The Evolving Management
Here’s How We Can Still Reinvent Leadership
In the last hundred years, technologies and related paradigms have kept shifting. However, decision-making structures in big organizations have changed little since the first industrial revolution. How can technology be used to optimize management?
Here’s How We Can Still Reinvent LeadershipBy Johan Aurik
On average, a US adult spends four hours a day on their phone, leaving a digital trail that enables Amazon to predict what they will buy, Facebook to know their mental state, and Artificial Intelligence (AI) to impute their most personal likes and beliefs.
We provide this data willingly for the benefits it brings us. Automated systems allow us to connect globally 24/7; optimise our travel based on real-time traffic conditions; buy anything for next day delivery; see the news we want to see anytime and anywhere; and listen to any music simply by asking for it.
Technologies are also changing the dynamics of power. Social media can galvanise popular opinion and political forces with lightning speed, as illustrated by the recent #MeToo movement.
Peer review sites allow one-person enterprises to compete with the most powerful multinationals. Key social media influencers can shape and steer marketplace trends more profoundly than a global marketing campaign. In sum, technology has unlocked vast new capacity to sense, connect, automate, amplify and augment.
Social media influencers can shape trends more profoundly than a global marketing campaign. (Image: REUTERS/Hannibal Hanschke)
Business and Government – Relics from a Different Age
Why then have decision-making structures in large organisations changed so little since the industrial revolution? Leaders still base decisions on retrospective data that has percolated up through layers of filtering and consolidation. Decisions are then handed down through progressive layers of management, where they are adjusted to practical realities.
Such a world forces leaders to make educated guesses based on often flawed assumptions, and to have faith rather than evidence that the organisation is doing what leaders decide, and that the results expected are indeed being achieved.
Such a system might be adequate in a reasonably stable environment, but most organisations are now in a constant state of transformation, driving complex, multi-functional programmes to address disruptive change. CEOs often tell us that they have up to 50 strategic programmes in motion at any one time, and say that delivering against these is a real struggle.
Such programmes have fluid objectives, ever changing timelines, and the need for cross-functional collaboration. In an attempt to manage this complexity, programme control systems demand ever more information from teams, diverting time and energy away from their assigned tasks.
Despite this torrent of information demands, when failures occur, leaders often learn that the causes were common knowledge to everyone, except leadership.
Technology can change all of that. What if leaders knew as much about their organisations as Google knows about them? By deploying appropriate technologies, it is possible today for organisations to capture data on practically every interaction and consolidate every performance metric in an organisation.
Analytic tools powered by AI can rapidly probe the resulting mountains of data to identify correlations and make accurate, useful predictions. By applying such technologies, companies can essentially automate many operational decisions, freeing leaders to focus more on areas where human judgement is clearly required.
Automating management offers decisive advantages. As the system knows exactly what everyone is working on and what is being produced, accountability is clear. Performance evaluation can be grounded in contextually relevant data, rather than subjective inference. Coaching and feedback can be automated, tailored to the individual, and delivered exactly when required, making the dreaded annual review cycle obsolete.
All information can be made available to anyone in the organisation who needs it, and collaboration tools can allow instantaneous communication around a single real-time version of the truth.
Dependencies become much clearer, as the impact of actions in one part of the organisation on another are immediately evident. Peer pressure can drive compliance to process and motivate people to meet their commitments. On a day to day basis, the organisation can be made to largely run itself.
The Decoded Company
So, is this science fiction? The New York Times best-seller The Decoded Company describes how a company named Klick has made technology and culture inseparable. A Canadian digital agency specialising in healthcare, Klick has pioneered applying digital technology to 1) provide real-time coaching to enable talent and to automate processes 2) use data as a sixth sense to inform decision-making, and 3) create a talent-centric organisation.
At the core of Klick’s culture and systems is clarity of roles and tasks. A platform developed by the company keeps all its leaders and employees informed on the progress of work and clearly specifies who is accountable for what.
There is a culture of hyper-transparency, where an entire project team can comment on every aspect of their project. Performance feedback happens every week.
And every transaction, interaction, input and outcome is stored in a ‘Wisdom Layer’ of data that enables “gut feel” to be combined with data to inform rich insights. AI brings predictive insights to inform the company whether a contract will be profitable or a recruit will be successful.
This experiment in automating and augmenting practically every aspect of a company has yielded remarkable efficiencies. Klick, an organisation of 700 people, has just five people in finance, no HR department, no annual review process, and remarkably few administrative assistants. It has sustained a consistent 40% annual growth rate, high levels of profitability, less than 3% voluntary attrition (in an industry where rates are typically near 20%), and public recognition for its contributions to broader society.
Klick CEO Leerom Segal says: “Our 20 year experiment in building Klick’s culture is founded in the idea that we can create a virtuous cycle that drives our success. We use rich ambient and self-reported data to create an environment that empowers and engages our people, which helps them deliver the best work of their careers, which gives our clients lots of reasons to give us more work, which helps fund that environment. Key to that cycle is trust that the information and data will be used responsibly, and that we, as leaders, are as open and transparent as we expect our people to be.”
In an age when management of most work processes can be automated, leaders can be freed to focus more of their energies where their judgement and experience truly add value. But they must first embrace new organisational models based on accountability, transparency and collaboration, informed by data.
Leaders aspiring to be great will be challenged to build their understanding of data science, learning how to augment their personal experience, intelligence and insight with rich data sets and predictive AI.
They must also become skilled social media activists, using technology to communicate their vision and nudge the organisation to achieve it. They must be coalition builders, making the connections required to deliver complex change programmes. And leaders must drive new cultural norms, showing that failures are not a reason for blame, but an opportunity to build learning.
Leaders must also be comfortable that transparency goes both ways. The more engaged they become with their organisations, the more their own performance will be exposed. While Klick CEO Leerom Segal may know where everyone in Klick is at any one time, everyone in Klick knows where he is too.
With everything recorded, no leader can credibly say they did not know. And with every action recorded, the real value that a leader adds is clear to all.
Augmentation v.s. Automation
Without question, much of what has traditionally constituted organisational management can and should be automated. Companies like Klick have proven that it can be done, and to profoundly positive effect.
Automation of leadership, by contrast, may be neither possible nor desirable. However, by augmenting leadership with technology, companies can become more effective, agile and better places to work.
Leaders should not be fearful of embracing managerial automation, nor of accepting the power of data and AI to augment their personal effectiveness. Both are urgently necessary advances in an increasingly disruptive world. Besides, when technology works this well in the outside world, its application within organisations is all but inevitable.
Edited by: Shawn Chou
Original content can be found at the website of World Economic Forum.
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