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14 July 2022 | Posted by Innova Institute

Dr. Jaume Llopis defended his Ph.D. dissertation: general management in the era of hyperconnectivity - the new coordinates.

The competitive environment has been radically transformed in recent years. Companies have reacted by reconfiguring their operations, business models and competitive strategies to adapt. But to what extent have their top managers done so?

The last ten to fifteen years have been marked by the acceleration and consolidation of a series of changes that have significantly transformed both the competitive environment and companies' organizational and management practices: globalization, digitalization, disruptive innovations, changes in consumer habits and preferences, new employee demands, the transformation of the company's role in society.

Almost all of these phenomena and their impact on organizations have been extensively researched and documented. However, the impact of all these far-reaching transformations on the day-to-day work of the CEO is a relatively unexplored field. Hence, we set out to study how the changes in the competitive environment and the changes that companies themselves have undertaken to adapt to the new circumstances are affecting the roles and tasks performed by company managers and, in particular, top management.

To carry out our research, we made an exhaustive review of the most recent literature on the aforementioned changes, with special attention to those factors, both external and internal, that have the greatest impact on the day-to-day work of the CEO or general manager. We also turned to the primary source, the managers themselves, to contrast and complement the observations gathered with their own perceptions of the evolution of management practices and styles in relation to these changes.

After comparing the academic research developed by other authors with our own fieldwork with a representative group of senior managers, we have found that the changes that have taken place over the last ten to fifteen years are indeed redefining the functions and attributes that characterize the figure of the CEO. But in what sense, and in what way?

The new coordinates of general management

Based on the results of our research, we have drawn up a proposal for the revision and updating of the basic tasks of the CEO, adapted to the competitive reality of the 21st century, with the aim of offering a practical and immediately applicable guide that can be of help to senior managers.

A guide that can be summarized in seven key ideas:

1) Emphasis on purpose, vision, mission and values.

Profitable and sustainable growth, understood as the creation of long-term value for all the company's stakeholders, is the new management mantra. The best managers work to endow the organization with a sense of purpose that guides the strategic future toward long-term, sustainable value creation for all stakeholders. When purpose is properly articulated and communicated, it not only improves employee motivation and engagement, but is also appreciated by consumers. In our interviews with executives, seven out of ten stated that their company was working or had recently worked on formulating a corporate purpose that would give meaning to their work beyond the bottom line. However, we also observed that not all of them were clear on how to articulate a clear, differentiated and effective purpose.

2) Creating and developing a powerful and attractive corporate identity

The most competent managers understand the importance of building a business culture and a corporate identity that acts as a lure to attract and engage the best talent available, to build consumer loyalty and to become a benchmark of good practice for the organization's stakeholders and for society as a whole. Studies confirm that more and more workers - and especially millennials and generation Z - need to feel personally identified with the values, culture and purpose of the company they work for, and even choose where to apply based on such considerations. Aware of this new reality, eight out of ten managers surveyed acknowledged that their organization's values and corporate culture had had to evolve to adapt to the changes. In particular, those related to building a culture that is agile, digital, open, inclusive and committed to the well-being of people and the planet, which is what the new generations of employees are demanding.

3) New leadership styles

In the organizations of the 21st century, shared leadership, collegiate decisions and the empowerment of individuals and teams are the norm. There is no room for authoritarian leadership or for management styles based on "command and control". The new generations of employees demand leaders who are close, empathetic and more human, capable of connecting with people's deepest motivations and harnessing them to develop their full potential. All of this requires a new skill on the part of senior managers: that of acting as coaches to those they supervise. In our work with managers, seven out of ten said that their personal management style has evolved towards a "much more collaborative" model and "greater delegation and autonomy" for their teams, which reinforces their levels of motivation and commitment. In this regard, it is worth noting Gallup's data, which found that companies with more engaged teams have up to 81% less absenteeism, achieve 18% higher productivity, are 23% more profitable and employee well-being is 66% higher.

4) More outward-looking management and greater attention to stakeholder relations.

Leading organizations in the 21st century requires adopting a more outward-looking management approach and a greater focus on relations with the company's various stakeholders. That means for senior managers learning to look beyond their own company, beyond even their own industry, and developing the ability to build a network of contacts and developmental relationships with third parties - a "social capital" - that will help the organization cope with change and, if possible, capitalize on it. "You need to know broader ecosystems because everything is more complex and interdependent," commented one of the senior managers we interviewed. In fact, most of them agreed that in recent years they have greatly increased their dedication to the company's various stakeholders and to institutional communication.

5) Focus on people and their development

In a context characterized by constant change and by the complexity and hyper-specialization of knowledge, the key to competitiveness lies, more than ever, in the talent, attitude, adaptability and learning capacity of human capital. The most admired CEOs always prioritize the development of people and teams. They lead by thinking about maximizing the potential of the organization's human capital because they know that this is the key to the profitability and long-term success of companies. The vast majority of CEOs we surveyed said that in recent years they had significantly increased their dedication to people. Because, as one of them said, "everything can be bought or rented except a united and motivated team".

6) The importance of training and organizational learning

When disruption is the norm and the only constant is continuous change, the only guarantee of survival for companies is their own ability to transform themselves into "learning organizations". Leaders of top-performing companies are concerned with developing the ability to "learn to learn," both individually and organizationally, as this is the only way to systematically incorporate new knowledge and skills. According to Gallup data, organizations that have made a strategic investment in employee development report 11% higher profitability and are more than twice as likely to retain their workers. But these companies practice transparency, accessibility and free access to knowledge, encourage cross-communication and the free flow of ideas to break down silos and promote organizational learning, constantly learn from the insights provided by the consumer, are concerned with developing the soft skills of all employees and, above all, know how to create an environment of trust and security that encourages people to experiment, even if this sometimes means failing.

7) Faster and more frequent decisions

Speed has become a key element in the competitiveness of companies, which must accelerate the metabolism of the entire organization to keep pace with the pace of change. To achieve this, the most effective managers do not hesitate to introduce changes in working methods, organizational structures and ways of harnessing available talent. The ultimate goal is to make organizations more flexible, adaptable and resilient, able to respond quickly and nimbly to the new challenges constantly posed by the market. Empirical evidence confirms that the best CEOs stand out for their ability to make decisions, even with incomplete information and in highly complex and uncertain environments. In the words of one of the executives we interviewed: "Before, you had to make good decisions. Now you have to make good decisions in time. Or the best decisions with the knowledge you have at the time, because a perfect decision made late has put your company out of the market".

In our view, the proposed courses of action define the new coordinates for successfully leading in highly changing, dynamic and volatile environments. Of course, many CEOs have already taken note of the changes and have adapted their management styles to the new circumstances. But there are still many senior managers who continue to lead their organizations with outdated practices and styles. They do not see beyond immediate results, they think that a purpose in the company beyond the P&L and corporate strategy is not important, they treat their employees as just another resource, they limit themselves to implementing restructurings in difficult times, or they still believe that the budget is the main measure of the company's performance. It is time to chart a new course.

 

Authors: Jaume Llopis, GREITM editorial group

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