The End of Management

A couple weeks ago I was browsing through the weekend edition of the Wall Street Journal and stumbled on an article titled “The End of Management”.     Contrary to what it suggests, the point of the article is not to rid companies of management, but to challenge the perception of the role of management as it faces unprecedented change.  One only has to look at the hyper-accelerated changes in the marketplace to realize that hierarchal or bureaucratic management approaches are outdated and in many cases are harmful to a company’s ability to adapt.  This dynamic is captured in the following paragraph discussing creative destruction:

“Yet in today’s world, gale-like market forces—rapid globalization, accelerating innovation, relentless competition—have intensified what economist Joseph Schumpeter called the forces of “creative destruction.” Decades-old institutions like Lehman Brothers and Bear Stearns now can disappear overnight, while new ones like Google and Twitter can spring up from nowhere. A popular video circulating the Internet captures the geometric nature of these trends, noting that it took radio 38 years and television 13 years to reach audiences of 50 million people, while it took the Internet only four years, the iPod three years and Facebook two years to do the same. It’s no surprise that fewer than 100 of the companies in the S&P 500 stock index were around when that index started in 1957.”

It is this “adapt or fade away” paradigm that provides modern day managers with one of its greatest dilemmas.  How does a manager provide enough structure to ensure effective execution of the company strategy, while at the same time encourage the necessary collaboration and innovation among the team to adapt to a changing marketplace?  What makes this question so difficult to answer is that it varies from company to company.  But what is consistent are some of the common approaches to building an adaptable and innovative organization.

Encourage Collaboration: Management that overly focuses on structure and rules can dampen employee initiative.  This discourages risk and encourages employees to view their jobs as a series of distinct predefined tasks.  In order to drive innovation and adaptability, employees need to believe they can bring new perspectives to challenge the status quo.

Employees themselves must also be willing to take an active role in challenging a company to adapt to changing market conditions.  Employees are on the front line of the market place and are first to be aware of nontraditional opportunities and potential threats to the business.  However, if employees are only engaged enough to focus on their formal job description, they are unable to provide management the insight they need to make appropriate adjustments.

Make Strategic Investments: “The single biggest reason companies fail, is that they overinvest in what is, as opposed to what might be.”  Gary Hamel

Companies who choose to remain competitive in the long term should invest some resources in non business as usual opportunities.  Whether it’s strategic planning or taking advantage of emerging opportunities identified in the field, reserving capital for strategic investments allows for an appropriate balance of short and long term needs.

Stay Informed: Speak to your employees, the competition, and participate in industry associations to ensure that you stay as aware as possible on industry trends that could impact your business.  By staying informed you will gain an important perspective of the threats and opportunities in the marketplace and expand your perception beyond the walls of your own company.

The rapidly changing marketplace highlights the importance of organizations of not becoming complacent with their current business model, and to consistently look for creative ways to adapt their organization to maximize their opportunities in the marketplace.