Focusing on continuously adding new value for clients requires a change in the way work is carried out, because a traditional bureaucracy was not designed for innovation or delighting clients. It was designed to produce consistent performance from largely non-‐skilled workers. This is one reason why efforts by traditional management to enhance customer focus have tended to flounder. The other is that as work increasingly became knowledge work, bureaucratic practices undermined a key ingredient of
productivity: worker morale.
To reach the new level of performance, the organization has to empower those doing the work, so as to facilitate collaboration, rapid learning and innovation. The result is a dramatic shift in the role of the manager from controller to enabler. Instead of the workers reporting to the managers, the managers are accountable to those doing the work and for removing any impediments that are hindering the work. This reversal of polarity recognizes that the engine of productivity, innovation and creativity resides in the energy and ideas of the people doing the work, working together across boundaries, drawing on new technology, to become more productive and innovative. Enabling talent unlocks passion and energy. This means that managers must inspire, motivate, encourage collaboration and make the workplace meaningful.
20th Century thinking drew a distinction between leaders (who articulated goals and inspired change) and managers (who got things done). In the new role for managers, the distinction dissolves: managers have to be leaders. They must articulate goals, inspire change and remove impediments. It is the workers-‐-‐those doing the work-‐-‐who get things done.
An exemplar of the approach is Vineet Nayar, the CEO of HCL, a software services company headequartered in India. Nayar saw that the people doing the work were the ones who created value for the customers. Taken together they created the value zone within the organization. Without them, the firm was nothing but a shell, layers and layers of management and aggregators who had nothing to offer to the customers. The management didn’t live in the value zone or anywhere near it. Often, management got in the way of creating value. Management had to stop wasting the employees’ time by requiring them to make endless presentations about irrelevant things and write reports about what they had or had not done and start supporting them and enabling them to create more value for customers. In this way, the value zone
becomes the center of the organization.To implement his thinking, Nayar introduced a number of changes, including allowing all staff in the organization to make inputs into the evaluation of managers at all levels.
Another example is Li & Fung:
Li & Fung is a $15 billion company, headquartered in China and orchestrating 14,000 factories in China and around the world. Li & Fung owns practically nothing. Its role is to figure out a way to orchestrate factories, so that by coming together, they can achieve performance that they could never achieve individually. All are working on extreme specialization. For example, to manufacture a particular garment, Li & Fung might source the yarn from Korea, dye it in Thailand, weave in Taiwan, cut it in Bangladesh, assemble it in Mexico, and bringing zippers from Japan and come up with something that is better than anyone else in the world can do.
The language used to articulate the new role of managers is varied and includes: “scalable learning and collaboration through open pull platforms in which people are encouraged to get access, attract resources and create” (The Power of Pull); “networks of self-‐organizing teams” (The Leader’s Guide to Radical Management); “putting employees first” (Employees First, Customers Second); “autonomy” and “intrinsic motivation” (Drive); “design thinking” (The Design of Business) “distributed, democratic, self-‐ managing” (Open Leadership); “empowerment” (Empowered). Despite the differences in terminology, the common theme of all these books is the idea of mobilizing the energies and talents of those doing the work so that they become more productive, more creative, more collaborative, and more able to
learn and innovate quickly.
The raison d’être for the very existence of the firm shifts from the reduction of transaction costs behind walls and tight control to scalable collaboration, learning and innovation.