Intuition and insatiable learning

Management intuition is under threat, undermined by the speed, depth and breadth of global change. Managers must now commit to changing their everyday operational mind-set to remain relevant. The way to do that is through learning. Reg Birchfield reports.

It matters little which set of fast-change statistics you use to support the point, management as practiced for the last 50 years is fast exceeding its “used by date”. Managing in the next 50 years will be vastly different.

The collision of technological disruption, rapidly emerging-markets growth and widespread aging is upending long-held assumptions that underpin strategy setting, decision making and management, according to some recent research into management in the next 50 years released by global consultancy McKinsey & Company. These three fast changing factors alone are sufficient to illustrate the magnitude of global and organisational change now under way.

Any one of these shifts would, on its own, be among the largest economic forces the world economy has ever experienced, according to the researchers. As they collide, they will produce change so significant that much of the management intuition that has served executives so well in the past will become irrelevant. 

The formative experiences of many senior executives were forged in a very different furnace, one in which these new forces were just starting to gather steam. Tomorrow’s fast approaching and significantly more heated management world will be less benign, more discontinuous and more volatile. Long held management and leadership assumptions will be eroded by the unrelenting demolition of traditional business models.

The dramatic shift in the global economy toward emerging markets will, McKinsey predicts, create a new breed of powerful companies. The global urban population is growing by 65 million a year and nearly half of global GDP growth between 2010 and 2015 will come from 440 cities in emerging markets.

The continuation of Moore’s Law (of expanding computer capability) means that the next 18 months or so will double the advances in computational power and speed we’ve experienced since the birth of the transistor until today. And that rate of expansion will happen again in the next 18 months. Managers’ new intuition must, therefore, recognise that businesses can start and rapidly gain scale using relatively little capital. Technology and connectively are shortening the life cycle of companies and decision making has never had to be so rapid fire.

Finally, falling fertility, shrinking populations in more countries and the world’s steadily greying population will have profound consequences. For example more Kiwis are now receiving National Superannuation or the veterans pension than are earning income from self-employment or business, according to our latest census statistics. Without a boost in productivity, a smaller workforce will mean lower consumption and constrained economic growth rates. For more on these dynamics, see “A productivity perspective on the future of growth.”

What are the management implications of these dramatically changing dynamics? McKinsey makes the obvious point that leaders must recognise the magnitude and the permanence of coming changes and alter their long-established intuitions. Senior managers will increasingly find it difficult to establish or implement effective strategies unless they remake themselves in the image of the technologically advanced, demographically complex, geographically diverse world in which they’ll be operating.

Change is hard. Social science and other research suggest we humans are biased toward the status quo. We resist changing our assumptions and approaches even in the face of compelling evidence. Response to change rests, of course, with managers’ willingness to learn new things and embrace personal renewal. The best leaders, according to management gurus like Jim Collins, are insatiable learners. And Fast Company magazine co-founder and author Bill Taylor thinks managers and leaders need to ask themselves if they are learning as fast as the world is changing?

Perhaps one of the more insightful commentaries on the urgent need for leaders to commit themselves to continuous learning and growing was delivered almost 25 years ago by John W. Gardner, an outstanding American who, among many other achievements, was an architect of the US President Lyndon Johnson’s Great Society programme. His address to a gathering in Phoenix Arizona was called ‘Personal Renewal’ and many of its messages are still relevant.

People, even young people, were “trapped in fixed attitudes and habits”, he said. Most men and women in the world of work were more stale and bored than they cared to admit, he said. The counter to this was to “be interested” he said quoting the proverb that says: ‘It’s what you learn after you know it all that counts’. 

“Educators, like those who deliver our management development programmes at the New Zealand Institute of Management, will confirm that we learn most from people who are least like us,” says NZIM General Manager Tait Grindley. “That’s why we encourage managers to use our networks and meet and share experiences with others from different backgrounds and organisations.”

Grindley agrees that managers must commit to learning and to changing their preconceptions about managing effectively in a fast changing world. “I agree with Bill Taylor who wrote recently that it takes a real sense of personal commitment, especially after you’ve arrived at a position of power and responsibility, to push yourself to grow and challenge conventional wisdom. Conventional wisdom is a diminishing currency in today world,” says Grindley.

It would, as the McKinsey report suggests, be easy for organisations and managers to become “frozen by the magnitude of the changes under way or to tackle them on the basis of outdated intuition”. Grindley thinks managers and leaders who understand the depth, breadth and radical nature of the change and the approaching opportunities change present will be best able to reset their intuitions, shape their new world and thrive. “And we think NZIM can help managers and leaders do that,” he adds.

In his call to managers to keep learning as fast as the world is changing, Taylor offers three “habits of mind”.  

  • The best leaders and learners have the widest field of vision. If you want to learn faster, look and live more broadly and don’t seek inspiration from the same sources as everyone else.
  • The best sources of new ideas can be old ideas from unrelated fields of endeavour. Ideas that are routine in one industry can be revolutionary when migrated to another sector.
  • Most successful learners work hard at not being loners. The most powerful insights often come from the most unexpected places – the hidden genius locked inside an organisation, the collective genius of customers, suppliers and other people around you. Ask for their insights. 

Management is entering its third era according to Columbia Business School professor Rita McGrath. “Management as it is practiced by the most thoughtful executives evolves,” she wrote in a recent Harvard Business Review blog.

“We’ve see three ‘ages’ of management since the industrial revolution, with each putting the emphasis on a different theme: execution, expertise and now empathy… Today we are in the midst of another fundamental rethinking of what organisations are and for what purpose they exist… I would argue that management has entered a new era of empathy,” she wrote. She might have added that managers will need new intuitions to survive and succeed in a more empathetic age.

 

References available on request.

 

 

Reg Birchfield Life FNZIM is a writer on leadership, management and governance. [email protected]

 

 

  

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