By Guest Contributor Lukas Michel
Four people-centric levers frame the operating system for 21st-century management. The levers offer a choice between the challenges an organization faces and the needs of the people that perform the work:
- The complexity and the clarity people need to be aware of what matters most
- The ambiguity and the direction people need to move in one direction
- The uncertainty and the energy people need to mobilize resources
- The volatility and the focus people need to maintain the attention on creating value
THE FOUR PEOPLE-CENTRIC LEVERS OFFER A CHOICE BETWEEN TRADITIONAL AND PEOPLE-CENTRIC MANAGEMENT:
Traditional management favours bureaucracy, power, command and targets. People-centric, on the other hand, is about self-responsibility, self-organization, delegation and attention. People-centric levers offer sliders with a choice that spans two operating modes. While sliders offer a choice, they often have an ambidextrous capacity. The sliders may indicate simultaneous use of both, or a mix of the two. For example, agility needs stability. A well-functioning managerial system serves as a stable platform. Agile without a stable platform is like a spring – it only works as a spring when it’s fixed on one end.
HOW DO WE KNOW WITH CLARITY?
Knowing with clarity identifies opportunities. It represents the capability to raise awareness, understand, and find purpose despite complexity. Lever 1 identifies how we help people understand and find purpose between traditional command styles and people-centric through self-responsibility.
In traditional command-oriented organizations, the goal is efficiency and reliability as the means to deliver shareholder value. Managers act as controllers and tell people what to do. In people-centric organizations, self-responsible teams delight their customers. With people-centric, the management task is to help people find purpose with customers first.
When knowledge is located with managers, command refers to the practice of them using information and routines to identify opportunities and offer direction. Command tends to increase complexity rather than supporting people’s efforts to cope with it. Traditional management uses instruction for people to understand and follow direction. But purpose is found, not given. With distributed knowledge, people-centric promotes self-responsibility with people who are aware, and able to identify opportunities and find meaning in what they do.
Purpose defines the meaning people attach to what they do. Knowing with clarity helps people understand, filter opportunities and, ultimately, find purpose. With this, they’re able to deal with complexity and create value for their customers.
HOW DO WE MOVE IN ONE DIRECTION?
To move in one direction is the ability to select valuable opportunities. Choice requires the alignment of forces and connecting people around purpose and direction, despite ambiguity. Lever 2 identifies how people align to form teams between applying traditional power and dynamic delegation.
In traditional organizations, power sits with managers who have people reporting to them. The relationship is between the manager and the employee. With a dynamic operating system, responsibility is delegated to teams at the client front. The role of the manager now is to offer direction and a supportive work environment.
With knowledge concentrated at the top, managers use power to tell people what the direction is and what the expectations are in following it. Power limits the use of knowledge in selecting the right opportunities when dealing with an ambiguous context. Traditional management applies power by using rules that help managers select valuable opportunities. With distributed knowledge, managers use systems to delegate the decision-making to where the knowledge is. Choice helps people select valuable opportunities and identify the direction.
Relationships define how people connect and align with each other to increase their knowledge and access capabilities to get work done. People who move in one direction make meaningful choices. As such, they can cope with ambiguity and create value.
HOW DO WE MOBILIZE THE ENERGY?
Mobilizing the energy refers to how we turn opportunities into value. It is the capability to trust our own resources and those around us, and to get things done despite uncertainty. Lever 3 identifies how we mobilize the energy to collaborate between traditional bureaucracy and self-organization.
Bureaucracy reigns in traditional organizations, with work being coordinated by managers, rules and plans. With a dynamic operating system, self-organized teams coordinate and collaborate while being supported by people-centric leadership practices.
When knowledge is concentrated at the top, managers coordinate work through routines and by telling people what they should be doing. Bureaucracy pushes uncertainty aside rather than reducing it. Traditional management applies bureaucracy rather than trusting people. But trust is the fastest management concept yet devised. Knowledgeable people trust their own capabilities to get work done. As such, agile promotes self-organization with motivated people who work in teams and turn opportunities into value.
Collaboration defines how people mobilize resources to coordinate work. Mobilizing the energy helps people bundle their efforts. In doing so, they can handle uncertainty and create value.
HOW DO WE MAINTAIN THE FOCUS?
Maintaining the focus is about sticking with the chosen opportunity. It’s the capability to focus attention and learn despite volatility. Lever 4 identifies how we focus and learn between traditional target setting and people-centric paying attention.
Traditional organizations are preoccupied with tight performance targets and goal achievement for efficiency and reliability. People-centric teams use attention to maintain their focus on the customer, supported by transparency, learning, sharing and continuous improvement. Focus of attention is natural to people. It’s people centric.
When knowledge is concentrated at the top, managers apply tools with narrow targets to ensure that people stay on track, don’t get distracted and follow the chosen opportunity. Narrow targets function like detailed prescriptions and operating procedures. Targets cannot deal with volatility; they’re always off. And so, people follow instructions, miss targets often and don’t learn. With distributed knowledge, attention mobilizes the ability of people to constantly focus attention. Focus of attention is the clue to learning.
Learning refers to the means by which people pay attention, refocus when needed, and enhance knowledge to constantly learn and improve performance. With this, people cope with volatility and create value for their clients.
After deciding on the four levers, with clarity on the principles, agile techniques as the means and dynamic operating systems, the next step is to align them with each other to maximize their impact, in line with the predominant operating mode, in response to the specific context.
By design, there are many possible combinations of these levers, achieved by simply moving the sliders. However, from our research we know that four combinations of capabilities are needed to cover most business cases.
ABOUT THE AUTHOR
LUKAS MICHEL has 30 years’ senior executive experience in global firms, supporting executives worldwide with agile management, enabling organizations to make step-changes in performance, innovation and growth. His consulting company, Agility Insights, is now present in 10 countries. He is the author of the THE PERFORMANCE TRIANGLE and MANAGEMENT DESIGN (both published by LID), which he uses regularly to support his client work. He is an Associate of the Peter Drucker Society and his work has been featured as part of the leading conversation at the annual Global Drucker Forum in Vienna. As a thought-leader on the subject of agility, he frequently publishes in journals, lectures at universities and speaks at recognized management forums around the world.
This book argues that people-centric leadership is essential to succeed in the new dynamic business context. It offers four agile levers for leaders to unlock the full potential of people and turn valuable business opportunities into value for society. The challenge for leaders is to balance the tensions between the changing business context and the needs of people to apply their potential. People are at the centre of attention in this book.
To unlock the full talent of people and succeed in a dynamic context, people need a work environment which differs from traditional organizations. It’s an organization with tools, capabilities, and a culture designed for people. It caters to the individual. Organizations that want to deliver superior outcomes in a dynamic environment require agility – agile tools, agile capabilities – and a culture with a shared mindset that enables people to serve customers.
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