Discussions during 7th Global Peter Drucker Forum and report prepared by Learning Consortium for Creative Economy give quite a consistent picture of how companies should operate, if they want to survive in the VUCA-world (Volatile, Uncertain, Complex and Ambiguous).
It is rather different from actions that the majority of executives and HR professionals are currently proud of.
Here’s a list of qualities/actions that decide and will decide upon the business competitive advantage – they are also pretty consistent with our (GFMP) demands for radical change in management.
- Stability within the company is provided by true company’s culture and values and by the sense that company’s existence has sense, not only for shareholders, but also for society, for the environment. And, despite a large number of training and consulting companies referring more or less importunately to values, despite a large number of culture change initiatives conducted in companies, despite of hectoliters of ink used to print all these beautiful posters, there is still a wasteland in this matter in many companies. Take for instance quite a fresh story of an advisor from one of the largest international banks in Poland that gave kid a toy, but took it quickly away, as kid’s parents didn’t want to sign the contract for a credit card. Bank highlights that it’s against “the existing values”, but people commenting this event notice that, on the contrary, as the bank’s only existing value is profit. But who would worry about child’s tears? And the last CIPD research on this matter reveals that 30% of managers, though last scandals are fresh in their minds, still don’t see a problem in rewarding people with high results, despite of the values they follow. But no worries, a couple of scandals more, and worthless and valueless companies won’t be able to pay even for the posters covering this dull reality.
- With stability in its culture, company doesn’t have to seek it in bureaucracy, procedures or structures. There are no 360-degree assessments or HR policies in Saatchi&Saatchi – because, according to its CEO, Kevin Roberts, it is exactly what stifles companies and hinders their ability to establish relations with their customers. Similar situation is in Spotify: “if you want to know, who exactly should make a decision, or to whom you should report , you better find another company.” Unfortunately, in many companies, saying: “forget about 360-degree assessments” causes nervous fidgeting on a chair. As if there was an old cupboard in the middle of the room, dilapidated and eaten by woodworms, and everyone were constantly stumbling against it and cursing it, but at the very moment, when somebody suggests to put it into the garbage, suddenly this cupboard, though it barely stands on its own, becomes the most valuable piece of furniture in the house, the one that we can’t imagine our lives without.
- And yes, it’s true, that everyone in such companies is busy, but they are aware of the purpose of their work. There is no rushing from one meeting to another, because there are not many meetings in that worst corporate meaning. Taking any new activities is preceded by a question – whether they will serve our customer? It cuts away a lot of unnecessary tasks from everyday errands.
- The superior goal of such company is delighting its customers – and making money is only a result of doing so. All work is coordinated around the customer, not around particular interests of various departments. Everyone is clear that their main task is to provide added value to the customer and an innovation that will delight him/her (again: customer first, not CFO). Everyone is clear (and this is a huge task for managers), how their work contributes to it. Therefore, company and all its employees should be around the customer all the time. Unfortunately, for many, both managers and employees, customers are still mythical creatures, that take away all satisfaction from work.
- Executives and managers of such companies are interested in mindset changing (including their own), not in implementing tools. SCRUM and agile methodology? Certainly, they function to some extent in such companies. But they don’t apply all methodological assumptions 1:1, they don’t implement identical nomenclature and meetings with a pathological precision. They only make sure that these methodologies function in the entire company in a form of general rules, a philosophy. What matters, is developing such mindset in their people allows them to accept change as something common, not something that is unusual, that should be “managed”. Such companies have made a point several times that all certifications and titles are unnecessary, as instead of providing agility, they quickly hamper the company. Without the change of leaders’ mindset, and change of their managers’ and employees’ mindsets, no methodology will bring any noticeable results.
