The dramatic shifts anticipated in terms of strategy and structure has profound implications for systems, the last of three legs of Harvard’s paradigm on General Management.
Traditionally, systems evolved as complexity and scale of organisations increased. These developments along with geographical expansion caused the need to have standardised, objective set of measures and tracking/monitoring of the same on a regular predetermined periodic basis. Systems evolved to fulfil this need. This allowed the top management to steer the organisation in the intended direction and speed and make course corrections as they go into future. It also ensured performance benchmarks and were closely mapped to rewards.
Plethora of theories
The essence of managerial task is decision making. Information and communication in a pre determined format became an imperative for enabling appropriate decision making. A plethora of theories and frameworks emerged to define, structure and implement the various administrative and information systems. Planning, Organising, Monitor and Control became the broad focus of top management’s task. Each one of them required support in the form of systems and procedures. MIS or Management Information System became the way of life for running the organisation.
With the advent of IT, significant automation of collecting/collating/disseminating happened. While this potentially put huge amounts of real time data in the hands of managers, the ability of the managerial class to handle/digest this amount of data lagged behind. Personal computers followed by Internet revolutionised the collection/collation of data and mobility and the ‘Internet of Things’ will completely reshape our notions of systems.
Strategic planning
Administrative systems have undergone an overhaul and with the shrinking of hierarchy and 24/7 access to information through mobility, the decision making doesn’t wait for formal meetings. Planning horizons have shortened and long term forecasts and projections are more directional and statement of intent rather than detailed budgets. With the uncertainty/ambiguity increasing along with complexity and volatility, any detailed forecast in terms of financial performance beyond a year is a fruitless exercise. With companies surviving from quarter to quarter, the medium and long term perspective has to be more strategic in nature and not just financial. I still remember in one of my earliest consulting project (almost 30 years back), the VP strategic planning for a client company (a major appliance manufacturer) took me to show the next 10 years plan documents which were nothing but leather bound volumes consisting of quarter wise forecast of cash-flows for 10 years !!! He beamed at me looking for admiration in my eyes.
The market place has become very dynamic, customers are more demanding and are armed with more information, competing products have become similar in terms of features and value propositions, Internet, mobile technology and ‘Internet of Things’ are churning out exponential volumes of data. With all these developments, organisations are expected to respond real time or get consigned to the dustbins of history.
Some of the salient features of emerging new age organisations are:
Empowerment of knowledge workers
Flexi working arrangements both in terms of time as well as place,
Democratisation of information and communication aided by technology – Social media
Globalisation of work force
Virtualisation of organisations
Shifting social contracts
Explosion of data and Information
Delayering fostered by technology
This demands radical new look at the principles on which traditional systems have been built. Here, a ‘Command and Control’ approach is just inconsistent with the VUCA world.