Winning business models, cultures and philosophies are diverging from successful practices that dominated the last 60 years. The main reason is that the rate of change and evolution continues to increase exponentially, allowing only the most flexible businesses to succeed long term. The people-centric enterprise is a preferred business model because it prioritises workforce participation, understanding and skills over standardised processes that are based solely on extreme cost cutting. This model requires balancing between right-brain skills and left-brain skills, and implementing a management philosophy that supports and motivates employees, rather than constraining them.
The Innovange vision was inspired from two distinct treatises: Profit Beyond Measure: Extraordinary Results through Attention to Work and People, by H. Thomas Johnson and Anders Broms (left column below) and A Whole New Mind: Why Right-Brainers Will Rule the Future, by Daniel H. Pink (right column).
Focus on the means before the end
Take a look at two very different management philosophies, each with a high impact on businesses:
(1) Management By Results (MBR)
Organisations worldwide have strongly favored MBR, a popular American model structured for quick business improvement and even quicker return on investment. This method consists of focusing management entirely on bottom line goals and intangible indicators, such as financial market activity. Usually led by accountants or economists, companies tend to focus on short-term financial results to appease shareholders and financial institutions. Under this philosophy, profit and loss become the only important factors and are actually used to set disengaged goals for business sections, departments, teams and individuals.
MBR philosophy does work well for short-term goals. However, usually at the expense of what's ultimately in a company's best interest. If the big picture doesn't get completely lost in the obsession with short-term results, the short-term goal can exhaust resources and create an unnecessary detour on the road to long-term sustainability.
(2) Management By Means (MBM)
The MBM philosophy, on the contrary, focuses resources and attention on areas such as processes, methods, people and their interrelations. The belief is that once the internal mechanism is aligned and targeted at the company's long-term success, desired financial results will be a natural consequence of improved quality of work. In other words: focus on the means to achieve better results instead of focusing on results, indifferent about how they are achieved.
A different approach to customers.
In a management by results (MBR) system, which is usually highly optimised with little waste, the organisation works as a well-oiled machine that outputs the maximum volume attainable, and profit is made and measured against mass production costs. This classic "push" system works, but only under the major assumption that external demand always equals the level of production.
Management by means (MBM) operates on a more natural, flexible "pull" system, where customers are the primary focus and their needs is the major external trigger to which the entire business system aligns first by understanding those needs and then by providing the best product or service. With MBM, because attention is redirected at people and towards cultivating relationships, the organisation as a whole is able to act/react as a living organism and each individual cell is able to take appropriate action on any external demand at any time. This adaptability has become extremely important in addressing present-day volatility and will become absolutely necessary to navigate an uncertain future.
Welcome to the Conceptual Age
Just like its predecessors, the Conceptual Age is a radical, organic and revolutionary period of socioeconomic and cultural development.
And it is happening right now.
Over the past four centuries, the world has evolved through several ages, each requiring different workforce skills:
Agricultural Age required farmers
Industrial Age required factory workers
Information Age required knowledge workers
And now, as we enter the Conceptual Age, a new set of skills is required, mostly related to creativity and emphasis, what Daniel Pink and others have identified as dominant right-brain or Right-directed thinking. But why are these skills becoming so important now? For one, salaries and demand are growing for more creative and empathic jobs that require strong right-brain skills, such as design and nursing and, even more interestingly, the following reasons, which Pink refers to as “the three A’s”:
Abundance, overproduction has over-satisfied consumer needs and is redirecting value towards emotional factors
Asia, underdeveloped countries started developing and due to impossible-to-compete-with labor costs, continue to absorb increasing volumes of work once monopolized by western countries
Automation, the evolution of technology, both hardware and software, is reducing the need for manpower in repetitive tasks
Which leads Pink to propose considering three imperative questions:
1) Is what I am offering in demand in an age of abundance?
2) Can someone overseas do it cheaper?
3) Can a computer do it faster?
If your company is ready to compete in the Conceptual Age, you should answer yes-no-no to the above questions. Otherwise, you need to Innovange.
Click here to watch Daniel Pink's full lecture (approximately 30 minutes, split into 6 short chapters)
Because future success and sustainability will belong to people and businesses that have a strong right-brain sensibility and can offer something that can't be easily outsourced or automated, companies and individuals need to recognize and develop their right-brain skills (such as creativity and empathy) while creating a balance with those still-necessary skills typical of the left part of the brain (analytical, sequential, rational).