Management will disappear, the only thing that can replace it is (a new kind of) leadership, by Ivica Vrančić

Management will disappear, the only thing that can replace it is (a new kind of) leadership, by Ivica Vrančić

It’s incomplete to say that we live in a time of change and that change is the only certain element of the present and the near future. It’s also insufficient to say that changes bring novelty into organisations and business environments, and the complete extinction or alteration of some roles – at least in the way we know them today. It’s incredible to see the amount of projections and predictions there are about jobs that will vanish or change. Yet, at the same time, there is very little talk about how or whether management as we know it will change or disappear. The author of these lines is an advocate of an extreme approach that involves the disappearance of management or at least its significant change in comparison to its current form. In our environment too, there are organisations that function and create value differently from the traditional approach and they succeed through different management and leadership, providing a good example and confirmation of that approach in this text. One great example is financial inclusion company Oradian, headquartered in Zagreb, and doing business across the globe.

Management is, above all, an organisational function within the organisational hierarchy. It’s simply a craft (without intending to diminish the importance with the word craft), which implies the following activities:

  • Managing processes
  • Managing products and services (and not just externally)
  • Managing clients and markets (internally and externally)
  • Managing resources (finance, information, raw materials…)
  • Managing people

Many of these activities have been replaced or are being substituted by more or less complex systems based on big data, artificial intelligence and blockchain technologies. In some systems, technology has replaced people because it is more successful than people in doing those jobs. If such technologies are better in diagnosing cancer than the world’s best medical doctors, why couldn’t such systems be more successful in managing business organisations?

Hierarchy is one of the key assumptions of classic management and its power as we know it today, however it, too, is changing – perhaps even disappearing, indefinitely. There are new organisations that are not defined by hierarchy, in which hierarchy is differently evaluated when adding value is in question.

Nowadays there are many high-tech companies where top engineers or developers are better paid than CEOs, and many restaurants where top chefs are better paid than those running the restaurants. Newer generations have a different attitude towards hierarchy, it’s not as important to them. The power that the managers use, which is based on hierarchy – means almost nothing. The common distortion of traditional management in which they are mere specialists is not sustainable in this new age, as expertise comes more from a team and steady learning, and less and less from individuals and their experiences.

Management based on hierarchical power, commands, micro-management, individual expertise, procedures and protocol is certainly not a way to successfully manage systems that are constantly changing and respond quickly to numerous changes in the modern work environment.

Managing systems will not disappear, as business systems will not disappear, but management’s success, and management itself, will heavily rely on one key competency: leadership. But a different kind of leadership than the one we know.

As such, leadership is a social skill, and not exclusive to business environments. It’s equally important in sports, the military, politics, culture… But it is key for the successful functioning of any social entity, including business organisations.

Leadership is the ability to influence others to do what is necessary to achieve the expected result. The power of leadership is measured by the strength of the relationship between leaders and those who readily follow it and the number of those who are willing to follow it. That is why the main question for every person who thinks or wants to be a leader is: Why would someone follow me?

Leadership of the new paradigm is very close to the model known as Fifth Level Leadership, which combines two rather incompatible ideas. On the one hand, there’s the willingness to make difficult and unpopular but necessary decisions (firmly and directly), and on the other, there’s the willingness to share success with a team, not to attribute merit to oneself, understand the emotional state of those who follow (using humility and emotional intelligence).

Such leadership does not use the power it possesses or that it has gained from hierarchy (though it does not give that power up when it’s needed). In the growing gig economy, where more and more people are self-employed and practically providing their services through temporary and occasional activities, it isn’t possible to use the hierarchical power of such “employees”. The power required for leadership is therefore built on personal qualities (which can be very different and innumerable), and today there are more and more values recognised by those who follow.

Building values and organisational culture is one of the key roles of successful management today and is a direct consequence of leadership within an organisation. Leadership that primarily works on building values and culture (and not predominantly on systems and procedures) offers an environment that will ensure employees’ full engagement, and therefore bring results that are consistent with or above expectation and planning. The importance of organisational culture was best and most simply described by Peter Drucker: “Culture eats strategy for breakfast, lunch and dinner.”

