Thinking Managers

Robert Heller of describes the way in which modern organisations need to rethink their approach to management if they are to avoid the pitfalls of the past.

The Five Drivers of The New Management

You can safely say that the endless boom in top pay is a reflection of an unhealthy regime. The system depends on three pillars:

1. The ultimate, overriding strength within top management of the supreme leader - the Chief Executive Officer.

2. The overwhelming enthusiasm of the majority of investors for the pursuit of short-term capital gains.

3. The continuance of hierarchical order-and-obey management within leading employers.

All three pillars are incompatible with modern ideas of organising effort to achieve superior results. The events of the Great Crunch demonstrate vividly how much danger the tri-pillar system runs.

The most successful companies increasingly operate on a very different model which depends on Five Drivers of the new management.

  • Personal mastery. People are expected to develop their skills-set to meet their own objectives as well as those of the company, which in turn is organised to encourage that personal effort.
  • Mental models. Companies actively seek to establish the correct mindset to guide actions and decisions - for example, the can-do mentality which believes that every task can be achieved.
  • Shared vision. Every member of the entire organisation is committed to its aims and its ways of realising an overarching vision.
  • Team training. Very good people are hired, but teamed together; group thinking has more value than the sum of individual parts added together.
  • Systems thinking. Actions and reactions, decisions and indecisions should not be isolated because they have ramifications throughout the organisation, so all sections are brought into the act.

The Five Drivers are derived from an excellent book, The Fifth Dimension, written by Peter M. Senge. His title alludes to systems management.

The Five Drivers are all vital elements in the pursuit of optimum profitability. The word ‘optimum’ is extremely important, because unnatural, excessive drives for profit will burst the system (and any related bubble).

One great asset of the top companies built around the Five Drivers is their natural bias to this style of management for sustainable growth. The competitive need to turn new technology into new products, processes and profits cannot be satisfied without rapid, intelligent use of the human capital inside the company to satisfy the human needs outside.

Speed is of the essence in generating the new products required to sustain ‘momentum’ - a word nowadays much used by sportswriters and coaches.

Momentum means development of self-sustaining, increasing forward movement. Lose that drive and you lose the advantage that can create sustained growth in any economy, industry or company.

People often talk about opportunity as if it were something you find, searching around until some chance discovery comes your way. That might sometimes be the case. However, entrepreneurs generally don’t just find opportunity; they create the opening by positive effort. Others miss out because they don’t have enough creative energy.

A terrible economic shock like the Great Crunch gives an easy excuse for inaction to people who wouldn’t have shone even in bright times. When you consider it, optimism always wins, simply because the pessimist will give up long before the enterprise becomes successful.

About the author
Robert Heller is one of the world’s best selling authors on business management.

  Robert Heller