standing on the shoulders of (business) giants
DESCRIPTION
IoD Course Tutor and Consultant Martin Thomas presented "Standing on the Shoulders of (Business) Giants - Lessons from the Old Economy" at the Elite Business Event. In a world where 'innovation' and 'disruption' are at the centre of new business, should traditional management concepts be discarded?TRANSCRIPT
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
3
“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
4
“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
5
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
6
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
7
Mind the generation gap
Post-Boomer mind-set
8
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
9
Learning through failure not received wisdom
10
“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
11
“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
12
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’
13
The fetish of disruption
14
Where does this leave the role of the manager and the relevance of professional development?
15
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?
16
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
17
Social technology is not a magic bullet
18
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
21
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
22
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
23
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
25
“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)
26
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
30
“If I have seen a little further it is by standing on the shoulders of giants”
Sir Isaac Newton
http://www.iod.com/developing
31