Reinventing management according to McKinsey

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After having published some studies about the “soft ROI” of organizational performance and informal networks, McKinsey brought out something very interesting about the need of reinventing management.

Before going into the document, a few things about all those relevant analysis from McKinsey :

– McKinsey treats a lot of problematics in direct relationship with enterprise 2.0…without mentioning this concept. It’s the very evidence that, regardless of tools, people who work and think hard on those topics are heading in the right direction.

– The future of enterprise is not enterprise 2.0 (if you consider that enterprise 2.0 is only about using web 2.0 tools within the company) but a company that decides to really face its challenges and adopt the right kind of organization will found in 2.0 tools what’s needed to power it.

– At the end it backs me up in my idea : everything starts with a strategic goal, then with organization, then with management and process, and at the end you have to provide the needed tools. Tools don’t make the enterprise but serve it.

So let’s have a closer look…

The facts : more and more in the upcoming years, companies will have to change in proportions they never knew before. Unefortunately, their static organizations will make adaptation very difficult if not impossible. Their hierarchical structure prevent them from creating value based on talents, worst of all it causes a counter productive complexity that stops them reaching their critical goals.

The context : our society is reaching a tipping point, going into the digital age, globalization is becoming mainstream and the decline of our prediction models can’t be denied. This implies a new way to manage people and organize talents in order to create a sustainable competitve advantage.

So it’s a matter of abandonning a kind of managerial orthodoxy and to balance some revolutionnary ideas with practical experimentations.

You just have to register to download the document and I think it’s really worth reading it.

Some ideas I picked out

• We’re leaving an era of material production to enter the immaterial age. We used to focus on long term scalabilty,  now we have to learn how to find new solutions every day. Long term is over, now things have to be reivented daily.

• Continuous innocation and adaptation are not a part of the enterprise DNA. The problem is companies are waiting for major crisis to innovate. This also make us wonder if innovation need crisis or if it’s only because of management orthodoxy.

• Technologies and globalization open a wide field of opportunities…but companies are not design to take benefit of it.
• Internet is an incredible tool to take the most of intensive thinking people but CxOs just don’t understand the issue.

• Technological innovation always preceded management innovation
• Les innovations technologiques ont toujours précédé les innovations managériales.

• Determining a new engagement model is essentiel. We have to forget the “how to recruit those who will serve the organization’s goals” question and  replace it by “how to build the organization that deserves the gift of one’s creativity, passion, initiatives…”

• We have to build both a hierarchical model for decision making and a flexible model for the day to day job. (Hum…that reminds me of something…)

• The value is in collaboration between intensive think people. The winners will be those who will help this population to build a competitive advantage by using their collective potential.• Human and talend are the main assets. But talent is useless if organization can’t transform it into profits.

• L’humain et le talent seront les plus gros atouts de l’enteprise. Mais le talent ne sert à rien si l’organisation ne sait le transformer en profits.

• Leader company =  combination of talent, technology and organization.

• The management function has to be separated from the notion of hierarchy. Management will be incorporated in the system and not done by individuals anymore. The kind of people we’re talking about can be self-managed, we just have to give them the ability to make thousands decisions a day with an adapted infrastructure.

• The next battle will be : organization Vs. creativity.
• What has to be set up :  a masterplan to work differently, new metrics for performancen, then a series of initiatives. Key actors will be those who are in charge of the “big” decisions. Audacious goals have to be set to make sense and motivate people.

• Change will be driven by risk management. Experimentations have to be made, assuming we can’t ancitipate remote consequences of what will be done. Looking at what works outside is a good way to minimize risk.
• People have to be evaluated on their ability to innovate. Ideas are monetized in a way we never saw before. Why not in the enterprise ?

• It’s more an evolution than a revolution.

•keywords : decisions made by peers, distributed creativity,  equality of ideas regardless of their owner. Power is a skill, not a question of hierarchy.

• Conclusion; this century’s management model has to be invented. Unfortunately, very few companies are ready and the more time passes, the more painful it will be. Present model is not bad but inadequate. We’ve come to a tipping point.