by Michael Pearce

Forward looking executives must routinely search for and consider the need for new management models. As Gary Hamel so accurately predicts in his book, The Future of Management your company will be challenged to change in a way for which it has no precedent.” He argues that our traditional, decades long way of making decisions, constructing an organization and approaches to employee relations will likely fail in their attempts to forestall restructuring and painful missteps.

The very organizational structure of many companies, perhaps even most companies, is based on historical models. The hierarchical model employed across a great many organizations was largely copied in the beginning of the industrial era of the 19th century from the great Prussian and Roman armies. It was largely designed to assure quality replication and reliability in the manufacturing process while the organization scaled its capacity and simultaneously increased efficiency. It emphasized the importance of labor and capital. In today’s world where globalization, the need for nimble adaptiveness, collaboration and wealth creation by talented “associates” rules, it may actually work at cross purposes and become an impediment to potential success.

The ability to innovate is the predictor of success for many companies today as they bring new products and services to the market. This means creativity needs to be applied to our organization structure and staffing.

The opportunity is both substantial and threatening. The impact of globalization, dramatic technical advancement, declining predictability from historic modeling practices, and the increasing lack of loyalty, both to and from the organization, all seem to mandate that only radical new approaches to recruiting, managing and organizing talent will provide companies with a sustainable and durable competitive advantage. Nearly every organization can boast of their “solution”, all can point to their commitment to quality with their 6th sigma, TQM, or Zero Defect implementations and all believe they have a competitive price. The fundamental difference will be their representatives. It’s not appropriate to refer to them as employees today, for too many tasks are rightly out-sourced, done by contract employees and other non-traditional engagements. But it is the people that make the difference in every organization. Many companies boast that their most precious asset is the people – but few realize just how critically true that statement is.

Today nearly 75% of all of the people who ever reached 70 years old are alive and leading vibrant lives. In 2005, Dustin, Florida had 14 drivers over 100 years old, with valid driver’s licenses! Yet may Human Relations departments still try of find ways to legally avoid interviewing, let alone hiring anybody in their mid-fifties or older.

This needed change won’t be easy. Innovation never is. And it won’t be without cost or risk. As historic models are challenged, even debunked, they will need to be replaced with flexible, innovative approaches that require balance and respect for the impact of change. Machiavelli had some interesting comments on the inability, even unwillingness, to embrace change which, unfortunately, is as appropriate for today’s culture as it was in his time.

In the past we talked about defined benefits and ways to foster loyalty and longevity. Today we describe defined contributions that are portable. The question for all hiring executives must be how to mobilize and monetize every employee’s commitment each and every day they are engaged with the organization. If loyalty and longevity are not to be rewarded, as they were in the past but largely are no longer, than we must create new approaches that will keep the work place a highly engaging and personally rewarding place to work. This simply cannot be done effectively using 19th century management models.

This new market and the new ways employees must be treated can be either be daunting or it can be viewed as a unique opportunity. We must react to a set of circumstances that simply didn’t exist just a short time ago, including the globalization of the market place, the impact of the internet and the sheer amount of data that is available to everyone all the time. Even the smallest and newest enterprise can effectively compete from their very first day in the international market place.

These new dimensions to business are phenomena’s that the executive ranks of most companies are struggling with today, and therein lays the opportunity. As Gary Ames, retired President of MediaOne International commented, “I never have hired for a season, but internationally, as we talk about it today, I realize they were all seasonal.” Most CEO’s and their executive management have yet to come to terms with the change that will be mandated in how companies organize, lead, allocate resources, plan, hire and motivate. This new reality will change the work of managing. Technological innovation has already forced organizational and management innovation. This is just another iteration in the long history of successful commerce. The difference is that we are on the leading edge, and we’ll have far less time to assimilate the needed changes before the competition will cause us to lose permanently. In the past we’ve worked to create organizations that encouraged people to serve the organization’s needs. We must now learn to build organizations that merit the gifts of creativity, passion, initiative and enthusiasm people will bring with them. These attributes cannot be commanded, as they are invoked out of a sense of desire. As Dr. Phil Nudelman, the retired Chairman of Group Health, one of the largest HMO’s in the country commented: “In the past we earned profits in order to deliver needed services. Now we deliver services in order to make profit. It’s a much different model.”

We are likely in the beginning phases of organizational design that will yield unforeseeable results. It will be critical for organizations to eliminate those barriers that stifle innovation. An example is the proliferation of tools that coordinate human effort, and those that support collaboration among those located anywhere. These tools in and of themselves will radically change the work of management and supervision. The young adults entering the work place have replaced the word “career” with word “authentic.” Their fundamental operating philosophy is that they should be judged upon the merits of their productive work, rather then on the basis of title, or credentials. Accountability will more likely come and come more quickly from a team member than a supervisor. In this emerging age of “stint-based” positions young workers continue to consistently report that a “lack of meaningful work” and “no sense of contribution” as the top two reasons for leaving a job earlier than they had planned or hoped.

Our traditional approach is not effective in directing the efforts of those involved in thought-intensive work, as so much of work is today. Self-directed people need to be able to make the subjective judgments that their own special knowledge prepares them to be proficient at making. These are the people who will create wealth. The ability to support collaboration as a fundamental hallmark of the organization, creating an environment that works as well horizontally as it does vertically, will enable self-directed professionals to work with their peers effectively, efficiently and continually.

