Last month the Australian Institute of Management (AIM) picked up on globally innovative Kiwi idea. It’s an idea spawned by its trans-Tasman cousin, the New Zealand Institute of Management.
AIM announced the results of its first foray into using NZIM’s Management Capability Index (MCI) to measure the performance of Australian managers nationwide. In so doing, it joined management institutes in India, Singapore and Malaysia, which already use the index to calibrate the capability of their managers.
The index is the brainchild of former NZIM National president and now governance writer and consultant Doug Matheson. It’s designed to record how top level managers – ideally chief executives – perform in 10 key categories that impact the operations and profit of their organisations. For the record, Australian managers scored marginally better overall than their Kiwi counterparts.
But the important message wrapped in this news is that Australia, like an increasing number of countries, is using the index to get better handle on the status of its country’s management capability. As AIM’s national president Jim Walker said in the foreword to the findings report: “How well we manage and lead our businesses is vital to maintaining our competitiveness both on the domestic and international stage.”
Global competition, economic uncertainty, organisational complexity and host of other dramatic changes are collectively fuelling welter of global research and intense re-thinking about the future of management practice. Management looks set to experience its most significant shake up since the end of the Great Depression 80 years ago. Then, as now, everyone started questioning the validity of managers’ unbridled and exploitative control of corporations and companies. The world at large held management responsible for the financial collapse and its ensuing recessionary repercussion.
Now fast forward to 2012. “We all know our organisations are pretty much crap when it comes to change,” author and discipline guru Gary Hamel recently told London’s Financial Times newspaper. “They were never built to change. They were built for stability, to eke out little more efficiency and little more productivity year by year by year.”
Management, he said, is on the cusp of revolution. The world is “going to see greater revolution in how companies are run and managed over the next decade than we’ve seen over the past 100 years”.
Other management thinkers and writers are saying similar things. The pressures underpinning the plethora of new thoughts about management are obvious. Companies at large are facing economic, social, competitive, regulatory and technological challenges that now demand organisational leaders to come up with answers and, more often than not, hitherto untested solutions.
Hamel thinks social media, for example, are subverting traditional management and, as consequence, the hierarchy of management will be “inverted”. New connectivity tools aggregate human wisdom in previously unimaginable ways. And so versions of what happened in Egypt and Tunisia are “happening in every company”, he says.
Research conducted by Britain’s Ashbridge Business School and Europe’s International Business Leaders Forum suggests senior executives increasingly need new competencies, many of which don’t “feature in traditional management education and leadership development experiences”.
A 2008 global leaders’ study conducted by Ashbridge and the European Academy of Business in Society (EABS), found three distinct clusters of knowledge and skills that the vast majority of senior executives surveyed agreed they needed to help them cope with today’s fast changing global marketplace. The missing skills are based around context, complexity and connectedness.
There is also, according to the research, significant performance gap between the importance the surveyed executives place on gaining these skills and the effectiveness with which they believe programmes to deliver them are being developed and provided by the companies they work for, by business schools and by professional management and leadership organisations.
The responding executives said they need to understand today’s changing business context, which includes the business risks and opportunities of social, political, cultural and environmental trends.
They also need the skills to lead in the face of complexity and ambiguity. There is, they said, often little certainty and agreement about the nature of, and the responses required to deal with, today’s more complex issues and the trends they represent.
And finally, executives want what the research analysts called “connectedness” knowledge and skills to help them understand all the “actors” now strutting the stage in the wider political landscape. They want to know how to engage with and build effective relationships with new kinds of external partners such as regulators, competitors, NGOs or local communities.
“Helping managers grapple with these issues provides an important opportunity for us,” says Kevin Gaunt, NZIM Inc’s chief executive. “So too does the practical learning approach which is unquestionably NZIM’s strong point.”
Nitin Nohria, the dean of Harvard Business School, reportedly thinks business leadership is at “tipping point”. Managers and leaders should adopt new leadership philosophy and demonstrate moral humility. They should start by admitting that they lack knowledge, which indeed they do. frank admission that they do not know much about how to build sustainable system for business and society would make them more effective.
Ken Starkey, professor at Nottingham University Business School, thinks business schools generally should “shift their centres of gravity away from economics, finance and dreams of individual fortune” and teach future leaders to “reflect and critique”. He wrote recently in Britain’s The Economist magazine that “if we are to create new business model out of the chaos of crisis to which business schools contributed, we will need to take long hard look at how leadership is taught in our schools. Business as usual is no longer an option.”
“Managers and organisational leaders face raft of new and challenging issues,” says Gaunt. “It is our job to research and keep abreast of international best practice and trends and to tell our members about them and also deliver programmes based on them.
“As the Ashbridge and EABS study shows, managers want practical, experience-based support to help them acquire the skills they need to deal with and exploit today’s increasingly complex management problems and opportunities. It is precisely because NZIM takes this approach to its role that we came up with the MCI. We take real life and proven management experiences and turn them into applicable and relevant solutions. We will do more of this kind of forward-focused work with our clients over the next few years.
“And now that we are talking the same language through the MCI, we will be working more closely with AIM and sharing our management development experiences. These may be testing times for managers but they are also exciting times. There is new sense of urgency about the need to better understand management’s evolving role and to help managers and organisational leaders be more effective.
“As today’s best known management thinker and researcher, Jim Collins, points out in his latest book, Great by Choice, by asking why some companies thrive in uncertainty and chaos when others don’t, he discovered the principles that can help managers build truly great enterprises. It’s our job to help New Zealand managers and leaders effectively deploy those principles and any others they need to succeed.” M
Reg Birchfield FNZIM is writer on leadership, governance & management. [email protected]
