‘The End of an era for Croatia, as a much-loved pencil factory closes: Zagreb Pencil Factory TOZ Penkala Bankrupt.’ (By Vedran Pavlic, 18 Aug 2015, Lupiga.com). I read this very sad article and wondered why TOZ Penkala went into bankruptcy. Of course it always has to do with not effective management! Did management miss developments in their markets? Was it bad financial and/or marketing management? I do not know but, it brought me to write this column about trends that no manager can ignore, based upon several management sites and leadership articles.

We see that the profession of Management is changing rapidly.
What are the trends leaders should see and act upon?
What is the best way to deal with these trends?  What does it mean for management?
Strategy, business planning, innovation, change-management and organisation design are changing. These dynamics go fast in all organisations and all sectors.

We see three main trends
The speed of Change goes faster; strategy and planning are already outdated before the plan is printed and communicated.
Unpredictability increases; many required and solid products and services compete with smart Apps and Start-ups. Many sectors and organisations are confused because of disruptive innovations.
Increasing complexity; stronger networks within and between organisations with increasingly longer dependency chains are sensitive for disruptions.

Somewhere in the chain something always will go wrong. Unexpected multipliers increase the risks and require thorough Risk-Management.

These developments have a big impact on leadership.

It becomes more and more important to create an organisation where the responsibility is delegated to the lowest level of realisation, to facilitate people to take action as soon as something goes wrong.
Organisations need to be more and more flexible to respond and act fast on the external changes. The best way of organising will be an internal network of flexible units that can serve their customers in changing configurations.

In these organisations ‘managing of responsibility’ is becoming the ‘new art’. Top management needs to delegate responsibilities, knowledge and budgets as low as possible.

The main questions are if top management in organisations, including their boards, are aware of these ongoing developments, the need for change and, if they know how to apply this?

Approach
What do these trends and developments require from leadership?

Actually we know enough to solve this, both in theory and from many best practices. Most of the dynamic sectors of our economies show enough examples.

• Modern organisations have another view on planning and models of business planning like a.o. organisation plan, business case, profit model, business model, business plan.
  Flexibility is everything: limit your plans to some directives and see every plan as a ‘beta version’ that gets improved in the ongoing process. ‘’Wisdom is in the doing!’ Manage the process, not the content.
  Strategy, Mission, Vision and Core Values become more concise and focused. A goal or a principle needs to be short and simple! What is the value of long and detailed stories and thick paper plans?

For instance:
SouthWest: ‘We are just doing things.’
Jumbo: ‘More than 100% customer satisfaction is what we go for!’
Springest: ‘We want to be ‘the Amazon of Learning.’
VDL: ‘Power through cooperation’.
Nike: ‘Just do it’.

Organisation Design: Top Management is more and more depending on the network they manage. More top down control and more micro managing is getting less and less effective. More procedures work contra productive. The answer is: a transparent organisation built upon small teams with much autonomy. The teams are responsible for their own results. Supporting functions (e.g. HRM, Marketing, Finance) go back to line management and the teams.

• Management Style: Managing on responsibilities and results, instead of (micro-)managing on procedures and targets.
• Innovation: Experiment and learn with your customers instead of internal analysing, studying and having endless meetings about the business case.
• Change Management: Make and keep middle management responsible. Focus change on innovation and continuous improvement of the primary process from the beginning to the end: Your Customer.

The pattern
In spite of the diversity and variation between organisations or sectors there is always a similar pattern in all change processes:

• Keep things simple.
• Delegate responsibilities to the deepest layer in the organisation.
• Mobilise and activate people by making them responsible.
• Show a stimulating ambition that motivates people to do more than formally required.
• Strive for continuous improvement on all levels.
• Be flexible: take the chances and opportunities!

A simple story
Actually this is a simple story to understand, however, more difficult to bring into practice.

It requires another attitude of management, another way of thinking and doing as present managers and leaders were trained at and gained experience in.

The point is that markets are changing, product-life cycles are getting shorter, customers become more demanding and so on.

Your competitors are organising their business in this way; what is your response to that? How do you want to keep or increase your market share and profit?

A stimulating message
This is also a stimulating message.

Nobody is motivated and happy with working in a bureaucracy, attending endless meetings without clear results, making plans and procedures that do not work, being controlled without a chance to come up with the good ideas they have for the business and so on.

Decision-making in most modern and dynamic organisations already works this way, or, organisations are in the transformation process to work this way.

Just compare how your organisation worked say 5-10 years ago and today; what has changed?

How should your organisation work in 5-10 years from now? What needs to change to accomplish that?

Every sector, including the governmental sectors, every organisation and every manager will be confronted with these trends and need to change if not already.

The question is not: ‘Do you want to change?’
The question is: ‘When, What and How do you change?’

Getting the best out of the people that work for you means your organisation will flourish by giving them responsibility and requesting results from them. Just let them do that!

John Lodder MA, MSc
www.balance-consultancy.com

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