The big levers for change
There is clear evidence that Management 1.0 with its pedigree in the industrial age will not be adequate to achieve the transformation. Hence the underlying model for Capitalism 2.0 has to be Management 2.0, based on the principles and values outlined below. Which one will be the key lever for change as we move toward a new and more effective form of capitalism and management? First, myriad studies show that there is a huge pool of unused or underused human capacity in today’s organisations. Yet most companies do not organise work in a way that can unleash this latent energy. We need new ways of thinking. Lynda Gratton has demonstrated this in her research on ‘hotspots’ and, more recently, in her book The Shift: The Future of Work is Already Here. In the same vein, the late Peter Drucker
challenged 21st-century managers to increase knowledge-work productivity to the same extent that their forebears increased the productivity of manual labour. Empowerment, autonomy and trust are essential ingredients to make knowledge work more productive and to accelerate innovation. Second, the entrepreneurial spirit needs to be awakened and fostered on a broad basis, within organisations and in our societies at large. Individuals must take their lives and their destinies into their own hands. And nation states have to create favourable conditions such as early education, tax incentives and the elimination of administrative hurdles. Drucker called for us to create ‘the
entrepreneurial society’ some 30 years ago. Are we finally getting there? Sara Horowitz, the executive director of the Freelancers Union, notes that 30% of the American workforce is now employed as independent contractors. She calls this a ‘third industrial revolution’.
84 Management Today | June 2012
Entrepreneurialism is not confined to start-ups and new ventures. It is a key capability for all organisations, new or old, big or small. Along with entrepreneurship goes innovation.
Open innovation, design thinking and frugal innovation are promising approaches to embed creative power at all levels of an organisation.
Next, a shift in values needs to take hold. Specifically, our leaders need to move from taking purely competitive stances to embracing collaboration. While competition is a major driver of efficiency in market-based economies, the potential for collaboration and mutual support in addressing key challenges is a way to increase the pie as opposed to competing for each little part of it. A new sense of responsibility needs to be instilled on a global basis. While the challenges ahead are daunting, they have the potential to create meaning for all those engaging in economic and social activity. Establishing meaning and purpose needs to re-emerge as one of the foremost responsibilities of leadership. Simultaneously creating social and economic value should become the new standard for businesses around the globe. Finally, the state must redefine itself in a fundamental way. In the Western world, government has evolved into a Leviathan, suffocating initiative and siphoning too much financial capital from productive use. Even though many politicians are quick to point fingers at the bankers for the financial crisis, they clearly deserve some of the blame themselves for their lax oversight and the way that they have bought off voters with ever-increasing promises from election to election. Translating all of this into action will be a tall order. There is, however, no choice. Achieving ‘betterness’ in capitalism and management, as consultant Umair Haque calls it, is the ultimate test for human ingenuity and creativity.
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