Four Emerging Trends in Management Thinking

2 years ago   •   9 min read

By Frank Dillon

Des Dearlove & Stuart Crainer, founders of Thinkers50, which ranks and celebrates the best management ideas and global thought leaders, look at the key ideas shaping current management thinking.

 

“If you want to help other people, be a manager. If done well, management is among the most noble of professions.” – the late, great Clayton Christensen, in How Will You Measure Your Life? (2012)

Thinkers50 is the world’s most reliable resource for identifying, ranking, and sharing the leading management ideas of our age. Every two years the Thinkers50 Awards Gala – dubbed “the Oscars of Management Thinking” by the Financial Times – celebrates the very best in management thinking, revealing the new ranking of the top 50 management thinkers and announcing the winners of the Thinkers50 Distinguished Achievement Awards.

“By 2030, the demographic, economic, technological, societal, and climate-related trends already underway will converge. Suddenly there will be more grandparents than grandchildren, more robots than workers, more currencies than countries, and the middle classes in Asia and Sub-Saharan Africa will outnumber those in the US and Europe combined,” Mauro F Guillén notes in his his forthcoming book 2030: How Today’s Biggest Trends Will Collide and Reshape the Future of Everything (MacMillan, 2020)

The future is impossible to predict, but if Guillén is even close, then the changes coming in the next decade will transform business and society beyond recognition. So what are the emerging trends in management thinking that are addressing these seismic shifts in the way we live and work?

 At Thinkers50 our mission is to identify, rank and share the very best management thinking. One of our challenges is trying to look around the corner to predict what’s next. As we enter a new decade at the start of 2020, we see four key shifts impacting business and leadership:

  1. Competitive shift: from efficiency to innovation
  2. Technology shift: mind vs machine 
  3. Personal shift: from command and control to responsibility and responsiveness 
  4. Global shift: geographical and cultural

 

  1. Competitive Shift

The first big trend in management thinking is the move from competing on efficiency to competing on innovation. In the 20th century, we saw the super efficiency of mass production manufacturing. Think of Toyota, for example, where the quality and quantity of a product was at the heart of the business model. The famous Toyota Production System was a watchword for manufacturing efficiency enabling the company to produce cars with zero defects. Organisations in the 21st century, however, have to be able to constantly innovate to survive and thrive. They need to react to the changing needs of the consumer, to pivot and adapt to the fast-moving business landscape. 

From “zero defects” to “zero distance”

In Japan in the 1980s the quality-efficiency revolution revolved around “zero defects”. In China today Haier’s “rendanheyi” model champions “zero distance”. The focus has shifted from product to customer. The business model has evolved from mass manufacturing to fulfilling the changing demands of the consumer. 

“There are no great companies; only relevant companies.” Zhang Ruimin, CEO of Haier (#15 in the new Thinkers50 ranking), told us. 

Learning to pivot

Flexibility and agility are required to stay relevant in the 2020s. But how do you structure your business so it can innovate and pivot to embrace change?

Vijay Govindarajan’s  “three box solution” (currently a video series available free on Thinkers50.com) shows us how to manage the present and selectively forget the past while also creating the future. Govindarajan won the Thinkers50 2019 Innovation Award.

Scott D Anthony’s (Thinkers50 ranking #9) “dual transformation” demonstrates how you can reposition your current business while simultaneously creating tomorrow’s engine for growth. The ambidextrous organisation, he says, can be good at both innovation and exploitation. 

Co-founders of the consulting firm Strategyzer, Alex Osterwalder and Yves Pigneur (#4) created the Business Model Canvas, a tool kit to help you re-imagine your business model – over and again – to be able to adapt and innovate. 

Thinkers50 number 1 ranked thinkers W. Chan Kim and Renée Mauborgne show us how to look for new, non-competitive market space in Blue Ocean Shift and, in their latest research, how to create new markets that don’t disrupt (‘Nondisruptive Creation: Rethinking Innovation and Growth’ – MIT Sloan Review, Spring 2019 issue).

Innovation has overtaken efficiency as the competitive advantage.

“If you become too efficient, you lose your flexibility so you can’t pivot when the market changes. To stay successful, you need to stay a little loose,” Reed Hastings, CEO of Netflix, explained when we met him.

