If there is one mantra which seems consistent across the literature and experience of running a company in the new economy (and as companies make more effort to digitise themselves) it’s that technology is just the enabler.
People and culture are still the keys to success.
What’s intriguing though is that while you’ll read that a business must now have flatter structures and less reliance on command and control type management, defining what managers do in this changing environment seems to be of secondary importance.
Business leaders and managers are assumed to simply get out the way of their new Agile teams of workers.
Not so, says Yves Morieux, Boston Consulting Group’s senior partner and managing director at the firms Dubai office, in “Bringing Managers Back to Work”.
He says, contrary to popular belief:
“The challenge of the organizational revolution represented by agile and other new approaches is not that they make management somehow irrelevant or obsolete. Quite the opposite: they make management more important than ever before. But they also transform what managers—from the very top of the organization to the frontline of the business—have to do and how they need to work… until organizations develop a management model that is equal to the challenges of the organizational revolution taking place today, that revolution won’t be successful.”
His approach is to encourage business managers to rethink their role in the organisation.
“Put simply, they need to stop thinking of themselves as the master designers of hardwired organizational structures, processes, rules, and procedures. Instead, they need to become the everyday orchestrators of a flexible and dynamic behavioral system, one that unleashes employees’ autonomy and initiative, and puts it in the service of more effective cooperation to achieve the organization’s goals,” Morieux wrote.
That’s a big step, but an important one because without it, what managers tend to do is fall back on a variation of the command and control model which, Morieux says, “is singularly ineffective at addressing the distinguishing feature of today’s business environment: the exponential increase in business complexity.”
At issue he says is that as complexity increases “the correspondence between the organization’s formal procedures and its business outcomes begins to fall apart.”
That is, “products need to be affordable but also of high quality. Manufacturing plants have to be efficient but also safe. Business processes require speed but also reliability,”.
The trouble is many business leaders, managers, and the companies they run fall back on “more rules, processes, and guidelines for each new performance objective” which has the effect of increasing “organisational complicatedness”. Morieux defines this as “the proliferation of contradictory rules and instructions” which he says “causes people to lose their sense of direction and to escalate decisions to committees or to senior leaders, who have no direct knowledge of the issues at hand”.
As a result Morieux says that managers end up managing the “complicatedness, not the work itself”.
But, he has a fix for this.
The key is to harness the autonomy of the individuals and groups working throughout the organisation by “creating an environment where people have an interest in deploying their autonomy in the service of cooperation with others for the greater good of the organization.”
Naturally this combination of autonomy and co-operation is somewhat at odds and won’t happen on its own.
Morieux says it needs a “particular kind of management” which instead of focusing on “formal procedures” sees managers paying attention to the “the behavioral dynamics that shape organizational performance: why people do what they do; how they understand their individual goals, the resources available to them to achieve those goals, the constraints that stand in their way; and how individual behaviors combine (often in unanticipated ways) to produce the collective behavior underlying performance.”
Of course the managers themselves are actors in this behavioural system and shapers of the company narrative, so “they need to know how to intervene in that system in order to foster more effective cooperation. And to do that, they must get much closer to the actual work.”
To do this Morieux has a three step process where managers intervene in the company’s behavioural system.
Framing through action
“In the new work environment, the separation of design and execution is replaced by the combination of framing and acting. Rather than design tasks, managers “frame” objectives and goals. That framing sets the context that allows employees not so much to execute but to “act” — that is, exercise initiative guided by strategic goals, not rigid processes and rules; operate more autonomously, making decisions in the moment in response to changing circumstances and unanticipated obstacles or opportunities; and work together to make the trade-offs that will create the most value over time”.
He says framing is an iterative process because of the “dynamic and fluid” operating environment businesses find themselves in and as such, managers need to be constantly acting to intervene in the company’s behavioural system.
“Framing doesn’t happen once; it happens continually, in close interaction with employees, and in response to the constantly changing circumstances thrown up by the work people do and the challenges they face in the ongoing effort to create value” Morieux wrote.
Integrating around the task
Morieux highlights what he calls the “paradox of specialisation” where complexity drives specialised functions and teams across the business but that these teams need to find a way to converse and cooperate across their various functions outside of “their specialised mindsets”.
As a result he says managers need to “make sure cooperation happens, people work together productively on the task, and they make the trade-offs necessary to create value across multiple performance objectives”.
Thus he says management is now “less about ‘managing people’ (in the sense of reporting relationships, career progression, performance evaluation, and the like) than it is about ‘managing behavior’ (in the sense of creating an environment in which people find it desirable to devote their full effort to the task at hand, to exercise initiative, to cooperate constructively with their colleagues)”.
Shaping the organisational context
The idea that in the new environment managers just set teams up and get out of their way is flawed, Morieux says, because it “underestimates the complexity of the senior management role in the new work environment. Ceding control to self-managed teams doesn’t mean abandoning them.”
His point is the role of a senior manager “is not to determine the content of people’s work. Rather, it is to provide the context for that work. That means helping employees understand how their immediate objectives relate to the organization’s strategic and business goals.”
That means “senior managers need to articulate a robust strategic context that teams can use as a ‘North Star’ that aligns their autonomy to those goals, guiding them as they exercise their initiative,” he says.
Crucially though senior managers need to be more present and get involved with the teams more often by “regularly interacting with teams and being present as a sounding board and ‘thought partner'”. More important still, senior managers “need to be engaged enough with the work of teams to have at least a first-order understanding of the on-the-ground obstacles, to recognize potential missteps, and to help teams course-correct” Morieux says.
What’s interesting about Morieux’s work is that it feeds from and reinforces the notion that tech is the enabler, but that culture and people are the keys to success in the new business environment. What Morieux has done, where many writers have not, is put important organisational context around just how managers fit into the new operating environment and what they need to do to ensure they, their staff, and the business are as successful as they can be.
You can read the full report here – it really is a a must read