The Budget 09 – what we really want is not what we really need

Alistair Darling will announce the UK budget today. What most people are looking for is stability, discipline, precision and control. Together with reliability and efficiency, these are precisely the traits that Max Weber, the renowned German sociologist, listed as the pinnacle of social organisation and the basis of excellence business structure and strategy.

Connection economyIt might seem strange to be referencing someone who has been dead for nearly a century on the day of arguably one of the most important budget speeches in the last hundred years. But both Weber and Darling illustrate why many companies are battling to deal with the recession and generate appropriate strategies right now.

The approach of most companies is based on a management style that is largely unchanged since “scientific management” was first developed by Frederick Taylor a century ago. At the zenith of the industrial age, the goal of management was to reduce waste, increase efficiency and develop the systems that have seen productivity rise year on year in industrialised economies almost unabated for a hundred years. One can hardly argue with this success. But is this the way forward?

The management style that achieved this focused on:

  • * a division of labour and responsibilities, with clear job descriptions for each individual
  • * hierarchies of control and scales of authority
  • * people selected for positions based on technical competence or educational levels
  • * managers working for the owners of the organisation, but not being primary owners themselves
  • * everyone within an organisation being subject to strict rules and control is relevant to the particular job, with such rules being impersonal and uniformly applied.

This list is a summary of Max Weber’s ideal organisation. Yet, it has no surprises for the average manager in 2009. Today’s leaders still believe that control, precision, stability, discipline, efficiency, productivity and reliability are the bedrock of good business practice and the foundation of great strategies.

While these might make life in an organisation a lot more predictable — and therefore possibly easier — are they really the characteristics of companies that will both survive the recession and thrive when it is over? I think not.

Right now, you are probably expecting me to list the characteristics and activities that should be in place. That is impossible — I don’t know your organisation. I’d be happy to have that conversation with you: feel free to contact me on graeme@tomorrowtoday.uk.com.

However, what I can say, is that the real issue is that most managers and organisations need a mindset shift. Call it a paradigm shift if you want to. Until we change how we see the world, no list of “things to do” or strategic goals will actually help us. For me, the most helpful shift has been to see that we have moved out of the industrial era, through the information age and are now entering a new emerging age that might best be described as the connection economy. Read a brief description of it here, or, if you have more time, flit or wade through our blog archives on this topic.

So, as you listen to the budget and consider your company’s strategy for the next few months or years, ask yourself what you’re hoping for. Are you wanting stability, predictability, control and so forth? Or, do you believe that creativity, talent, innovation should be unleashed within your organisation? Do you believe that your strategy needs to be fixed and focused? Or should it be fluid and flexible? And, if so, how will you manage that?

This blog post isn’t really about the budget at all, I know. But it gives us a good opportunity to reflect on what we’re hoping for, what we want, and what we really need as managers and strategists in our companies right now.

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