What Are the Challenges of ion Behavior

8/8/2019 What Are the Challenges of ion Behavior

1/54

What are the challenges of Organization

behavior?

Improving quality and productivity through the use of quality management, reengineeringand other techniques; improving people skills; managing workforce diversity-a key

challenge since organizations are becoming more heterogeneous in terms of gender, race,and ethnicity; responding to globalisation; empowering people by the reshaping of the

relationship between managers and those they are supposedly responsible for managing;

stimulating innovation and change; coping with temporaries as the workforce becomesmore part time and contingency based; dealing with declining employee loyalty; and

improving ethical behaviour.

Managers and employees must become capable of working with people from different

cultures-

~Multinational corporations are developing operations worldwide.

~Companies are developing joint ventures with foreign partners.

~Workers are pursuing job opportunities across national borders.

Organisational Challenges

Home :Organisational ChallengesEspecially in today's environment, employees are the single mostvaluable asset within an organisation. KBC understands that ourclients are facing Organisational Challenges such as shiftingdemographics, knowledge retention, aligning the organisation forsuccess, and employee development.

We are committed to helping clients leverage the full value of theirpeople to achieve NextGen Performance through OrganisationalServices such as:

Leadership and Management Consulting

Strategic Vision and Operating Philosophy Development

Cultural and Behavioural Assessments

Organisational Design/Redesign

Workforce Optimisation

Development of Local Workforce
http://www.kbcat.com/http://www.kbcat.com/Organisational-Challenges/http://www.kbcat.com/Organisational-Challenges/http://www.kbcat.com/Products-and-Services/Organisational-Services/http://www.kbcat.com/Products-and-Services/Organisational-Services/http://www.kbcat.com/Products-and-Services/Organisational-Services/http://www.kbcat.com/http://www.kbcat.com/Organisational-Challenges/http://www.kbcat.com/Products-and-Services/Organisational-Services/http://www.kbcat.com/Products-and-Services/Organisational-Services/


2/54

Organisational Alignment and Culture Change

Work Process Optimisation

Abnormal Situation Management

Human Capital Consulting

Job Profile Development/Job Alignment

Effective Training Organisation Establishment/Improvement

Training System, Programme, and Material Development and Delivery

Performance Management System Development and Implementation

Health and Safety Programme Establishment/Improvement

Employee Support Systems

Procedure/Manual Development

KPI Tree Specification and Implementation

Focused Job Aid Development

New challenges to leadership


This brief text offers some thoughts on what is involved in leading

complicated organisations. There are three sections. The first of theseconsiders the changing nature of the leader's task. We suggest that in

the knowledge economy, this applies hard criteria to defined things,and enables emergent direction-setting in those critical areas where

renewal and the less-than-clear task are dominant. We suggest thatwhat is needed is less personal 'leadership' than the creation of whathas been called the 'leaderful' organisation: a structure which has

learned to talk about the key issues.

We have discussed the two 'arms' of management: the specified andthe less-than-clear. We have shown that whilst the specified

component is heavily, roundly managed, the 'unspecified' componentis not. The knowledge economy flows from handling the unspecified.

The specified will be increasingly commoditised. How is one to manage

for issues which have yet to be' defined? Essentially, through a processof recursion. Senior staff have to set a general area - "over there, not

over here", "we shall be a lead innovator; or we shall be a fastfollower" - and the rest of the organisation have to fill in the blanks.

This suggests two tasks. One of these consists of knowledgemanaging, of idea-crystalising dialog, which is needed for blanks to be

filled and general directions to become increasingly strong. The other

is a toolkit of measures which predispose the organisation to self-
http://www.chforum.org/methods/xc415.shtml#one%23onehttp://www.chforum.org/methods/xc415.shtml#one%23one


3/54

assemble in one way, rather than in the very many others that areopen to it.

Complex structures operate less through formal direction than from

bottom up examples and exploration that adds up to a recognised

trend. "You can tell where the supertanker has been by looking at thewake." Personal advantage through apposite criteria, reward to risktaking of the right kind, the need to justify project plans in terms of

the 'big picture', personnel selection, corporate heroes are all

examples of such a tool kit. Where the overall use of these is coherent,then the organisation will be predisposed to move in the direction

which this coherence suggests. This does not just happen, however,but has to be organised. What will work depends on the details of the

structure in question: on what kinds of people work within it, on thestate of maturity, of the 'specified' or less than clear sources of added

value within it.

The second section notes how plural organisations are and will remain.No one style or process is enough. The third reviews a major survey of

how both leaders and the led perceive leadership, and the various

categories of leader which appear to exist.

The new tasks of leadership


Most forms of governance place senior managers in a position in whichthey are responsible for carrying out several parallel, quite distinct and

often superficially contradictory roles. They are tasked with keeping

the show on the road, reconciling shareholder, state, customer,employee, supplier and partner interests, creating future potential and

selecting and overseeing people and the human fabric that theyweave. The paper on strategy suggests the complexities which are

innate to organisations of any scale and reach.

Few of these roles are new. Some of these are chiefly concerned withthe intensification of traditional pressures. Others, such as the

professionalisation of the workforce, are new to many industries. The

de-integration of commerce, the inter-linking of what it does with farmore stakeholders and the frequent lack of clarity as to the boundaries

of the firm all challenge some industrial sectors in novel ways. What isclearly new to all forms of leadership - in politics as much as in

commerce - is the shift away from performance as the sole guarantorof success to the need to "get it right".
http://www.chforum.org/methods/xc415.shtml#two%23twohttp://www.chforum.org/methods/xc415.shtml#three%23threehttp://www.chforum.org/methods/xc415.shtml#two%23twohttp://www.chforum.org/methods/xc415.shtml#three%23three


4/54

Chapter One discussed the distinction between 'specified' - clear,defined - activities, and those critical areas of renewal where the key

consists of finding options and clarifying a way of thinking about theissues. "Specified" tasks can be run on traditional grounds, perhaps

with more complex criteria. The role of outsourcing, virtual teams,

partnership and geographical diffusion is relatively easy to managewhere th eissue under development is clear.

