THE business management structure has remained fairly static for the past decade. However, recent changes in the business environment have brought about a challenge to long-held beliefs. This is a challenge to the way we manage our businesses and is more relevant by the day.
This challenge was recently articulated in Loose; The Future of Business is Letting Go, a book by Martin Thomas. Traditionally, we have based our businesses on a structure that starts with all of the positions required in the business. We wrote rigid job descriptions of each position that required the holder of each position to adhere to an equally rigid set of policies and procedures.
The problem is, the internet has changed this. People are shopping online, communicating with us, and with the wider marketplace – online. We now have empowered consumers with an enormous amount of information at their fingertips; the consumers are no longer coming to business for information – they’re coming with that information looking for a deal.
This changing business environment was expressed by Proctor & Gamble’s former CEO, AG Lafley, who said “businesses are now operating in a very much ‘let go’ world”, and by WPP’s Sir Martin Sorrell, who said “the 21st century is not for tidy minds”. (Thomas’ book provides further detail on the basis of considerable research.)
The changes are affecting the workforce, where behavioural psychologists have recognised it is far better to see what people like to do, and then help them get better at it. Even the oft-quoted mantra ‘if you can’t measure it, you can’t manage it’ is being challenged by a world based on the far more creative approach of ‘if you can’t imagine it, you’ll never create it’.
While we shouldn’t be tempted to throw the baby out with the bathwater and reposition our entire modus operandi, perhaps we should be rethinking our approach in recognition of today’s reality.
Because change is occurring at such a rate, other business platforms are also being challenged, such as long-term strategic planning. Again, it is not necessarily suggested that we should stop doing it (every business needs a vision and a purpose), however it needs to be in a far more fluid format and we need to be able to react to changes quickly.
As Thomas says: ‘Strategic planning as a discipline is not redundant, if anything, it has become more important: it just needs to be faster, more flexible and pragmatic, and far less confident in its predictions and assertions.’
Thomas notes that successful ‘loose’ organisations:
• develop and nurture strong internal cultures built on a high level of mutual trust;
• believe in the critical importance of operating in an open and transparent way;
• demonstrate a high level of operational agility, allowing them to plan and work in close to real time;
• are highly informal, embracing the mantra used in the software industry of ‘living the life of beta’ (testing prototypes on consumers that are rough and unfinished – counter-intuitive to most of us);
• regard collaboration with all key stakeholders as a fundamental driver of commercial success; and
• have a looser approach to the development and management of their most prized brand asset.
Trust is at the core of this new way, starting with a set of core values that drive all aspects of the company. Once core values are established, it’s a matter of recruiting people who are in alignment with those values, training them to do their work effectively, trusting them and giving them the freedom to do their job creatively.
Thereby, a foundation from which to develop a strong corporate culture is established, resulting in people being passionate about their work and their company.
Rupert Murdoch is quoted as summarising the current reality as: “The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow”.
Creating a ‘loose’ business structure does not mean letting go of everything that has been successful in the past; it simply means ensuring the business model is one that can quickly react, rather than being so tight that change is difficult and time-consuming.
Looser ways of thinking and acting will be required, together with, in the words of Martin Thomas, “the virtues of pragmatism, collaboration, dialogue and transparency and that long-established business rules are made to be broken”.
