Here’s a little something (actually rather long) that I’ve just written for a magazine called Future Orientation (F/O) in Denmark – www.cifs.dk.
Back in 1987 I worked with a company that was trying to convince the citizens of Europe that what they needed to be happy was a salami stick and some ice cream. Twenty years later and I was back working with the same company, this time helping to sell the idea of eternal youth via Italian pasta sauces.
A lot has happened between the salami and the pasta sauce, not least the fact that the company has changed how it connects with its employees. So what are the changes and what else is happening when it comes to management and leadership trends?
1. Going feminine
In the US not a single woman held a top management job in the Fortune 100 in 1980. However, things have started to change. Female Chief Executives are now running many of America’s largest corporations including PepsiCo, Xerox, eBay, Kraft, Sara Lee and Avon and the same is broadly true in many other countries.
Why has this happened? The reasons are legion and varied. First of all, over the last twenty years we have seen women entering the workforce in greater numbers and they have slowly but surely worked their way up the corporate ladder. Thus a more feminine ethos has infiltrated many organizations and organizations have become more attuned to the needs of women, be it employees or customers. For example, Procter & Gamble now runs a reverse mentoring scheme whereby newly recruited female graduates mentor older male employees about how to manage women.
2. Instilling a sense of community
There is still a very long way to go but I believe that we have more or less reached the use-by date for the old patriarchal style of management. Leadership that is macho or combative and based on the idea of discipline doesn’t work anymore. As a result leaders are now becoming facilitators and motivators whose job it is to instill a sense of community and inform people about the wider mission and meaning of their work. Thus leaders are developing soft coaching skills instead of hard control skills, which is something that intuitive and empathetic women are especially good at.
3. Putting innovation centre stage
But what else is happening? One of the biggest changes over the last two decades has been the way that innovation has moved centre stage. Previously, innovation (if it existed at all) was a department. Moreover, it was very often a small department staffed by outcasts from marketing and R&D and what it did and how it did it was more or less a ‘state secret’. As a result it was virtually impossible for anyone outside of the department to contribute. Not anymore.
The result is that failure is now not only tolerated but is widely encouraged (within limits) and free spirited employees that previously struggled to fit in to corporate life now feel slightly more comfortable due to the informality of their new surroundings. The food company in question even has artwork alongside the staircases to encourage creative thinking and has an internally run venture capital fund and a new ventures unit to invest in employee ideas. Indeed, it’s now virtually impossible to tell who works for the company and who doesn’t because people drift in and out much as they please and dress-down. Friday casual clothing rules now apply all week.
4. Listen and trust
Back at our food company innovation has become the holly grail. It is an open process involving all stakeholders from staff and suppliers to customers. Moreover, decision-making responsibility has moved to the frontline and control is now achieved with very limited supervision. This is obviously quite difficult because leaders must give workers the opportunity to develop decision-making skills and, most importantly, workers must learn to trust management and management must learn to trust the workers. Crucially, both sides must also learn to listen to and trust their customers even when what they are saying is inconvenient or unpalatable.
5. Gaining buy-in from the people around the organization
Of course, running an organization where everyone has a say and where consensus building is a key function of management can be a recipe for anarchy and paralysis. But not always. Mozilla Corp. is the company that’s behind Firefox, which is a suite of Internet applications including the Internet browser. The company has 70 employees and almost 200,000 volunteer helpers. Firefox itself has a 15% share of the global browser market and has been downloaded around 200 million times. In other words this is a large corporation whose main product is free and that relies largely on unpaid workers.
If you haven’t already guessed Mozilla Corp. is run as an open-source corporation. As you’d expect its successful existence raises a whole host of questions about everything from the definition of a corporation to the interplay between a company and its community. It has also, along the way, had to invent or reinvent many of the ideas and assumptions about how companies operate. You might think that leadership within such an organization would be easy, but it appears that it’s actually more difficult than within for-profit organizations. For example, if workers are unpaid bullying or incompetent managers are not tolerated. Nether are unfair conditions. Instead workers simply walk away. A clearly articulated vision, clear communication and meaningful work are therefore essential. The rules of the game therefore include the fact that the ‘best’ decisions are not necessarily the best ‘strategically’ but those that gain the most buy-in from the people that one way or another work for the organization.
6. Being responsible
Another significant shift in the way that organizations operate is that leaders have started to think about the wider social and environmental impacts of their actions. Corporate Social Responsibility (CSR) is hardly a new idea but whereas previously it was a paragraph in the annual report it is now, in many cases, forming the bedrock of corporate strategy.
For example, Wal-Mart recently pledged to transform itself from the world’s largest retailer into the world’s greenest company. Wal-Mart (revenues US $312 billion per year) has laid out a plan to turn itself (and by default its suppliers, staff and customers) green. The aim includes increasing the fuel and emissions efficiency of its vehicle fleet by 25% by 2009 and doubling this by 2016. The company also plans to reduce energy use in-store by 30% and lower solid waste (e.g. packaging) in its American stores by 25% by 2009. Total investment in sustainable and environmental projects will be close to half a billion US dollars.
Again, having to think about the wider impacts of actions on employees, local communities and the global environment is hardly news, especially in the Nordic region where interest in ethical investment principles has been high for many years, but it is moving centre stage thanks to everything from scandals like Enron to climate change. This clearly links with other trends like globalization, connectivity, transparency and the breakdown of trust in institutions but it also connects with the attitudes of Generation Y and the looming shortage of skilled workers.
7. Companies as employee brands
In the future strong company personalities (brands) will attract and repel certain types of individuals. This has always been the case but whereas previously corporate branding was either created by accident or targeted at the media and financial institutions, in the future it will be deliberately created and targeted at existing and potential employees. The reason for this is twofold.
First Generation Y (roughly people born between1980 and 1999 (i.e. people currently aged 8-27)) are starting to enter the workforce for the first time and they are very interested in ethical standards and behavior. Moreover, money alone is not a reason to work for an organization. Financial ambitions and concerns tend to disappear quite quickly once satisfaction and self-realization is achieved through social integration through work and whilst job security is important, short attention spans mean that Generation Y employees tend to move on quickly once a job disappoints or the learning stops.
Historically this wouldn’t have mattered very much because an employee could easily be replaced, but in the future there will be a severe shortage of workers thanks to the declining fertility rate and the leaders of organizations will have to work very hard indeed to create and maintain environments where people want to come to work.