Stop. Think. Before you scrap your managers

By TEC Member Anne Moore, CEO at PlanDo

A radical change to business structures is leaking out of Silicon Valley and spreading through Australia and beyond. It even has a name: holacracy. Atlassian has scrapped its managers and so have Canva.

The tenets of holacracy are simple: authority and decision-making rests with the team that is actually doing the work, not with the boss. Employees, the theory goes, spend their work hours getting work done instead of seeking management approval for every small change in direction.

But before you scrap your managers, consider the following instead:

1. Find a career management platform that works for both the individual and the business
The traditional performance review process is broken. Most organisations in Australia have invested in expensive outdated ‘talent management’ systems that reflect what the organisation wants from its employees, to ‘manage’ them. Today, this approach simply doesn’t work. ‘Talent’ can’t be managed. The role an individual was hired to do six months ago, isn’t necessarily the role that person is doing today. With a younger generation of workers coming through, they want to take control of their own career and not have an organisation dictate to them the path they need to take to progress. Cloud based platforms such as PlanDo enable both the individual and organisation to have an ‘adult to adult’ conversation about career development, giving more control to the individual while still providing the ‘manager’ or ‘leader’ with greater visibility of the individual’s career goals and how they’re progressing.

2. Drop the ‘manager’ tag and replace with ‘leader’
Rather than scrapping managers altogether, replace them with ‘leaders’. Today, we don’t want or need to be ‘managed’. Research has proved that giving people accountability for their actions, increases engagement and loyalty towards organisations. By giving authority to individuals to be able to make decisions, not only empowers them but increases efficiency for the organisation, reducing the chance of bottlenecks.

3. Give more feedback more often
Instead of having to make team members wait for 12 months for their review, over a 3 hour meeting, organisations need to provide more feedback more often. This feedback shouldn’t just come from ‘managers’ or ‘leaders’ as they should be known, it should be from more than one person –  peers, mentors whomever the individual chooses. That way, a more complete picture can be built of the individual’s progress and a different perspective can be provided.

4. Set goals and objectives between individuals and leaders
It’s important for you to set goals and objectives together with your team members. Ask them how they can contribute to achieve the goals your organisation has set. Again, it comes down to ownership and if the individual has suggested a goal or objective, they’re much more likely to achieve it, than if they’re given one.

5. Let the individual take responsibility for his/her career development
Finally, helping your team members with their career progression is not all down to you, the employer. Competition is fierce in many industries in Australia to attract the best talent and then once you have those individuals, it’s a common misconception that it’s down to you to nurture them and outline a path for progression. Wrong. Today, this is a shared responsibility. The individual is responsible for their own career, ensuring their experience and skills are documented and taken with them to their next employer.

So before you scrap your managers altogether, adopt ‘leaders’ instead and give individuals more responsibility to self-direct their own careers. Equipping your people with tools and technology that facilitate regular conversation works well from both sides.  For leaders, it’s timely information about where your people are going and how they’re tracking.  For individuals, they’ll value the opportunity to gain regular feedback and take more control over their career. Do that well, and engagement and work satisfaction will soar.

Leadership vs. Management: Closing the great divide

Although it might seem like it doesn’t make much of a difference, what we call the people at the top of the organisational hierarchy can have significant implications.

The quickening rate of change in modern business means there is now a plethora of titles that executives can hold these days, with more appellations constantly being devised. However, there are two that have stood the test of time and continue to be widely used in the workplace today: leader and manager.

Are these two essentially the same thing? Or is it worth digging into the semantics, looking at the different nuances of each and what they mean for modern executive development?

In reality, there are key differences between the two concepts – but they may be of equal importance for today’s executives.

The Leader

Literature over the years has tended to paint leaders as a charismatic figure at the head of the organisation, engaging, inspiring and motivating employees to succeed. A lot of focus has been placed on how the best leaders transcend their technical skills and expertise and hold the innate ability to stir up their workers and get the best out of them.

These attributes are, of course, essential – the Center for Creative Leadership’s ‘What Makes a Leader Effective?’ study, for example, found that respondents in the US ranked being charismatic as the top quality for effective leadership. This placed it ahead of other factors such as being team-oriented, participative and humane-oriented.

In summary, a business’s leader appeals to its higher ideals and vision and aims to excite these within employees. The ‘Leadership versus Management: A Key Distinction – At Least in Theory’ paper by Sam Houston State University’s Fred C. Lunenburg explains it perfectly. While a manager “executes plans, improves the present and sees the trees”, a leader “articulates a vision, creates the future and sees the forest”.

While this comparison highlights the importance and value of a leader, it also indicates that strong management skills are also crucial – and the modern leader needs to be a great manager as well.

