The ability to radically transform your business is increasingly becoming an essential leadership skill. Economic climate is uncertain and global events are disruptive. The ability to quickly adapt to a changing business environment is now a must have, not a nice to have. Fortunately, we are better equipped now as a global community to get this right than we have ever been. Technological developments and radical shifts in our collective consciousness have opened the space for rethinking our approach to business.

How has the landscape shifted in business transformation?

There clearly has been a shift in how business leadership has been envisioned over the last 4 decades. When I started my career in the early 1980’s, the vast majority of leaders viewed their business as a system. Senior leaders and business owners saw their businesses as machines; a system of processes and controls working to produce profits. People in charge of people in business, both big and small, were referred to by people as managers. There was no apology about this. It was the only appropriate way to speak of bosses at work.

From the early 1990’s the language people used to describe bosses at work had incrementally begun to shift. Professionals were increasingly using the words ‘leader’ and ‘leadership’. Partly, people saw this to be consistent with a more modern approach to running businesses.  They had become increasingly uncomfortable with the clearly antiquated ‘command and control’ styles of management. The world was slowly developing a desire for a more ‘democratic’ approach to running workplaces.

In some workplaces leaders were willing to experiment with new and alternative ways of work. Typically, their principle strategy was to emphasise the autonomy of work teams. Most of these experiments failed. I know because I watched this happen in slow motion in more than one business. The minority that did succeed proved to be very difficult to sustain.

For transformation to be sustainable, it must be more than cosmetic

The principle reason leaders failed in those attempts is that the new ways of work were only a cosmetic change. The strategy was to change designations & structures, and send leaders on some leadership training, whilst maintaining the same fundamental view of the business. You will only produce a cosmetic change in working relationships when this is the extent of the measures you adopt.

For the change to be sustainable, you actually have to transform your understanding of what the business is. Unfortunately, our current organisational narrative still sees businesses as systems that work to produce profits.

It is appropriate to put a manager in charge of a system. Just as it is appropriate to put an operator in charge of a machine. It is purely cosmetic to refer to a person who functions like an operator in a system as a leader. Leaders lead communities, they don’t run systems. For the shift from ‘managing’ to ‘leading’ to be authentic there must be a parallel shift in how the business is viewed. Leaders must not see the business as a system; they must see the business as a community of people who collaborate to serve.

Transform your business into a community of people who collaborate to serve

When the leadership structures of an organisation are successful in establishing this shift, it has significant benefits for the organisation. Leaders who view the organisation as a system that works will view their people as  less important than the system. When leaders do this, they confine people to boxes in an organo-gram. They then force employees to comply to a rigid set of controls to ensure that the system works. Whether he cares to admit it or not, a leader who does this is actively viewing his people as human resources that he is willing to use up to produce a result. He is not seeing his people as intelligent agents who can be collaborated with.

On the other hand, a leader who views his organisation as a community makes the person, the human being, centre stage. This leader will no longer see his people as peripheral resources plugged into a process, he sees them as the point. He does not see his organisation as a system of process that must be manned by people. Rather, he sees his organisation as a community of people that must be supported by systems and processes. He understands that it is his people who bring the potential for initiative; and that people can actively produce a contribution which is greater than that which can controlled for.

To transform your business you must forget management science

One of the necessary causalities in this process will have to be the current “management-science”. In fact, the very idea of scientific management will have to be jettisoned as antiquated.  Management-science as a discipline was clearly the product of a 19th Century fascination with quantification and mechanisation. In presenting business as a matter of structures, systems, processes, accounts, spreadsheets and scoreboards, management-science obscured the reality that businesses are communities of people.

The central concern of any community is the loyalty of its members to its leadership, each other, the community and its cause. In fact, the central problem of organisation must shift from the efficiency of the system to the initiative of the individual. Like any community, a business is a political entity. The most important variable for leaders is whether their people are on their side.

Business transformation starts with the narrative

We see then that not only the nomenclature of hierarchy needs to change, that of business needs to change as well. I have been struggling with a word that would best describe a business in the right way. It needs to describe the business as a collaborating group of people. At first I thought the word ‘company’ would suffice. The problem with this word is that it is too associated with commercial enterprise. We need a word that could work for any kind of organisation of people, whether for profit or not. I actually think that the best word is “community”.

When leaders call their businesses communities and genuinely view them as communities, they will be able to unlock the willingness of people within the community to collaborate and serve. Transformation is fundamentally about shifting the narrative of the organisation from a system that works to a community of people who collaborate to serve. Until this happens we will still have a job helping leaders manage what are inescapably adversarial relationships at work.

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