Innovating management

In 2006 a Dutch healthcare worker called Jos de Blok (Winner of the Thinkers50 2019 Ideas Into Practice Award) became frustrated with the inefficiency of traditional, management-lead healthcare systems and created a new one, Buurtzorg. Based on self-organized teams, the Buurtzorg model effectively disbanded the management level, allowing small teams of nurses to manage their regions and patients themselves. 

The Buurtzorg story in Holland has similarities with the Haier story in China, where CEO Zhang Ruimin famously sacked 10,0000 middle-level managers in order to create multiple micro enterprises within the company. The difference being that the Haier micro enterprises compete with each other whereas the Buurtzorg teams – which now operate in 24 countries worldwide – flourish on collaboration.

  1. Technology Shift

Not surprisingly, the second big trend in management ideas is the rise of technology and digital thinking. In their 2017 book Machine Platform Crowd Eric Brynjolffson and Andrew McAfee (T50 #8) argue that competition and labour – stalwarts of the mass-manufacturing models of the 20th century – are less important than collaborating, creativity, and networks.

They have identified three key changes in how we work:

  • a shift from man to machine with the rise of AI – think self-driving cars, 3D printing
  • a shift from products to platforms – think Uber, Airbnb, and Alibaba
  • a shift from the core to the crowd – think de-centralised, self-organised participants such as Wikipedia contributors.

Richard D’Aveni (#7) provides powerful insights into the impact of AI in The Pan-Industrial Revolution (2018). His rigorous analysis of 3D printing demonstrates how this new way of manufacturing will change the economic and geopolitical landscape.

The rise of platform technology has turned the traditional business model on its head. In  Platform Revolution (co-authored with Sangeet Paul Choudary, 2016), Marshall Van Alstyne (#36) and Geoff Parker (#36) explain the concept of the inverted firm, where value is increasingly created outside the organisation rather than internally, and offer guidance on how businesses can thrive in the era of platform technology. Their work on the Inverted Firm earned Van Alstyne and Parker  the Thinkers50 2019 Digital Thinking Award.

Who is in charge?

The rapid advances in technology have also raised crucial questions of governance; how do we protect customer and employee privacy and citizen’s rights? Van Alstyne has been turning his attention to preventing the spread of fake news. One possible intervention he suggests is putting pressure – what he calls “friction” – on the perpetrators, which requires the platform companies themselves (eg Facebook, Twitter, et al) to change their behaviour, incentives, and goals. 

Futurist Amy Webb (winner of the Thinkers50 2017 Radar Award), and author of The Big Nine (2019) highlights the dangers of leaving the development and direction of AI to the big tech firms such as Google, Amazon, Alibaba, and Tencent, who serve masters with conflicting interests. “Wall Street wants profit now, with little regard for the consequences. The Chinese government wants citizens cowered by social controls. As a result, these companies are making decisions that are not in humanity’s best interests,” says Webb.

  1. Personal Shift

The third trend we see in management thinking is the rising importance of soft skills. The evolution of technology, the emergence of innovation over efficiency, and the new business landscape of disruption and change require a re-valuation of leadership. Traditional “command and control” power hierarchies are giving way to the fundamentals of responsibility and responsiveness. Leaders and managers need to be more agile, more engaged, and more empathetic to be able to enhance and harness the talents of the people in their organisation. 

Talent and the Human Touch

In her book Multipliers (2017) Liz Wiseman (#17 and winn of the 2019 Leadership Award) distinguishes two types of leader: the “diminisher” who drains the capabilities of their team; and the “multiplier” who amplifies the ideas and talents of those around them. The best leaders, she argues, are the leaders that motivate others to do their best.

Amy Edmondson, (#3) and winner of the Thinkers50 2019 Breakthrough Idea Award for her pioneering work on psychological safety, shows in her 2018 book The Fearless Organisation how being able to speak your mind is essential to innovation and to attracting and retaining talent. 

Edmondson has also conducted extensive research into teams and coined the concept of “fast-paced teaming” where the ideal team is an evolving group that adapts and changes in response to different new challenges. 

Teams are also forefront of Disrupt Yourself (2016) and Build an A-Team (2018) author Whitney Johnson’s (#14) latest books. In Build an A-Team she illustrates how investing in employees enables an organisation to thrive no matter what the future holds. This means identifying what employees know and what they need to learn and designing their roles accordingly, to enable them to tackle each new challenge and to maximise engagement as a team. Develop high-growth individuals, Johnson says, to execute high growth and achieve ambitious organisational goals.