 

All members of the Oradian team are aware of the importance of our organisational culture, which dramatically affects how we work together and is a powerful element that shapes our work: satisfaction, relationships and processes. We are all aware that a healthy and positive organisational culture brings good results. Clear vision and autonomy at the workplace inspire and create a special chemistry that connects and motivates both individuals and teams. At Oradian, each employee is the “guardian” of our culture that is based on one mission, shared values, focus on outcome, feeling personal responsibility and involvement and continuous learning and development. Oradian is obsessed with the success of its customers and its employees, we see obstacles as opportunities and we reconsider traditional practices that do not yield satisfactory results. We strive to find more effective solutions every day. – Mihaela Smadilo, Head of Human Resources

 

The key role of a leader is to provide meaning, understanding, as Jack Welch says: “Each leader is at the same time a Chief Meaning Officer,” or as Simon Sinek explains, leaders ensure the “Why”, not the “What” and “How” through their communications.

Both, for the sake of successful leadership, require very intensive two-way communication, which involves a lot of listening and questioning, interaction, exchange of opinions and messages, and not a one-way command. Active listening is that in which the leader doesn’t ensure understanding for his/herself first, but rather makes sure that those following receive a strong message, or acknowledgement that they were heard.

 

At Oradian, two-way communication is a constant. It’s based on the fact that each individual in the team has been selected for his/her expertise, experience and motivation and encourages to actively contribute to the growth of the organisation through the ways they think. So, for example, a typical brainstorming session can be a manager with 25 years of experience carefully examining the opinions and attitudes of his/her team to come up with the best ideas. At Oradian, inclusivity starts from the inside – from each individual who is open and willing to share his/her thoughts and creativity freely.

 

This type of communication, combined with constructive feedback, is also a prerequisite for good coaching. Leaders in the digital era also act as coaches who not only develop others, especially their teams, but also develop themselves through interactions with their people. The best leaders, especially in the business environment, are people who actively work on the development of others and leave behind equally valuable successors.

Successful business and leadership at times of great change, when many solutions do not exist, calls for diversity. Diversity in the sense of different approaches in thinking and (constructive) confrontation of opposite positions, so that together we can come to new solutions. Therefore, successful leadership is one that embraces and respects diversity (experiential, educational, cultural, in ways of thinking…) of those who are leading, and in some ways, insist on them. Out of these things, it draws out mutual success. Recognising and insisting on differences with a firm hold of goals is the key to successfully managing changes.

 

Team Oradian currently counts 130 employees – 30 nationalities who speak over 20 languages. Some of our employees spent months or years working or studying abroad, others grew up in different countries and decided to come to Croatia, and there are also those who spent their entire lives in one of the countries where our other offices are located, Nigeria and the Philippines. Experiences are diverse – from engineers to sales and communications experts, customer success specialists to skilled financiers and back to the Human Resources team, which actively works on finding the best people and maintains their growth, development and needs.

 

Today, it is increasingly acknowledged that respectable leadership is the key to the successful performance of companies. This is particularly well-documented by Dave Ulrich in his book “The Leadership Capital Index” (2015), in which he empirically confirmed the connection between a company’s added value expressed through stock indexes and the quality of leadership in the same companies. Today, there are a number of important consequences of successful leadership. Leadership has a high and positive correlation in attracting and retaining high-quality employees in times when Europe (as it’s not a global problem, but above all, a growing problem in Europe) has a significant shortage of working-age population. In that sense, only the companies that manage to attract and retain quality employees here will survive. Leadership plays a key role in this process.

 

My first contact with Oradian was through digital media: the company’s web page, social networks, and then emails. What attracted me was a strong sense of community and a very well-versed and multi-cultural team that’s making a positive influence in the poorest, least-accessible parts of the world from the heart of Zagreb. Already in my first few conversations, Oradian’s team demonstrated professionalism, authenticity, pragmaticism and flexibility. Fortunately, it was not only a first impression, but values that are nurtured daily, and these are some of the key factors that keep me here to this day. – Marija Kata Vlašić, Communications Manager

 

In changing and uncertain times, as human beings, we need (psychological) stability, while classic (traditional) management and leadership based on hierarchy, rigid procedures and structures will clearly fail. The needed stability will be ensured by a (new kind of) leadership with all these characteristics.

 

Recap:

Characteristics of (new) leadership:

  • A combination of strength and humility
  • Not based on power and hierarchy
  • Builds desired values and culture
  • Values and encourages diversity
  • Intensively promotes two-way communication
  • Actively develops its people and organisation, is a coach

Results and outcomes of (new) leadership:

  • Organisational culture and values that ensure employee engagement
  • Better for attracting and retaining quality employees
  • Development of people and their successors
  • Better business results and organisational sustainability