The Manager

So if the leader is in charge of guiding the organisation through its groundbreaking new steps, what does the manager do? An equally important role, according to Lunenburg – while a leader creates change, he says, the manager is responsible for managing that change.

Alan Murray’s Wall Street Journal Guide to Management, quoting leadership expert Warren Bennis, puts it another way – the leader develops, while the manager maintains. In addition, Bennis reiterates the different but equally vital perspectives the two take: the leader watches the horizon, while the manager has their eye on the bottom line.

In business, managing the day-to-day short term is just as important as taking a long-term view into the future, a notion that is reinforced by the branches of leadership and management – and how they complement each other.

Putting two and two together

As these analyses suggest, leadership and management can seem like polar opposites that are difficult to reconcile. However, in order to truly succeed in the modern business world, executives should focus on how they can leverage both their leadership and management capabilities, making them work for each other for the good of the organisation.

Benefits of transparent leadership

Transparency is a goal that a number of businesses claim to have achieved – yet many leaders still have a tendency to keep certain information under wraps.

Honesty and openness are key elements in gaining the trust and respect of employees, so why do senior executives still feel the need to operate in a state of secrecy?

In some cases, leaders are afraid of the consequences of releasing sensitive information early, such as the possibility of job cuts or other downsizing measures. Executives can feel that withholding this knowledge gives them greater control over the situation and is in the best interests of staff members. They may also worry about panicking employees.

However, in a social media-driven world, organisations are expected to be more transparent than ever before. Enterprises now face significant brand damage if disgruntled workers or customers flock to sites such as Twitter and Facebook to air grievances.

There is also a significant risk of poor morale and higher turnover, with employees unsure over their future role within the company.

The benefits of transparency

Research shows that a lack of leadership transparency not only makes executives appear dishonest, it also impacts how their performance is judged among colleagues and partners.

In 2010, a study in Elsevier’s The Leadership Quarterly Journal outlined the benefits of keeping employees informed on company changes, processes and strategies.The University of Nebraska-Lincoln and Colorado State University-Pueblo researchers suggested that transparency had a positive effect on job satisfaction, staff retention, commitment and performance.

“Our results support that both the level of transparency exhibited by the leader and the leader’s level of positive psychological capacity each positively impacted both participants’ rated trust and perceived effectiveness of their leaders,” the authors noted.

“All study hypotheses were supported with leaders that were represented as being higher in both positive psychological capacity and transparency being rated as more effective than leaders in any other condition.”

In other words, employees hold leaders they consider to be transparent in a higher regard than other executives. This can lead to an increase in staff loyalty and productivity in the workplace, raising morale and mitigating uncertainty.

The challenges of transparency

The research clearly shows there is an advantage for businesses that prioritise transparent leadership, but that is not to say this methodology is devoid of pitfalls.

Companies must strike a delicate balance between effective information sharing and giving away proprietary knowledge that market rivals can use to improve their own products and services. Salary transparency can also present problems, particularly if there are any disparities between wages for employees who are doing the same job.

Making decision-making more transparent can be extremely beneficial, as it allows stakeholders to understand the reasoning behind important changes. On the downside, the entire process can be slowed down, and more transparency does not necessarily translate into better decisions.

Understanding the importance of transparency

Ultimately, even the disadvantages of improving transparency can be seen as benefits, as they often highlight areas of the business that currently aren’t performing well enough.

Writing for Fast Company, the co-founder of social media management company Buffer, Leo Widrich, described his organisation’s decision to increase transparency as “incredibly nerve-racking”.

“Both the great strength and cause of pervasive fear of transparency in corporate America is that, with transparency, you show your employees the company for what it is and you expose how it works. That’s disastrous at terrible companies,” he said. “The power of transparency then is that it drives us to be better – to create a company that’s both great and good.”

According to Mr Widrich, his company takes its cues from Google, which is often considered a market leader for corporate transparency among large multinationals. He cited the firm’s use of the Google Snippets internal system. The platform allows all employees to see what their colleagues are working on, enabling people to make decisions autonomously.

“That limits the power of bad bosses to control the flow of information and makes everyone’s accomplishments recognisable by everyone.”

Are you ready for transparency?

While there are both advantages and disadvantages to boosting leadership transparency at your organisation, in many cases the pros outweigh the cons.

Withholding key information from stakeholders leads to distrust, poor performance, higher staff turnover and a bad reputation both internally and externally. Conversely, leaders who are open and honest about decision-making are perceived to be better at their jobs and inspire employees to raise productivity and offer constructive feedback.

