28 January 2019

Desired Leadership – Leadership-Z Series Chapter 1

Like in any other company, leaders work as mirrors for their subordinates and they project their dreams and ideals on them, they see them as an example. In my first blog of the Leadership-Z Series I described the shortcomings of an outdated autocratic management style still prevalent in many industrial companies today, and much to their detriment. So let’s now take a look at the desired leadership most conducive to task and work environments in the digital age. I can tell you this much: as leaders are mirrors for those they lead, successful management starts with the leaders themselves.

Modesty and prudence are key

Autocratic companies are vulnerable, because they allow that egotism might take over, being arrogant and ignorant, mostly uncalled for and without even realizing it has already become part of their culture. Even the Romans and Greeks realized this; that’s why the most important philosophers like Aristoteles and Plato considered that the two major values for leaders are modesty and prudence!

Incongruous leadership creates confusion

I have seen the effect it has on the culture when leaders behave in an incongruous way: serving as mirrors for others they transmit disorientation and a leak of seriousness and ultimately create confusion! Nevertheless, over the last decades, we have heard of many examples of successful leadership. Even authoritarian leadership can be successful, especially in a crisis such as bankruptcy or dramatic operational problems. Under such circumstances people react effectively by receiving direct orders.

many leaders believe, that creating a crisis will help to make people change,

In the decades after World War II large scale companies in the Western Hemisphere have undergone military management in which force and intimidation were displayed. Therefore, many leaders believe, that creating a crisis will help to make people change, or better said, to follow the order to change. Creating or thinking in crisis was business as usual in the automotive supplier industry. Therefore, during my time in the USA, I explained to myself a production system as something, that helps a company to survive.

For successful change management: tap your survival instincts!

For me, the ability to adapt to change was quintessential, much like activating a survival instinct. I like to compare it with successful strategies of people who found themselves in life-threatening situations.

Imagine you find yourself in a life-threatening situation. You will survive by following five basic steps:

Don‘t Panic!

In a panic situation, many want to solve the problem quickly, like anyone in the world would also. The difference here is that almost every non-lean company picks a path that looks right and on which consensus was found without really considering alternatives. While it is essential to move quickly down a path, one should always maintain the necessary caution, even when time is running short. Even in crisis mode there should always exist the option to step back, go over the alternatives again, and check them right or wrong.

Use your Knowledge!

To use all company knowledge, it needs a functional learning organization that makes continuous use of tools to search for inefficiencies and waste and strives for sustainable excellence.

Activate your Survival Instinct!

It must be made clear to everybody, that it is really crucial to solve all problems from the root cause and not just address symptoms and quick solutions.

Set small Milestones!

I realized that small reachable milestones are essential for the motivation of team and employees. With each small success story, the trust in the overall target and system will grow stronger and stronger.

Think Positive!

Accepting errors as a potential to learn and improve, and honoring success along the way, lead to a general mindset of positive thinking, a strong support system for the realization of the overall targets and vision.

Culture changes happen through addressing peoples’ behavior rather than trying to modify it directly.

In many cases this thinking helps me structure my thoughts up till today.  However, I soon had the feeling that there is more than just positive thinking to get an organization back on track and make people really adapt. Something was still missing. I worked out that if we want to get an overall positive thinking on change, we have to define what we want, how we want to act and, finally, who we want to be. This is why many production systems base leadership on respectful conduct guidelines and on values approaching mistakes as a source of continuous improvement. Up-to-date lean companies consider openness and empathy as a requirement for leadership. Anyhow, reasonable utilization of statistics and analytical methods needs transparency; otherwise continuous improvement and learning are not achieved. During my time in healthcare, I understood that culture changes happen through addressing people´s behavior rather rather than trying to modify it directly.

I am convinced, to change behavior patterns, profound product and process knowledge, guidelines for practice, as well as operational advice and individual commitment to continuous learning is required.

This has definitely significant impact on leadership behavior, on the overall culture and, in the long run, on the operative success. Without accompanying changes in the way things gets done, “only” the actual and obvious improvement potential exists.

