The digital era requires new management methods
Being a leader in the digital era allows employees to innovate by concentrating on people, instead of things, says researcher Annika Steiber, who has studied Google's corporate culture.
Digitalisation disrupts the business models of companies and requires new management methods. This is the view of Swedish researcher Annika Steiber, who has studied the management models of innovative companies.
The main idea is that a committed and motivated employee is the most valuable resource of a company.
“Leaders have to become better managers of human resources, because employees who are motivated and committed have become an even more important factor in the success of a company. Management has to be able to motivate with the right kind of leadership and incentives,” Steiber stresses.
In the future, the need for interaction and empathy will be emphasised. Supervisors will lead the way, but they must also understand the different needs of the employees and give them an opportunity to succeed.
Eye opener of a year
Steiber is particularly familiar with the search engine company Google. A couple of years ago, she had a unique opportunity to watch from the inside how management models and company culture encourage innovation. Steiber collected her experiences in her book Googlemodellen, which was published by Swedish innovation agency Vinnova in 2014.
According to Steiber, one of Google’s innovations is that the development of new things cannot be pushed to the research and development division alone. Innovation must also be done by the company’s board of directors, management and the entire personnel. In order to speed up innovation and to reduce bureaucracy, Google’s organisation has been made as thin as possible. They have tried to move as much responsibility as possible to teams.
“If a company wants to succeed, the power to make decisions must be moved down in the organisation to allow employees to really do things, not just create ideas.”
Inflexibility hinders innovations
Steiber says that continuous innovation and renewal are crucial to all companies, if they want to succeed in the long run. In line with her observations, the inflexible organisational structure of many large companies limits their possibilities to innovate.
“A company’s organisation must be dynamic to allow the company to adapt to changes. Success requires that companies change as fast as their operating environments.”
Steiber highlights that the need for change concerns everything from a company’s strategy to budgeting and from management to organisational structures. Internal startup practices, which large companies are now establishing, can help drive innovation. Steiber sees this is as a good thing.
“In addition to a company’s core business, other operations must provide innovation and new business models, which can then generate growth through new business operations and areas.”
Steiber goes on to say that companies can also speed up innovation by working in closer cooperation with partners.
“It is not necessary to do everything inside the company. Successful companies build a partner network where everyone benefits from new innovations. This requires open operating models from each party.”