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The end of Management


August 27, 2010


The title of the story in the Wall Street Journal read: “The End of Management—Corporate bureaucracy is becoming obsolete. Why managers should act like venture capitalists.” That article, adapted from the new book by Allan Murray, “The Wall Street Journal Essential Guide to Management,” (2010 Harper Business) grabbed me. I’m on my way out the door to buy it.
It captured what I’ve been sensing for some time. We are evolving into some new form of leading companies…which has yet to be fully recognized. As the article points out, “Even the best-managed companies aren’t protected from this destructive clash between whirlwind change and corporate inertia.”
It goes on to say that Clayton Christensen’s book, “The Innovator’s Dilemma” “documents how market-leading companies have missed game-changing transformations in industry after industry—computers (mainframes to PC’s), telephony (landline to mobile), photography (film to digital), stock market (floor to online)—not because of bad management, but because they followed the dictates of ‘good’ management. They listened to their customers. They carefully studied market trends, They allocated capital to the innovations that promised the largest returns. And in the process, they missed the disruptive innovations that opened up new customers and markets for lower-margin, blockbuster products.”
Just yesterday, I heard on the radio about the significant drop in cable subscribers and rise of cheaper Internet television to take its place. The new cover of Forbes Magazine shows Andrew Mason, the founder of Groupon, “The fastest-growing company ever.” Groupon “figured out how to inject hysteria into the process of bargain hunting on the Web.”
I don’t think we can brush off these changes as just another dot bomb moment in time. Something big is happening here.
Christensen studied big companies to try to identify what caused them to miss the big innovations. He found it wasn’t that they didn’t see them coming…it was that they didn’t invest enough to capitalize on them.
Murray points to Google’s attempt to rectify that problem. They have a “20%” policy. Engineers can spend 20% of their time on company-related projects, rather than just those projects on their boss’s to-do list.
Besides resource allocation, structure is another hurdle. The traditional, military-based hierarchy just doesn’t support the entrepreneurial culture needed to create innovative thinking. Even the best managers I’ve seen have a vested interest in controlling their department’s resources, outputs and turf. And those are the good managers…
The changes are morphing everywhere you look. Eleven percent of all employees now work from home at least one day a week. Forty percent of IBM’s workforce works remotely. Deloitte, the international accounting and consulting firm, has abandoned flextime in favor of what it calls “Mass Career Customization.” The idea is that today’s careers don’t follow the corporate ladder, but rather lattices, where employees can ramp up or scale down their responsibilities. GE’s innovation is fueled by a bee hive of matrixed organizational structures forming around projects. Best Buy created a ROWE-results only work environment. It’s premise is that it’s results, not face time, amount of time in office, or how many meetings you attend that really count.
Economic regions have also awakened and smell the entrepreneurial coffee. BizStarts Milwaukee, born out of a realization that attracting big employers to the Southeast region of Wisconsin wasn’t an effective strategy, is making big strides in helping entrepreneurs who have ideas or products with high growth potential. Among other helping strategies, it includes help with marketing plans, mentoring and connections to venture capital.
America was built on the entrepreneurial spirit. In my view, the only way we are going to stay one of the great nations, effectively competing in a global economy, is to go back to our roots, whether you work for a corporation or a start up.

 

 

Joan Lloyd works with owners, executives and managers who want to improve the people side of their business and build a sense of ownership and commitment in their employees.  She's a management consultant, executive coach, workshop trainer & professional speaker for companies of all sizes, from start-ups to the Fortune 500, as well as trade & professional associations across the country. Reach her at (800) 348-1944, Email info@joanlloyd.com, or visit www.JoanLloyd.com.