April 9, 2019

Magnitude of Change when Shifting the Management Paradigm

Jaakko Hartikainen

Vice President , Tieto CEM

Mikko Virtanen

Head of Sales, Tieto CEM

With some years in corporations, we are probably all used to different kinds of change programs. How about changing the management paradigm? Can it be considered as one change program among others? Can it be done with the typical change program receipts and methods?

Based on our 24 months experience our answer is NO. In this blog we will open up why we feel and believe that the magnitude of management transformation is in a different scale.

This is our No. 2 blog in a series that was launched in March 2019 with the opening issue “Call for Paradigm Shift in Management”. In case the paradigms feel somehow unknown, you can check this opening issue for getting some background for the topics elaborated further in this new blog.

Paradigm Shift

In books and articles management transformation is often called as “Paradigm Shift”. What does this actually mean? By definition Paradigm is more than a way of thinking. It is often defined as a worldview of beliefs of what problems are even worth solving.

As human beings, we are prisoners of our paradigms. Because of the strong influence of taylorism and traditional models, the vast majority managers in big corporations today are captive of a paradigm that places efficiency above everything else. In another words we are members of bureaucratic class due to the predominant paradigm in today’s business. Is it possible to break out from the prison?

Albert Einstein used to say “No problem can be solved with the same level of consciousness that created it”. So getting out from the prison is not easy, it requires that we are able to find a fundamentally different way to look at ourselves, leadership and management.

Because of all this, it felt scary and challenging to initiate the big shift early 2017. Those days we had a belief and intuition, but it felt like heading towards something unknown, without evidence of success and without knowing how to get there. Because of all this uncertainty and the prevailing paradigms around us, we couldn’t either start asking for permissions to do it at the scale it would be done. There was no way to build a comprehensive business case, investment plan and change program with Gannt-diagrams and decision points, which are the lenses to look things through when following the traditional paradigm.

The level of consciousness brought us to another major challenge in the very beginning. When designing something new (organization, way-of-working, culture) to solve the problems caused by the current paradigm, you can’t start asking people to provide ideas too much before the level of consciousness has been increased. Otherwise, the ideas and solutions will be limited by the prevailing paradigm. This felt extremely bad, because you would like to involve the people and collective intelligence is at the hearth of the wanted paradigm.

Putting this into a wider timeframe and perspective, we can see that a paradigm shift has happened a couple of times in the history of mankind and always when humanity has shifted to a new stage it has meant new ways to collaborate and new way to organize things. At the moment there are signals indicating that we might see a revolutionary change for mankind to take place during the 21st century. Feels exciting to be witnessing a historically significant shift!

How does it feel as a manager to face the new paradigm

Everyone of us see the world through our own individual glasses. We have developed the glasses ever since we were born. In our career, we have probably had years in an environment and culture that represents the 20th century tayloristic model. All these years have had a strong influence on our mindsets and obviously, it is easy to follow those strong emotional taggings and patterns in our everyday operations.

For many in executive and leadership roles, it has become almost self-evident to define yourself, and not only who you are in work but actually who you are as a whole, through your rank, amount of revenue you are responsible of, number of people below you in the pyramid, the size of the paycheck, title you have and the story goes on. This is a result of the current paradigm. We all fall into this easily, because the aforementioned attributes are respective by our society, friends, relatives, colleagues - everyone who matters. It is a common, jointly agreed language we all have. Easy to measure, easy to understand, easy to compare people. But does it really define you as a human being, does it really tell who you really are? Does it really tell what is your contribution to the value generated? It does not.

In the shift of paradigm, all this will collapse big time! Leaders are not anymore followed because of their formal rank but the value they generate and the inspiration they create. Hierarchies, silos and units will break and there is no way to even calculate how many people are below someone. The power in the organization is not divided by the people above, but it emerges where people find common ground and movements emerge. Leaders become naked — either you are able to create value and gain the trust from the peers and thus, get people following you or otherwise you are next to nothing. There is no way to play the game somewhere in the cabinets anymore too far from day-to-day life, ensuring one’s own position. These days are soon to be gone. The process of going through this shift is enormous, since the very fundamental elements, such as self-esteem, ego and dignity of individuals are being heavily shaken.

One interesting experience during the journey has been the situation when we have met some new people and have the typical small talk discussion about the work. It is a strange feeling when you know that the other party is expecting to hear the traditional language and you don’t anymore define yourself with those attributes. What to say in those situation? There is not enough time to start explaining the idea of the paradigm shift and without that explanation anything you say probably feels strange. But this is part of the journey.

Based on our experience, moving on to a new stage is a massive feat by being highly personal and even mysterious process which can’t be forced or too much taught from outside. It is everyone’s own process and is tightly linked to own life journey and typically requires intense and deep self-evaluation and processing.

Consistency in everyday operations

The moment you believe you are ready as a leader, the doom loop starts. It’s because leadership is measured every day in every single interaction. This idea is very much the case when we aim for a paradigm shift level of change in management. So believing that we have learned the paradigm is a dangerous state. You need to continuously monitor and build awareness of your operations as a leader. Falling into old paradigm in daily operations too often harms the transformation and momentum. It is because dissonance in leaders words and actions breaks the intended transformation. We shall of course be gracious to ourselves. Human beings are imperfect and fail on many things every day. The important thing we can do is to try to continuously reflect on things and learn from failures. Actually, when a leader openly flags his failures and imperfection, it is a very strong way to foster the intended transformation.

One key learning to share is the importance and challenge of getting key people enlightened about the new paradigm. Without the “critical mass” of people living and communicating close to the new target state and paradigm, the whole transformation journey is in danger. The deviation between the communicated vision and the daily operations and key people behavior cannot be too wide, otherwise we lose the momentum and people start questioning the whole idea. People start losing their faith on the journey leading to the envisioned state. For mitigating this it’s important to work on consciousness building across the whole organization. This work needs to be humble, honest and transparent dialogue with continuous reflections. For succeeding in the journey it’s essential to learn from all small pieces of information from the organization; concerns, fears, positive and negative thoughts.

Typical misconceptions

During our journey we have shared our learning and ideas with several people in different organizations inside and also outside the company. In those discussions we have often faced a dangerous misconception. People we talk to start easily to think like “this model sounds great, let’s take that into use, let’s look at the model structure (process/roles/team setup) and copy that into our context and then we are done”. We see this thinking process dangerous, because management / culture paradigm shift change cannot be done by just copying a setup from our organization or Spotify or wherever. This is a much deeper change where we need to make people believe into another paradigm.

One key characteristic of our journey has been a very iterative and exploratory approach. In the beginning there was just an idea and belief, that has later on become more structured and modeled via lot of laboratory testing in real context and environment. Based on this experience and process we see that there is no one-fit-for-all model — with many different variables and parameters involved, it needs to always be quite heavily tailored for the context and environment.

What makes paradigm shift difficult

As a summary, driving paradigm shift and management innovation in a company is difficult because of following reasons:

  • In short run, the cost of the management innovation may be more visible than benefits.
  • Old mental models are a real brake for the change. Traditional management has lot of emotional capital invested in their existing strategies and models.
  • Biggest obstacle may be what managers already believe about management. Legacy beliefs is much bigger liability than legacy costs. Prisoners of orthodox models can’t invent unorthodox ways.
  • Most senior and middle managers and people in staff functions will view the transition as a threat.

Gary Hamel wisdom is saying: “Bureaucracy is a massive role-playing game. If you’re an advanced player, you know how to deflect blame, defend turf, manage up, hoard resources, trade favors negotiate targets and avoid scrutiny. Those who excel at the game, unsurprisingly, are unenthusiastic about changing it.”

No pain, no gain

In business there is probably always going to be a never ending and continuous hunt for competitive advantage. In the articles, books and business there are many examples of companies re-inventing their business processes and models. But there are much fewer examples and articles about re-inventing management models and processes.

Based on what we have learned, we believe that the biggest constraint for a company is their management model.

When succeeding in management innovation, a company is creating a strong and sustainable competitive advantage. What makes this different to other advantages is that it is systemic and is developing all the time and therefore hard to copy. When world is getting more complex, company’s competitive advantage at certain point of time is actually not so important. It is all about evolutionary advantage over time.

Summary

As a conclusion we see paradigm shift as a Quantum leap that needs to be done in incremental steps. However, the success in the small steps requires enlightenment and thorough enough understanding of the new paradigm.

In this one blog we can only just scratch the surface a bit. In the next chapter we will open up more in detail what kind of problems and consequences companies are facing because of the 20th century paradigms building it even stronger to our real-life learnings. Stay tuned!

With passion and humility,
Jaakko Hartikainen & Mikko Virtanen

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