What can be achieved is striking. Boeing designed their new 777

aircraft with 230 teams of around 40 people in each of them. Theyworked with three major customers, 500 suppliers and a network that

deployed 1,700 workstations in 12 countries. According to themanagement consultants McKinsey, Boeing was able to manage the

entire process from concept to metal bending in around two-thirds ofthe time that previous experience with linear management systems

had led them to expect.

This said, it is the less specified, socially-intensive steps that realisecomplex options on which the knowledge economy is increasingly

founded. Less specified tasks require completely different forms of

motivation, time scales, criteria and managerial approach.

Managers of the 'unspecified' need to unify the thoughts of people with

a wide range of skills and outlooks. Senior staff (or their delegates)

create a way of thinking that challenges the organisation to achievemore or less loosely-defined conceptual tasks. Research signposts, for

example, can be used to assert that 'by 2005, our industry will havehad to overcome the following hurdles'. These provide a powerful focus

for debate, however valid the statements themselves may or may not

be. Scenario and strategic planning play similar roles, as doaspirational or horizon-scanning statements and speeches.

These general statements need to state what they exclude: is the firmis to be an innovator, then it is not to be a follower or an integrator.

Often, it is important to indicate what kind of innovation or other issue

is at stake. It may mean that the firm is a research-focusedorganisation, or a fisher for ideas in the commercial milieu. Second,

such statements must have a recognisable business model in them.Worthiness is all very well, but - as with the dot.com failed revolution -

the economics must be there. Third, the statements must lead to

action: to better sceening critieria, to the winnowing of responses fromthe organisation, to better future statements. The aim should be to

refine a shared model of how things work, what the firm will excludeand what it will address; and why it will do this.


5/54

This said, assessments suggest that only around five percent of teamsare currently capable of outperforming individuals who are managed

from above. So-called 'silo management', in which people aremaintained in relative ignorance of the reason why they perform a

task, but are given highly specified work to do, performs at least as

well as creative teams which are assembled for specific projects. Itdoes not innovate or correct its tendencies to make mistakes,

however, and it is limited in what it can do by what a single individualcan know, particularly when embedded in the demands of line

management. It is, perhaps, a style for an established activity within a

stable industry or within labour-intensive industries, and may beparticularly suited for the industrialising nations. It cannot deliver the

goods where huge amounts of knowledge must be marshalled, orcomplex structures mastered as they change and mutate.

As indicated in the introduction, two leadership information loops are

at play. One, assisted by analysis, lays out general, sensible directions.Opinion is taken and the view of how the operating environment works

gradually shifts and adapts to changing awareness and knowledge.Second, a host of tools are used to predispose the organisation to

behave in appropriate ways. Where it is not possible to give orders

(even given that the subject of those orders is clear to senior staff) theorganisation has to be equipped with criteria, culture, people and

processes such thatthe right 'kinds of thing' go forward and theinnapropriate is blocked. Such criteria will vary between business

divisions and activities with the same leadership envelope. How one is

to treat a group of self-motivated innovators is quite different fromappropriate inducements and checks elsewhere.

Setting direction in a multi-cultural environment.


The many forces which we have described suggest that firms needs to

spend more time defining how the operating environment operates,

what options this and prospective change may offer, and what can bedone about this. They need to do this internally, and often with

partners, regulators and others. Achieving this is an iterative processthat demands time, skills, resource and high quality attention. It

diverts attention away from maintaining the status quo.

Small companies and large ones have different and sometimescomplementary skills. Figure 1 suggests, however, that small

companies and large both feel themselves weak in respect of


6/54

oversight, human skill development and innovation. Further, smallfirms believe themselves to be worse at almost all activities except

order servicing, which is known objectively to be one of the easiestactivities for large firms to automate and outsource. The knowledge

economy is most certainly not going to consist of a web of small,

entrepreneurial companies, but of agile, oversight-deploying firms thathave generated a sufficient surplus (and level of experience) to allow

them time to steer the engines of change.

Figure 1: Self-assessment by small and large Europeancompanies

The last decade have focused firms upon 'getting themselves right'.

They have stripped themselves down for a highly specific set of tasks,and usually applied a common style to all that they do. More recently,

the idea of the 'balanced scorecard' has suggested that whilst a

homogenous approach is sensible, a uni-dimensional focus is not.Firms need to take account of regulators and customers, shareholders

and interest groups, partners and employees. This said, a commonstandard tends to be imposed.

Projects need different styles at different stages in their life cycle. The

initial stage, of thinking through an idea and finding ways to express itto decision taking structures and potential partners, regulators and

others, tends to be long on creative analysis, synthesis andexperiment and short on both hard data and defined goals. Indeed, it

is inventing the goals and finding the data. There follows a second

stage, in which the vague ideas that emerge from the first are


7/54

transformed into an implementation plan and into contractualrelationships, and in which significant amounts of money start to be

spent. This stage, in its turn, becomes an implementation project,overseen against a project plan by hard-eyed scrutineers. Finally, the

completed project passes into routine, where further refinement is

applied and productivity is pursued.

Each of these require a different 'culture': differing ways of interacting

and different criteria. The people who thrive in these situations may be

innately different, and certainly need quite different forms of direction.The knowledge economy is, therefore, concerned with a number of

different things:

Developing an oversight of the

pertinent operating environment, such

that a framework exists in which tovalidate potential forms of renewal. In

particular, noting technological andmarket-based 'systems busters' which

may change the nature of the industry.

The US giant company GE haveinstituted the 'DYB' program: that is, in

a creative way, to Destroy YourBusiness (because if you do not,

someone else, somewhere in the global

economy will certainly be planning to

do so.) Developing machinery to reachout to sources of knowledge and

capability so as to put flesh on the

bones of this potential. This might beas much working with an industry

regulator so as to define paths forwardas with internal or external interests.

Developing systems of management which license but rein in

the styles of operation that are

distinctive to the various stages ofimplementation of new projects.

Developing systems that allow abalanced approach to be taken to the

shifting ground in each part of the

portfolio of activities: allowing gradualinnovation in established parts of the


8/54

business as well as driving them forbest practice, taking into account

stakeholder concerns and the like.

Developing the habit of working

in networks and partnerships, taking a

realistic view of what can (and cannot)be achieved in frameworks in which

motives are usually spectacularlymixed.

These skills are plainly necessary in order to cope with a fast-

changing, low barrier world. The capacity to deploy them alreadyproves a major source of competitive advantage in many fields: in

entertainment, in science, in venture capital. Membership of aknowledge network is earned, for others will work with a firm when it

has proved the equivalent of good citizenship and has engendered

trust. Members of a network have to contribute to well as extract valuefrom the network. The skills that are involved are often human-

focused, requiring protracted and personal contact. These are noteasily created across impersonal IT systems alone, and knowledge

networks have tended to remain rooted within a context or even

around a physical location, such as Hollywood or the City of London.Indeed, it may be a major source of strength for the industrial world

that this is so, in the face of billions of educated people withconsiderable access to technology.

Steering what might be called 'multi-cultural' companies can be verydifficult. Reward structures need to differ, people need to be givendistinct and often incompatible tasks. A more fundamental problem

can be illustrated by the following consideration.

Most companies have a set of innate tensions, as between imposingcommon disciplines from central control or allowing diversity. Equally,

the firm can respond to external imperatives (often to thedisadvantage of the internal socio-technical balances that have served

in the past) or can focus upon these, sometimes at the expense of

agility, regulatory compliance or customer satisfaction. Figure 2expresses these dilemmas, and identifies both four healthy outcomes

that arises from accepting any one of these. Inset, however, are thesymptoms of uncritical acceptance of any one of these as the sole

guiding principle.


9/54

Figure 2: Four cultures that arise from solutions to twokey dilemmas, and four set of symptoms of pathologies

that may arise.

This said, it is far easier to manage for one thing than for many. Asimple imperative - to cut costs and never mind any other

considerations - is easy to propagate and clear for individuals tointerpret. Mixed messages are far harder to handle. The figure shows

some gradients in which managerial signals of increasing intensity arefed to the organisation, seeking faster reaction from it. The gradients

express the equal ease with which single or mixed messages can be

expected to have their affect.


10/54

Figure 3: Mixed imperatives creates contours of equallyeasy organisational response

A firms that finds itself at location A may wish to move to location B. A

light push 'up' and a strong push to the 'left' would appear appropriateto a perceptive management. Unfortunately, due to the tendency of

the corporate social system to simplify issues and to take them out ofcontext, the locus will tend to follow the contour gradient, ending at,

perhaps, C. Change (often on many more than two dimensions)therefore requires active steering, not a single push.

Worse, an activity in the upper right (an advertising project team,

perhaps) would have a quite different innate 'culture' from any of theother quadrants. The measures that steered from A to B would have a

pathological affect upon it, taking it into the unfortunate areas on

Figure 2!

Management is, therefore, a matter of deploying experience in

diversity, and recipes which have this or that style (enthusiasm, the

hard line, coaching.) is bound to be inadequate in some area or other.The next section shows how idiosyncratic such issues of local 'fit' can

be.


11/54

Styles of leadership: a UK survey


McKinsey have, for many years, worked with chief executive officers. A

survey of American CEOs gave their prescriptions for success. Thesewere remarkably uniform: to set clear domains of activity, to create

personal accountability for equally clear targets within these, tominimise central interference and to drive the firm for low cost and

high share of the market. CEOs seemed to feel that change was best

created bottom-up, that they would know a good thing when they sawit and that if they gave conceptual direction, everyone else would stop

thinking. Many readers will recognise the style. It appears to suit the'silo management' style, described above, but does not seem likely to

create overall managed migration.

CEOs are, like the rest of humanity, susceptible to fashion. McKinsey'sreport documented the fashion of the 1985-95 period. Many business

leaders are wondering what to do now for an encore and how to cope

in a world of knowledge-intensive activity, having already pared costs,often jettisoned the company's higher brain functions and focused

upon doing one thing very well. As a whole, the US appears to besolving the problem, but often by large companies drawing upon small

start-ups for their ideas. This may well be a satisfactory solution: only

time will tell.

There are, of course, other styles of leadership, many of themcurrently out of fashion, although widely practised. The IndustrialSociety is Europe's largest training group. It has completed a study on

the concomitants of leadership, drawing on a sample of around a

thousand UK managers and those managed. Such studies may becriticised in two ways: they measure what people believe is effective,

not what yields whatever results one deems to measure efficacy; andthey tend to notice whatever the experimenters set them up to note.

The book has another weakness, which is that it discounts 'implicit'

leadership, in which the goals of the organisation are embedded incriteria, targets and procedures. The focus is placed firmly upon

personal, rather than impersonal, interaction.

The Industrial Society's study does, however, contain an illuminatingreview of the literature on leaders and followers, who are not always

the same thing as junior and senior staff. Indeed, around four-fifths ofthe examples of leadership that were cited involved people who were

not in positions of authority. A large portion of those who were in


12/54

positions of formal authority indicated that their chief frustration wastheir inability to induce people to do what they wanted, leading to

friction and HR problems. The literature review points up a significantdisparity between the emotional drivers which take many people to

power and the human skills required of the job, notably in today's

environment. Previous samples of managers - both from the US andthe UK - have been assessed in ways which isolate the chief emotional

components that drive their career goals. An overwhelming elementwithin an equally large fraction of these shows a strong desire for

personal dominance. Unless skilfully masked, however, this desire is

the exact antithesis of what is needed for efficacy.

We have already noted that management may be thought to exist

along an axis which has two extremes, neither of which is incorrect butboth of which are fitted to circumstance. At one end of this axis,

managers encourage people to pool what they know in order to clarify

issues and create as yet unknown possibilities. At the other end,managers define the problem and the tasks needed to solve it, and

allocate these tasks as they see fit. The first style is suited to thosetasks in which virtually everything is unclear: the terrain of knowledge

management. Its products require analysis and clarity. It requires

team play, spontaneity, recursive clarification; it places great stressupon an overarching sense of direction, of process, of passing the

baton. The second style is best suited to line management or projectmanagement, in which virtually everything is clear and where the

problems are essentially operations. This requires compliance,

oversight, accountability, formal targets, formal criteria, formalassessment; it needs diligence and application from a compliant

workforce who are prepared to take orders and to operate in 'silos'.

The 'liberating leader' is, perhaps, a title for the style which isappropriate to the synthesising, knowledge-managing end of the

managerial axis. Analysis of the elements of this showed up ninecontributory sub-styles.

Protector: promotes individual self-

esteem, stands up for others' interests,minimises friction.

Tutor: encourages forward-lookinghuman development, treats mistakes as

opportunities to learn.

Mentor: defines a role for theindividual, but shows consistency and

integrity in a personal role.


13/54

Teamplayer: makes explicitstatements about targets, progress,

performance.

Director: decision-taking order-giver,

who inspires fear but who enforces

performance. Listener: notes, works around

individual capacities and weaknesses.

Innovator: encourages new

approaches, communicates oversight and

general purpose.

Delegator: creates an environment in

which sensible, local risk-taking appearspossible.

Networker: keeps in touch with the

wider world, maintains the context of ateam.

Of these, the "Protector" was by far the most powerful explanatoryvariable characteristic of leadership. The others are organised in

descending order. "Director" and those below it explained only around

3% of the variance in the sample: they were essentially - perhapsworryingly - trivial components.

The upper part of this continuum is chiefly focused upon sorting out

people, while the lower part is, perhaps, more concerned with sorting

ideas. The explanations that accompanied this investigation are, forthe most part, highly people-oriented: no interviewee seems to haveset much store by management as the custodians of financial probity

or safety. External influences - customers, the environment, regulators

- are allocated to the least powerful component, that of the"Networker". Readers can make up their own minds as to whether this

reflects perceived sources of weakness in management rather than ananalysis of the overall sources of excellent management.

An attempt to carry out such an analysis produced the following as the

key concomitants of leadership:

Communicating an inspirational

view of the future.

Supporting other people.

Promoting understanding.

Understanding before makingjudgments.


14/54

Valuing individual differences.

Promoting a sense of direction.

Promoting the self-esteem ofothers.

The views of the sample were assessed by age, gender, industry andjob level. There was no obvious age-related trend, except that theyoung valued "Director" and "Tutor" while older people tended to

prefer the styles concerned with networks, knowledge and inclusivity.

Gender differences were stark: 93% of the variance was explained bywomen preferring a participative style (Protector, Innovator,

Networker, Listener) while men rejected this approach.

Industrial differences were revealing. Manufacturing and utilities

sectors preferred the order-giving "Director" style, although utilities

supplemented this with affection for "Teamplayer". Technologists, bycontrast, disliked "Director", but liked "Mentor": evidence of preference

for a closed little world, set apart from the rest? Public-sector andgovernment sources focused on "Delegator", which retailing, by

contrast, found unacceptable, but without having much of an

alternative to offer. Professionals hated both "Director" and"Teamplayer", but vaguely enjoyed "Delegator". Those in training and

education, surprisingly, were negative about "Listener" but the mostpositive of all about "Director" and "Mentor". The finance industry did

not like any managerial style at all.

Job roles showed similar differences. Nobody admitted to liking the"Director" style. Senior managers disliked "Mentor", but saw

"Innovator" and "Networker" as their preferred style. Lesser managers

showed the same, but less pronounced, pattern. Project managerswere also unhappy with "Mentor", but team leaders, by contrast, were

highly positive about it, as were administrators. These last alsoadvocated "Innovator" and "Delegator". Technical staff hated all styles,

but hated "Mentor" the most (which fits unhappily with this as thepreferred style of the technology-based industries!) Sales people very

much approved of "Innovator" and very much disliked "Delegator", the

strongest measures in the survey. Personnel were equivocal about allstyles, and professionals, as indicated earlier, chiefly negative.

Conclusions

What does this tell us? Chiefly, that if human society is the most

complex grouping in the known universe, then the management of

parts of this must be about many solutions and many syndromes, not


15/54

one. We have tended to bend people to fit the limits of our owncapacities, as re-engineering tended to bend companies to fit into the

limitations of information technology. Knowledge-managing companieswill, however, need to find their innate skills and capabilities,

deploying these in ways which cannot be predicted and which cannot

be constrained by belt-and-braces limits. The military, confronted withthe need to liberate local choice while avoiding rogue operators, have

tended to adopt a series of concentric domains. In the subsidiarycentre, the infantryman can make his own choices. He knows exactly

when to delegate upwards, however, and has been trained to do so.

New command structures drop into place as new conditions aredetected and new issues raised. We suspect that this 'fractal'

management may be the style of the future. It is very far from the 'setthe criteria and push for the results' model of the past decade.

The figure states the obvious. The two most important axes that define

demands on leadership are, first, the scale of the activity and second,

the degree to which the work undertaken is safely specified orworryingly unspecified. Small businesses addressing an unchanging

world have a very different set of needs from large activities for whichthe world is constantly changing, and within which success stems from

the implementation adaptive responses the the knowledge economy.

Grand prescriptions (Excellence! Seven Great Secrets!) from theAirport Bookshelf School of Management miss this essential point.


16/54




complicated organisations. There are three sections. The first of theseconsiders the changing nature of the leader's task. We suggest that in

the knowledge economy, this applies hard criteria to defined things,and enables emergent direction-setting in those critical areas where

renewal and the less-than-clear task are dominant. We suggest thatwhat is needed is less personal 'leadership' than the creation of what

has been called the 'leaderful' organisation: a structure which has

learned to talk about the key issues.

We have discussed the two 'arms' of management: the specified and

the less-than-clear. We have shown that whilst the specifiedcomponent is heavily, roundly managed, the 'unspecified' component

is not. The knowledge economy flows from handling the unspecified.

The specified will be increasingly commoditised. How is one to managefor issues which have yet to be' defined? Essentially, through a process

of recursion. Senior staff have to set a general area - "over there, notover here", "we shall be a lead innovator; or we shall be a fast

follower" - and the rest of the organisation have to fill in the blanks.

This suggests two tasks. One of these consists of knowledgemanaging, of idea-crystalising dialog, which is needed for blanks to be

filled and general directions to become increasingly strong. The other

is a toolkit of measures which predispose the organisation to self-assemble in one way, rather than in the very many others that are

open to it.



trend. "You can tell where the supertanker has been by looking at thewake." Personal advantage through apposite criteria, reward to risk

taking of the right kind, the need to justify project plans in terms ofthe 'big picture', personnel selection, corporate heroes are all


which this coherence suggests. This does not just happen, however,

but has to be organised. What will work depends on the details of thestructure in question: on what kinds of people work within it, on the

state of maturity, of the 'specified' or less than clear sources of addedvalue within it.


17/54


how both leaders and the led perceive leadership, and the variouscategories of leader which appear to exist.



Most forms of governance place senior managers in a position in whichthey are responsible for carrying out several parallel, quite distinct and

often superficially contradictory roles. They are tasked with keepingthe show on the road, reconciling shareholder, state, customer,

employee, supplier and partner interests, creating future potential and

selecting and overseeing people and the human fabric that theyweave. The paper on strategy suggests the complexities which are

innate to organisations of any scale and reach.

Few of these roles are new. Some of these are chiefly concerned withthe intensification of traditional pressures. Others, such as the

professionalisation of the workforce, are new to many industries. Thede-integration of commerce, the inter-linking of what it does with far

more stakeholders and the frequent lack of clarity as to the boundaries

of the firm all challenge some industrial sectors in novel ways. What isclearly new to all forms of leadership - in politics as much as in

commerce - is the shift away from performance as the sole guarantor

of success to the need to "get it right".

Chapter One discussed the distinction between 'specified' - clear,

defined - activities, and those critical areas of renewal where the keyconsists of finding options and clarifying a way of thinking about the

issues. "Specified" tasks can be run on traditional grounds, perhapswith more complex criteria. The role of outsourcing, virtual teams,

partnership and geographical diffusion is relatively easy to manage

where th eissue under development is clear.


aircraft with 230 teams of around 40 people in each of them. They

worked with three major customers, 500 suppliers and a network thatdeployed 1,700 workstations in 12 countries. According to the

management consultants McKinsey, Boeing was able to manage theentire process from concept to metal bending in around two-thirds of

the time that previous experience with linear management systemshad led them to expect.


18/54


founded. Less specified tasks require completely different forms ofmotivation, time scales, criteria and managerial approach.

Managers of the 'unspecified' need to unify the thoughts of people witha wide range of skills and outlooks. Senior staff (or their delegates)create a way of thinking that challenges the organisation to achieve

more or less loosely-defined conceptual tasks. Research signposts, for

example, can be used to assert that 'by 2005, our industry will havehad to overcome the following hurdles'. These provide a powerful focus

for debate, however valid the statements themselves may or may notbe. Scenario and strategic planning play similar roles, as do

aspirational or horizon-scanning statements and speeches.

These general statements need to state what they exclude: is the firmis to be an innovator, then it is not to be a follower or an integrator.

Often, it is important to indicate what kind of innovation or other issueis at stake. It may mean that the firm is a research-focused

organisation, or a fisher for ideas in the commercial milieu. Second,

such statements must have a recognisable business model in them.Worthiness is all very well, but - as with the dot.com failed revolution -

the economics must be there. Third, the statements must lead toaction: to better sceening critieria, to the winnowing of responses from

the organisation, to better future statements. The aim should be to

refine a shared model of how things work, what the firm will exclude

and what it will address; and why it will do this.

This said, assessments suggest that only around five percent of teams

are currently capable of outperforming individuals who are managedfrom above. So-called 'silo management', in which people are

maintained in relative ignorance of the reason why they perform atask, but are given highly specified work to do, performs at least as

well as creative teams which are assembled for specific projects. Itdoes not innovate or correct its tendencies to make mistakes,

however, and it is limited in what it can do by what a single individual

can know, particularly when embedded in the demands of linemanagement. It is, perhaps, a style for an established activity within a

stable industry or within labour-intensive industries, and may beparticularly suited for the industrialising nations. It cannot deliver the

goods where huge amounts of knowledge must be marshalled, or

complex structures mastered as they change and mutate.


19/54

As indicated in the introduction, two leadership information loops areat play. One, assisted by analysis, lays out general, sensible directions.

Opinion is taken and the view of how the operating environment worksgradually shifts and adapts to changing awareness and knowledge.

Second, a host of tools are used to predispose the organisation to

behave in appropriate ways. Where it is not possible to give orders(even given that the subject of those orders is clear to senior staff) the

organisation has to be equipped with criteria, culture, people andprocesses such thatthe right 'kinds of thing' go forward and th

einnapropriate is blocked. Such criteria will vary between business

divisions and activities with the same leadership envelope. How one isto treat a group of self-motivated innovators is quite different from

appropriate inducements and checks elsewhere.



The many forces which we have described suggest that firms needs to

spend more time defining how the operating environment operates,what options this and prospective change may offer, and what can be

done about this. They need to do this internally, and often withpartners, regulators and others. Achieving this is an iterative process

that demands time, skills, resource and high quality attention. It

diverts attention away from maintaining the status quo.

