In an earlier post entitled The Death—and Reinvention—of Management: Part 1, I noted that current management practices represent a set of economic, social and political problems of the first order, which cannot be resolved by a single fix.
Instead, a whole host of business leaders and writers, including Umair Haque, John Hagel, John Seely Brown, Lang Davison, Rod Collins and Ranjay Gulati, are exploring a fundamental rethinking of the basic tenets of management. Among the most important changes being proposed are five basic shifts in management practice:
1. The firm’s goal (a shift from inside-out to outside-in).
2. Role of managers (a shift from controller to enabler).
3. Mode of coordination (from command and control to dynamic linking).
4. Values practiced (a shift from value to values).
5. Communications (a shift from command to conversation).
In this continuing series of posts, I explore in more detail the specific practices needed to accomplish these five shifts.
In yesterday’s post, I explored the first shift in terms of the organization’s goal.
I continue here with the second shift—the shift in the role of the manager from controller to enabler.
Principle #2: New role for managers: From controller to enabler
Focusing on continuously adding new value for clients requires a change in the way work is carried out, because a traditional bureaucracy is not suited to innovation. It was designed to produce consistent performance from largely non-skilled workers. To reach the new level of performance, the organization has to empower those doing the work in self-organizing teams that are responsible for deciding how the work is to be done. The result is a dramatic shift in the role of the manager from controller to enabler.
How do organizations accomplish this shift? The principal shifts in managerial practices include:
1. Organize work in self-organizing teams: The default model of doing work shifts from individuals reporting to bosses, to organizing work in networks of self-organizing teams who regard their clients as “the boss”, not the manager. The teams are responsible for deciding how much work to attempt in any cycle, and how to do the work.
2. Keep teams small: A key factor in Apple’s success is keeping teams small. According to Google’s chief executive, Eric E. Schmidt, the biggest strategic issue now facing Google is that its teams are too big.
3. Transmit passion for the goal: People only give their very best if they believe that it is worthwhile. A generic form of a compelling purpose is delighting clients. The manager’s role is to create meaning at work (the purpose of the whole organization as a whole is to delight clients) and meaning in work (the purpose of each team in each iteration is to delight its clients). The manager must articulate the goal with clarity, consistency and passion. Unlike the managers described by Abraham Zaleznik in his classic HBR article who communicate by abstract “signals”, managers bring their own personal passion for delighting clients to the workplace.
4. Hire right: Hire people who can share the passion. In hiring, managers must find people who are capable of loving what they are hired to do. These are people who take pride in their work, inspire their fellow workers to greatness, and become the driving force behind the business. There is no way to find and keep such people unless the managers themselves feel the same passion.
5. Transfer Power: Creating self-organizing teams that unleash the talents and creativity of their members requies that management transfer power to the team to decide how to go about the work for the duration of the work cycle. The risk involved in transferring power to the team is manageable as a result of the protections offered by dynamic linking: by working in short cycles, nothing can go too far wrong. In this way, performance is given priority over predictability—the opposite of the bureaucratic practices of traditional management.
6. Hold the team accountable: The transfer in power is conditional on the team actually delivering on delighting clients in each cycle. The transfer of power is thus an offer, for which the team must accept the responsibility to deliver. Then in due course the team is accountable for delivery. It involves creating a setting where a team has an appropriate role in deciding how much work can be done and in removing impediments so that the team gets on a steadily improving trajectory. After standing back and letting the team get on with the job, the team is held accountable for the results as determined by the client.
7. Be patient: Teams go through a process of storming and forming as they develop norms of behavior. In this initial period, management must be willing to persist and not give up at the first hiccup. They must help identify and remove impediments. In effect, management must adopt teams as the basic mental model of the way the work is done. Managers must be patient as the team learns.
8. Recognize performance: Recognizing teams that are succeeding in delighting clients is key to sustaining high performance. Recognition is not by itself sufficient, but it is necessary. Good management requires both informal feedback and formal feedback mechanisms that systematically pay tribute to performance that contributes to the overriding goal of delighting clients.
9. Remunerate fairly: Managers must make sure that remuneration is perceived as fair. High-performance teams are driven principally by intrinsic rewards. People will give their best only if they feel the desire to do something because it matters. Research shows that financial rewards–extrinsic motivation–work well only for tasks with a simple set of rules and a clear destination to move toward. Financial rewards, by their very nature, narrow our focus and create tunnel vision. Nevertheless, remuneration has to be part of the picture. The essence of work is that one gets paid for it. Pay thus needs to meet a certain threshold of fairness—fairness in relation to other workers on the team, other teams, other firms, what the managers are making, and what the organization is capturing.
10. Do no harm: Managers are responsible for ensuring that the work is done in a way to protects the environment, that enables the organization to act as a responsible citizen in the communities in which it operates. The organization refrains from pretending that good acts in one area (environmental responsibility absolve it from asocial practices in other areas e.g. employee practices.
To learn more:
To learn more about reinventing management, read the whole series:
And read books such as The Power of Pull by John Hagel, John Seely Brown and Lang Davison, or Reorganize for Resilience by Ranjay Gulati, or The New Capitalist Manifesto by Umair Haque, or Leadership in a Wiki World by Rod Collins, and my own book, The Leader's Guide to Radical Management: Reinventing the Workplace for the 21st Century.
 Abraham Zaleznik: “Managers and Leaders Are They Different?” Harvard Business Review. 1977, 82 (1), p74-81.
 Buffett, M., and Clark, D. Warren Buffett’s Management Secrets: Proven Tools for Personal and Business Success. New York: Scribner, 2009.