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Managing the Company of the Future
has been developed collaboratively by

University of London and London Business School.
Copyright Julian Birkinshaw 2014

Managing
the Company
of the Future
Julian Birkinshaw
www.london.edu
Overview of
the course

The Business World is changing
Technology: Social change:

Web 2.0 Gen Y
New strategic
challenges
Purpose, Innovation,
Agility, Engagement
Emerging Sustainability
economies concerns

Our “management model” is no longer fit for purpose
Coordination achieved through…
Rules & Procedures

Decisions made according to…
Hierarchy
People motivated by…
Extrinsic Rewards
Objectives set through…
Linear Alignment
“Bureaucracy”
Two different views of the future
Same as it ever was Radically different
Photo: Sam Howzit

Forces for stasis Forces for change

What this course is about
Managing
the company
of the Future

Management
versus
Leadership

What is Leadership?
Photo: David Shankbone
Photo: Matt Yohe

Winston Churchill Richard Branson Steve Jobs
Leadership: “A process of social influence”

A leader is someone who attracts followers by virtue
of what they say and how they act

What is Management?
Koontz & O’Donnell, Principles of Management, 1955

What is Management?
“Getting Work Done Through Others”
“Bringing People Together to

Accomplish Desired Goals”

Management has been
squeezed out by Leadership
A Leader… A Manager…
Copes with change Copes with complexity
Sets a direction Plans & budgets
Aligns people Organizes & staff
Photo: Keiradog
Motivates people Controls & problem-solves

John Kotter
Promotes effectiveness Promotes efficiency

Is his/her own person Is a good soldier
Photo: TeamBennis
Originates Imitates
Challenges the status quo Accepts the status quo
Warren Bennis

Managing:
The word that dares not speak its name
“I equate management with bossy, insecure, weak

people trying to intimidate”
“A manager is someone who interferes with someone

else’s work”
“I think in the National Health Service, manager is a

particularly dark word … if I am one of those managers,
the implications is I am not that good, not that
competent”

Management versus Leadership
• A false dichotomy: effective executives need to work on both

• The challenge is to get the right balance
• This course focuses on management – to help redress the
balance

How is the
business world
changing?

Exponential change is underway
in many technological areas
Credit Default Swaps
Processor speed (MIPS)
Processing power/$
Number of internet hosts
Data transmission speeds
Cost of bandwidth (bits/second/$)
Number of genes sequenced
Astronomical data collected

So how exactly is the world changing?
“KNOWLEDGE
ERA”
“INDUSTRIAL
ERA”
?
1920 1940 1960 1980 2000

Transitioning from the industrial era
to the knowledge era
CAPITAL INFORMATION
Photo: Climate Disclosure Standards Board

Efficiency
driving out
Photo: Flickr: doctorwonder
effectiveness
LABOUR KNOWLEDGE
Productivity
driving out
motivation
Photo: Flickr: Allan Ajifo

Transitioning from the industrial era
to the knowledge era
CAPITAL INFORMATION

Efficiency
driving out
Photo: Flickr: doctorwonder
effectiveness
LABOUR KNOWLEDGE
Productivity
driving out
motivation

Transitioning beyond the knowledge era
INFORMATION DECISIVE ACTION

Too much

information
creates deficit
of attention
KNOWLEDGE EMOTIONAL CONVICTION

Overemphasis
on logic leads
to sterile
decision making

The changing source of advantage
INDUSTRIAL “KNOWLEDGE “POST

ERA ERA” KNOWLEDGE ERA”
Labour Information Action

Capital Knowledge Conviction

The “Failure” of
Traditional
Management

Many high-profile management failures
“…most of the mistakes and

oversights at Macondo can be
traced back to a single
overarching failure - a failure
of management”
Photo: US Coast Guard
William Reilly, Co-Chair, National Oil Spill

Commission, January 2010

Employee engagement levels are low
across most countries
80
60
40
20
Highly Engaged Moderately Engaged Disengaged
Source: Towers Perrin Global Workforce Study via The Employee Engagement Group

Who are you happiest with?
Friends 3.3
Parents/relatives 3.0
Spouse 2.8
My children 2.7
Co-workers 2.6
Clients/customers 2.4
Alone 2.2
Boss 2.0
(Rating is on a 1-5 scale)

What problem was management
invented to solve?
• How to routinise and

standardise work?
• How to maximise employee
discipline and diligence?
• How to organise complex
work processes?
Source: Gary Hamel

What are today’s management challenges?
• How do we change fast enough to Agile

stay relevant in a turbulent world?
• How do we innovate boldly enough
Innovative
to stay ahead of our competitors?
• How do we create an organisation
where people are able and willing to Engaging
do their best work?
Source: Gary Hamel

Koontz & O’Donnell, Principles of Management, 1955

The Need for
Management
Innovation

Broadening our concept of innovation
FROM NEW
PRODUCTS AND
SERVICES
Photo: Apple
TO NEW
WAYS OF
WORKING
Photo: Google
Innovations in management can be
a source of long-term advantage
Ford GM Toyota
1900s-1920s 1930s-1960s 1970s-2000s

The Internet as inspiration
and engine of change
Photo: Philip Bachmann

Photo: llinusmag.com
Photo: Enrique Dans

Linus Torvalds Tim Berners-Lee Jimmy Wales

Today’s Management Innovators
Zappos Topcoder
Valve Morning Star

Today’s Management Innovators
Photo: Chemical Heritage Foundation
Photo: World Economic Forum

Terri Kelly, CEO, WL Gore Vineet Nayar, former CEO,
HCL Technologies

What does this
mean for me?

