Posts Tagged ‘Management’

Evolving from technology to feelings

Wednesday, May 4th, 2011

Emotionally aware individuals will play a leading role in the near future, as increasing complexity and technology contributes to the emergence of an ‘emotional economy’ to replace the knowledge economy. Four key forces are underway that are contributing to this shift: depersonalisation, saturation, acceleration, and fragmentation.

Depersonalisation occurs when we feel that we have been treated like a number, or a machine, rather than a person. This happens when, for example, we are forced to navigate a maze of complex interactive voice response systems, and just long to talk to a real person. Sophisticated technology often creates frustration as it treats us like another piece of technology, not a person with intellect and emotions.

The sheer volume of information can overwhelm us and create a feeling of saturation. While the volume of useful information is growing, the ‘signal to noise ratio’ is getting worse, requiring intense effort to find information that matters. We know more and more about less and less. Paradoxically, this fosters an addiction to technology as we slavishly seek the next piece of often useless information.

Despite having an abundance of time saving devices we have become an ‘always on’ society and have less time than ever. Complex global linkages and interconnections accelerate our daily exposure and compound the saturation. ‘Time saving’ tools like the Blackberry or iPhone allow us to regularly check email and the internet, extending work deeply into personal time, making everything happen so much faster than it did for previous generations.

While technology collapses geography we find ourselves less personally connected than ever. We can feel closer to someone in another part of the world, with whom we engage online, while completely disconnected from our immediate neighbors. This gives rise to a sense of fragmentation – of belonging in different places at the same time, of belonging to everywhere but nowhere, of feeling pulled in competing directions.

With increasing technological capability fewer people will be required to produce what we require to run our lives, and we will be able to spend more time doing human interaction type tasks and less time doing intellectual tasks which can be automated. Much functional work will be done by artificial intelligence, and the remaining core staff in a business will be focused on caring for customers, tailoring services to each specific individual and their needs. These employees will be highly skilled and trained in emotional intelligence.

The outcome of this will be an emotional economy, which will place far greater premium on care – the ability to meet the needs of others in a way that is emotionally engaging and fulfilling. Leadership will be a core competency for every employee, and will be vital in every successful role. People who cannot lead themselves before leading others will find it hard to obtain meaningful work.

The call centre industry, for example, could completely reinvent itself to take advantage of this shift. Operators in the near future will recruit and train emotionally intelligent people for crucial personal touch situations. Workers who focus on caring, supported by very powerful artificial intelligence to provide ready answers to the customer, will enjoy a much better quality of life than call centre operators who focus on high-volume transactional work. Artificial intelligence will be able to guide the operator through the resolution of complex problems, enabling them to concentrate on full engagement with the customer. Short-sighted call centre operators will reduce headcount and shift to greater technology. Wiser operators will retrain staff to provide a higher level of emotionally engaging service, leading to increased staff and customer retention, and consequent profitability.

The emotional economy will encourage a distinction between the transaction and the transpersonal. Real value-add will occur person to person as basic transactions are automated. This will enable a range of choices about the level of interaction a customer wants and how much they will pay, with some choosing to pay a premium for human interaction. This is a market opportunity that few have yet recognised, given the current tendency to downsize organisations, automate interactions, and use logical rather than emotional measures.

In a knowledge economy we say people are our greatest asset, endeavour to manage by objectives, and use words like ‘mind share’, and value. In an emotional economy we will recognise that relationships are our greatest asset, will manage by meaning, and use words like ‘heart share’ and purpose. Leadership will be more about character than vision, and organisations will focus more on contribution than profit.

In a knowledge economy personal value is directly related to how much you know, how much you can create or generate, and the quality of your judgment – in short the ability to acquire and apply knowledge. Significant attempts are already underway to systemise anything that can be automated. Computers will do most of the work currently done by knowledge workers. We will spend less time doing intellectual work and more time engaging with people. Therefore, the ability to deeply empathise, to apply emotional know-how, and to reach out and touch people will be the new source of wealth. Your personal value will be the size of your heart, not the size of your ideas.

Remote control

Friday, April 8th, 2011

As China and India surge along the path to development and give rise to highly aspirational middle classes, many Australian companies have capitalised on the rising level of wealth by setting up shop in the region.

