Great concepts and exercises inspire people during a training and offer them perspective, but I notice that not many of them can be simply applied by the participants in the work situation. There may be other avenues and opportunities to work deeper in companies with people on the real problems in their work situation.
I have investigated this together with my colleague Bernd Kloke and a group of German entrepreneurs who are willing to participate in a pilot process of organizational development for their company. In three two-day sessions and interim meetings in their companies over a period of almost a year, we worked with them on the key change issues facing their companies, specifically the question “How can they run their business in such a way that the people in the company want to participate fully in this development process and they do so wholeheartedly”. We find out that the common desire that they all have is: “What can I do that the people in the company take the right initiatives from their own sense of responsibility to improve their work and perform well?”
I clearly remember the case of one of these entrepreneurs, the owner of a textile company, who was very sales-oriented and found in the process that he had no real understanding of how the purchasing department in his company worked, even though they spend 40% of the operating costs to the raw material expenditure.
As he began to observe more deeply into the process of the purchasing department, he saw that the older experienced lady and the young man who ran the department were doing this out of the routine to the best of their ability and found that there were many opportunities to negotiate with the suppliers about quality and prices missed. He himself became more actively involved in this purchasing process and they were able to save substantial costs in a short time by negotiating better with the suppliers. The company’s profits improved and this enabled the owner to make investments that had been waiting for several years.
Good leaders make the difference
I started looking at how management can make a difference in the proper functioning of development processes in the company. If leaders could find the way to involve the whole community in the development process and everyone’s involvement is based on their personal motivation to contribute, then everyone could connect their own impulse in life with the impulse of this company and be part of a co-creation approach, that is my expectation.
I have had to experience time and again that this is not self-evident and easy to achieve.
Spinoza: People find it easier to achieve what they need if they help each other and join forces.
Management – employees
It is an urgent issue/question whether the top-down, hierarchical and functional way of leading and directing with systems by management and as a result the almost independent work of the individual professionals within the given structures of the company, provides sufficient basis in the future for us to be able to deal with the complexities that we are confronted with today in all dimensions of an organization. I don’t think this will be enough in this commonly practiced way.
As Peter Drucker pointed out, this takes something different: “An organization that knows it practices with a high degree of integrity and is socially responsible, all else being equal, usually outperforms an organization that practices neither. More importantly, if something goes wrong, people will support an organization and a leader they trust and believe in, and eventually leave an organization that doesn’t.”
First, let’s share some professional views on leadership that have influenced our way of looking at leadership and organizations. During the last century after the Second World War there have been two very influential personalities who have dealt with management and leadership: Peter Drucker and Bernard Lievegoed. Peter Drucker, born in Europe, moved to the US while Bernard Lievegoed proclaimed his views in European countries. Later, the work of the two went around the world and they have had a major impact on how we can see management and leadership develop in the organizational context.
Peter F. Drucker developed a unique leadership concept that focused on developing the capabilities of people working in organizations to achieve extraordinary results. The amazing thing about this concept was that it was very different from the mainstream, mainly Anglo-American concepts that tried to connect leadership and the achievement of results.
Drucker wrote, “Leadership is the vision of elevating a human being, elevating a human’s achievements, building a human’s personality beyond staying within its normal limitations.”
Instead of seeing people as some kind of tool or resource in the hands of management to achieve the desired results, he ultimately sees the pursuit of organizational leadership to get people to do things they never thought possible. Peter Drucker once linked this to a Shakespearean saying: “This above all: be true to your own self. And what follows, as the night becomes the day, then you cannot be unfaithful to yourself…”. And Peter Drucker also stated: “You don’t have to give up the efficiency or profitability of the organization. You just need to be ethical and be socially responsible as part of good leadership.”
Bernard Lievegoed was and is a great source of inspiration for leaders and entrepreneurs who work worldwide. After the Second World War, he was asked by Dutch and German entrepreneurs how they could change the management style of directors and executives so that the new generation of young employees could be better integrated into the companies. That question set organizational development in motion and Bernard Lievegoed can be seen as the pioneer in this field. He introduced the concept of business development stages in which he described how businesses begin as pioneering initiatives carried by intimate circles of supportive people. If the organization touches a target group that needs this initiative, there will be growth. At certain times it appears that the improvisational style of working and leadership is not enough. The company needs structure to overcome the crisis of declining performance. Then we see differentiation, specialization, functionalization, coordination and management. Management begins to take over and the organization becomes a system. Further growth happens, but this changes man into an official, the loss of commitment of man is the result and a new crisis that arises from this requires a new step.
People must come first and the company must integrate into the wider society.
Instead of focusing inwards, one should look outwards and connect with the wider development of society and with people, including new generations in particular. People who work in companies must gain insight into the whole and can therefore act as leaders themselves in the leadership process in which everyone is involved. Lievegoed saw organizations develop from groundbreaking pioneers to differentiated systems to integrated institutes.
Lievegoed’s leadership vision can be summarized as: “Leadership must balance the orientation on the customer and the process with the customer with what the organization produces as a process and adds value, while steering information and communication on the right process on which decisions are based and with the resources and capabilities used to make it happen”.
This new image of seeing an organization as a constellation of processes was a new step towards getting closer to how an organization could develop and change further. This image inspired people like Daniel Jones and others to further develop this kind of image, and from this came new impulses such as the ‘lean organization’. Later, people like Otto Scharmer based their work on the impulses that Bernard Lievegoed and colleagues in his Institute the NPI gave to the world.
I personally think that management is essential for the operations to run smoothly (we are in control) and leadership is essential to bring about the necessary changes (we are developing). In practice, it strongly depends on the inner and outer orientation of the manager/leader where his/her personality lays the emphasis. If we open the door to leadership and the door to management for top, middle and bottom, through which we see how everyone stands in this vertical/horizontal cross, then we have a chance that companies can develop a way of being what Lievegoed described. as: “people at the center of our organizations”.
It is astonishing how much management literature has been produced in recent decades that has provided impetus for a change in management and leadership. Also ideas such as the “lean organization” (Womack and Jones), “the learning organization” (Peter Senge), “the living organization” (Arie de Geus), these promising impulses for change in the way of working and leadership in the company have unfortunately not infrequently been transformed in business practice into traditional efficiency practices, cutting costs and increasing profits, as this has remained the dominant shareholder oriented view of a majority of the top executives of larger companies.
This means to me that new impulses can only find their way into organized life if we practice a different kind of leadership than mainstream management practice shows today.
- the visionary leadership in connection with
- the further development of the community of people and
- the way the customers are served and
- the integration of new generations over time, is done
that can form the foundation for the survival and further development of the company.
- the company’s customer/client who, as the most important person, should be at the center of our attention,
- the work processes in which people work that need to flow to generate a positive attitude from the people that handle the work process,
- the good cooperation between us,
which together make the difference.
These, in my view, are the key principles and objectives for inspiring leadership in the organized community and should not be seen merely as means to achieve the objective of a stakeholder, the shareholder.
What conclusion do I draw?
I have worked with hundreds of leaders at all levels in companies in many different countries around the world. We have gone through intense processes of change and innovation and in doing so I discovered a fundamental dimension of leadership:
Leadership is not a person who gives orders but is a process in which the new can emerge and in which different people contribute to create change and development in a vibrant business community.
We called this type of leadership horizontal leadership.
In executing that horizontal leadership process in the community, the leadership dialogue is essential for the development, change and innovation that the company needs. Top leaders, managers and professionals need their own personal leadership in the leadership process to make things happen in the right way and to start a dialogue with each other so that we can all act in the sense of the whole and take the right steps to bring things further. The most important feature of this horizontal leadership dialogue is: we regularly talk to each other in a personal way about the real change issues, ie the issues that see top, middle and base together in their different reality so that everyone can find the right steps from there and make important things happen.
That will then become circular leadership.
(Image form managementsite.nl)