WHY COMPANIES NEED TO INVERT THE BUSINESS PYRAMID AND THE LEADERS ‘NEW’ ROLE
| posted by Richard Townsend
Living and working in Asia it is interesting to find that many companies that operate here, including some multinationals, still don’t seem to fully grasp either the concept of the manager as a leader, nor the need to invert the organizational pyramid. It seems to be just as big a mystery to many of them as to how to define and implement the ‘role change’ that manager/leaders must undergo to accomplish this inversion task. Just as importantly many mangers don’t seem to understand that in their role as formal leader one of their primary responsibilities is provide the resources that their staff (followers) need to effectively do their jobs. Perhaps the problem stems from the fact that even the most ‘liberal’ of Asian governments are authoritarian and bureaucratic by nature (and design) and companies still seem to rigidly follow the old authoritarian boss at the top pyramid organizational model. This problem is exacerbated by a shortage of competent staff; an unwillingness to implement soft skills training programmes and in many cases a reluctance to hire experts from overseas.
So what of the pyramid? Tradition has built the organisational pyramid based on early military and bureaucratic structures where the power was with an elite group at the top. In this system the customer (enemy in the case of the military) only received what they were seeking at the whim of the people with the power. For example, not too far in the past if you wanted a telephone connection (in most countries) it could take weeks, or even months before the connection was made. Yes the boss had to ratify all the decisions and the process took almost forever. A great example of a modern ‘power at the top’ based monopoly is the visa section of most Asian embassies you wish to visit. The misuse of power, the lack of interest in the ‘customer’ and the long lines of frustrated ‘victims’ bear testimony to the shortcomings of all-powerful bureaucratic organizations.
The traditional pyramid therefore looked as follows;
BOSS
MIDDLE MANAGEMENT
STAFF STAFF STAFF STAFF
Serving “Customers Customers Customers Customers”
As Ken Blanchard explains in one of his many leadership courses the responsibility and decisions for an organization always stay at the top, so the pyramid and customer responsiveness looks like this:
OLD DAYS/MONOPOLIES/LESS COMPETITION/LESS EXPECTANT CUSTOMERS
Boss (Responsibility and decisions remain at the top)
Middle Management
Staff Staff Staff Staff Staff (Responsiveness and Support stay at the ‘bottom’)
Customers Customers Customers Customers Customers
With globalisation and the opening of markets however alternative choices are available and the power over the organization rapidly shifts to the receiver of products or services and away from the providers. This is a fact that from my experience is still lost on many Asian companies and probably on more ‘Western’ Organizations than we would like to admit. Two great examples of this new reality (and Asian paradigm shift) are the telecommunications and banking industries. As these industries have been deregulated, providing the customer with the power to choose, the management and staff of these industries have had to find new technologies, systems and of course methods of structuring themselves to maintain their market share. They have it seems in many cases however forgotten to change their corporate culture to reflect the past/current/continuing challenge.
The new business reality looks more like this:
TODAY/TOUGHER COMPETITION/GLOBALISATION/MORE CHOICE/EDUCATED & EXPECTANT…
Customers Customers Customers Customers Customers
Staff Staff Staff Staff Staff Staff (Responsibility and decisions remain at the top)
Middle Management
Boss (Responsiveness and Support stay at the ‘bottom’)
The constant struggle for those of us working in these rapidly changing markets is:
1. For the staff that deals face to face with this powerful ‘new’ customer the struggle has been (and still is) to expand their knowledge to be able to effectively deal with their customer’s ever increasing demands. Organizations need to provide customers with rational decisions on ‘problems’ in the shortest possible time to survive, let alone prosper. This has forced a process of empowerment or the need for individuals to take responsibility for their own performance (success) as well as their company’s success. In some corporate, or even national cultures this is quite a problem. I recall not so long ago an ‘empowerment program’ which was decreed by an American Hotel chain’s head office that a Malaysian Hotel tried to implement locally… the staff’s response ‘you just tell me what to do and I will do it’. The staff empowerment and the training that needs to be conducted to foster this culture change must to be seen as a “hard target” with the appropriate financial and management resources allocated to the task. It wont be easy in Asia as even the schooling here is highly structured and authoritarian.
2. For the middle management that has time, money, status, careers, success, knowledge and their power based in the system as it was/is, the great challenge is to overcome their fear of change. For many of these people, being good at working the system has led to their success. To them I say, in the future being good at doing business with the most important person in the equation… “The Customer”… will be the only basis for continued employment. Even the concept of an internal customer is from my experience almost non-existent in many Asian companies. I guess a great example of the downside of this is the well publicised (and real) quality problems with Chinese products. Wasn’t it Jack Welsh that said ‘destroy the bureaucracy’, or as legend has it even more dramatically do as he did and perhaps go further and sack the powerful change resisting middle management. On a major scale the Chinese Government (or those commenting on it) seem to imply that even though the ‘Cental Committee’s’ improvement ideas for the country are in many cases reasonable and well thought out, they are often as not thwarted by regional (middle management) governments and therefore no progress occurs on newly ‘implemented’ policies.
3. Senior management’s role is still to provide vision, mission purpose and values however it is impossible for them to be ‘the technical expert’ or even the operational decision makers. The levels of service demanded by the powerful new customers make it impossible to operate effectively with only a few top decision makers. Senior managers need to give up the formal “power to decide” and take up the “socialised power to facilitate”. That’s a big ask for any boss and for many Asian bosses in particular. The recent demise of a famous South Korean Industry ‘leader’ bears testimony to the arrogance some of these people are inflicted with.
Ultimately however those who won’t or can’t change to the new business reality face at best a bleak future in ever disappearing lowly paid manual labour or even worse perhaps a career in the public service, where they just might be able to hide for a few more years, particularly in Asia.
Richard Townsend
Corporate Learning Consultant
Beijing (for now)