But quite a few successful multinationals such as BHP Billiton, Microsoft, Google and eBay have found that the Asian tigers can be hard to tame.

James Wakefield, Associate Lecturer in accounting at UTS Business School, says that many common problems businesses encounter with their foreign subsidiaries can be avoided by establishing robust control systems at headquarters.

He is currently writing a PhD thesis on international corporate operations, specifically on how multinational corporations control their wholly-owned foreign subsidiaries.

Many countries don’t allow foreign entities to operate alone, so an Australian company looking to expand overseas may have to form a joint venture, or strategic alliance, with a parent partner. There are a number of issues and challenges associated with that, including the fact that most joint partnerships of this kind only survive into the medium term.

Factors driving control choices usually depend on the level of integration of the foreign subsidiary with the parent company i.e. how well is the subsidiary aligned with the corporate strategy of the business units at head office.

Administering an overseas subsidiary can increase the degree of uncertainty facing management. James Wakefield is examining whether such challenges are symptomatic of control choices made by the company.

Wakefield has taken a two-stage approach to his research: interviewing managers of Australian companies with wholly owned foreign subsidiaries; and surveying managers on factors driving their control choices in relation to offshore operations.

The ultimate goal of Wakefield’s research is to develop greater clarity and refinement in the approach to control packages and achieve a better understanding of how the elements of a management system work together.

A new global ethic

Friday, March 25th, 2011

Business leaders who embrace societal issues that transcend themselves and their organization will drive change that echoes through history. No longer is it sufficient to work for purely institutional goals such as profit, market dominance and stakeholder return.

It is a great privilege to be part of a moment in history where society and the environment shift from being servants of the economy to the economy being a servant of society and of the environment. That privilege brings a challenge for leaders who have been operating in the old paradigm to not only embrace the shift but show genuine leadership through the transition.

Every institution, and its leaders, has a responsibility to the society in which it resides. At one level that responsibility is to be a good corporate citizen, and to not damage people, the community or the environment. But the deep interconnections between the purpose of the organization, the purpose of its leader, and the needs of the society they inhabit allow the corporation to have an impact on an entirely different level that fosters profound social wellbeing.

There is no shortage of societal challenges that a motivated, purpose driven leader, could positively influence – particularly those beyond the reach or capability of charities. Purpose driven leaders can touch major systemic challenges like effective infrastructure, equality of women, fair pay, trade, cultural and racial harmony, global conflict, cross border worker mobility, access to education, technology and medicine, global financial systems. The list is endless, limited only by the imagination of those who take the time to look beyond the institution and see the wider community of which they are an integral part.

“What meaningful contribution can I make to the world in which I belong?” is perhaps the most compelling question of our age. We cannot fully exist without understanding this purpose. It is more compelling and carries greater societal significance for contemporary business leaders, who have an opportunity to define their time, in the same way that great religious, political or military leaders did in the past.

The focus of great business leaders needs to be bigger than the here and now or the institution towards building a better world, not just a better business. This is done by aligning personal purpose, corporate mission, and societal challenge. Finding this alignment creates an impact point that leverages the contribution of individuals and the enterprise of which they are a part to transform wider societal systems.

Leaders operating by a new leadership ethic will define themselves in a number of important ways. In addition to mastering the art of business and creating sustainable enterprises which operate by timeless values they will exhibit a number of personal traits, including self mastery, global awareness, strength of character and societal involvement.

True leader masters themselves before assuming a role of leadership over others. They demonstrate a deep and broad awareness and understanding of the world, cultures, nations and businesses, gained from moving outside one’s comfort zone and visiting places and people that are not on the normal radar. Their actions are founded on strength of character, exhibited by a set of good habits, such as honesty, integrity and authenticity.

But the big shift is they recognise they can be a catalyst for good, and don’t wait until retirement to act. They make wise choices about where they can have the greatest impact today and align themselves with influential agencies to support them in this work. This is no longer after hours work on the periphery of business. This is core business for great leaders in great firms, which has a positive impact on both engagement and profitability.

Paul Polman, Group CEO of Unilever, is a wonderful example of such a leader. His call to “double the size of the business while using less of the world’s resources” created a compelling vision which is delivering outcomes for the traditional stakeholders of the firm, the communities of which Unilever is a part, and for future generations.