However, for transparency to be truly successful, organisations need to ensure the way they do business is fair, efficient and ethical. Otherwise, they could face significant problems when opening up sensitive company information to a wider audience.

Keeping up with the times: Is your leadership modern enough?

Anyone who works in a business leadership capacity knows that the corporate landscape is forever in a state of flux, with change the only constant in an unpredictable environment. The implication of this, of course, is that leadership skills and attributes are evolving in tandem.

Never has the impact of continuous business change been as pronounced as it is today. With the relentless rise of technology, new markets and shifting consumer preferences, the only companies that survive are those that can keep up with the times.

Some of the leadership traits that were relevant only a few years ago are now considered outdated by many – and there is always a new batch of skills for the modern leader to learn. What are the key qualities that today’s managers need to master in order to stay ahead?

Be a tech guru

Technology has long been one of the biggest priorities for business leaders, and the latest indications are that this trend is only set to grow in the future.

Whether it’s to streamline internal processes or to enhance consumer-facing interactions, there is rarely a space within your organisation that can’t be improved through technology. In 2014, we looked at some of the top business technology trends, which highlighted, for instance, the increasingly mobile nature of commerce and what this means for businesses and consumers.

Already a vital area to invest in for companies, mobile will only grow in dominance. In this article, CNET analysed data from US Census Bureau and GSMA Intelligence to demonstrate that there are now more active mobile devices than human beings on Earth – and their growth rate also exceeds that of our population.

There are no two ways about it – technology is touching more and more aspects of our personal and business lives and your success as a leader is likely to hinge on how well you can leverage this change.

Think data, think big

In addition to mobile, one of the technology trends that is revolutionising business processes the most is big data.

Companies are now dealing with quantities of data that were once thought unimaginable. Correctly and efficiently tapping into this information to extract meaningful insights is, and will continue to be, of utmost importance for any business.

One of the areas in which companies are deriving the most value out of big data analysis is customer relationship management (CRM). The savviest businesses are using the latest software and tools to crunch customer data and enhance individual relationships with them. It’s no surprise, then, that research firm MarketsandMarkets predicts the global CRM market to grow at 36.5 per cent between 2013 and 2018, reaching a value of US$24.22 billion (AUD$27.8 billion).

In addition, technology research group Gartner announced that advanced analytics, fuelled by big data, will be “a top business priority”.

“Rather than being the domain of a few select groups (for example, marketing, risk), many more business functions now have a legitimate interest in this capability to help foster better decision making and improved business outcomes,” explained Alexander Linden, research director at Gartner.

Harness the power of people

Despite the growing attention being placed on technology, it is still crucial for the modern leader to appreciate the human aspect of their business.

Engaging your employees and showing you value them by offering advancement and development opportunities is an area of increasing focus. This is true regardless of the industry in which you operate, no matter how “techy” or not it is.

For example, a survey by recruitment firm Robert Half polled technology professionals and asked them what frustrates them most at work. The most common response, with nearly half (45 per cent) of votes, was the lack of opportunities for advancement.

An additional study by the same company surveyed a range of CFOs and employees on the factors that cause the best employees to leave an organisation. Both pools of respondents were remarkably similar in their answers, with the second most cited reason being “limited opportunities for advancement” (22 per cent for CFOs and 20 per cent for employees). The first-placed factor was salary and benefits.

In the context of a digital business environment, it is essential you do not neglect the potential of your people, and give them the opportunities to grow and flourish within your organisation.

Be a student

Don’t limit professional development to just your employees, however. The best leaders are those who seek opportunities to personally learn and develop for the benefit of their business, and in an increasingly networked world, executive coaching is a great option.

Business leaders can benefit immensely from an executive development program, working with someone in a coaching or mentoring capacity. Often, the best way to learn in business is working closely with someone who has ‘been there and done that’, and using them as a sounding board.

According to Grant Thornton’s International Business Report, 40 per cent of business leaders in the Asia-Pacific (excluding Japan) region said they have used a business coach – this was one of the highest proportions around the world. In order to keep up with the times, it may be worthwhile investing in a relationship with an erudite business mentor.

Look global

In an earlier blog post we looked at the importance of globalisation, especially with a focus on Asia – and the need to take a worldwide view to business is not likely to change.

Additionally, the October 2014 Technology Leaders Forecast Survey from DLA Piper found that two-thirds (67 per cent) of technology business leaders believe China will be “a source of major technology innovation in the next five to 10 years”. Given its proximity to the region, Australian businesses are well placed to tap into Asian markets, and the onus will be on business leaders to instigate this investment.

The business world is always changing – but by knowing which skills and qualities you need to master today, you can ensure you and your business are ahead of the curve.