The changing source of advantage
INDUSTRIAL “KNOWLEDGE “POST

ERA ERA” KNOWLEDGE ERA”
Monitor Information Implementer

and Conduit and and
Controller Expert Empathiser

Google’s Project Oxygen:
What makes a good manager?
1. Be a good coach
2. Empower your team and don't micromanage
3. Express interest in team members' success and personal well-being
4. Don't be a sissy: Be productive and results-oriented
5. Be a good communicator and listen to your team
6. Help your employees with career development
7. Have a clear vision and strategy for the team
8. Have key technical skills so you can help advise the team.
Adam Bryant, New York Times, March 12th 2011

And what does this mean for the employee?
Consider the men’s world high-jump record…
2.55m
2.45m
2.35m
2.25m
2.15m
2.05m
1.95m
1900 1920 1940 1960 1980 2000

John Thomas vs. Valeriy Brumel
2.55m
2.45m
Bundesarchiv, Bild 183-S0305-0030

2.35m
2.25m The Straddle Jump
2.15m
2.05m
1.95m
1900 1920 1940 1960 1980 2000

Dick Fosbury: Mexico Olympics Gold
2.55m
Bundesarchiv, Bild 183-W0718-0022

2.45m
2.35m
Athlete performing a Fosbury Flop
2.25m
Olympics
2.15m
2.05m
1.95m
1900 1920 1940 1960 1980 2000

Three waves of innovation in
the high jumping industry
2.55m
The Fosbury Flop
2.45m
2.35m The Straddle Jump
2.25m
2.15m The Western Roll
2.05m
1.95m
1900 1920 1940 1960 1980 2000

George Bernard Shaw:
Progress depends on “unreasonable” people
Photo: Brian Solis

Elon Musk and the “Hyperloop” proposal

What does this mean for me?
• Understanding the changing world

• Evaluating the old and new ways of managing
• Managing others more effectively
• Taking the initiative to help shape the company of the future

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Managing the Company of the Future

has been developed collaboratively by

Copyright Julian Birkinshaw 2014

Copyright Julian Birkinshaw 2014

Technology: Social change:

Copyright Julian Birkinshaw 2014

Coordination achieved through…

Rules & Procedures

Same as it ever was Radically different

Photo: Sam Howzit

Copyright Julian Birkinshaw 2014

Copyright Julian Birkinshaw 2014

Copyright Julian Birkinshaw 2014

Photo: David Shankbone

Photo: Matt Yohe

Leadership: “A process of social influence”

Copyright Julian Birkinshaw 2014

Koontz & O’Donnell, Principles of Management, 1955

Copyright Julian Birkinshaw 2014

“Getting Work Done Through Others”

“Bringing People Together to

Copyright Julian Birkinshaw 2014

Motivates people Controls & problem-solves

Promotes effectiveness Promotes efficiency

Copyright Julian Birkinshaw 2014

“I equate management with bossy, insecure, weak

“A manager is someone who interferes with someone

“I think in the National Health Service, manager is a

Copyright Julian Birkinshaw 2014

• A false dichotomy: effective executives need to work on both

Copyright Julian Birkinshaw 2014

Copyright Julian Birkinshaw 2014

Credit Default Swaps

Processor speed (MIPS)

Number of internet hosts

Data transmission speeds

Cost of bandwidth (bits/second/$)

Number of genes sequenced

Astronomical data collected

Copyright Julian Birkinshaw 2014

Copyright Julian Birkinshaw 2014

Photo: Climate Disclosure Standards Board

Photo: Flickr: Allan Ajifo

Photo: Climate Disclosure Standards Board

Photo: Flickr: Allan Ajifo

INFORMATION DECISIVE ACTION

Photo: Climate Disclosure Standards Board

KNOWLEDGE EMOTIONAL CONVICTION

Copyright Julian Birkinshaw 2014

INDUSTRIAL “KNOWLEDGE “POST

Labour Information Action

Copyright Julian Birkinshaw 2014

Copyright Julian Birkinshaw 2014

“…most of the mistakes and

William Reilly, Co-Chair, National Oil Spill

Copyright Julian Birkinshaw 2014

Highly Engaged Moderately Engaged Disengaged