Leadership’s #1 Challenge: An article for comment!

I'm working on another article, this time for a leadership magazine. My draft is set out below. It's a draft. Please comment!

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LEADERSHIP'S #1 CHALLENGE: REINVENTING MANAGEMENT

The idea that leaders and managers are fundamentally different is widespread. Leaders inspire people and spark change, while managers organize and get things done with disciplined execution. The tasks involve different skill sets and different attitudes. Leaders and managers each do their own thing. The conventional wisdom is that the roles happily complement each other.

The woeful state of management today

Unfortunately, running organizations in this way has led to disastrous results. In a comprehensive study of some 20,000 US firms by Deloitte’s Center for the Edge, The Shift Index 2010 shows that management is in steep decline:

•             The rate of return on assets of US firms is one quarter of what it was in 1965.

•             The life expectancy of a firm in the Fortune 500 has declined to less than 15 years and is heading towards 5 years unless something changes.

•             Executive turnover is accelerating.

•             The topple rate of leading firms is speeding up.

•             Only one in five workers is fully engaged in his or her work: the larger the company, the lower the level of passion among the workers.

Traditional management in established organizations has also shown itself incapable of handling disruptive innovation, of generating new jobs or of coping with the demands of social media.

Overall, current management practices represent a set of economic, social and political problems of the first order. Professor Julian Birkinshaw of the London Business School concludes that management has “failed,” According to Alan Murray of the Wall Street Journal, we are looking at “the end of management”. Business guru Gary Hamel tells us that “[e]quipping organizations to tackle the future would require a management revolution no less momentous than the one that spawned modern industry.”

How management is being reinvented

This complex array of problems cannot be resolved by a single fix, such as getting more employee buy-in, or instilling a sense of urgency, or introducing new technology platforms. This is why forward-thinking leaders are rethinking the basic tenets of management.

Among the most important changes are five fundamental shifts in management practice:

1.      The firm’s goal becomes one of delighting clients: a shift from inside-out (“You take what we make”) to outside-in (“We seek to understand your problems and will surprise you by solving them”)

2.      The role of managers shifts from being a controller to an enabler, so as to liberate the energies and talents of those doing the work, and remove impediments that are getting in the way of work. 

3.      The mode of coordination shifts from hierarchical bureaucracy to dynamic linking. 

4.      The values practiced shift from value to values; i.e. a shift from a single-minded focus on economic value and maximizing efficiency to instilling a set of values that create innovation and growth for the organization over the long term.

5.      Communications shift from command to conversation: i.e. a shift from top-down communications permeated with hierarchical directives to communications that are characterized by adult-to-adult conversations that aim at solving problems and generating new insights.

Individually, none of these shifts is new. However what has been learned in recent years is that when one of these shifts is pursued on its own, without the others, it tends to be unsustainable because it runs into conflicts with the attitudes and practices of traditional management. This agenda of five simultaneous shifts is strenuous but it offers significant benefits. When well executed, it generates simultaneously high productivity, continuous innovation, disciplined execution, greater job satisfaction and client delight.

The central challenge facing leaders today is to orchestrate these five shifts in management simultaneously.

Is this a challenge for leaders or for managers?

Do leaders need to get involved in the reinvention of management? Or should they leave that task to the managers? The question only arises because of the distinction between the roles of leaders and managers stemming from Abraham Zaleznik’s classic 1977 article in Harvard Business Review: “Managers and Leaders Are They Different?”  

That article argued that managers have different skill sets and different attitudes. Three aspects are key. First, the manager focuses attention on procedure and not on substance. Second, the manager communicates to subordinates indirectly by “signals”, rather than clearly stating a position. Third, the manager plays for time. With conflicting rules and procedures, and conflicts about priorities between different senior managers, managers have no way of knowing what the right answer is. Self-protective routines are used, up and down the hierarchy.

The article provided the insight that traditional managers acted differently from leaders who could inspire people to act in new ways. That insight might have been useful if it had led to an examination of whether "focusing on procedure rather than substance" and "playing for time" were productive managerial behaviors even in 1977. The reality is that they represented an early depiction of what has come to be known as a Dilbert-style manager, whose antics are celebrated in Scott Adams popular cartoon. The behaviors dispirit workers, crush innovation and lead to frustrated customers.

But instead of these management practices being condemned as inappropriate even in 1977, the article led to reinforcment of those management practices and a bifurcation of management from leadership. Leaders were to inspire people to embrace change while managers were grimly grinding out disciplined execution. They were two separate groups of people with different attitudes and different skill sets, but inevitably working at cross-purposes. As much as leaders inspired employees with bold new ideas, managers were dispiriting those same people with their grim-faced Dilbert-cartoon style management, while also crippling innovation and frustrating customers.

