How You Can Restructure Your Company's Management Into 21st Century Leadership There's the 'old school' model and the 'new school' model. Which one are you?
By Jeffrey Hayzlett Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
The age of management is dead! At least management as we knew it. Executives are no longer looking to micromanage everyday decisions; instead, they're empowering other employers to implement and own the decisions that will propel the business forward.
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The reasons are clear: People don't want to be managed into following the same pattern or acting under the premise of doing things the same way they've always been done. Instead, employees need to know and believe that their ideas are being heard and/or implemented in a way that makes a tangible difference toward attaining the larger goal.
To get there, companies don't need a hierarchy of permissions and processes; they need to build leaders who commit to live the brand and company values.
"Old school' versus new
The "old school" model used a top-down approach to drive efficiency through control and perfection, a model built on scarcity and a centralized leadership style. While there are advantages to that style of leadership, it can also have an adverse effect. Leaving the decision-making process to one person can delay outcomes and potentially cause the entire project to fail.
For example, according to research by KPMG, 70 percent of organizations surveyed had suffered a project failure in the 12 months prior to the study. And PMI's 2017 Pulse of the Profession survey stated that "A lack of clear goals is the most common factor" -- cited by 37 percent of companies -- behind project failure.
Every business has an organizational structure that outlines its framework and guidelines for managing the business. Small businesses, in particular, usually create structure based on their immediate needs; and this structure tends to reflect the owner's personality and managerial style.
However, as a business experiences growth, its leadership style may will need to be revised to keep up with the fast pace of business.
5 ways the new management model surpasses the old
Here is a list of some of the massive changes occurring in companies shifting to the new model:
Old: Top-down management
New: Bottom up management
Old: Content reflects the status quo.
New: Disruption is the name of the game.
Old: The end justifies the means (prioritizing results over people).
New: The priority is people over profits. Good leaders guide and inspire,
Old: Talked the talk, didn't walk the walk
New: Talks the talk and walks the walk
Old: Driven by ego
New: Driven by teamwork
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The shift from fully centralized to a somewhat decentralized and goal-oriented model is more prevalent nowadays, not just in smaller companies, but in bigger companies as well.
Johnson & Johnson is one of those well-known companies with a decentralized structure, with over 200 units that function autonomously. Gaming software company Valve is also a decentralized company that got rid of job titles and allows employees to work on any initiative they want, and to "own" that project.
Leaders need to challenge the status quo. As a leader myself, I like to ramp up the tension because I believe that people need to be pushed out of their comfort zones in order to grow. I do this with my team all the time. I push and then I push some more. I won't say that the result is always pretty, but in the end, it works.
We leaders also need to put money where our mouths are. Not only do I push my team, but I empower them to take ownership of a great number of tasks -- and an active leadership role, at whatever level they're in. If I'm talking the talk, I have to walk the walk.
Here are three advantages for having just this kind of decentralized leadership structure.
1. Empowers employees to make high-level decisions
Delegating the day-to-day decision-making to employees frees higher-level executives to focus on the overall strategy, to high-level decisions and, in my case, sales strategies that move the needle forward.
This structure also provides opportunities to, and experiences for, those employees who normally don't have the chance to make decisions on a regular basis. Those in higher management, meanwhile, gain the opportunity to evaluate these employees performance when given a task to own. This makes them potentially more promotable in the future.
In any company, there are people that work in the trenches-- helping customers on the floor of a store, or making things happen behind the scenes at the corporate level. As a result, they're better equipped to handle situations that may come up better than is anyone at high level management.
For example, our company has several events annually where I host or conduct interviews with leading business executives. My production team handles every part of that process -- all behind the scenes. They're empowered to make decisions so the show runs as smoothly as possible because they know the ins and outs better than I ever will.
I don't need to know the specifics of how the event is run. I trust them to do it for me and make it all look seamless.
2. Lets businesses make decisions more quickly
To stay competitive, businesses need to be nimble and pivot at a moment's notice. Therefore, employees need to be in a position to make decisions quickly. If a competitor is kicking your butt because it's adopted new technologies, do you really have the time to go through the bureaucracy of getting the approval of the one person who just jumped on a 20-hour flight to Hong Kong?
You don't. Be nimble enough to make decisions quickly.
3. Helps develop employees
In a decentralized system, managers get the opportunity to show, and prove, their expertise because they actually make decisions. This helps prove their value to the organization and encourages diversity of thought.
Every manager will have his or her own style of management, but that same diversity is what will make your company stand out from the rest. It will encourage creativity and promote ideas that otherwise might have died on the cutting room floor of businesses where the status quo prevails.
Anyone implementing innovation and decentralized leadership will, in turn, work better with other companies similarly innovating and creating solutions. The result? a less hierarchical structure that encourages the free flow of ideas.
Effective leadership direction is critical, as we live in a climate of constant change that requires everyone to be a leader and hold a great deal of responsibility. For a business to survive, everyone needs to act and move as one -- at every level.
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Goals need to be clearly defined, and employees empowered to make decisions and pull out all the stops to remain competitive and elevate their leadership skills as we move further into the 21st century.
