It Is Time To Transform Management

by Jay Deragon on 07/25/2012

In the old days managers focused on timelines, budgets, organizational structures, metrics, controls, and numbers.  Leaders focus on vision, buy-in, motivation, culture, and people. Today the role of management is no longer what it used to be rather it must be transformed.

The truth is that the roles for managers  is defunct, a relic of 20th Century thinking. It’s a leftover from the industrial era and no longer fits the requirements to succeed in the networked economy.

While past management models worked well for much of the 20th Century, the results in today’s networked economy are disastrous, as shown by a comprehensive study of some 20,000 US firms by Deloitte’s Center for the Edge.

  • The rate of return on assets of US firms is one quarter of what it was in 1965.
  • The life expectancy of a firm in the Fortune 500 has declined to less than 15 years and is heading towards 5 years unless something changes.
  • Executive turnover is accelerating.
  • The topple rate of leading firms is speeding up.
  • Only one in five workers is fully engaged in his or her work: the larger the company, the lower the level of passion among the workers.

In this new world, managers must be retrained and provided with new knowledge so they can lead the organization into the 21st century. Managers now have to be leaders helping teams not only solve problems but drive the organization through rapid cycles of change which each cycle designed around customer engagement.

The role of the manager shifts from being a controller to a leader who can break down barriers that constraint progress.  They have to be enabling workers to achieve the goal of continuing to add value to customers, internal and external, and get it to them faster .

Managers have to put their primary emphasis on systemic performance, i.e. measuring whether the firm is delighting its customers, empowering it’s employees, seeking, creating and enabling innovation that creates enriched engagement and better outcomes rather than just outputs.

The 21st Century manager is able to mesh the efforts of autonomous teams of knowledge workers who have the agility to innovate and meet the changing demands of clients while also achieving disciplined execution. It requires a set of measures that can reduce variation of outcomes and provides insights into broken processes and customer preferences.

The transformation is already underway but the mindset of many managers can’t even begin to see it never mind embrace it. To them the end of the journey is near, to those who have made the transition the journey has just begun.

{ 1 comment }

Virtual Office August 7, 2012 at 7:28 am

Great post! I totally agree that it is now time to change the manager’s roles. In this competitive world, it is important that managers need to put more emphasis on systemic performance. A manager now needs to perform the role of a leader and guide the employees appropriately.

Comments on this entry are closed.

Previous post:

Next post: