‘Everybody has accepted by now that change is unavoidable. But that still implies that change is like death or taxes – it should be postponed as long as possible and no change would be vastly preferable. But in a period of upheaval, such as the one we are living in, change is the norm.’ Peter Drucker.
As with much of what Drucker wrote these words are as pertinent to today despite coming from ‘Management Challenges for the 21st Century’[1] a book published in 1999. This Blog has previously examined his role as one of the most influential management thinkers of all time with no less a figure as Winston Churchill pinpointing Drucker’s most significant role of possessing ‘…the gift of starting other minds along a stimulating thought.’ (See Blog ‘Collaboration – It’s about Mindset’, 24th April 2018)
In Drucker’s first line above he has used the word ‘everybody’, a generalisation that probably was optimistic in the late 20th century in which it was written and one that may still remain so today in the 21st century - many leaders did not listen to him then nor have they woken up to reality today. The British High Street is but one example as well-known names have recently reported losses that reveal the outdated nature of their business models.
Unfortunately, many leaders were aware of this having known it for a long time but as Drucker points out in his second line, change has been ‘postponed as long as possible’ and where ‘no change would be vastly preferable.’
The British High Street is not alone, for the pace of change has outstripped many businesses ability to keep up with fast shifting customer desires as well as deal with the threats and opportunities of technology. As such, not enough businesses are experiencing what Drucker describes in his final line as ‘…upheaval, such as the one we are living in’ where ‘change is the norm.’
Many leaders say that change is the ‘norm’ and that ‘they’re in continual change’. The reality, however, is that what they mean by change in is no more than ‘tinkering’ – no more than ‘moving the deck chairs on the Titanic whilst the ship sinks’ – rather than making the deep significant changes they need to make to create an operating model that is customer focused, non-hierarchical, inclusive, open, learning based, and innovative around technology that optimises the opportunities of AI - artificial intelligence.
As the global management consultants, McKinsey, report in an article[2] based upon their research on the new capabilities leaders need to build 21st century organisations, only 4% of 2,500 companies they surveyed had achieved a new operating model that meets the above. The top challenge they report rests in the ‘need to transform the culture and ways of working’[3]. Here lies the crux of the problem – culture.
Our understanding of culture comes from the field of anthropology that looks upon culture as being the deeply rooted and taken-for-granted shared meanings of a group that enables it to make sense of both their internal and external worlds, and which form the rationale for their beliefs, attitudes, and behaviours.
To understand culture and its influence upon leadership in organisations we need to appreciate that with the rapid growth of business through industrialisation in the 19th century many businesses quickly became major employers, with the need to better structure their businesses to improve efficiency and effectiveness. The model that emerged of the business organisation was shaped around the principles of command, planning, organisation, coordination, and control - it was military in nature for it was vertical and hierarchical - with the ‘leader’ sitting right at the top.
This model reflected not just the culture of the time but reached its zenith a century later in the large corporations of the 1960s that were used as the Harvard Business School case studies in the 1970s and subsequently copied by most other business schools thereafter.
It is important to appreciate that leaders, particularly the founders of a business, create organisational culture. The leader’s beliefs and values are the first way that the new organisation ‘does things’ that if they work become the culture of the organisation. This culture becomes a self-reinforcing web of beliefs, practices, patterns, and behaviours of the way ‘things are done around here’ – it is the DNA of leadership.
The model created two leadership cultures:
The Dependent leadership culture that operates with the belief that ‘people in authority are in charge’.
The Independent leadership culture that operates with the belief that leadership emerges from ‘individual expertise’ and ‘heroic action’.
Many organisations operate on a mix of these two leadership cultures notwithstanding that it is the complete opposite to what is needed today in the 21st century where a new, third culture is required:
The Interdependent leadership culture that operates with the belief that leadership is a democratic ‘collective and inclusive activity’ that works for the benefit of the customer, organisation, and all those that work in it. (see Blog, ‘Effective Leadership – It’s All About the Style’, 2nd February, 2018)
Culture is pervasive and powerful with its DNA generating a leadership culture that works effectively in that organisation over another. This is why some leaders from another organisation often do not transition well into another – the DNA does not fit.
Changing culture, and in turn the predominant leadership style and corresponding mindset takes time, often years, to change as it involves growing new DNA. Additionally, changing the existing organisational operating model that has worked well to date for the unpredictability of something new is not attractive to top leaders who can see their very existence threatened, for as humans we all loss averse and who in a ‘period of upheaval’ would prefer to seek the comfort and certainty of the status quo where ‘no change would be vastly preferable’.
Leaders of many organisations today could do no better than pay careful attention to the view of Ronald Reagan, 40th President of the United States of America, that the: ‘Status quo is Latin for, “the mess we’re in.”’
'Sandpaper Leadership’ © 2018 is a highly pertinent and practical approach to optimising and sustaining organisational performance.
[1] Drucker, P. (1999) ‘Management Challenges for the 21st Century’ Harper Business Publications, New York.
[2] ‘Leading Agile Transformation: The new Capabilities Leaders Need to Build 21st-century Organizations’ McKinsey & Company, October 2018
[3] ‘How to Create an Agile Organization’ McKinsey & Company, October 2017