Standing on the shoulders
of (business) giants
Lessons from the old economy
Presented by Martin Thomas
IoD Course leader a...
Welcome to the new economy
What are the biggest changes in the
world of business that you have
witnessed in the past 5 yea...
Analogue thinking in a digital age
“The approval time for each Tweet,
by the time it had gone through
compliance and tone ...
“Digital communications is a
destabilizing force in a
bureaucratic environment. And I
am sitting right in the middle of a
...
“The instinctive reaction from the board is:
how do we control the online lives of our
staff? But social media – available...
Privacy and tight
news management
Rigid, formal
hierarchies
Key opinion formers
Intuition and gut
instinct
Openness and
tr...
Empiricism v Intuition
“Long-gone is the day of
the gut-instinct
management style.
Today’s business
leaders are adopting
a...
Mind the generation gap
 Post-Boomer mind-set
8
Mind the generation gap
 Post-Boomer mind-set
+
 Gen Y expectations
“We’re giving people the latitude to go off
& do the...
Learning through failure
not received wisdom
10
“Remember, we celebrate our failures. This is a
company where it’s absolut...
“What we've thought of as leadership
skills – setting direction, having the
answers, controlling performance,
running a ti...
“To thrive in the world of social media,
leaders need to acquire a mind-set of
openness and imperfection and they
must hav...
A culture of anti-management
 ‘Organisation without organisation’
 Adhocracy comes of age
 Welcome to the holacracy
“Ou...
The fetish of disruption
14
Where does this leave the role of
the manager and the relevance
of professional development?
15
Everything has changed?
.
Cash flow
problems
Poor
location
Poor
employee
relations
Poor
marketing
planning
Lack of
clear
o...
Business fundamentals have not
changed
Businesses continue to succeed or fail
depending on ability to:
 Think and operate...
Social technology is not a magic bullet
18
Room for improvement
64%
of employers agree that weaknesses in
leadership and management skills are
holding back company g...
Trouble at the top
0
10
20
30
40
50
60
70
80
90
Line
employees
Lower
management
Middle
management
Top
management
What mana...
21
What makes a post-digital leader?
“The dynamics of social media amplify
the need for qualities that have long
been a stapl...
The end of planning?
 ‘Plans let the past drive the future. Plans are
inconsistent with improvisation. Unless
you’re a fo...
Always
on
Real
time
Triumph of the tactical
Optimisation
Cheaper
production
Automation
Shorter
attention
spans Management
...
The ‘grown-ups’ fight back
25
“Now that [the assertion that planning is
a waste of time] really is dumb. Maybe
in a low ri...
Strategy matters even more
in a digital age
“The determination of the
long run goals and
objectives of an enterprise
and t...
Management strategy matters
0 10 20 30 40 50 60
Insufficient product quality
Bad customer service
Too decentralised
Insuff...
20061936200820012013
20022012199020132007
* Amazon physical book sales (analysed by Business Insider), Dec 2013
Good think...
Professional development opportunities with the
IoD
Coaching skills
Negotiating
Leadership
Social media strategy
Nationall...
Stand on the shoulders of
business giants
 Borrow from the past
 Principles and practices, developed and
codified by ear...
“If I have seen a little further it is by
standing on the shoulders of giants”
Sir Isaac Newton
http://www.iod.com/develop...
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Standing on the Shoulders of (Business) Giants

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IoD Course Tutor and Consultant Martin Thomas presented "Standing on the Shoulders of (Business) Giants - Lessons from the Old Economy" at the Elite Business Event.

In a world where 'innovation' and 'disruption' are at the centre of new business, should traditional management concepts be discarded?

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Standing on the Shoulders of (Business) Giants

