Managing Business in the New E-conomy
By Dennis Duitch, CPA, MBA
Too often, business executives find themselves in the role of “juggler,” as the process of allocating scarce resources (time, capital, skilled labor) to the most critical business tasks or issues competes and conflicts with longer-range business strategies. Moreover, when operational problems arise, they too often get resolved superficially, when allocated resources aren’t sufficient to deal with root-level causes of the problems or when “Change” gets too hastily introduced in response to crisis at one level, which then creates new problems elsewhere in the process.
In the “new E-conomy,” where strategy and decision-processes continue to become more complex and specialized, and as the timelines for decision processes continue to compress, the discipline of Management has become all the more critical.
Peter Drucker, Management Guru who has accurately recognized and forecast business trends over the past five decades, has recently published another seminal book, Management Challenges for the 21st Century, noting numerous factors and changing paradigms which relate to the difficulties executives face in attempting to efficiently and effectively run a new E-conomy business. The more relevant of his observations include these:
- The collapsing worldwide birthrate has resulted in a shrinking population of young workers who recognize their value as a scarce commodity. Managing and challenging such young workers generally requires approaches and job structure which are very different from conventional business models; examples include: (a) autonomy to manage themselves, (b) continuous learning opportunity and innovation, and (c) measurement of output by quality (outcome) versus quantity.
- The defining challenge in the new economy involves raising the productivity of ‘knowledge work’ provided by employees or contractors whose value result from what they KNOW and can APPLY moreso than from skills in following the best methods of task completion — all in a climate of continual adaptation to Change.
- Change cannot be managed, per se, but the process and implications of Change can be optimized by executives who recognize Change as the norm rather than the exception and accept its inevitability, as well as focus on the business opportunities which evolve consistent with company goals (versus focusing on the business distractions which arise from Change).
- Effective management in today’s new E-conomy requires becoming a “Change Leader” who can “abandon yesterday” to anticipate and systematically watch for that Change which promotes allocation of resources to the most productive uses. Drucker suggests that every person, product, process and/or customer should meet a continuing test of relevance based on current information and perspective – – – i.e. based on what you know now, would/should further resources be committed?
Managers also need to be aware that in today’s new E-conomy “attention span” is a diminishing resource. Too often overloaded with information, ‘knowledge workers’ can become roadblocked and lose the capacity to achieve efficiency or effectiveness in meeting company goals. Research shows that even an “average manager” receives over 100 daily voicemail/email messages and that “many companies are on the verge of an acute attention deficit disorder …Attention is what’s in short supply.” Keeping employees focused and attentive is critical in the face of new E-conomy information overload.
A Survey of E-Management by Economist magazine concluded that “the internet changes the skills required from managers, but not fundamentally so.” The message is that managing ‘knowledge workers’ simply requires a different level of sensitivity, since “getting people to share what is in their heads takes more than mere money or clever software.”