Executives might have battled through the shocks of the recent downturn, but few have yet come to terms with the seismic changes that it has ushered in.
"Most people are still deeply mired in the industrial age approach to management," says Dr Stephen Covey, professor, consultant and author of The 7 Habits of Highly Effective People, which was named the most influential business book of the 20th century. "But the economic situation today demands a paradigm shift away from the top-down command-and-control model, where people are considered an expense, not an asset. It requires a new approach to leadership for the knowledge age, where the aim of [corporate] culture is to empower employees and support the four points."
The points Covey refers to are the central theme of his latest book, Predictable Results in Unpredictable Times, co-written with Bob Whitman. They will also form the basis of his presentation at a leadership event in Hong Kong on October 20, organised by Right Management and for which Classified Post is the exclusive media sponsor.
In essence, Covey warns that failure to change will not only prove costly but will cause firms to go downhill in all areas. Those locked into outdated methods of operation and modes of thinking will find things going sour unless they steel themselves to take the bold, yet relatively straightforward, steps needed to realign priorities and inculcate new attitudes to management.
The four key issues, he believes, will come to define winning companies in the years ahead. They are all about building high levels of trust with stakeholders, executing with excellence, doing more with less and creating hopeful, positive energy so as to transform fear into engagement.
"These were whittled down from a larger number and are formulated with the financial crisis in mind," says Covey, speaking by phone from the United States. "Therefore, they are a product of the real economy and reflect what is happening throughout the world. I try to show that the new approach to leadership in the knowledge economy depends on moral authority, not formal authority, and that by empowering employees, companies can accomplish much more."
Getting started is not necessarily easy for executives used to working within a strict hierarchy and with closely guarded areas of responsibility. For them, though, one of the first things to realise is that procedures, rules and meetings don't make a winning company. Instead, the essential is to have simple goals with clear targets and a strong follow-through. All team members must be clear about their part in achieving the goals and be in a position to execute precisely.
"People have to be very proactive and take the initiative to make good things happen," Covey says. "But it can be done, and in Hong Kong I plan to give illustrations of the four points from organisations around the world, but with an Asian perspective."
He stresses that every company is ultimately a product not of economic or other conditions, but of reasoned decisions. And it is increasingly obvious that certain decisions bring better results. For instance, empirical evidence shows that companies that decide to empower employees, involve them in forming policy and cede, rather than withhold, authority consistently outperform peers or rivals stuck in the industrial age.
Similarly, in terms of building trust, organisations that make a conscious effort to be transparent and totally honest in their dealings find that this competency pays off with lower costs and a higher standing in the wider community.
"It makes no difference what the economic conditions are," Covey says. "Anyone can learn from this approach. People are a product of their decisions and they can decide to build trust, execute with excellence, accomplish more with less and turn negative energy into positive."
Another important message for executives is to loosen the reins and allow staff to be proactive, creative and focus on the things that really matter. "The key is to be accountable to the culture, not the boss," Covey says. "Look at Gandhi, who had no formal position but changed a country, and Nelson Mandela, who got his moral authority not from a title but from his time in jail."
In his book, Predictable Results in Unpredictable Times, Stephen Covey lists "doing more with less" among his key principles of success during uncertain periods.
This may seem counterintuitive, as countless companies have made substantial cuts in recent years and were left struggling to deal with the consequences. A common scenario after a round of layoffs is for fewer staff members to be left trying to maintain the same level of sales and productivity with limited resources, while under considerably more pressure.
Some short-term gains may be had with operational cost savings and a lower headcount, but such deep cuts are hardly a recipe for steady growth, a loyal workforce and satisfied customers.
Covey therefore elaborates on his principle by saying that it is important to do more of what matters for the good of the business.
"You have to decide what is really important and focus on executing the key activities to produce that," he says.
He notes that most people fill their workdays with "must do" tasks that, upon closer analysis, are unnecessary, unproductive and do not contribute to the success of the business.
For example, he says a flight attendant's job description includes serving drinks and peanuts, but in turbulent weather those activities become non-essential and the passengers' safety takes priority.
"Everyone wants to do more with less, but the real question is, 'more of what'?" Covey says.
He stresses that it should not be more of the same, but more of what your customers value.
"People are getting the message," he says. "In spite of the conditions of a bad economy, taking this approach gives the opportunity to be very proactive and focus on the things that matter most."