Small companies and large ones have different and sometimescomplementary skills. Figure 1 suggests, however, that smallcompanies and large both feel themselves weak in respect of

oversight, human skill development and innovation. Further, small

firms believe themselves to be worse at almost all activities exceptorder servicing, which is known objectively to be one of the easiest

activities for large firms to automate and outsource. The knowledgeeconomy is most certainly not going to consist of a web of small,

entrepreneurial companies, but of agile, oversight-deploying firms that

have generated a sufficient surplus (and level of experience) to allowthem time to steer the engines of change.


20/54









others, tends to be long on creative analysis, synthesis and

experiment and short on both hard data and defined goals. Indeed, itis inventing the goals and finding the data. There follows a second

stage, in which the vague ideas that emerge from the first aretransformed into an implementation plan and into contractual

relationships, and in which significant amounts of money start to bespent. This stage, in its turn, becomes an implementation project,

overseen against a project plan by hard-eyed scrutineers. Finally, the

completed project passes into routine, where further refinement isapplied and productivity is pursued.




21/54


different things:


pertinent operating environment, suchthat a framework exists in which tovalidate potential forms of renewal. In

particular, noting technological and

market-based 'systems busters' whichmay change the nature of the industry.




economy will certainly be planning todo so.)

Developing machinery to reachout to sources of knowledge and




Developing systems of

management which license but rein inthe styles of operation that are


Developing systems that allow a

balanced approach to be taken to theshifting ground in each part of the


business as well as driving them for

best practice, taking into accountstakeholder concerns and the like.

Developing the habit of workingin networks and partnerships, taking a


motives are usually spectacularly

mixed.


22/54

These skills are plainly necessary in order to cope with a fast-changing, low barrier world. The capacity to deploy them already

proves a major source of competitive advantage in many fields: inentertainment, in science, in venture capital. Membership of a

knowledge network is earned, for others will work with a firm when it

has proved the equivalent of good citizenship and has engenderedtrust. Members of a network have to contribute to well as extract value

from the network. The skills that are involved are often human-focused, requiring protracted and personal contact. These are not

easily created across impersonal IT systems alone, and knowledge

networks have tended to remain rooted within a context or evenaround a physical location, such as Hollywood or the City of London.

Indeed, it may be a major source of strength for the industrial worldthat this is so, in the face of billions of educated people with

considerable access to technology.

Steering what might be called 'multi-cultural' companies can be verydifficult. Reward structures need to differ, people need to be given

distinct and often incompatible tasks. A more fundamental problemcan be illustrated by the following consideration.

Most companies have a set of innate tensions, as between imposing

common disciplines from central control or allowing diversity. Equally,the firm can respond to external imperatives (often to the

disadvantage of the internal socio-technical balances that have served


agility, regulatory compliance or customer satisfaction. Figure 2expresses these dilemmas, and identifies both four healthy outcomesthat arises from accepting any one of these. Inset, however, are the

symptoms of uncritical acceptance of any one of these as the sole

guiding principle.


23/54


that may arise.







24/54









Figure 2!




be.


25/54





personal accountability for equally clear targets within these, tominimise central interference and to drive the firm for low cost and

high share of the market. CEOs seemed to feel that change was best


thinking. Many readers will recognise the style. It appears to suit the'silo management' style, described above, but does not seem likely to

create overall managed migration.

CEOs are, like the rest of humanity, susceptible to fashion. McKinsey'sreport documented the fashion of the 1985-95 period. Many business

leaders are wondering what to do now for an encore and how to cope




time will tell.

There are, of course, other styles of leadership, many of themcurrently out of fashion, although widely practised. The IndustrialSociety is Europe's largest training group. It has completed a study on

the concomitants of leadership, drawing on a sample of around a


not what yields whatever results one deems to measure efficacy; andthey tend to notice whatever the experimenters set them up to note.

The book has another weakness, which is that it discounts 'implicit'







26/54



power and the human skills required of the job, notably in today's

environment. Previous samples of managers - both from the US andthe UK - have been assessed in ways which isolate the chief emotional


personal dominance. Unless skilfully masked, however, this desire is

the exact antithesis of what is needed for efficacy.



managers encourage people to pool what they know in order to clarify

issues and create as yet unknown possibilities. At the other end,managers define the problem and the tasks needed to solve it, and


management. Its products require analysis and clarity. It requires

team play, spontaneity, recursive clarification; it places great stressupon an overarching sense of direction, of process, of passing the


problems are essentially operations. This requires compliance,

oversight, accountability, formal targets, formal criteria, formalassessment; it needs diligence and application from a compliant


The 'liberating leader' is, perhaps, a title for the style which isappropriate to the synthesising, knowledge-managing end of the


Protector: promotes individual self-

esteem, stands up for others' interests,minimises friction.



Mentor: defines a role for theindividual, but shows consistency and



27/54


performance.







general purpose.

















view of the future.





28/54



















highly positive about it, as were administrators. These last alsoadvocated "Innovator" and "Delegator". Technical staff hated all styles,

but hated "Mentor" the most (which fits unhappily with this as thepreferred style of the technology-based industries!) Sales people very

much approved of "Innovator" and very much disliked "Delegator", the

strongest measures in the survey. Personnel were equivocal about allstyles, and professionals, as indicated earlier, chiefly negative.

Conclusions

What does this tell us? Chiefly, that if human society is the most

complex grouping in the known universe, then the management of

parts of this must be about many solutions and many syndromes, not


29/54

one. We have tended to bend people to fit the limits of our owncapacities, as re-engineering tended to bend companies to fit into the

limitations of information technology. Knowledge-managing companieswill, however, need to find their innate skills and capabilities,

deploying these in ways which cannot be predicted and which cannot

be constrained by belt-and-braces limits. The military, confronted withthe need to liberate local choice while avoiding rogue operators, have

tended to adopt a series of concentric domains. In the subsidiarycentre, the infantryman can make his own choices. He knows exactly

when to delegate upwards, however, and has been trained to do so.

New command structures drop into place as new conditions aredetected and new issues raised. We suspect that this 'fractal'

management may be the style of the future. It is very far from the 'setthe criteria and push for the results' model of the past decade.

The figure states the obvious. The two most important axes that define

demands on leadership are, first, the scale of the activity and second,

the degree to which the work undertaken is safely specified orworryingly unspecified. Small businesses addressing an unchanging

world have a very different set of needs from large activities for whichthe world is constantly changing, and within which success stems from

the implementation adaptive responses the the knowledge economy.

Grand prescriptions (Excellence! Seven Great Secrets!) from theAirport Bookshelf School of Management miss this essential point.



complicated organisations. There are three sections. The first of these


30/54

considers the changing nature of the leader's task. We suggest that inthe knowledge economy, this applies hard criteria to defined things,

and enables emergent direction-setting in those critical areas whererenewal and the less-than-clear task are dominant. We suggest that

what is needed is less personal 'leadership' than the creation of what

has been called the 'leaderful' organisation: a structure which haslearned to talk about the key issues.

We have discussed the two 'arms' of management: the specified and

the less-than-clear. We have shown that whilst the specifiedcomponent is heavily, roundly managed, the 'unspecified' component

is not. The knowledge economy flows from handling the unspecified.The specified will be increasingly commoditised. How is one to manage

for issues which have yet to be' defined? Essentially, through a processof recursion. Senior staff have to set a general area - "over there, not

over here", "we shall be a lead innovator; or we shall be a fast

follower" - and the rest of the organisation have to fill in the blanks.This suggests two tasks. One of these consists of knowledge

managing, of idea-crystalising dialog, which is needed for blanks to befilled and general directions to become increasingly strong. The other

is a toolkit of measures which predispose the organisation to self-

assemble in one way, rather than in the very many others that areopen to it.



trend. "You can tell where the supertanker has been by looking at thewake." Personal advantage through apposite criteria, reward to risktaking of the right kind, the need to justify project plans in terms of

the 'big picture', personnel selection, corporate heroes are all


which this coherence suggests. This does not just happen, however,but has to be organised. What will work depends on the details of the

structure in question: on what kinds of people work within it, on thestate of maturity, of the 'specified' or less than clear sources of added

value within it.


how both leaders and the led perceive leadership, and the various

categories of leader which appear to exist.


31/54


Most forms of governance place senior managers in a position in which

they are responsible for carrying out several parallel, quite distinct andoften superficially contradictory roles. They are tasked with keeping

the show on the road, reconciling shareholder, state, customer,employee, supplier and partner interests, creating future potential andselecting and overseeing people and the human fabric that they

weave. The paper on strategy suggests the complexities which areinnate to organisations of any scale and reach.

Few of these roles are new. Some of these are chiefly concerned with

the intensification of traditional pressures. Others, such as theprofessionalisation of the workforce, are new to many industries. The

de-integration of commerce, the inter-linking of what it does with far

more stakeholders and the frequent lack of clarity as to the boundariesof the firm all challenge some industrial sectors in novel ways. What is

clearly new to all forms of leadership - in politics as much as incommerce - is the shift away from performance as the sole guarantor

of success to the need to "get it right".

Chapter One discussed the distinction between 'specified' - clear,defined - activities, and those critical areas of renewal where the key

consists of finding options and clarifying a way of thinking about theissues. "Specified" tasks can be run on traditional grounds, perhaps

with more complex criteria. The role of outsourcing, virtual teams,

partnership and geographical diffusion is relatively easy to managewhere th eissue under development is clear.


aircraft with 230 teams of around 40 people in each of them. Theyworked with three major customers, 500 suppliers and a network that

deployed 1,700 workstations in 12 countries. According to themanagement consultants McKinsey, Boeing was able to manage the

entire process from concept to metal bending in around two-thirds ofthe time that previous experience with linear management systems

had led them to expect.


founded. Less specified tasks require completely different forms of

motivation, time scales, criteria and managerial approach.


32/54

Managers of the 'unspecified' need to unify the thoughts of people witha wide range of skills and outlooks. Senior staff (or their delegates)

create a way of thinking that challenges the organisation to achievemore or less loosely-defined conceptual tasks. Research signposts, for

example, can be used to assert that 'by 2005, our industry will have

had to overcome the following hurdles'. These provide a powerful focusfor debate, however valid the statements themselves may or may not

be. Scenario and strategic planning play similar roles, as doaspirational or horizon-scanning statements and speeches.

These general statements need to state what they exclude: is the firm

is to be an innovator, then it is not to be a follower or an integrator.Often, it is important to indicate what kind of innovation or other issue

is at stake. It may mean that the firm is a research-focusedorganisation, or a fisher for ideas in the commercial milieu. Second,

such statements must have a recognisable business model in them.

Worthiness is all very well, but - as with the dot.com failed revolution -the economics must be there. Third, the statements must lead to

action: to better sceening critieria, to the winnowing of responses fromthe organisation, to better future statements. The aim should be to

refine a shared model of how things work, what the firm will exclude

and what it will address; and why it will do this.

This said, assessments suggest that only around five percent of teams

are currently capable of outperforming individuals who are managed

from above. So-called 'silo management', in which people are

maintained in relative ignorance of the reason why they perform atask, but are given highly specified work to do, performs at least aswell as creative teams which are assembled for specific projects. It

does not innovate or correct its tendencies to make mistakes,

however, and it is limited in what it can do by what a single individualcan know, particularly when embedded in the demands of line

management. It is, perhaps, a style for an established activity within astable industry or within labour-intensive industries, and may be

particularly suited for the industrialising nations. It cannot deliver thegoods where huge amounts of knowledge must be marshalled, or

complex structures mastered as they change and mutate.

As indicated in the introduction, two leadership information loops areat play. One, assisted by analysis, lays out general, sensible directions.

