Nine tips for building empowering management structures

Mathias Calonius • Site Head, Munich / Partner

This article is part of a series designed to help enterprises become more lean. We’re partnering with Lean Enterprise co-author, Barry O’Reilly, to host executive roundtable sessions in London and Berlin, as well as an event in Helsinki, ‘Lean Rocks’, all during February. Futurice and Barry will be offering bespoke training and workshops with clients in Helsinki during February and early March, if you’re interested in learning more about this please contact Timo Hyväoja.

Management systems including organization and budgeting define the structure and culture of how we do things. A management system is an authority that tells those lost in the wilderness what is important and what the right thing to do is.

Management systems are sometimes inflexible and slow, creating pain when it’s time to enact change. Was the system designed to recognize and eliminate deviations from the norm and preserve the status quo? Or was it built to support change, speed and results in an operational environment where business models change rapidly? Often management systems tend to veer towards control and many things that could be useful in creating new business and strategic flexibility are lost.

I’ve created nine tips to take into consideration when you want to redesign the management system of your company. The ultimate aim of this is releasing the energy of your talented people and making successful innovation possible.

1. Complexity requires cooperation

A complex operational environment brings with it countless details and only very few people are able to understand all aspects of the challenge at hand. We want the customer experience to be the result of a union of technology, design and business. The organization needs to combine technology, design and business into a dialog that creates pleasant and seamless experiences that customers fall in love with.

2. Multidisciplinary teams with an extensive allocation of responsibilities are ideal for creating new services

New innovations are born out of deep understanding and as a result of combining existing elements in novel ways. Multidisciplinary teams whose members represent varied perspectives and fields of expertise have the knowledge base required to create something new. Productive teams are created when the members share a goal and prioritize the success of the team over drawing attention to their particular expertise area.

Teams should have the right to move things forward as independently as possible. It’s hard for someone from outside the team to know how the team should function in a complex environment. The team’s right to progress should be based on trust and open communication. Teams should also have the option of disbanding.

3. Physical proximity matters

It has been scientifically proven that the amount of information and communication that passes between people is drastically reduced when they are more than five meters away from each other. Thus physical proximity plays an important role when creating and developing new, innovative services. People at start-ups usually work together in a single office. At bigger companies, product development responsibilities are usually distributed so that one physical office is responsible for one facet of the service. In these cases, combining the different facets presents a real challenge, whereas the development of the individual facets is usually efficient.

4. Part-timers are a source of inertia and mediocrity

The design and development of new services is often slowed down by the need for a contribution by an in-demand expert with a very particular skillset. Experts of this sort are usually working on a number of projects and their contribution can be hard to acquire and take a long time. Great success is more likely when the team members are fully committed to working on the project in question. A project team consisting of part-timers is slow and mediocre. Organizations will frequently lose sight of the big picture in their race to make sure all their employees’ utilization rate is as close to 100% as possible.

5. Open distribution of knowledge promotes productivity

Knowledge is central to the way society works and often a tool for control and power. The more open an organization is about sharing information, the better the tools its staff has access to are going to be. Open sharing of knowledge promotes productivity.

6. Transparency promotes responsibility and desirable behavior

Transparency helps people see the connections between things and what role their work contribution plays in the big picture. Transparency helps make independent decisions. Transparency helps give feedback and promotes desirable behavior models. Transparency helps people focus on their own contribution by increasing trust. Let everybody know their status of their own and all other units.

7. Reward experimentation and the creation of new

Every company has its own traditions and value beliefs. If the best way to advance in your career is to take the traditional route and avoid errors even if the boat is already sinking, this is exactly how your staff will behave. In a digital environment where operational models are still evolving and the environment is volatile, you should strive to try out new things. If you want your organization to function better in this sort of environment, it should be apparent in how you reward people and what sort of career advancement opportunities you offer.

8. Autonomy + know-how + meaning = work motivation

People mistakenly believe that monetary compensation is the primary motivating factor for work. The bigger the paycheck, the more motivated the employee is to do the job. In fact, pay is a mere hygiene factor. Real motivation comes out of an opportunity to drive things independently, the ability to excel at the substance of your job and the meaning you derive from doing it. People are comfortable in organizations that support these three themes. When comfortable, people are at their most productive.

9. When embroiled in change, budget the search for a new path

It’s not about one or a dozen projects that the organization has to perform to escape a moment of discontinuity when the future seems even more opaque than usual. The digital revolution is a longer continuum where the rules of business are redefined, old assets become burdens and new successful business models are yet to be recognized. Budgeting should make it easier for decision-makers to function in this state. Getting new ventures up and running should be fast and old projects that fail to produce the required results should be terminated. There’s always a shortage of prime resources. They should be allocated to only the most important projects.

Visit our Lean Rocks event page to register if you would like to attend.

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