John Kotter further reinforced the distinction between leadership and management with his influential HBR article, What Leaders Really Do (1990) Without hierarchical bureaucracy, he wrote, “organizations tend to become chaotic in ways that threaten their very existence.” The fact that such bureaucracy killed innovation, dispirited both managers and workers and typically frustrated customers was not noted. This way of managing was portrayed as necessary to avert chaos.

The alternative to hierarchy and anarchy: dynamic linking

The principal reason that is given today for preserving hierarchical management is that it is necessary to prevent anarchy. We don’t want chaos. So we are stuck with hierarchy. It’s not pleasant or fun. But that’s the only way to run an efficient organization.

The reinvention of management shows that there is another way. One can mesh the efforts of autonomous teams of knowledge workers who have the agility to innovate and meet the shifting needs of clients while also achieving disciplined execution. It requires a set of measures that can be called “dynamic linking”. The approach began in automotive design in Japan and has been developed most fully in software development with approaches known as “Agile” or “Scrum”.

“Dynamic linking” means that (a) the work is done in short cycles; (b) the management sets the goals of work in the cycle, based on what is known about what might delight the client; (c) decisions about how the work should be carried out to achieve those goals are largely the responsibility of those doing the work; (d) progress is measured (to the extent possible) by direct client feedback.

As The Power of Pull (2010) points out, one proceeds “by setting things up in short, consecutive waves of effort, iterations that foster deep, trust-based relationships among the participants… Knowledge begins to flow and team begins to learn, innovate and perform better and faster.… Rather than trying to specify the activities in the processes in great detail.., specify what they want to come out of the process, providing more space for individual participants to experiment, improvise and innovate.”

The practices needed to support dynamic linking are spelled out in detail in chapters 6 and 7 of The Leader's Guide to Radical Management (Jossey-Bass, 2010).

It’s not hierarchy and it’s not anarchy. It gets the best of all worlds. It has the decisiveness and discipline of a hierarchy but without its inflexibility or its tendency to demotivate workers and frustrate customers. It creates an agile environment that is radically more productive for the organization, more congenial to innovation, and more satisfying both for those doing the work and those for whom the work is done. The approach has been implemented for over fifteen years in organizations large and small with great success.

Leaders must reinvent management

The reinvention of management is not just a task for managers. It is the central challenge for leaders. Without the reinvention of management, the best leadership in the world will achieve little.

In the process of reinventing management, the distinction between leaders and managers dissolves. In the 21^st Century, leadership has a larger role to play. The manager who is not a leader has no place in the reinvented organization. Managers must also be leaders. They must articulate goals, inspire change and remove impediments. It is the workers—those doing the work—who get things done. The central challenge for leaders today is to lead the reinvention of management and so generate the creative, innovative organizations that are needed for the 21^st Century.

Comments

[davidburkus]

I definitely agree that newer management techniques (what you call radical management) can be effective and have their place. However, I would recommend strengthening your introduction. You're basically making an argument that things have changed and business are failing, but a strong argument that this is because of old management techniques is still needed. It could be that constantly shifting to new "bright ideas" in management is causing the problem. Or that the over-emphasis on leadership INSTEAD of management is the cause. In truth, the jury is still out: so make a strong argument for the need to change management.

[Steve Denning]

David

Great points! I can see that some of the connective arguments that were dropped as a result of trying to squeeze into the 1,400 word limit may need to be reinserted.

As to what really caused the disastrous management performance, I and others believe that two huge forces are responsible: the shift in the balance of power from seller to buyer and the shift in the nature of work from semi-skilled to knowledge work. Those two shifts have changed everything. Traditional management was devised to deal with a world that no longer exists. Some of that argumentation needs to be woven back into my piece.

Continually shifting to bright new ideas certainly conveys a weird atmosphere of Attention Deficit Syndrome. But I don't think that this could really be the principal cause of the deep-seated array of problems I describe. It does reflect a certain amount of desperate flailing as traditional management is seen to fail, and running faster doesn't seem to do much good. What is more remarkable is that anyone seriously imagines that these "bright ideas" like introducing "creating a sense of urgency" or "getting more buy-in" (Kotter) will really make much difference.

I agree that there has been an over-emphasis on leadership and a neglect of management. Most of the creative thinking has gone into the former and very little into the latter. As a result, management didn't evolve, as the world evolved. But ultimately it's the failure of management to evolve that is the root cause of the problems, not the emphasis on leadership.

Thanks for the helpful comments.
Steve

[davidburkus]

You're dead on with the shift to knowledge work. That alone may be the reason for a need to shift management techniques.

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Im so grateful to be part of this discussion. You all made a good point of this subject.

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