Chaos! Disorientation! Inefficiency! The above quote appears to make no sense. What kind of executive only wants to manage themselves and forgo their managerial "high horse"? Devoid of "power", managing is no longer worth the bother, right? Expect a storm of protest from fans of the old school of management.
However, if you take a closer look at this piece of wisdom, it is actually visionary. After all, the world of business and economics has changed dramatically over the last 100 years. The clear trend: we are all being transformed from "manual labourers" to workers who are increasingly putting their grey matter to good use. Take a study carried out by McKinsey, for example, which showed that while the percentage of blue-collar workers came to 73% of the work force in 1900, this number has dropped to just under 24% today. And the percentage of strategists and managers has jumped by a factor of four.
The result: Our society is well underway to going from an industrialised society to a knowledge-based society. Peter F. Drucker, the godfather of modern management and the Austro-American author of numerous books, puts it this way: "Neither land, nor labour, nor capital, nor machines gives a business that important edge.
What makes that critical difference and what represents that decisive characteristic is a business’s capability to benefit from and apply knowledge of all kinds – from scientific or technical knowledge, to social, economic and business management knowledge. This knowledge is the only factor that differentiates one business from another, namely when it manages to make a product or render a service that generates value on the market."
These developments have far-reaching consequences for businesses. For quite some time modern management has been using a wide variety of tools in order to benefit from the "more knowledge" trend and, as a result, from the dynamics of "learning organisations" as much as possible. Indeed, the way we deal with knowledge is not new, but now demands a targeted and coordinated approach. Only those organisations that are able to learn faster than their competitors will maintain their decisive competitive advantage in the future or, put in even more dramatic terms – will even survive. Here are a few figures to illustrate this:
- one third of Fortune 500 companies from 1970 were no longer in existence in 1983,
- one third of Fortune 500 companies from 1983 were no longer in existence in 1990,
- and of the 43 excellent companies listed in the 1981 publication "In Search of Excellence", only 14 earned this distinction just five years later, while eight were about to go bankrupt.
And the same applies to managers as well. Leadership must also be flexible and dynamic. In truth, no business leader is the "master and commander" of all of the knowledge and processes in his or her company. The agreement between the management and the staff concerning how something is to happen has long been replaced by a "results agreement". This agreement sets the goals, but in innovative and successful companies, how this goal is met is left up to project teams and working groups. We’re talking about management by objectives and, as the next logical step, management by results.
In the past, the lone authoritarian manager leading the company with "a strong hand" was the norm. Now flexible visionaries are in demand. They have to be "designers", creating the infrastructure and the organisation in which productive work is possible; they must be "teachers", supporting and promoting their employees; they have to be "stewards", helping and supporting from the wings, and finally they have to be "gardeners", creating a climate where growth and prosperity can thrive; in other words making sure that the proper framework in is place, from the technical, social, educational and financial architecture, in the figurative sense, to spatial and office architecture in all their important detail.
Management by attention, in other words the strategy of giving the necessary attention to the decisive criteria, structures and projects and to arouse this interest among the company staff, sums this idea up quite nicely.
But that isn’t quite enough. Modern leaders must also be aware of their individual view of the world in order to be able to inject these values into their personal knowledgement-management style. They must reflect on it and recognise how this personal concept influences their actions. Those incapable of doing this run the risk of turning a blind eye to other options, or may even find him or herself stuck in a defensive routine that stifles any kind of further development.
"Managing oneself" is the increasingly favoured "technical term" for this process. The idea is to boost one’s own individual capacities on an ongoing basis, but also to shape one’s own future. The so-called "survival mode" is replaced by an "experience mode". However, this presumes that we know exactly what we want to and are able to personally shape and influence. Here, intelligence, know-how, perceptive ability, learning capacity and ability to act set the boundaries for individual potential.
Modern leadership is built on the ability to work in teams, self-initiative, willingness to learn and ability to learn. It entails the ability to share power and information, openness and honesty vis-à-vis the team, as well as appreciation for the team, the ability to communicate emphatically and emotional intelligence.
Those at the top must be able to recognise the individual potential among the staff, to initiate processes, take on responsibility for reaching common goals and – very important! – be genuine. They have to mean what they say and say what they mean – and practice what they preach. This goes for every kind of constellation, be it as a leader assuming individual responsibility, or as a member of a leadership community functioning as an increasingly important hub in today’s multi-national business networks.