Is your Organisation a Frog in a Slowly Heated Water?

Is your Organisation a Frog in a Slowly Heated Water?

Vlatka Hlupic 14/09/2018 5
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Many organisations today are like a frog in a slowly heated water. Unaware of the forthcoming danger, complacent, unwilling to change, shift to a better place, jump out of the increasingly dangerous hot water and move to safety. They are surfing on the edge of chaos - markets change faster and faster, unforeseen influences require quick adaptation, and changing demographics of the workforce demands different management practices. Many businesses are becoming global, helped by advances in connectivity and digitisation. This means that competitor profiles are constantly shifting and there is an increasing emphasis on innovation, cooperation and collaboration.

The management dogmas of the past do not serve their purpose anymore; it is time to adopt new thinking, take a different type of actions in organisations worldwide and make them more human and fit for purpose. Organisations and societies are better able to adapt by taking a path based on values, integrity, purpose, compassion, continuous innovation and the commitment to make a positive difference and safeguard the future for the young generations.

Continuous learning and innovation are becoming progressively more important for sustainable performance. Engaged employees who feel passionate about their work create innovative cultures, but can be held back by outdated management practices. Managers need to create the conditions for unleashing the power of human passion, wisdom and ingenuity. It is becoming apparent to CEOs, management thinkers and practitioners that we cannot use old solutions for new problems as we have never experienced such a magnitude of changes before. There is a dramatic need for a shift to new mindset, and new management practices, what I call 'The Management Shift'.

Many organisations, both in public and private sectors, need to make profound systemic changes not just to management practices, but to organisational cultures, business processes, regulatory frameworks, work arrangements and work ethics. Traditionally managed organisations resemble supertankers, difficult to respond to any sudden changes in their environment and difficult to change the course. Modern organisations should be managed and led as sailing boats - a general direction is to be determined, but the journey towards the destination should be flexible depending on the environmental conditions.

Management thinking has been traditionally influenced by scientific discoveries. Conventional management approaches have been based on the Newtonian machine model that focuses on hierarchical linearity, a culture based on rules, command and control and formal relationships. It is no more than a metaphor, and while such an approach might have worked well in predictable and stable environments when the objective was efficiency in the production economy, there is ample research evidence that in dynamic and complex business environments this traditional approach inhibits creativity and innovation and decreases motivation, engagement and productivity.

Management innovation is a greater potential source of competitive advantage than traditional innovations of products, services or technology[1]. Einstein’s insights into relativity have influenced other disciplines such as art, music, religion or literature at the beginning of the last century. The main paradigm was that rational and analytical were inseparable from emotional and intuitive, but this has not affected management thinking until recently. The main reason was 'if it is not broken, do not fix it' mantra. From 1950s traditional management model flourished with the wealth creation for industrial nations based on increasing productivity. Then, with all technological changes and increasing importance of knowledge, new business models emerged (such as Amazon.com), where talent, collaboration and innovation enabled faster commercialisation of ideas. However, embracing these new management approaches requires a shift in the mindset which is not easy to achieve, and majority of organisations today are still managed using conventional, Newtonian management approaches.

Not surprisingly, organisations, institutions and societies are now going through a major crisis. Performance continues to decline whether measured through Return on Assets or Return on Invested Capital; U.S. firm's Return on Assets has progressively dropped 75 percent since 1965, despite rising labour productivity[2]. The average life expectancy of Fortune 500 companies has steadily decreased from 75 to 15 years in the last 50 years. Furthermore, data shows that only 25 percent of the workforce is passionate about their work[3], despite the plethora of techniques and resources spent on Learning and Development (L&D) and global figures for engagement show that 80 percent of employees are less than fully engaged at work[4].

There is a cause to the above problems: outdated management paradigm and practices. And now we know that there is a solution to these problems - the new management paradigm and practices or 'The Management Shift' based on people, purpose, collaboration, trust, transparency, community and autonomy. Authority is distributed and decisions are made on the basis of knowledge rather than a formal position in organisational hierarchy[6] and organisations are managed holistically as complex adaptive systems. This approach brings better engagement, productivity, innovation and profit - this is the future of work and we can implement it now.

