In the 20th Century, there appeared to be a settled choice in setting priorities for business management: either you managed for profits, or for your staff and society. You prioritized commercial ambition, or you had a conscience. You managed with your head, or with your heart.
Evidence has been building for some years now that this is a false choice. Emphasizing either just ‘the head’ or ‘the heart’ is equally mistaken.
The business model that emphasized profits, or ‘maximizing shareholder value’ as the most commonly used phrase for this philosophy put it, has hit crisis. Its main features were: treating people as ‘resources’, a command and control hierarchy and a select few leaders devising strategy, while employee welfare, morale and communication were regarded as ‘the soft stuff’.
The problems with this approach are no longer just moral, but commercial too. Evidence shows that the creation of great services, innovation and even strategy are most effective when the whole workforce is emotionally and intellectually engaged. This is especially the case in a technological, international, fast-moving trading world, where strategy has top be a continuous, participative evolution, not a handful of decisions at an annual Board meeting.
Of course, treating your staff well and heightening employee engagement do not guarantee success. My approach, known as The Management Shift, seeks to bring all elements of effective business leadership together. Too often, they are taught separately. My research and work with employers has resulted in identifying six key factors, which form the 6 Box Leadership Model. Three of the dimensions relate to people: Culture, Relationships and Individuals. Three are related to processes and materials: Strategy, Systems and Resources.
I’m very confident of the evidence base for this approach, but along with evidence, we need a new mindset to encourage equal attention to all six. And this means moving away from the false 20th-century choice of head versus heart. In the real world, and in the most successful approaches to business management, the head and the heart are always connected.
We are in new territory, and it is an incredibly exciting agenda. The new approach to management is not just about inclusion, but about modernization; not only about employee engagement, but enhanced innovation and more effective strategic renewal. As I put it in the new book The Management Shift:
From the 1950s traditional management model flourished with the wealth creation for industrial nations based on increasing productivity. Then, with all technological changes and increasing importance of knowledge, new business models emerged (such as Amazon.com), where talent, collaboration and innovation enabled faster commercialisation of ideas. However, embracing these new management approaches requires a shift in the mindset …. As the CEO of Whole Foods John Mackey and Professor Raj Sisodia state in their inspiring book “Conscious Capitalism”[i], “the world urgently needs a richer, more holistic, and more humanistic philosophy and narrative about business than the one we have encountered in economics textbooks, in business school teachings, and even from the mouths and pens of many prominent business leaders”.
[i] Mackey J. and Sisodia R. (2013) Conscious Capitalism, Liberating the Heroic Spirit of Business, Harvard Business Review Press, Boston, Massachusetts.