Change and challenges


The simple and perfectly satisfactory mobile phone of only one or two years ago has been superseded by a device that still makes phone calls and sends messages, but also plays music, takes photographs, calculates, handles data, and so on. This proliferation has made it extremely difficult to take a rational decision on which wonder is the 'best buy'.

The whole process of buying has become more complicated and requires more skills from the buyer.

But what is happening to consumers is also changing management. Simple solutions just aren't there any more. Outsourcing provides a very good, not to say chilling example.

The wisdom of buying in services from outside suppliers may seem irrefutable. Why should an airline pose as a catering company when outsiders are clamouring for business - firms whose concentrated skills ostensibly provide better quality for lower costs?

No doubt that sales pitch convinced British Airways before handing its in-flight catering to Gate Gourmet. The practices of the supplier, as many hundreds of miserable would-be passengers can testify, led to a strike whose support by BA's own workers brought the airline to a standstill and lost the customer £40 million.

Putting your key business processes in the hands of dedicated partners may seem the easy way of coping with burning need to make full use of revolutionary advances in IT; and to do so, moreover, while making significant savings. However, it's deeply irrational to expect these economies.

Outsourcers reap their rewards either by squeezing costs or lowering quality or both

Gate Gourmet and the IT outsourcers are driven towards reaping their due rewards either by squeezing costs or lowering quality or both.

Recently the way in which intelligent people are stultified by absurd norms was highlighted to me by a role-playing exercised arranged by training consultants Extensor.

To demonstrate the effectiveness of its methods, Alistair Schofield got the participants to act as employees of three different companies, each having to cope at speed with a different, difficult business situation.

The executives were divided into Tops (the boss class), Middles (who must seek to serve both superiors and subordinates), and the Bottoms (who carry out the work, but have no control or influence over its design).

In the role-playing, the Tops didn't relate to the other two tiers, and the Middles didn't relate to their subordinates. The plain commonsense of working in unity to achieve sensible and agreed ends only came to the fore when a fourth party, the Customers (played by observers), exercised their final power to force the Tops to begin to lead.

Extensor utilises the succinct, five-point Kouzes-Posner model as a leadership tool. How does your business rate against the five criteria?

Does the leadership...

1) Model the Way? (being clear about personal values; setting an example and planning small wins)

2) Inspire a Shared Vision? (envisioning the future; getting the support of others)

3) Challenge the Process? (looking for opportunities; experimenting and taking risks)

4) Enable Others to Act? (fostering collaboration; empowering others)

5) Encourage the Heart? (acknowledging contributions; celebrating accomplishments)

If all five elements of leadership are present where you work, well done. However, even one negative is not allowable. The absence of any one positive could well negate all the other four.

Emotions connected with status and the fears created by hierarchical management hold back the natural drives to achieve and improve. As Schofield states, "Management hierarchies have been the traditional way of organising companies since the Industrial Revolution, when the process of management was exclusively 'top-down'.

"However, although this predominantly top-down approach is no longer appropriate in today's fast-moving environment, where decisions need to be taken at all levels in the organisation, it is proving very resistant to change."

Schofield's hierarchs can't see past existing businesses. They have no criteria to inform their choices. They judge progress mostly on financial metrics and under-finance their inadequate ventures. Small wonder that they have no success. For success, stick to the Five Elements.

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About The Author

Robert Heller
Robert Heller

Robert Heller, who died aged 80 in August 2012, was Britain's most renowned and best-selling author on business management. Author of more than 50 books, he was the founding editor of Management Today and the Global Future Forum. About his latest title, The Fusion Manager, Sir John Harvey-Jones wrote: "The future lies with the thinking manager, and the thinking manager must read this book".