Forces on Organizations

The most striking change now affecting organizations and management is technology. Consider that computing power has roughly doubled every 18 months over the past 30 years while the cost has declined by half or more every 18 months. In addition, the internet which was little more than curiosity to many managers a decade ago, has transformed the way business is done. Many organizations use digital networking technologies to tie together employees and company partners in far flung operations. Companies are becoming interconnected and managers have to learn how to coordinate relationships with other organizations.

The Internet and other new technologies are also tied closely to globalization. Global interconnections bring many opportunities to organizations, but they bring many threats, raise new risks and accelerate complexity and competitiveness as well. Think about the trend towards outsourcing company activities to low cost providers in other countries. US companies have been sending manufacturing work to other countries for years to cut costs. Now, high level knowledge work from US organizations is also being outsourced to countries like India, Malaysia and South Africa. India’s Wipro Ltd, for example writes software performs consulting work, integrates back office solutions, performs systems integration and handles technical support for some of the biggest corporations in the United States and they do it for 40 per cent less than comparable US companies can do the work. Diversity of the population and the workforce in the United States is another fact of life for all organizations. The general population of the United States and thus of the work force is growing more ethically and racially diverse. In addition, generational diversity is a powerful force in today’s workplace with employees of all ages working together on teams and projects in a way rarely seen in past.

In the face of these transformations, organizations are learning to value change and speed over stability and efficiency. The fundamental paradigm during much of the twentieth century was a belief that things can be stable. In contrast, the new paradigm recognizes change and chaos as the natural order of things. Events in today’s world are turbulent and unpredictable with both small and large crises occurring on a more frequent basis.

New Management Competencies

In the face of these transitions, managers have to rethink their approach to organizing, directing and motivating employees. Today’s best managers give up their command and control mindset to embrace ambiguity and create organizations that are fast, flexible adaptable and relationship-oriented. The Unlocking Creative solutions Through People box describes the benefits one company has gained from a new approach to management. In many of today’s best companies, leadership is dispersed throughout the organization and managers empower others to gain the benefit of their ideas and creativity. Moreover, managers often supervise employees who are scattered in various locations, requiring a new approach to leadership that focuses more on coaching and providing direction and support than on giving orders and ensuring that they are followed.

Success in the new workplace depends on the strength and quality of collaborative relationships rather than single minded focus on profits. Today’s managers recognize the critical importance of staying connected to employees and customers. The Internet has given increased knowledge and power to consumers so organizations have to remain flexible and adaptable to respond quickly to changing demands or competition. New ways of working emphasize collaboration, cross functions and hierarchical levels as well as with other companies. Team building skills are crucial. Instead of managing a department of employees many managers act as team leaders of ever shifting temporary projects.

An important management challenge in the new workplace is to build a learning organization by creating an organizational climate that value experimentation and risk taking, applies current technology tolerates mistakes and failure and rewards non traditional thinking and the sharing of knowledge. Everyone in the organization participates in identifying and solving problems enabling the organizations to continuously experiment, improve and increase its capability. The role of managers is not to make decisions, but to create learning capability where everyone is free to experiment and learn what works best.