“If employees feel safe, they’re able to create and they’ll be much more productive because that’s where innovation comes from. If not, they go into the cave emotionally, and all their energy goes into making sure they’re protected.” – Witney Johnson

  1. Global Shift

The final big trend we see at Thinkers50 is one that we are proud to promote – the spread of management ideas around the world. Management thinking has become truly global and is undergoing a geographical and cultural shift. This is the fourth emerging trend.

 

From Silicon Valley to Bangalore, Shenzhen, and Silicon Savanah

The US is no longer the epicentre of management ideas, or the font of all knowledge. The emergence of Chinese and Indian thinkers in particular – the most influential being the late CK Prahalad (T50 Hall of Fame) – has taken the power out of Palo Alto. 

Chinese thinkers such as Zhang Ruimin, proponent of “rendanheyi” and Ming Zeng (28), author of Smart Business (2018), join Indian globlisation expert Pankaj Ghemawat (#19) and Bangladeshi-born “quality prophet” Subir Chowdhury (#24) in the Thinker50 2019 rankings, as do founders of the China India Institute, Anil Gupta and Haiyan Wang (#25), while innovation guru Vijay Govindarajan joins CK Prahalad in the Thinkers50 Hall of Fame. 

It is not just Asia that is knocking on the door of management thinking. A recent World Economic Forum/Harvard Business Review report* highlighted the emergence of entrepreneurship in Africa, with tech clusters forming in Nairobi (Silicon Savannah) and Lagos (Yabacon Valley), and notable initiatives such Rwanda’s government-to-citizen e-portal, Irembo. In the next few years we expect to see the rise of African management thinkers.

 Reverse Innovation

Developing countries are reversing roles with the richer nations when it comes to innovation. Whereas once we believed it was the industrialised west that came up with the inventions and exported them to less developed regions, innovation, as Vijay Govindarajan says, is actually very suited to smaller economies, where the need for innovative ideas is perhaps much more acute, and it is the developing countries that are now exporting to the rich. The Indian NH healthcare organisation is one prime example, having now opened a profit-making hospital in the Cayman Islands offering open-heart surgery to Americans for one fiftieth of the cost of the equivalent procedure in the US. 

Conclusion

If we had to distil the best in emerging management ideas into one key takeaway, we would go for “be human”. The competitive shift is towards creativity and collaboration; the technology shift is about mind over machine; the personal shift is towards creating talent; and the global shift demands cultural awareness.

The theme of tech giant Fujitsu’s 2019 Forum was “Human Centric Innovation – Driving a Trusted Future”. 

Matt Gitsham, Director of the Ashridge Centre for Businesss and Sustainability at Hult, says “In today’s world, making money is not the only role of a business leader—you also have a collaborative role to play alongside political leaders and civil society leaders to take the lead in tackling global challenges.” 

Put the human back into business and we might then see another significant shift: from corporations based on profit seeking to organisations as major investors in our common future.

Corporations can also take part in re-imagining capitalism. Rather than shareholder returns being the main aim, firms can re-align their values and mission with a much wider goal: bringing returns to the whole community,” says Issac Getz, author of The Altruistic Corporation.

“In August, nearly 200 CEOs of giant multinationals who are part of the Business Roundtable declared an end to a decades-long obsession with shareholder returns. The purpose of a corporation, they said, is “to create value for all of our stakeholders,” comments Andrew Winston, author of The Big Pivot.

Thinkers50 is built on three enduring beliefs, that: ideas can change the world; management is essentitial to human affairs; and fresh thinking can create a better future for all. Those beliefs have never seemed so valid or relevant. 

In the next few years we expect to see the rise of African management thinkers.

 

Further reading

MIT Sloan Management Review Research Report: The New Leadership Playbook for the Digital Age (January 2020)

https://sloanreview.mit.edu/projects/the-new-leadership-playbook-for-the-digital-age/?utm_medium=email&utm_source=newsletter&utm_campaign=flrpt2020

Why We Need the ‘Davos Manifesto’ for a Better Kind of Capitalism – Klaus Schwab (December 2019)

https://www.weforum.org/agenda/2019/12/why-we-need-the-davos-manifesto-for-better-kind-of-capitalism/

HBR: The Top Sustainability Stories of 2019 – Andrew Winston (December 2019)

https://hbr.org/2019/12/the-top-sustainability-stories-of-2019

 

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