Modernize Leadership: Shifting 8 Outdated Management Practices
February 18, 2016 5 Comments
Over the previous decade, I’ve had the opportunity to work with and study thousands of companies. One of the things that I’ve noticed is that the world has changed a lot, but organizational management has stayed substantially the same.
Technology has enabled entirely new practices and we’ve developed a much deeper understanding of what drives human behaviors and business success. But these new realities have not been translated into how leaders run their companies. Instead, management techniques continue to reflect outdated assumptions such as:
- Mainstream economics works on the assumption of Homo Economicus, a model of people as rational self-interest maximizers. So “agency theory” informs management that employees can’t be trusted to act on behalf of the firm and, therefore, controls must be put in place to align their efforts.
- Strategic planning cycles (annually, quarterly) have been established based on a constraint of limited data availability. When these processes and cycles were initially created, it was impractical to more frequently pull together meaningful insights about the business.
- Management focus has been driven by economists like Milton Friedman who argued that corporate officials have one core responsibility: making as much money as possible for their shareholders. But the value that a company creates comes from a combination of resources contributed by different constituencies (not just investors) who’s returns should also be maximized, especially employees who contribute their knowledge and skills.
While these underlying assumptions aren’t necessarily discussed explicitly, they frame the basic structure of today’s approach to management. Well, it’s time to Modernize Leadership. We need to redefine how we run organizations based on the realities of today, which will require more inspiring leaders in the future.
To help make the shift, I plan to write individual posts that describe eight key shifts required to modernize leadership. In those posts I’ll describe the move from:
- Command and Control to Engage and Empower
- Strategize and Plan to Learn and Adjust
- Amass and Review to Detect and Disseminate
- Measure and Track to Observe and Improve
- Goals and Objectives to Purpose and Values
- Problems and Solutions to Strengths and Appreciation
- Process and Projects to Culture and Behaviors
- Price and Features to Experience and Emotions
The bottom line: Let’s Modernize Leadership together!