Therefore, during the introduction of a production system, the following questions have to be raised and answered:

  • Where are we?
  • Where do we want to be?
  • What hinders us from changing?
  • What are the next steps?

Once that the organization has clearly identified the value that they want to provide, question 2 is much easier to answer and a lean strategy can be developed and what type of leadership is required.

To re-think a culture, often puts old economy companies in a dilemma

Let us insist we know exactly where we are and where we want to be in respect of leadership. Than the question three and four are becoming more challenging: “What hinders us from becoming a lean company?”

To re-think a culture, often puts old economy companies with a long tradition in a dilemma; re-defining job environments and organizational structures means to re-define the company itself and to break, at least partially, with the past. How do you break with a culture which has always been regarded as a mayor reason of a company’s successes?

Well, it just has to be done! Especially nowadays, where traditional managing practices are coming to their limits and everybody has the same access to information, job satisfaction and job environment must be seen in a totally different context than in the past. To get closer to the expectations of young talented people companies must react.

Learning from the New Economy: my time at Facebook

Once I had the chance to visit one of those new economy companies. I was very excited about what I was to learn, and what I could take with me from looking how things are done at Facebook.

What was observable is that the atmosphere at the site is a mixture of university campus, Disney Studios and start-up company. Ice-cream bars, libraries, coffee shops and candy bars, IT-corners where you can go if you have problems with your PC (no ticket hast to be opened), couch corners and bicycle trails (also inside the office), bicycle repair stations and dry-cleaner service and many training areas (physically and mentally). Creativity is key and people can write on any wall to discuss ideas or simply sharing how they feel today. The idea behind all that is simple: making their stay in the company as comfortable as possible. Take away what bothers them and they will get creative and productive.

It looked like everyone was in a good mood and smiling. So, they were smiling! What is your experience in your work place when you see someone in the morning?

Everything is handled via trust.

4/1 is the work schedule, 4 days’ work on the job, one day on a personal project. No budget planning, no Capex Card. Quality is the key, and it is assured via redundancy. They are not willing to lose time for detailed requirement descriptions. Speed is the overall mantra. In the development areas scrum and open source platforms are used. A lean organization system with no work time control, no vacation control and also no sick leave. Everything is handled via trust.

When it comes to individual performance, it gets very interesting; they have clear expectations and clear goals. Every six months a performance review is done and on a quarterly basis a clear feedback from peers and subordinates is given. People are accepting much higher individual control level than in any other company and also accept very high expectations towards their performance. Their individual performance is always available on a daily basis. They even accept that if they do not fulfill the expectation, they have to leave the company in less than three months.

Nevertheless, the company is able to hand select the best graduates from the top universities in the world. Nobody has problems with such high individual transparency. It’s a simple tradeoff: freedom and individualism for performance and goals.

As we now know, an organizational culture is shaped and strongly influenced by its leaders. Marc Zuckerberg for example has an all-hands meeting every week at the time. But,  just as a person’s behavior is rooted in his mind, the culture of an organization represents its general mindset, i.e. its way of approaching different situations, for example: customer claims, recommendations, warranty cases or even success.

Like at Facebook, the success of a sustainable implementation of a different culture very much depends on the leadership and work environment employees are exposed to and on the lessons learned along the way. With other words, a firm conviction is less likely to change if the overall conditions of job environment are kept the same.

Therefore, it is not very likely to succeed at implementing a sustainable desired culture in any work environment without understanding the past shaped by different leadership styles.

As George Santayana says in his book “The Life of Reason”, “Those who cannot remember the past are condemned to repeat it”.

In difference to New Economy enterprises which started with a totally new and never before seen work environment with open space meeting areas, flexible or even complete open work conditions, “old economy” companies have a history and commemorations.

Santayana proclaims that sustainable progress necessarily implies an analysis (knowledge) of the past and without it, any attempt to progress is doomed. This practice is deeply rooted in the oriental mentality and manifests in its coaching routines with the simple question “What have we learned out of that approach” playing a central role.

For such a change, we need certain management capabilities.

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