While talented people are at a premium, they are available. Attracting talent is not the biggest challenge. The biggest issue before most companies is how to profit from the talented people they recruit. The ability to combine talent, technology and organizational design to create much higher profit per employee is the fundamental challenge. Highly talented people really don’t require, nor are they willing to accept overly hierarchical models. Increasingly, the directed behavior part of management will be relegated to embedded systems. The concept that this generation of skilled, educated self-directed thinkers will require a privileged class of overseers, bureaucrats and administrators is an example of how today’s organizations have created barriers and impediments that work at cross purposes.

The real challenge is to recognize that today’s worker is directed by their peers as much as by direct supervisors. Companies must create a system wherein their people can make the decisions their role calls for them to make within an infrastructure that makes it easy for them to do so. And easy for their management to have visibility and confidence in those decisions. The outline already exists in a number of companies. Decision making is peer-based, the tools necessary are widely distributed throughout the organization, management may be remote as often as not, perhaps even in a foreign location, and power will be earned from competence rather than position. The idea that strategy and direction are rightly concentrated in a very few people at the top is one of those enigmas that presents a barrier to change. Change in this kind of organization is bound up in those few senior executives’ willingness to embrace and adopt the change. Richard Florida, in his book, The Rise of the Creative Class argues that some of the most difficult organizational battles will be fought between the forces of creativity and the forces of traditional management.

The opportunity lays in a company’s ability to take control of their own destiny and consciously innovate. Much of the inspiration may very well come from looking outside the world of traditional organizational management. The truly scarce resources in nearly every company today are discretionary spending, talent and the ability to focus. It has often been said that today’s problems cannot be solved using yesterday’s methods. We may well have reached the point in the development of management that we will not for long effectively compete continuing to employ traditional methods and approaches.

Let’s consider a practical example, that of recruiting, hiring and integrating a VP of Sales. We admit to ourselves that we may be hiring for only a few short years, but we admit that even if we get just that we’ll be the better for having hired this particular talent. Research indicates that the VP of Sales role in most organizations has a life of less than two years. So, we know we are hiring for a season, but we continue to interview for a career. We talk about career progression and longevity with prior companies, and all of those metrics that really have little bearing on the capacity to succeed with a new company. The idea, the elephant in the room we all see but resist coming to terms with, is that both the prospective employee and the employer are thinking of the hire from a seasonal perspective. The employee isn’t committing to a career, nor is the company expecting him to, as evidenced by all of the other policies they have in put in place, especially those that effect benefits, which was the traditional way of locking employees to the company and ensuring longevity.

Sales leadership often requires a span of skills that very few possess. On one hand, creating a structure and process that can assure optimum performance all the time, predictably and consistently, requires a person well versed in the science of sales management. This includes the metrics, dashboards, CRM implementation, reporting, pipeline definition that can yield both accurate reporting, and provide a catalyst for performance. Once that system is in place and proven, the challenge migrates from one of transformation to one of transactions. It calls for a much different kind of personality, one who is empathetic, a coach, a mentor and tactician versus a strategic thinker. Very few excel at both ends of this wide spectrum. Some hire for competence based on historical experience and soon lose confidence when their expectations aren’t reached. Then the revolving door of trying to identify someone who can deliver the expected revenue results continues. An effort that is an unproductive diversion, and causes more lack of focus. Those highly skilled in one aspect will rarely be highly skilled in the other. The organization that will lead the way for accelerated performance may well be the one that can come fully to terms with the idea that there are seasons when certain skills and styles are necessary, and begin to recruit and hire against that criteria, forsaking the unrealistic notion of a career hire. Those in the organization that fail to see the wisdom of hiring for a season are likely those that need control and access, yesterday’s hierarchical model, and one destined for failure when competing against organizations who have embraced a new model.

Those recruiting “interim” hires at the senior level, hiring for a specific set of skills for a defined period of time, may well be the first to realize the enormous opportunity that lies within embracing a new model, that of yielding the best results from the best people for a specific task or period of time. They will likely be the leaders we study when we look to those companies who have created the most wealth, routinely turn in the highest productivity per employee, and are the most sought after companies for whom to work “for a season.”

Reference Materials:
Patrick Lencioni, The Three Signs of a Miserable Job, Wiley, 2007
Howard Stevens, Achieve Sales Excellence, Platinum Press, 2007
Joanna Barsh, Innovative Management; A conversation with Gary Hamel and Lowell Bryan, 2007
Glen Heimstra, Turning the Future into Revenue, Wiley, 2006
Nicholas Aretakis, No More Ramen: The 20-Something’s Real World Survival Guide, Next Stage Press, 2007

Michael Pearce is a principal at OneAccord Partners based out of Los Angeles and author of the sales management book, “Don’t Shoot the Piano Player” that has been used by educational institutions and companies alike as a model for building and maintaining successful sales teams. His corporate tenure includes domestic and international sales leadership assignments for North America, Europe, Asia, and the South Pacific while he served several of America’s leading companies including Citicorp, Boeing, Weyerhaeuser, Singer and EMC. He can be contacted at 425.830.4156 and michael.pearce@oneaccordpartners.com.

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