Does your management model limit performance?

As business leaders, we must find ways to deliver consistently profitable results in rapidly mutating markets. The changing business environment – the ecosystem – to which we must adapt, requires us to develop agile, high performance teams.

The Darwinian Imperative applies to our “living business” just as it does to all other living things: Evolve in response to the rapidly evolving ecosystem or perish! Blockbuster and Borders are two, high visibility examples of slow, inept responses to morphing markets driven by disruptive technologies that permanently changed their ecosystem.

In our gallant efforts to successfully deal with the chaos, frustration and overwhelm, we round up all the “usual suspects.” We focus on various aspects of our business model. We may create new strategies, or streamline our organization’s structure, or develop new products or overhaul our processes and systems. But most of us don’t examine our management model!

We define management as the technology of human accomplishment and leadership as the art of influencing human behavior (without coercion). The traditional management model evolved over the last 100+ years for the efficient control of large-scale, complex enterprises. It emphasized standardization, specialization, hierarchy, alignment and conformance. “Management 1.0” was successful beyond our wildest imagination; it created more wealth per capita than the world had ever known.

When well done, Management 1.0 produces a very reliable and predictable organizational culture. Everyone knows their job and the limits of their authority. Note: the purpose of an organization’s culture is to preserve the status quo. It insures that everyone will do today what worked yesterday. It provides stability to its operating model.

But Management 1.0 is “so last century!” Back then, the big fish ate the small fish. Now the fast fish eat the slow fish! Organizational size is nearly irrelevant. Only those organizations that can quickly adapt to morphing markets driven by disruptive technologies will survive. Only those survivors who are lead by agile, high performance teams successful in anticipating the change in the evolving ecosystem will thrive.

Management 2.0 is “this century!” While the attributes that will define Management 2.0 are rapidly evolving, at this time, they are very amorphous. The leading academic thinkers in the theory of management and leadership, individuals such as Gary Hamel (author of the “Future of Management.”), are utilizing crowd sourcing methods on the internet to identify and organize the network of ideas that will provide Management 2.0 with its recognizable shape and identity.

This much is now clear: the ultimate collection of attributes that defines Management 2.0 will include a strong focus on the organization’s culture. The culture is “the employee’s most successful way of thinking, feeling and behaving.” Without fully engaged employees who enthusiastically deliver a consistent customer experience that creates repeat business, strategy is worthless. There is no strategy so brilliant that cultural inertia cannot render it worthless! Several years ago, Peter Drucker recognized this when he said “Culture eats strategy for breakfast!”

While Management 1.0 was organized around a Command & Control paradigm, Management 2.0 is organized around a Values & Priorities paradigm. Management 2.0 denotes a more fluid, less static culture; one characterized by a continuous flow of information. An organization’s agility is proportional to its ability to make timely and profitable decisions at (or near) the customer interface. An organization’s performance is proportional to the speed with which “bad news” safely and accurately flows from the customer interface to senior management (those farthermost removed from the customer.)

Gary Hamel’s research indicates that “activities will still need to be coordinated, individual efforts aligned, objectives decided upon, knowledge disseminated, and resources allocated, but increasingly this work will be distributed out to the periphery”. Our experience in introducing Management 2.0 concepts into organization is consistent with his research and experience.
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