The rising complexity in business as a result of digital transformations, globalisation, market volatility and the pandemic means managers must adopt agile ways of working.
Traditional management has reached a turning point. Consider these latest findings from a BCG & Ipsos 2021 survey: 63 per cent of Western managers do not want to stay in management roles and 37 per cent believe their management layer will disappear within five years. Just over 80 per cent of Western managers also say the job is harder than just a few years ago.
Middle managers are burning out and junior employees are more willing to move into expert roles or work as independent contractors, rather than moving up the management ladder. The main reason for this is the rising complexity in business as a result of digital transformations, globalisation, market volatility and the pandemic.
As the business environment becomes more complex, employees spend an increasing amount of time on non-core activities such as providing updates, preparing reports and cross-functional coordination compared to less than one-quarter of their time dealing with clients or teams.
When asked, most employees say they just want to get their job done and solve problems for their clients. In fact, what they enjoy most is a sense of productivity by mastering the tasks at hand. To the contrary, they are telling us that they have the feeling of constantly putting out fires, playing politics and writing reports.
Instead of responding to this complexity by introducing more agility, organisations tend to respond by setting up more rules and processes in a desperate effort to control uncertainty and change. In addition, middle managers often find themselves stuck in the middle of conflicting priorities and an unclear company vision.
In the smart city space, for instance, products need to be well-designed but still affordable; they need to integrate multiple potential features and open-source technologies but be modular and scalable; manufacturing plants need to be further automated but jobs still protected; and team skills need to be upgraded but neither there is often sufficient budget nor time to do so.
Agile ways of working, which are now taking root in non-tech and larger organisations, address what employees dislike about their jobs and enable managers to shift the focus on what employee like and are good at doing. This means that management roles are redesigned taking into consideration each individual’s strengths and motivational drive.
After assessing employees’ behaviour profiles, organisations need to bring together multi-disciplinary teams that are free to pursue different approaches and work towards a clear vision and predefined goals with a start-up mentality.
These people-centered teams are meant to operate around projects, in rapid learning and fast-decision cycles which are enabled by technology and strong alignment around a common purpose. But often there is not enough time and thought spent on defining the exact common purpose. There needs to be a clear differentiation line between the purpose of the project, in other words the outcome expected from the mission or tribes, and the sense of purpose that usually binds the team together.
The outcome of the mission must be defined as short-term and tangible business results or product developments, benchmarked to historical performance data.
One typical trap for an organisation moving to an agile pilot is spending too much time on role modelling new mindsets and implementing new organisational and operational models without clearly defining the desired outcome. In other terms, the “why” are we going through this needs to be crystal clear and is not a team-building purpose.
Instead of top-down hierarchy resulting in detailed instruction and working in silos, agile organisations design teams that are built around end-to-end accountability, focused on action and not on ticking boxes or advancing processes. A stable top-level structure is maintained but much of the traditional hierarchy is replaced by an autonomous and scalable network of teams.
In fact, networks are a natural way to organise efforts because they balance individual freedom with collective coordination. Operation standards are often higher in terms of accountability, alignment, expertise, transparency and collaboration. Roles and people are separate entities meaning that roles can be shared and people can have multiple roles.
For this to work, teams need to be designed around a set of skills required to solve the project’s various problems or full delivery of a service and are cross-functional by nature as well as end-to-end in orientation. They are experimental in essence but nonetheless rigorous in tracking results and staying persistent.
Instead of falling into the reporting and escalating trap, managers need more room to manoeuvre and effectively guide their teams. In an agile organisation, the role of the manager as the boss largely disappears in favour of two distinct leadership roles: the “what” and “how” roles. What should a team be working on and how, if they are to create more value?
The manager becomes a supporting role rather than a coordination or directing role and leads to rich discussions with other team leaders and his teammates about strategy execution and operations. Instead of just passing along orders and controlling, these roles actively build alignment and team engagement by leveraging collective intelligence mostly through informal brainstorming.
The internal network of empowered teams is augmented by an external network of active partnerships to access the best talents and ideas, generate insights and co-create new solutions and services. Therefore, the relationship to clients, service providers or vendors is also redefined in a way that creates more joint value. Co-creation becomes the key word.
Smart city managers
The smart city sector is based on fast-moving IoT technologies and evolving urban infrastructures, putting it at the forefront of the need for management agility. We see our clients building networks of empowered teams with clear, flat structures and hands-on governance. It often starts with one performance-based team that shares its model of success.
The fact that smart cities solution providers are forced into new service models based on outcome and return on investment creates an urgent need to shape, pilot and launch new initiatives and business models in an agile mode.
Agile companies not only enable managers to thrive, they also achieve much higher customer-centricity, faster time to market, higher revenue growth and overall lower operational costs. Employees are more willing to become managers in agile organisations because they can express their entrepreneurial drive, take ownership of team goals and experiment new initiatives.
As people and skills are put at the centre, managers are encouraged to develop new knowledge and skills and know that they can expect role mobility as a result.
Activities most likely to benefit more quickly from agile transformations are the ones around customer-centricity such as innovation, customer experience, sales and servicing or product management. On average across all B2B sectors, less than 50 per cent of employees are currently working in agile mode.
In the smart city sector, as well as related telecom and energy sectors, the level of agile working employees is even lower but momentum is building and will increasingly be associated with business success. Indeed, citizens are becoming cities’ customers and digital and IoT technologies are disrupting ways of working in the public sector by requiring multiple data to be shared and stakeholders to be involved, signaling the end of silos.
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