Companies organized along traditional functional lines tend to be slow to change and inflexible, unable to respond to customer demand. But how innovative companies are built? BARE shares an article by Brad Murphy for Forbes on The New Manager: How Organizations Can Thrive In The Experience Economy.
‘In today’s fast-paced, competitive world, corporate managers are increasingly realizing that working in silos seriously impedes innovation.
According to Deloitte, over 80% of corporations with 5,000 employees or more are either in the process of reorganizing or plan to do so to be more responsive to customer needs.
Currently, only 24% of large companies remain organized into separate functional areas such as sales, marketing and service. At innovative companies like Netflix and Spotify, traditional departments have been largely replaced by self-managing, cross-disciplinary teams in which each member is invested in a given project’s outcome.
This new configuration requires a different kind of manager — one who understands multiple functional areas, can leverage the expertise of people with diverse skill sets and, most importantly, has the courage to challenge the status quo.
Managers can no longer think of themselves as gatekeepers whose task it is simply to comply with company norms. The focus needs to be on empowering teams and exchanging information with peers. The critical success factor centers around spurring team members to work creatively and innovatively.
FUNDAMENTAL SHIFTS LEAD TO DRAMATIC RESULTS
Traditionally, managers were tasked with making sure employees and business practices adhered to the company’s policies and processes. Sadly, this ruthless focus on compliance almost always comes at the cost of snuffing out creativity among those with the greatest interest in delighting customers. Today’s managers need to think differently: They need to take risks and challenge assumptions, and they need to be rewarded for experimentation.
How do you lead a team and cultivate creativity and innovation? That’s the question the executive vice president of one of the world’s largest media companies grappled with last year. One of the corporation’s operating units was in crisis: A heavy-handed top-down management style was leaving employees feeling increasingly interrupted and unheard and needlessly micromanaged. The situation had gotten so dire that human resources recommended shutting down the division and moving the work to another operating unit. The executive realized that a fundamental shift was necessary to save the group.
During the ensuing eight months, the executive brought in our firm to facilitate a transformational approach that was deeply personal and behavioral — a significant departure from the company’s previously compliance-heavy management style. The group made a massive shift toward collective team ownership of projects. Simultaneously, leaders began to focus more on coaching teams rather than micromanaging employees, empowering individuals to exercise more initiative.
The changes led to a redesign of the group’s workflow and management structure, individual roles and responsibilities, and performance metrics, as well as an adoption of lean agile tools and techniques. And, just one month after the reorganization, the results of another employee survey were released, showing dramatic improvements in communication and collaboration over the previous year.
HOW TO PART WITH TRADITION
To foster organization-wide entrepreneurial mindsets, companies need to establish new workplace norms that make clear what managers should be focusing on — as well as what they should stop doing.
First and foremost, managers need to realize that it is not up to them to dictate how work should be carried out. Daily decision making should be delegated to semi-autonomous teams of people who hold themselves accountable for achieving objectives. Managers need to focus less on coordinating and more on energizing employees and making sure teams have the resources they need to meet their collective goals.
Another important consideration for managers: Instead of rewarding individual employees, focus instead on the success and performance of entire teams.
A study published in the Journal of Business Research found that group-based evaluation and reward systems were more effective than individual reward systems for most employees who work in teams. Workers are simply more motivated to perform at their best when their performance affects the outcome of the entire group — and, ultimately, the success of their organization.
A key practice that managers need to dispense with is “sanitizing” information before pushing it up the chain of command. When companies establish a culture in which team progress remains transparent to all stakeholders, leaders no longer need to spend their time developing slide decks to make sure higher-ups know what their groups are doing and how well they’re doing it. Managers will always need to facilitate communications, but in today’s organizations, they should spend less time broadcasting information up the chain and more time sharing insights with other teams and peer managers.
EMPOWERING CROSS-FUNCTIONAL TEAMS
When managers are no longer bogged down with day-to-day micromanaging and administrative work, they have more time for the more complex challenge of leading multidisciplinary teams. It’s likely, for example, that a former head of sales may now be leading people with marketing, IT, customer service and other backgrounds. Instead of handling one aspect of a product or service, managers must oversee entire projects from nascent idea to implementation.
To shepherd projects from start to finish, team leaders need to master the art of collaborating with peers to drive the flow of information that will help their teams succeed.
Often, the work required to deliver great customer experiences flows horizontally across teams: Making an important e-commerce change to offer transactions and shipping to international customers might involve graphic designers, coders, product fulfillment specialists and regional experts that know each market.
Managers need to build coalitions with other leaders in order to work effectively across departments. Information has to flow continually and freely among groups about best practices, new insights and lessons learned.
Restructuring large companies around team management and collective results require forward-thinking leadership from above and involvement and buy-in from every level of the organization. It’s not a simple endeavor, and companies can often benefit from support from experienced outside change agents. Making this transition successfully will determine which businesses will thrive — and which will go the way of former giants such as Kodak and Borders.’
Today, BARE International sets the industry standard as one of the largest independent providers of customer experience research, data, and analytics for companies worldwide. BARE’s customer experience research can provide you with critical data to make meaningful business decisions. Ask us how.
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