Opinion is taken and the view of how the operating environment works

gradually shifts and adapts to changing awareness and knowledge.Second, a host of tools are used to predispose the organisation to

behave in appropriate ways. Where it is not possible to give orders


33/54

(even given that the subject of those orders is clear to senior staff) theorganisation has to be equipped with criteria, culture, people and

processes such thatthe right 'kinds of thing' go forward and theinnapropriate is blocked. Such criteria will vary between business

divisions and activities with the same leadership envelope. How one is

to treat a group of self-motivated innovators is quite different fromappropriate inducements and checks elsewhere.


The many forces which we have described suggest that firms needs tospend more time defining how the operating environment operates,

what options this and prospective change may offer, and what can bedone about this. They need to do this internally, and often with

partners, regulators and others. Achieving this is an iterative process

that demands time, skills, resource and high quality attention. Itdiverts attention away from maintaining the status quo.

Small companies and large ones have different and sometimescomplementary skills. Figure 1 suggests, however, that small

companies and large both feel themselves weak in respect of

oversight, human skill development and innovation. Further, smallfirms believe themselves to be worse at almost all activities except

order servicing, which is known objectively to be one of the easiestactivities for large firms to automate and outsource. The knowledge

economy is most certainly not going to consist of a web of small,

entrepreneurial companies, but of agile, oversight-deploying firms thathave generated a sufficient surplus (and level of experience) to allow

them time to steer the engines of change.


34/54









others, tends to be long on creative analysis, synthesis and

experiment and short on both hard data and defined goals. Indeed, itis inventing the goals and finding the data. There follows a second

stage, in which the vague ideas that emerge from the first aretransformed into an implementation plan and into contractual

relationships, and in which significant amounts of money start to bespent. This stage, in its turn, becomes an implementation project,

overseen against a project plan by hard-eyed scrutineers. Finally, the

completed project passes into routine, where further refinement isapplied and productivity is pursued.




35/54


different things:


pertinent operating environment, suchthat a framework exists in which tovalidate potential forms of renewal. In

particular, noting technological and

market-based 'systems busters' whichmay change the nature of the industry.




economy will certainly be planning todo so.)

Developing machinery to reachout to sources of knowledge and




Developing systems of

management which license but rein inthe styles of operation that are


Developing systems that allow a

balanced approach to be taken to theshifting ground in each part of the


business as well as driving them for

best practice, taking into accountstakeholder concerns and the like.

Developing the habit of workingin networks and partnerships, taking a


motives are usually spectacularly

mixed.


36/54

These skills are plainly necessary in order to cope with a fast-changing, low barrier world. The capacity to deploy them already

proves a major source of competitive advantage in many fields: inentertainment, in science, in venture capital. Membership of a

knowledge network is earned, for others will work with a firm when it

has proved the equivalent of good citizenship and has engenderedtrust. Members of a network have to contribute to well as extract value

from the network. The skills that are involved are often human-focused, requiring protracted and personal contact. These are not

easily created across impersonal IT systems alone, and knowledge

networks have tended to remain rooted within a context or evenaround a physical location, such as Hollywood or the City of London.

Indeed, it may be a major source of strength for the industrial worldthat this is so, in the face of billions of educated people with

considerable access to technology.

Steering what might be called 'multi-cultural' companies can be verydifficult. Reward structures need to differ, people need to be given

distinct and often incompatible tasks. A more fundamental problemcan be illustrated by the following consideration.

Most companies have a set of innate tensions, as between imposing

common disciplines from central control or allowing diversity. Equally,the firm can respond to external imperatives (often to the

disadvantage of the internal socio-technical balances that have served


agility, regulatory compliance or customer satisfaction. Figure 2expresses these dilemmas, and identifies both four healthy outcomesthat arises from accepting any one of these. Inset, however, are the

symptoms of uncritical acceptance of any one of these as the sole

guiding principle.


37/54


that may arise.







38/54









Figure 2!




be.


39/54




personal accountability for equally clear targets within these, tominimise central interference and to drive the firm for low cost andhigh share of the market. CEOs seemed to feel that change was best


thinking. Many readers will recognise the style. It appears to suit the

'silo management' style, described above, but does not seem likely tocreate overall managed migration.

CEOs are, like the rest of humanity, susceptible to fashion. McKinsey's

report documented the fashion of the 1985-95 period. Many businessleaders are wondering what to do now for an encore and how to cope




time will tell.

There are, of course, other styles of leadership, many of them

currently out of fashion, although widely practised. The Industrial

Society is Europe's largest training group. It has completed a study onthe concomitants of leadership, drawing on a sample of around a


not what yields whatever results one deems to measure efficacy; and

they tend to notice whatever the experimenters set them up to note.The book has another weakness, which is that it discounts 'implicit'








40/54


power and the human skills required of the job, notably in today'senvironment. Previous samples of managers - both from the US and

the UK - have been assessed in ways which isolate the chief emotional


personal dominance. Unless skilfully masked, however, this desire isthe exact antithesis of what is needed for efficacy.



managers encourage people to pool what they know in order to clarifyissues and create as yet unknown possibilities. At the other end,

managers define the problem and the tasks needed to solve it, and


management. Its products require analysis and clarity. It requiresteam play, spontaneity, recursive clarification; it places great stress

upon an overarching sense of direction, of process, of passing the


problems are essentially operations. This requires compliance,oversight, accountability, formal targets, formal criteria, formal

assessment; it needs diligence and application from a compliant


The 'liberating leader' is, perhaps, a title for the style which is

appropriate to the synthesising, knowledge-managing end of the


Protector: promotes individual self-esteem, stands up for others' interests,

minimises friction.



Mentor: defines a role for the

individual, but shows consistency and



41/54


performance.







general purpose.

















view of the future.





42/54



















highly positive about it, as were administrators. These last alsoadvocated "Innovator" and "Delegator". Technical st

What Are the Challenges of ion Behavior

Documents

Transcript of What Are the Challenges of ion Behavior