Firms make shortages worse by inadequate and inappropriate training. Only 28% of the sample were equipping their managers to cope with change, while less than 5% were training people to make the most of IT - totally ignoring Percy Barnevik's pregnant comment, quoted earlier, that 'All companies are in the IT business today. The difference lies in how well or badly they use the technology''.
Barnevik and his company, ABB, are among the examples which Brummer and Cowe hold up as shining contrast to Weinstock and GEC. The similarities between these two conglomerates of independent businesses, with their flat structures and strict financial controls, are marked. The key difference lies in their people management. The inspirational Barnevik is contrasted with the 'distant, anonymous' Weinstock. The latter served his shareholders well, as noted, but in some respects he failed to serve his managers, and thus their people, as effectively as they deserved.
Companies which want to ride the revolution have to pass this questionnaire, which tests how well a management is serving its people. Does the company have....
1. The right culture to reach its goals?
2. The required knowledge, skills and abilities?
3. The appropriate measures, rewards and incentives?
4. The right organisational structure, communications systems and policies?
5. The ability to improve work processes, to change and to learn?
6. The leadership required to meet its goals?
The six questions are derived from the Harvard Business Review, in which Dave Ulrich argues that the human resources function must take the lead in meeting the challenges of globalisation, achieving profitability through a mixture of growth, information technology, knowledge management and 'change, change and more change'. These areas are pre-eminent in the strategies of the 'giant killers', but there's another. Ulrich notes that 'the primary responsibility for transforming the role of HR belongs to the CEO and to every line manager who must achieve business goals'.
But that doesn't go far enough: every manager, not only CEOs or line managers, must be a people manager first and foremost. You wouldn't get that impression from another article in the same issue of the HBR, in which Robert Simons and Antonio Davila explore the interesting notion of 'Return on Management'. That means the amount of productive organisational energy released in relation to the management time and energy invested - though just how do you measure either managerial or organsational energy? Leaving that difficult matter aside, the two authors ask five questions:
1. Does your organisation know what opportunities are out of bounds?
2. Are your company's critical performance measures driven by a healthy fear of failure?
3. Can managers recall their key diagnostic measures?
4. Is your organisation safe from drowning in a sea of paperwork and processes?
5. Does everyone watch what the boss watches?
The article produces anecdotal studies of companies like Motorola and Pepsi-Cola as examples of high ROM. Note, however, that people figure little in the five questions. The ROM concept focuses on control: people-based management is founded on freedom. No opportunities are out of bounds, nobody fears failure, measurement is less important than achievement, and 'everybody turns when father turns' is anathema.
MANAGEMENT GRIDLOCK
The only point on which people-based managers agree with the ROM thesis is the healthy disrespect for paperwork and for non-productive processes. But that is surely found in any serious attempt to manage effectively.
Geoffrey James gives a convincing picture of what happens when management is defined as control. You get gridlock: 'The attempt to control creates resistance and spawns other attempts to control, causing decision-making to grind to a halt'. He has a telling quote from a Xerox escapee:
'Everything from the press release to the product description to the information sheet had to be reviewed and approved by multiple vice presidents and announcement committees. We spent almost six months trudging through the paperwork'.
You don't have to look much further for an explanation of Xerox's failure to exploit the greatest invention it ever made, the personal computer. The culture of control, inward-looking and obsessive, blotted out the vision that might have created the world's most successful industrial enterprise. It's bizarre, too, that a company which lives on automated document handling hadn't used IT to reduce its press release trudge from six months to six days - if not six hours.
It isn't only gridlock that grips the organisation. There's also the 'yes-man syndrome', which means that 'People agree with their managers even when there are better ideas and better ways to approach a situation'. And there's 'limited power' - because 'Control that is limited at the top limits the exercise of power to the executives, slowing corporate growth'.
Power is at the root of the difficulty in moving to people-based management. The more absolute the power, the less its possessor has to care about his or her behaviour or what happens to others. But a manager's conduct directly affects the performance of those others, and their performance depends on how much or how little they can influence their own work and its outcomes. The issue of outcomes is fundamental - but it may appear to have no direct link with the issue of power.
In an anti-absolutist book entitled The Power Principle, Blaine Lee thus lists six types of behaviour that will change managers from GE's Type IVs to the adventurous type who enable the giant killers to kill. You've crossed the divide if you can answer yes to these questions. Can you...
1. Learn about alternatives?
2. Get help from others?
3. Develop a desire for something different?
4. Recognise opportunities to choose?
5. Make the decision to change?
6. Take a leap of faith?
The difficulty with those questions is that they are 'soft' in a world where hard results are decisive. How can you translate people-based management into hard practice? For a start, give recruitment and training top priority, including training in the use of IT. Second, take every opportunity to place people in those multi-disciplinary, cross-functional, interdepartmental teams. More: copy Percy Barnevik at ABB and make special efforts to achieve cross-fertilisation between businesses and (if that's a factor, as it may well be) across frontiers.
Deconstruct the pyramid. Eliminate layers of management, not to eliminate people, but to speed decisions and implementation. All this is needed to meet the demands, not just of fast-changing markets and technologies, but of changing people. The nature and nurture of today's generation of managers differs in many respects from previous times. People are taking responsibility earlier, and these relative youngsters are more outspoken, more open to new ideas, more articulate, and more likely to move to other employers if the opportunities or the environment look better.
As the electronic giant killers have shown, with such people you can have your cake and eat it. You can apply soft principles with hard methods to create a people-based business that is both enjoyable and vastly rewarding. For once, the technology does not operate against the people. It is on their side.
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