- These companies are not afraid to implement new technologies, but not always, not everywhere, not for cost-cutting. Technologies and tools are not fetishized. As in Menlo Innovations, where they make plans on a piece of paper, what brought the company a title of being „an Amish software developer.” It is opposite to what managers and HR professionals think, when they implement expensive tools and systems that not only don’t bring any added value, but also generate additional transactional costs
- Companies are not afraid to experiment – as, for instance HDFC, Indian bank that invests a little in different markets, observes results of these investments, and decides upon them to extend them or to withdraw them. It does not conduct large projects, there is no fear against “wasting company’s resources” either – companies as such operate on a rule of continuous reconfiguration, change is written in their DNAs. Their detectors are constantly up and they react faster to changes on the market. Spotify philosophy is: “we are the company that wants to make mistakes as soon as possible. The sooner we make them, the sooner we will learn, we will draw conclusions and we will make it right.” Philosophy I can observe in many companies is, unfortunately, quite different: “It’s better not to lean out.” Or “If it worked so far, why should we change it?” Or (my favorite): “We want to be innovative and to become a market leader, but… who has already implemented this solution?”
- Such companies are increasingly less frequently defined by industries, in which they operate. They rather seek the arena for their actions, at which they could satisfy customers’ needs and use the potential of their employees. As HDFC bank or Riot Games, company creating League of Legends, one of the largest net games, but also releasing music, creating special effects, organizing sports games.
If any company wants to be a number 1 in its industry, it should analyze very thoroughly the way Riot Games operates, as their superior value is exactly following the customer. Players want to feel the atmosphere of our game? We create music (two albums have become iTunes bestsellers), we create first-class special effects. Players like to watch others play and win in our game? We organize competition with 60 000 spectators, for which tickets sold out in 3 minutes. Players complain about the quality of our game, because their internet’s speed sucks? We build (for now in U.S.) a dedicated network, so we enter infrastructure industry.
Why should any CEO bother with a company that creates an internet computer game and the way that it’s being managed? Surely not much, as it’s just the internet, it’s not real. But it should bother him/her in every sense.
Well, the majority of CEOs should not get a proper sleep because of Riot Games
Because of this company, as for many similar ones that operate in that way, the industry has no longer any meaning – in this sense, it knows no boundaries (it has already entered music industry, special effects industry, sports games industry, as well as network infrastructure). Such companies follow customer’s needs, so if you don’t do that, my dear CEO, they could enter your backyard any time soon.
- Employees of these companies have great autonomy, they work in self-managing teams. What’s the point of employing the best of the best and then adjusting them to obligatory standards by micro-managing and control? None. Manager’s task is therefore: giving direction, building sense of purpose, enabling autonomous work, shaping conditions to advantage fully from employees’ talents and potentials. As in Haier Group, one of the largest manufacturing companies in China, within which exists a large number of micro-enterprises, diagnosing customers’ needs, creating products, testing them and implementing them on a larger scale with the help of the company.
- Manager must have an authority in the eyes of his/her employees. He or she has to deserve to be their leader. Sometimes he or she is even elected by his/her employees. His management style is not about inducing fear, but about developing employees’ potential, shaping their self-efficacy and creating appropriate work conditions for them. Kevin Roberts: “Hierarchies were wonderful 100 years ago. Now organizations should maximize their employees’ intelligence, not stifle it.”
And now some questions:
- Do you have a feeling that your company serves some bigger purpose than only money-making? Do you have the feeling that its existence and activity, in every meaning, are profitable for the society (and, we don’t mean corporate social responsibility)?
- Do you have a feeling that everyone in your company follows certain values that correspond with universal moral laws? Can this company’s culture be felt in its every corner, in each employee’s behavior?
- Does your company reduce and eliminate structures and processes? Does it try to reduce transactional costs?
- Do you have a feeling that your work has meaning? Do you have a feeling that tasks that you perform serve the specific result and the customer?
- Do you and your colleagues think every day about the consequences of your work for the customer and its adequacy considering his/her needs?
- Is there a belief in your company that technology should serve people, and not the other way around?
- Is it possible to experiment in your company, go beyond the standards, make mistakes?
- Do employees in your company have a great autonomy? Is there an absolute ban for micro-managing?
- Do managers deserve in the eyes of their employees to manage them?
If you answered negatively to most of the above questions, well, points of life are nearly over. Game over is near.
Photo: Suzie Tremmel, Flickr