Managing In The ‘Now’ Society – What CEOs Need To Know

Economist and management guru, Peter Drucker, predicted in his book Managing in the Next Society that CEOs would have to become “change agents.” Nobody expected just how fast this would come true. For many in CEOs and managers, it’s changed everything about how they work with people, processes and running the business.

As Dean Aloia, owner of the Brooklyn insurance agency Aloia McKinnon said, “It’s forced decisions on the fly and I’m not so sure that’s a good thing. Who expected technology to advance and progress at the pace that it did? It often forces you to do things too fast.” Many business owners and managers feel the same way. “If your level of commitment is good, you can manage it. But it does take that level of commitment to keep up. It’s my biggest challenge because communication comes at such a fast pace and the client expects to be replied to equally fast. It is very hard to take personal time as a result,“ Aloia continued.

Executives across the country agree. Drucker predicted that this rapid change would also force businesses to hire more highly skilled workers in order to keep up where change can happen literally overnight. He suggested that executives must also change the way they think about the workers.

At the time it was written, many CEOs scoffed at this idea. After all, wasn’t it the managers’ job to tell the worker what to do? But, as Drucker said, “Knowledge is only effective if it is specialized. Knowledge workers may have a supervisor, but in their area of expertise, they do the telling.” It takes a change in thinking that many businesses have not adopted yet. Though the book is more than a decade old, Dr. Druckers’ advice is relevant today for CEOs who want their business to succeed in the new economy.

The New Paradigm – The CEO is Not the Expert

It used to be that a business owner or manager knew everything about the business and could teach employees what to do. Not anymore. Specialists are needed because there is simply too much to keep up with and know in an ever changing environment.

The thing about hiring specialists to handle parts of the business is that their knowledge is portable. They can take it with them and the business has to scramble to fill the void. This is a challenge for any business that wants to keep growing.

Drucker shared these insights to help executives understand the mindset and priorities that can make a difference in how knowledge workers are managed:

  1. They introduce themselves by their specialties and feel they have more in common with other specialists like them than they do their coworkers.
  2. They are highly mobile within their specialty. They think nothing of changing companies because their primary allegiance is to their particular brand of knowledge.
  3. Knowledge workers see themselves as professionals and expect to be treated as such. They prefer to be treated like associates, not ordinary employees.
  4. While money is important, they do not consider it a substitute for recognition and achievement. They see this as a ‘life’ rather than just making a living with it.
  5. Because of the intensity of their work, they will arrange their life to accommodate the lifestyle they wish to have.  Most consider flexibility and lifestyle as at least as, if not more, important than having a job that pays well.

Drucker wrote, “The CEO, in order to be successful, will focus on the key to greatness which is focused on looking for the potential of people and spending time developing it. Get to know the knowledge worker and be known. Mentor them and listen to them. Challenge them and encourage them.”

Keeping the Most Talented Workers

According to Drucker, although money is important to knowledge workers, it’s not the only thing they value and a company cannot keep them through bonuses and stock options alone. Lifestyle is at the top of the list for many. If these priorities are not understood, companies can lose their most valued workers.

For example, Kelly Bownes, owner of MedPlan Recruiting, a Birmingham-based company that helps medical facilities recruit highly skilled medical practitioners, shared a recent situation where a client lost a very talented physician.

“With the younger generation, their view is different. They demand more flexibility and it’s high on their list,” said Bownes. “My client had a talented doctor who loved his job. He did not want to leave. But the client was not able to renegotiate another contract because they would not allow him to do the one thing that was important to keep him.”

She explained further. “He and his wife both work and have small children. He felt a great need to be more involved as a father and asked to go to a four day work week, working the same number of hours spread over fewer days. This would give him more freedom to spend time with his children. The company would not agree to it and, as a result, they lost him to a competitor, even though he wanted to stay.”

The best, most talented workers are those who work long hours and they work hard. To manage effectively, companies must become more flexible in meeting the individual needs of the highly skilled people they want to keep.

Managing Specialists for Best Results

For managers, another issue is how to get workers who have different skills, different priorities and different needs to also work together with a common vision. If an engineer is working on development of a new product with little input from the person who knows and works directly with the customer, the company will not get the best results. One problem caused by separation of duties is sometimes communication gets lost. It may take a specialist to help bridge the gap.

For example, one management consultant saved a company from building a brand new multimillion dollar plant. They assumed they needed extra capacity for production because they had difficulty in delivering products on time. He discovered the problem was not in production but in processing the order. The processor was overloaded with paperwork and couldn’t process orders in a timely fashion. Nobody knew.

A second order processor was hired which immediately solved the problem. Software that enables workers to post activities, share and access others documents make it much easier for everyone to be on the same page. However, there can still be gaps in understanding.

Josephine Gabriele who helps manage the team of insurance specialists at Aloia McKinnon shared her feeling that, “The most important factor is what the manager can deliver. They need to be able to clearly communicate and guide employees to accomplish the best results.” She believes a lot depends on the attitude of both the manager and the team. For example, her company offers a number of opportunities for workers to gather and socialize in a relaxed atmosphere as one way to get people talking and collaborating on projects.

Outsourcing as a Strategy to Get the Best Talent at the Lowest Cost

As Drucker predicted, “There will be a time when people who are not employees of the organization for which they work, including government, will greatly exceed the number who are. In many cases, it will make more sense to work with highly specialized senior people as independent contractors.”

Employers used to hire younger people for less money and train them to take on the work of the experienced worker so they could either move up or retire. It offered employees opportunities for promotion and good workers stayed with the company for years. Today, that may not be the best move with people more willing to move to another company in a shorter period of time, even after being trained.

It may also be inefficient and expensive if there is not enough of the work that requires an expert. For example, a small firm of architects may need someone with skills to create 3D animations when a project is nearing presentation, but not all of the time. An experienced knowledge worker can be hired for the project and the company only pays for what they need, when they need it. It saves money and time.

However, the manager needs to be sure that the person they hire is up to date in what they know. Many choose to get continuous education on their own, but not always.

Gabriele shared her point of view, “We can require certain training and guide them, but it is definitely the responsibility of the individual to be in charge of their own education. “A former employer once told me, ‘Do whatever it takes to become an asset for the company’ and I think that was the best advice I ever got.”

Workers As Partners in the Success of the Company

Dr. Drucker shared the idea of managers partnering with their specialist saying, “The new knowledge workers, collectively, are capitalists. Knowledge is the key resource and the only scarce one.” For that reason, the new type of worker needs to be treated as a partner in the success of the company, rather than someone who does whatever the boss says. They bring their expertise to the table in exchange for payment, but they must be treated with respect for their knowledge.

As Drucker wrote, “Successful participants in joint ventures understand that one can’t ‘command’ one’s partner.  Working with a partner is essentially a marketing job. That means asking question like what are their values, objectives and expectations.”

The CEO will have to understand when to command and when to partner. Employers who fail to adapt and effectively manage knowledge workers may find themselves in charge of a sinking ship without the right people on board to row to safety.

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