Blake Mycoskie of Tom’s Shoes, giving one pair of shoes to the poor for every pair they sell, is another example. Society needs leaders who will engage and provide leadership on questions like:

  • What kind of world do we want to both live in and leave for our children?
  • Should quality of life come before quantity of profit?
  • How much is reasonable profit?
  • How do we ensure equitable distribution of profit, and recognise and reward all workers appropriately?
  • How do we ensure people are treated as human beings with inalienable rights, rather than as economic assets to be used for productive outcomes?
  • How can we embrace systemic life-cycle thinking in the provision and costing of goods and services?

These questions don’t start with those who enjoy hierarchical positions of leadership. They start with each of us, for we are all leaders in our own right, and cannot stand idly by and allow others to agitate for change. Those who step up and engage with these issues will create an enduring legacy for themselves and their firms.

Today’s societal challenges ask for business leaders of courage and conviction to master the art of being human, and to master the art of running a successful enterprise, while becoming a servant to society by fostering a new global ethic within their sphere of influence.

This is a summary of “A new global ethic”, Journal of Management Development, Volume 29, no. 5

What makes collaboration work?

Friday, February 25th, 2011

The reality of corporate collaboration is that almost every second alliance fails. Yet some organisations are spectacularly successful at developing alliance cultures. Dr Jochen Schweitzer explains how leadership and governance are key to successful collaboration.

Collaboration is important for many organisations because it gives them access to resources that they would otherwise not have. While executives like the idea of minimising risks through collaboration, they are also attracted to the advantages that they can gain by having access to their partners’ knowledge and experience. With the learning that comes through combining and developing capabilities with external partners, alliances now contribute significantly to developing competitive advantages and achieving strategic objectives for all involved.

Alliancing has many obvious strategic and operational advantages, but the unpleasant reality of corporate collaboration in the last 25 years has been that almost every second alliance fails to achieve the anticipated outcomes. Although the wide spectrum of alliances has been intensively researched, it is not yet clear what really makes collaboration work and what doesn’t.

In my research I’ve been focussing on the issues of alliance governance, the role of alliance leadership and how innovation capabilities develop within alliance teams. In general, success often depends on to what extent the leadership team is able to agree and implement suitable governance structures and engage with the team to foster desired behaviours and work cultures.

Governance mechanisms like organisational structures, roles and responsibilities, decision-making processes or reward systems create work culture. Too often alliances fail because partners are unable to agree on governance to match their individual and joint work cultures. What’s more, organisations often have only limited ways of capturing the knowledge that is created and developing it into competitive advantages for the organisation.

I surveyed more than 400 alliances around the world, asking particularly about how they structure and govern their alliances, and how they perceive the leadership within their alliances. The focus in that study was on finding those factors that would make alliances achieve innovation and allow them to create capabilities that enable them to compete better in their markets. I looked at characteristics like innovativeness and proactiveness of people within the alliances, their ability to work with each other, the extent to which they learned from the alliance, and the extent to which they captured and advanced knowledge.

I also looked at the governance, the actual management structure and the mechanisms that were used to organise the partnership, as well as the leadership behaviour within the alliance.

In alliances as much as in any other type of organisation, leadership behaviour occurs on a continuum: At one end of the continuum we observe transformational (charismatic and inspirational) leaders, who motivate teams often based on their strong vision and outstanding personality. At the other end of the spectrum we have transactional leaders, who base their relationship with the team on the fact that they give people a reward for a certain type of work.

One might assume that a more charismatic leader would help an alliance create more entrepreneurial or innovative abilities, while on the other hand, the transactional leader would be less likely to create innovation. But in fact both types of behaviour are very important to create innovation-type capabilities. The more the leadership team in the alliance is able to show both of these types of behaviour, the more the alliance will innovate.

Alliances fail when they do not achieve the objectives that the partnering organisations agreed upon. Sometimes organisations agree to part ways when they realise this, and other times they stick to it, even though they realise it’s not going to go anywhere. Unsurprisingly it’s difficult to find data about alliances that have failed – it’s a lot easier to find examples of organisations that do really well: Organisations like IBM, Cisco or Hewlett Packard are known for their ability to collaborate at multiple levels with multiple organisations.

The key aspect for an organisation that is looking for innovation through alliances is to gain access to resources within another organisation that it wouldn’t have otherwise. From there on it is all about aligning governance mechanisms for the partnership, work culture and leadership styles with the strategic intention for the alliance.

