I follow the Corporate Rebels and Joost, in their regular Newsletter, ever so often pens something that I find of great interest and relevant to the current business situation.
Joost’s attached document highlights how the current Command-and-Control management approach in business has had a devastating impact upon organizations.
He states that “Efficiency (that supposedly comes from that approach) has to make place for (staff) engagement and adaptability”. He predicts that “organizations that know how to fully engage their employees” will thrive in the 21st century.
Through a very effective Harvard Business Review figure he draws our attention to the origins of general management beliefs spread over the 20th Century:
- Scientific Management – Frederick W. Taylor (1911)
- Bureaucratic Management – Max Weber (1922)
- Hierarchy of Needs – Abraham Maslow (1943)
- Theory X & Y – Douglas McGregor (1960)
- Positive Psychology (2000)
He sees Taylor’s Scientific Management and Weber’s Bureaucratic Management forcing organizations to be efficient but at the price of strong hierarchies, rigid rules and specialized work that has resulted in employee disengagement and prevents them from exploiting their talents. These consequences he states as disastrous.
Using Gallup’s Pie chart he illustrates the situation of modern-day employee engagement which is no more than 13% for staff but at the same time shows 63% for disengaged staff and a staggering 24% for those who are actively disengaged.
Using a Deloitte chart Joost highlights how only 12% of the Fortune Global 500 companies in 1955 have survived. Worse than that “in the last 15 years, 52% of them have disappeared. In 1960 the average lifespan of a S&P 500 company was about 60 years – currently this figure has dropped to 15 years. “Organizations like Kodak, Blackberry, Motorola, Lehman Bros and Enron are a few of the many companies that became overly comfortable and lost the battle”.
Quoting a study done by Gallup, Joost shows that the organizations with staff that were engaged enjoyed significantly higher levels of profitability, productivity and customer ratings. There were also had significantly lower numbers on turnover, absenteeism, safety incidents and quality defects. “The outcome of Gallup’s study clearly shows the strong correlation between employee engagement and business performance. Moreover, the findings were proven to be highly consistent cross different organizations from diverse industries and regions of the world”.
The document claims that “There is convincing evidence that organizations that focus on creating engaging workplaces move themselves into a position to flourish” The document continues about “companies designing workplaces that are able to meet the intrinsic needs of employees. We therefore need to spread this new management paradigm that does no longer support rigid hierarchies with managerial command and control in place”.
“We should stop to reinvent practices that do not work and go beyond our traditional beliefs and ideologies. We should clear our mind from the old paradigm so that we can start to fill in an entirely new canvas”.
All the above comes to life when one looks at the figures from various sources provided by Joost. I strongly recommend not only reading the attached document but also allowing the figures to underpin the message.
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