Modern business leaders are facing employees and customers who demand engagement, transparency and responsibility. One billion people are now on Facebook, and 500m Tweets are sent everyday. Customers don’t want to be sold to; they want to connect with your brand and play a role in the development, sales and marketing of your products. If we ever thought we had control over business, it’s definitely gone now.
All of this presents a completely new challenge for how we think about and practice management. Organisations of the future are neither consensus driven nor top down. They aren’t dictatorships, nor are they anarchies. They’re not merely occupied with increasing shareholder value or making their people happy. Leaders of the future know that the two go together, and that happy and productive workforces are not about team building exercises or lucrative benefit packages but about creating a working environment that offers purpose, mastery, challenge and autonomy.
Take the simple hypothesis that employees will work harder for more money. This of course is the reason why most companies have cascaded their corporate strategy down throughout their organisation in the form of Key Performance Indicators (KPIs) linked to bonuses. However, in research conducted by London Business School, respondents ranked financial remuneration as seventh most important – after factors such as “working with good colleagues” and “independence” – in the answer to “When thinking about a job, how important is each of the following factors to you, as something you value?”.
This is despite the millions that are poured into leadership development, training and communication initiatives every year. A Learning & Development manager (who shall remain nameless) illustrated the problem well; when discussing how to enhance learning in their senior executive leadership development programme, he responded: “But we don’t want these leaders to do anything differently or change anything. We just want them to get some ideas.” For £27m? Unbelievable!
Organisations of the future need to operate as living systems that are interconnected and interdependent, and capable of responding to constantly changing environments. The role of the leader is to inspire greatness, not control or manage through KPIs. Likewise, the approach to strategic innovation and problem solving is participatory, not top down. Co-creation, dealing with ambiguity and uncertainty, and non-hierarchical networks are all key to making this work.
Rethinking management is not about promoting the latest fad, repackaging an old concept or ignoring all the great work that has been done in this field up until now. It’s about taking a good look at the needs of today’s and tomorrow’s diverse set of employees, customers and other stakeholders.
Businesses with higher employee engagement rates show on average 12 per cent higher customer advocacy, 18 per cent higher productivity and 12 per cent higher profitability. Isn’t it time you kicked your organisation into the 21st Century?
Therese S. Kinal is the CEO and co-founder of Unleash. She is the co-author of “Unleashing: The Future of Work”.