If a firm is after innovation, there are certain mechanisms and leadership behaviours that work towards innovation. It really is about finding the right combination. Take decision-making. The partnering organisations could agree upon leaving all decisions with the alliance team (a decentralised approach). If the alliance team is flexible and open, there is a greater chance for them to be innovative and come up with solutions. On the other hand, if you leave all decision-making with the partnering organisations and force this mechanism upon the alliance, there is less flexibility, which leads to less innovation within the alliance.

If you then combine that with the type of leadership that you implement, by choosing a predominantly transformational or transactional type of leader for the organisation or the alliance, that again would influence the extent to which innovation takes place or not.

Organisations increasingly seek alliances to achieve innovation objectives and in doing so, they need ways to do it better than they did in the past. That’s why it is important to do the research to find the mechanisms that really make them work.

Unlocking creativity from the accounting matrix

Wednesday, February 16th, 2011

At first consideration, it sounds like an oxymoron – traditional accounting practices freeing project teams to stimulate creativity.

It may sound crazy, but I invite you to reconsider. This is a field I’ve devoted a case research project to. Let’s look at the management practices of top performing firms. Is their management employing traditional accounting systems to get the best out of their employees? Not many firms think of accounting systems as fostering free thinking amongst management, but my research shows it’s certainly possible.

‘How?’ You ask. Let me explain.

If you read the Harvard Business Review, or most other practitioner journal publications, most budget criticisms relate to how budgets are used to evaluate people. However, the majority of firms that derive maximum benefits from budgets don’t place their greatest emphasis on evaluating people through budgets.

Judging people on a number can be an invitation to start fudging or padding that number. The moment the performance aspect of a budget is divorced from the budgeting process and the budget is set more to plan, businesses get much deeper, fundamentally beneficial outcomes.

Used to its best potential, budgeting aides planning and better resource coordination. When budgets are used to give people more of an idea about how much they can spend and explicit acknowledgement they’re not going to be judged on that number, the outcomes from budgets are quantifiably more beneficial than saying: ‘Here’s a budget, you meet it, Bonus. You don’t meet it, no bonus’.

Traditional accounting research has predominantly acknowledged that accounting controls constrain. By constraining, it’s often implied that they detract from creative expression.

We’re now observing that accounting tells us stories about businesses and directs thinking in ways that enable creative behaviour. I’m interested in the enabling and constraining forces that accounting and other controls in organisations have on groups of creative people, to aide the creative thinking.

Let’s take the traditional budget. An innovation project manager, who, along with another manager, oversees a team of five project staff, sits with those staff fortnightly to talk about the budget adherence of the project team. That moment represents a very traditional accounting event. What’s interesting though, is that in those meetings, deviations in the budget facilitates discussion and debate, and it is these discussions and bantering about why deviations occurred that reveal the true benefit of a budget process – you begin to see why accounting really adds value.

By imposing pressure and saying ‘Have you stuck to your expenses?’, you force managers to think about how they’ve spent the money, which in itself is not interesting, but what’s really interesting is you put them in a space where they have to think about what they’ve done, and how they could do things better. It’s then that they start talking to you about what you’re really there to get them talking about, which is the value of their time spent in contributing to the firm.

How have they accomplished their tasks? Have they directed their efforts in certain ways or in other ways? Could they have perhaps better thought through their methods? The traditional budget, often treated as a check box, transforms into a management space where sophisticated discussions are enabled. In the case of the creativity project case I investigated, the budget discussions represented the primary “space” through which team members critically reflected on their critical thinking. This in turn shaped their future creative thinking and choice of techniques adopted.

This form of diagnostic accounting system, or budgetary evaluation, allows for an interactive conversation about businesses and fundamentally helps it do better.

It’s almost like The Matrix. You might remember those screens with green lines coming down and all the numbers and letters – while you and I just saw lines, the characters in the film saw stories and events and they were responding to them. They played quite a key role in advising the characters in the film and shaping their behaviour.

Of course, the Matrix is fiction and certainly not a budget! However, there is a broad parallel. If you understand accounting numbers, you “read” an organization through those numbers, and better understand and appreciate the resulting stories they tell you about your business. That can only help you manage your businesses better.