  1. 1. Standing on the shoulders of (business) giants Lessons from the old economy Presented by Martin Thomas IoD Course leader and consultant @crowdsurfing April 2014
  2. 2. Welcome to the new economy What are the biggest changes in the world of business that you have witnessed in the past 5 years?
  3. 3. Analogue thinking in a digital age “The approval time for each Tweet, by the time it had gone through compliance and tone of voice, was 10 days” Head of Customer Marketing, Major UK Financial Institution 3
  4. 4. “Digital communications is a destabilizing force in a bureaucratic environment. And I am sitting right in the middle of a bureaucratic environment.” Senior corporate communications director “We’re not set up for this shit” UK CEO 4
  5. 5. “The instinctive reaction from the board is: how do we control the online lives of our staff? But social media – available at the touch of a button on the mobile phone – does not lend itself to Soviet-style command and control”. Anthony Goodman, Tapestry Networks, Financial Times, Oct 2013 Analogue thinking Digital thinking Command and (top-down) control Empowerment and dispersed authority 5
  6. 6. Privacy and tight news management Rigid, formal hierarchies Key opinion formers Intuition and gut instinct Openness and transparency Flexibility and informality Dispersal of influence and authority Data analytics Institutional time Real time Analogue thinking Digital thinking Command and (top-down) control Empowerment and dispersed authority 6
  7. 7. Empiricism v Intuition “Long-gone is the day of the gut-instinct management style. Today’s business leaders are adopting algorithmic decision – making techniques and using highly sophisticated software to run their organizations.” Ian Davis, worldwide managing director of McKinsey “Let me suggest an alternative trend – the rise of heuristics over algorithms; qualitative over quantitative research; judgement over analytics, creativity over crunching. Smart executives are recognizing that the analytic approach to business has over reached.” Professor Roger Martin, Dean of the Rotman School of Management at the University of Toronto 7
  8. 8. Mind the generation gap  Post-Boomer mind-set 8
  9. 9. Mind the generation gap  Post-Boomer mind-set +  Gen Y expectations “We’re giving people the latitude to go off & do their own thing. We trust them to do their regular jobs & to experiment, innovate & have fun” Microsoft Senior Manager, quoted in Business Strategy Review 9
  10. 10. Learning through failure not received wisdom 10 “Remember, we celebrate our failures. This is a company where it’s absolutely OK to try something that’s very hard, have it not be successful, and take the learning from that” Eric Schmidt, Google
  11. 11. “What we've thought of as leadership skills – setting direction, having the answers, controlling performance, running a tight ship – are less relevant in an environment of constant change. Increasingly, leadership is about creating a context for innovation and inclusion in the face of ambiguity and the unexpected” Tamara Erickson, author of What’s Next, Gen X Leadership in a digital age 11
  12. 12. “To thrive in the world of social media, leaders need to acquire a mind-set of openness and imperfection and they must have the courage to appear raw and unpolished” Six Social Media Skills Every Leader Needs: Roland Deiser and Sylvain Newton, McKinsey Quarterly, Feb 13 Leadership in a digital age 12
  13. 13. A culture of anti-management  ‘Organisation without organisation’  Adhocracy comes of age  Welcome to the holacracy “Our philosophy? To determine precisely the amount of management we need – and then use a little bit less” Shona Brown, ‘Google’s chief chaos officer’ 13
  14. 14. The fetish of disruption 14
  15. 15. Where does this leave the role of the manager and the relevance of professional development? 15
  16. 16. Everything has changed? . Cash flow problems Poor location Poor employee relations Poor marketing planning Lack of clear objectives Poor manage- ment Failure to embrace new tech Poor business planning The Times 100 Business Case studies Why do 1 in 3 start-ups fail? 16
  17. 17. Business fundamentals have not changed Businesses continue to succeed or fail depending on ability to:  Think and operate strategically  Manage money and people  Put in place the systems and procedures that support (rather than constrain) ability of talented people to get things done  Recognise importance of good governance without becoming a slave to it 17
  18. 18. Social technology is not a magic bullet 18
  19. 19. Room for improvement 64% of employers agree that weaknesses in leadership and management skills are holding back company growth Cranfield School of Management, Aug 2013 43% of managers consider their line manager to be ineffective or highly ineffective CIM August 2012 Too many of our organisations, both private and public, are failing to achieve their full potential: managerial shortcomings and a lack of strategic thinking are holding them back. BIS Report, July 2012 19
  20. 20. Trouble at the top 0 10 20 30 40 50 60 70 80 90 Line employees Lower management Middle management Top management What management level caused the internal crisis? Turnaround Management Study Feb 14 20
  21. 21. 21
  22. 22. What makes a post-digital leader? “The dynamics of social media amplify the need for qualities that have long been a staple of effective leadership, such as strategic creativity, authentic communication, and the ability to deal with a corporation’s social and political dynamics and to design an agile and responsive organisation” Six Social Media Skills Every Leader Needs: Roland Deiser and Sylvain Newton, McKinsey Quarterly, Feb 13 22
  23. 23. The end of planning?  ‘Plans let the past drive the future. Plans are inconsistent with improvisation. Unless you’re a fortune-teller, long-term business planning is a fantasy. There are just too many factors that are out of your hands.’ Jason Fried, David Heinemeier: Rework  ‘Stop forecasting, embrace uncertainty, start managing,’ Alastair Dryburgh 23
  24. 24. Always on Real time Triumph of the tactical Optimisation Cheaper production Automation Shorter attention spans Management fixation with short-term tactics
  25. 25. The ‘grown-ups’ fight back 25 “Now that [the assertion that planning is a waste of time] really is dumb. Maybe in a low risk software company you can just do it, but if you have capital expenditure, or you are moving a factory, you had better make sure you plan the move, the stock-build, the overtime, the working capital and service implications. I am not sure these guys are real business people. They need to stop behaving like children.’ John Vincent, Management Today, March 2010
  26. 26. Strategy matters even more in a digital age “The determination of the long run goals and objectives of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals” Alfred D Chandler, 1963. As quoted in the IoD’s Director’s role in strategy and marketing workshop Alignment with organisational priorities Credible and comprehensive executional plan Resource allocation (people, process & systems) 26
  27. 27. Management strategy matters 0 10 20 30 40 50 60 Insufficient product quality Bad customer service Too decentralised Insufficient cash flow Not enough new customers Ineffective marketing Lack of workforce goals Liquidity problems Insufficient investment Failed expansion Too much bureaucracy Mgmt not well educated in business Market changes underestimated Poor internal comms Insufficient financial controls Lack of management vision Management failure to adapt Poor management strategies Most common internal causes of corporate crisis Failures of management capability Turnaround Management Study Feb 14 27
  28. 28. 20061936200820012013 20022012199020132007 * Amazon physical book sales (analysed by Business Insider), Dec 2013 Good thinking and ideas are timeless Most popular business books of 2013*
  29. 29. Professional development opportunities with the IoD Coaching skills Negotiating Leadership Social media strategy Nationally-recognised qualifications A wide range of short courses Stage 2: Diploma in Company Direction Stage 1: Certificate in Company Direction Stage 3: Chartered Director Plus: executive coaching services with independent and qualified experts. Find out more at: www.iod.com/developing Personal effectiveness The Company Chairman The Executive PA The Finance Director The Managing Director The Company SecretaryBusiness presentation skills Strategic thinking The Non- Executive Director Coaching skills
  30. 30. Stand on the shoulders of business giants  Borrow from the past  Principles and practices, developed and codified by earlier generations, are still relevant  Invest in senior management training and development, including for yourself 30
  31. 31. “If I have seen a little further it is by standing on the shoulders of giants” Sir Isaac Newton http://www.iod.com/developing 31

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