standing on the shoulders of (business) giants

Standing on the shoulders of (business) giants

Lessons from the old economy

Presented by Martin ThomasIoD Course leader and consultant

@crowdsurfing

April 2014

Welcome to the new economy

What are the biggest changes in the world of business that you have witnessed in the past 5 years?

Analogue thinking in a digital age

“The approval time for each Tweet, by the time it had gone through

compliance and tone of voice, was 10 days”

Head of Customer Marketing, Major UK Financial Institution

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“Digital communications is a destabilizing force in a

bureaucratic environment. And I am sitting right in the middle of a

bureaucratic environment.”Senior corporate communications director

“We’re not set up for this shit”UK CEO

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“The instinctive reaction from the board is: how do we control the online lives of our staff? But social media – available at the touch of a button on the mobile phone –

does not lend itself to Soviet-style command and control”.

Anthony Goodman, Tapestry Networks, Financial Times, Oct 2013

Analogue thinking Digital thinking

Command and(top-down) control

Empowerment and dispersed authority

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Privacy and tight news management

Rigid, formal hierarchies

Key opinion formers

Intuition and gut instinct

Openness and transparency

Flexibility and informality

Dispersal of influence and authority

Data analytics

Institutional time Real time

Analogue thinking Digital thinkingCommand and

(top-down) controlEmpowerment and dispersed authority

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Empiricism v Intuition

“Long-gone is the day of the gut-instinct management style. Today’s business leaders are adopting algorithmic decision –making techniques and using highly sophisticated software to run their organizations.”

Ian Davis, worldwide managing director of McKinsey

“Let me suggest an alternative trend – the rise

of heuristics over algorithms; qualitative over

quantitative research; judgement over analytics, creativity over crunching.

Smart executives are recognizing that the analytic approach to

business has over reached.”

Professor Roger Martin, Dean of the Rotman School of Management at the University of Toronto

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Mind the generation gap

Post-Boomer mind-set

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Mind the generation gap

Post-Boomer mind-set+

Gen Y expectations

“We’re giving people the latitude to go off & do their own thing. We trust them to do their regular jobs & to experiment, innovate & have fun”

Microsoft Senior Manager, quoted in Business Strategy Review

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Learning through failure not received wisdom

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“Remember, we celebrate our failures. This is a company where it’s absolutely OK to try

something that’s very hard, have it not be successful, and take the learning from that”

Eric Schmidt, Google

“What we've thought of as leadership skills – setting direction, having the answers, controlling performance,

running a tight ship – are less relevant in an environment of constant change.

Increasingly, leadership is about creating a context for innovation and inclusion in the face of ambiguity and

the unexpected”

Tamara Erickson, author of What’s Next, Gen X

Leadership in a digital age

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“To thrive in the world of social media, leaders need to acquire a mind-set of openness and imperfection and they must have the courage to appear raw

and unpolished”

Six Social Media Skills Every Leader Needs: Roland Deiser and Sylvain Newton,

McKinsey Quarterly, Feb 13

Leadership in a digital age

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A culture of anti-management

‘Organisation without organisation’

Adhocracy comes of age

Welcome to the holacracy

“Our philosophy? To determine precisely the amount of management we need –and then use a little bit less”

Shona Brown, ‘Google’s chief chaos officer’

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The fetish of disruption

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Where does this leave the role of the manager and the relevance of professional development?

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Everything has changed?

.

Cash flow problems

Poor location

Poor employee relations

Poor marketing planning

Lack of clear

objectives

Poor manage-

ment

Failure to embrace new tech

Poor business planning

The Times 100 Business Case studies

Why do 1 in 3

start-ups fail?

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Business fundamentals have notchanged

Businesses continue to succeed or fail depending on ability to:

Think and operate strategically Manage money and people Put in place the systems and procedures

that support (rather than constrain) ability of talented people to get things done

Recognise importance of good governance without becoming a slave to it

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Social technology is not a magic bullet

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Room for improvement

64%of employers agree that weaknesses in leadership and management skills are holding back company growth

Cranfield School of Management, Aug 2013

43% of managers consider their line manager to be ineffective or highly ineffective

CIM August 2012

Too many of our organisations, both private and public, are failing to achieve their full potential: managerial shortcomings and a lack of strategic thinking are holding them back.

BIS Report, July 201219

Trouble at the top

0102030405060708090

Lineemployees

Lowermanagement

Middlemanagement

Topmanagement

What management level caused the internal crisis?

Turnaround Management Study Feb 1420

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What makes a post-digital leader?

“The dynamics of social media amplify the need for qualities that have long been a staple of effective leadership, such as strategic creativity, authentic communication, and the ability to deal with a corporation’s social and political dynamics and to design an agile and

responsive organisation” Six Social Media Skills Every Leader Needs:

Roland Deiser and Sylvain Newton, McKinsey Quarterly, Feb 13

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The end of planning?

‘Plans let the past drive the future. Plans are inconsistent with improvisation. Unless you’re a fortune-teller, long-term business planning is a fantasy. There are just too many factors that are out of your hands.’Jason Fried, David Heinemeier: Rework

‘Stop forecasting, embrace uncertainty, start managing,’ Alastair Dryburgh

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Always on

Real time

Triumph of the tactical

Optimisation

Cheaperproduction

Automation

Shorter attention

spans Management fixation with short-term

tactics

The ‘grown-ups’ fight back

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“Now that [the assertion that planning is a waste of time] really is dumb. Maybe in a low risk software company you can

just do it, but if you have capital expenditure, or you are moving a

factory, you had better make sure you plan the move, the stock-build, the overtime, the working capital and

service implications. I am not sure these guys are real business people. They need to stop behaving like children.’

John Vincent, Management Today, March 2010

Strategy matters even more in a digital age

“The determination of the long run goals and

objectives of an enterprise and the adoption of

courses of action and the allocation of resources

necessary for carrying out these goals”

Alfred D Chandler, 1963. As quoted in the IoD’s Director’s role in strategy

and marketing workshop

Alignment with organisational priorities

Credible and comprehensive executional plan

Resource allocation (people, process & systems)

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Management strategy matters

0 10 20 30 40 50 60

Insufficient product qualityBad customer service

Too decentralisedInsufficient cash flow

Not enough new customersIneffective marketing

Lack of workforce goalsLiquidity problems

Insufficient investmentFailed expansion

Too much bureaucracyMgmt not well educated in business

Market changes underestimatedPoor internal comms

Insufficient financial controlsLack of management vision

Management failure to adaptPoor management strategies

Most common internal causes of corporate crisis

Failures of management capability

Turnaround Management Study Feb 1427

20061936200820012013

20022012199020132007

* Amazon physical book sales (analysed by Business Insider), Dec 2013

Good thinking and ideas are timelessMost popular business books of 2013*

Professional development opportunities with the IoD

Coaching skills

Negotiating

Leadership

Social media strategy

Nationally-recognised qualifications

A wide range of short courses

Stage 2: Diploma in Company Direction

Stage 1: Certificate in Company

Direction

Stage 3: Chartered Director

Plus: executive coaching services with independent and qualified experts.

Find out more at: www.iod.com/developing

Personal effectiveness

The Company Chairman

The Executive PA

The Finance Director

The Managing Director

The Company SecretaryBusiness presentation

skills

Strategic thinking

The Non-Executive Director

Coaching skills

Stand on the shoulders of business giants

Borrow from the past

Principles and practices, developed and codified by earlier generations, are still relevant

Invest in senior management training and development, including for yourself

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“If I have seen a little further it is by standing on the shoulders of giants”

Sir Isaac Newton

http://www.iod.com/developing

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