Getting the most from next generation workers (part 1)

Monday, February 14th, 2011

Generation Y represents around 20 per cent of the Australian labour force, but according to the literature, Australian industry is still trying to figure out how to get the most out of this generation in the workplace.

My team at the Commonwealth Bank includes many Generation Ys and in my experience they are (to generalise) educated, confident, technology savvy, and demand to be treated well. And they are influencing other generations to follow suit.

It’s time to stop berating Gen Y for being different, and get practical about what business leaders can do to make sure we don’t squander the great talent in our own backyards. There is little to be gained by forcing Gen Y to fit into an outdated paradigm of management.

At the risk of stereotyping an entire generation (apologies in advance!), here are thoughts from a Gen X-er on where we are going wrong, and the simple and practical changes that will help create an environment where Gen Y – and all other generations for that matter – can thrive.

Four key changes Australian business leaders can make to get the most out of the next generation of team members (NextGens) are:

  • Treat each person in your team in a tailored individual way;
  • Keep work fresh and interesting for your staff;
  • Create clear expectations of what constitutes outstanding performance and facilitate a fast-track for those who meet those expectations; and
  • Provide regular high quality feedback for people so they can learn from their job and achieve their full potential.

Treat everyone as an individual

Australian corporations in the most general terms try to be extremely fair. These notions of fairness, however, often equate to ‘sameness’; in practice, treating everyone equally can mean ‘in exactly the same manner’. For example, often a single policy will apply to the whole company on, say, working from home, or access to technology such as Blackberries and iPhones. Or training programs may be designed around sending everyone at a certain level in the organisation through the same training courses. We tend to believe these ways of doing things are fair and equitable. But we may need to modify them for the NextGens.

The NextGen idea of fairness rarely equates to sameness. Each person wants to be treated and catered to as an individual. This belief is very much entrenched in the way that Facebook and social networking works. In that world, everybody is a ‘somebody’ with his or her group of friends who are kept intimately updated on the person’s life. It matters that people choose different interests and have different experiences and it matters that people understand and appreciate their uniqueness and individuality. To NextGens, sameness does not seem as equitable as it does to older generations; it just seems cold and faceless.

So, to get the best from NextGens, use your knowledge of them as individuals to tailor their work experience, interactions, training and all aspects of their job. Here are examples of moving from ‘sameness’ concepts of fairness to ‘equality’ concepts of fairness:

Table 1: Moving from 'sameness' to 'equality' concepts of fairness

DATA

Newness

NextGen workers crave newness. They are hungry for new challenges, different tasks, variety and learning. Unfortunately many managers find it is far easier to define a job and then ask for repeated performance to that job specification over time than to constantly re-engineer what people are working on. The art of coming up with new tasks or sharing interesting tasks across a team is more time consuming and logistically complicated.

Another idea is to reverse this attitude, and recognise the welcome gift that this desire for newness brings to a team. It means that a manager can use their team to help work on different problems that require attention, to cross-train on new skills, and to participate in new or unconventional tasks. Rather than lamenting the challenge of ‘keeping restless Gen-Ys occupied’, it would be positive to embrace the usefulness of having workers who are happy to experiment with changes.

Here are some tips for designing a workplace that enables you to offer variety in work:

  • Keep a list of rainy day initiatives and productivity ideas that everyone contributes to regularly. For employees who are excelling in their work, assign one of the initiatives and ask them to spend 20% of their time solving or implementing that idea.
  • Involve the team in planning for events so they organise a charity morning tea or the next team-building event.
  • Redefine how work is allocated between staff members to cater for variety and skill building, as well as development needs of each individual.
  • Provide articles of interest to the team for extra reading.
  • Introduce team members to other parts of the organisation or other industry players with an agenda for them to learn about the other team or organisation and share that learning with the team.
  • Invite team members to help you on some of the work you are involved in as they could undertake research, benchmarking, generate ideas and help you sort through alternatives.
  • Buddy up team members to see if they can help each other find ways to improve their day-to-day job performance (and learn another job!)
  • Try a new way of working with a small subset of the team

In part two, Kelly discusses the importance of creating a fast track career path for those with high potential, as well as providing high-quality feedback to NextGen staff. Meanwhile, what are your strategies for engaging your next generation of talent? Leave your thoughts in the comments below.