohesion.
9: Reinvent strategy
making as an emergent process. In a turbulent world, strategy making must
reflect the biological principles of variety, selection, and retention.
10: De-structure and
disaggregate the organization. To become more adaptable and innovative,
large entities must be disaggregated into smaller, more malleable units.
11: Dramatically
reduce the pull of the past. Existing management systems often mindlessly
reinforce the status quo. In the future, they must facilitate innovation and
change.
12: Share the work of
setting direction. To engender commitment, the responsibility for goal
setting must be distributed through a process in which share of voice is a
function of insight, not power.
13: Develop holistic
performance measures. Existing performance metrics must be recast, since
they give inadequate attention to the critical human capabilities that drive
success in the creative economy.
14: Stretch executive
time frames and perspectives. We need to discover alternatives to
compensation and reward systems that encourage managers to sacrifice long-term
goals for short-term gains.
15: Create a
democracy of information. Companies need information systems that equip
every employee to act in the interests of the entire enterprise.
16: Empower the
renegades and disarm the reactionaries. Management systems must give more
power to employees whose emotional equity is invested in the future rather than
the past.
17: Expand the scope
of employee autonomy. Management systems must be redesigned to facilitate
grassroots initiatives and local experimentation.
18: Create internal
markets for ideas, talent, and resources. Markets are better than
hierarchies at allocating resources, and companies’ resource allocation
processes need to reflect this fact.
19: Depoliticize
decision making. Decision processes must be free of positional biases and
should exploit the collective wisdom of the entire organization and beyond.
20: Better optimize
trade-offs. Management systems tend to force either-or-choices. What’s needed are hybrid systems that subtly optimize
key trade-offs.
21: Further unleash
human imagination. Much is known about what engenders human creativity.
This knowledge must be better applied in the design of management systems.
22: Enable
communities of passion. To maximize employee engagement, management systems
must facilitate the formation of self-defining communities of passion.
23: Retool management
for an open world. Value-creating networks often transcend the firm’s
boundaries and can render traditional power-based management tools ineffective.
New management tools are needed for building and shaping complex ecosystems.
New management tools are needed for building and shaping complex ecosystems.
24: Humanize the
language and practice of business. Tomorrow’s management systems must give
as much credence to such timeless human ideals as beauty, justice, and
community as they do to the traditional goals of efficiency, advantage, and
profit.
25: Retrain
managerial minds. Managers’ deductive and analytical skills must be
complemented by conceptual and systems-thinking skills.
This is undoubtedly a significant challenge for most
corporations. However it is becoming obvious that the old models are not
sustainable anymore. A new management model that creates engagement in all stakeholder
groups can significantly disrupt existing large companies and markets.
Who dares to start?