Organisations can try to keep the status quo and hope business as usual will work in the foreseeable future. This may mean that at some point it might be too late to jump out of the hot water. Or, alternatively, you and your organisation can shift now, get out of danger and embrace new ways of working that will bring sustainable success and create happier and more purposeful work places. The choice is yours!

References:  

[1] Hamel G. (2007), The Future of Management, Harvard Business School Publishing, Boston.

[2] http://ow.ly/7TeUE

[3] http://edgeperspectives.typepad.com/edge_perspectives/2010/11/2010-shift-index-passion-and-performance.html

[4] Hamel G. (2012), What Matters Now: How to Win in a World of Relentless Change, Ferocious Competition, and Unstoppable Innovation, Jossey-Bass, San Francisco.

[5] Hamel G. (2012), What Matters Now: How to Win in a World of Relentless Change, Ferocious Competition, and Unstoppable Innovation, Jossey-Bass, San Francisco.

[6] Amar A.D., Hentrich C.and Hlupic V. (2009), 'To Be a Better Leader, Give up Authority', Harvard Business Review, Vol. 87, No. 12, pp. 22-24.Business Review, Vol. 87, No. 12, pp. 22-24.

[7] Holland J. (2006), 'Studying Complex Adaptive Systems', Journal of Systems Science and Complexity, Vol. 19, No. 1, pp. 1-8.


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  • Jack Brookes

    The key takeaway is that one cannot manage change because change occurs beyond the boundary of management control.

  • Lucas Chamoun

    The system we live in doesn't want to help people develop their true talents and dreams, it just wants cogs in the machine.

  • Sean Phillips

    I completely agree with your reasoning.

  • John Poole

    Good article !!

  • Stuart Broom

    It is time for transformation and equity should be every person's right!! Great read!

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Vlatka Hlupic

Leadership Guru

Vlatka is an international award-winning thought leader, an activist for humanising management, and an author of a ground-breaking book 'The Management Shift - How to Harness the Power of People and Transform Your Organization for Sustainable Success' (Palgrave Macmillan, 2014), which was listed by Forbes as one of the top eight business books in 2014.  She is a Visiting Professor in the Department of Organizational Psychology at Birkbeck, University of London, Professor of Business and Management at the University of Westminster, a former Adjunct Faculty at London Business School, a consultant for Said Business School, a global faculty member of FT/IE Corporate Learning Alliance and a Global Thought Leader at ICG Group. She is also a founder and Chief Executive Officer of The Management Shift Consulting Ltd and the Drucker Society London. She received a PhD in Information Systems at the London School of Economics, as well as a BSc (Hon) in Economics and an MSc in Information Systems from the University of Zagreb. She was voted one of the Most Influential International HR Thinkers in 2015, 2016, 2017 and 2018 by HR Magazine (ranked at position 9) and has won the Croatian Woman of Influence Award as well as an Honorary Award from the Leadership Awards in 2016. Vlatka is the winner of the CMI Management Articles of the Year Award 2015 and the winner of the Axiom Business Books Award (silver medal in the "Leadership" category). She has been nominated for the Thinkers50 list and "Ideas to practice" Award. Her book has been shortlisted for the CMI Management Book of the Year Award and it has been nominated for the FT & McKinsey Business Book of the Year Award. Her new book "Humane Capital" (Bloomsbury Publishing, 2018) has been nominated for 5 awards and the Foreword was written by His Holiness the Dalai Lama. As a renowned professional keynote and TEDx speaker, she regularly presents at major business events worldwide, including events at the Houses of Parliament, European Commission, Home Office, the Economist and Financial Times. She has published more than 200 academic articles, including the award winning 'To be a Better Leader, Give up Authority', Harvard Business Review, December 2009. Vlatka is also a management consultant and Board adviser, helping organisations worldwide substantially to improve performance, engagement, innovation and profit. She has advised major international organizations including the House of Commons, GlaxoSmithKline, BP, The National Health Service, Learndirect, Brand Velocity USA, the Drucker Institute USA, the Croatian Government and the Hungarian National Bank. For her consulting engagements, Vlatka uses her research-based and empirically validated tools described in 'The Management Shift' book, helping leaders and organisation to shift to the new level of working and success. 

   

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