“The Power of Management” by Adrian Brown.

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This is the transcript of Adrian’s talk at the Like Minds “Nudge Ideas Festival” If you’d prefer to watch it you can do so here.

So if you’re going to scale a business, it needs to be managed. So budget, because scale is gonna happen. Let me tell you, who wants to scale their business? Who thinks growing your profit is called scaling? Is that scaling? Yeah. It is. Because you’re scaling your profit.

Scaling your revenue, scaling your revenues, scaling your numbers, scaling your customers. If you’re growing your business, you’re scaling it. Things are changing. And the size of your business changes the conditions in your business. So as your business grows, the conditions change, and that can put the culture you started with at risk. So those 6 people, created a company and they created a culture. So as you scale, what you’re doing is putting that original culture of 6 at risk.

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But if you’re going to scale, you cannot leave this to chance. Because if you leave it to chance, things are going to happen That you won’t quite understand, and you might not have all your people on your side. How many of you know of a business that as it scales, suddenly the People start to split into little fiefdoms or little factions, and it gets a bit weird, a bit cliquey? And those businesses often run into trouble. Now the interesting thing about management is that the function of management has nothing to do with managing people.

Who thinks that’s a bit odd? Who thinks managing is managing people? I’m going to try and dissuade you of that. Admittedly, in the current conditions, we have a predominance of hierarchical linear command and control management.

Now, it’s that top-down approach. The boss says it, so the bottom does it. But there are some new approaches around. I can think of Holocrosy as one of them. And Holocrosy claims to be slightly different. But, in the end, it’s still a bit linear, because we’re stuck in this post-industrial area model, Which is the people at the top tell the people at the bottom what to do, so the people at the top make the most money.

And that’s what happened from the Industrial Revolution onwards. But I want to talk to you about a fresh alternative. An alternative where instead of managing people, What we’re doing is we’re managing knowledge and information. We’re managing the conditions of the organization, And the principles of the organization, not the people.

We’re doing this through something I call an organizational platform. I’ll explain this in a minute. And we have to have a new function of management, so they can work. Now, If you look at your company as a platform, your company’s got a core.

That’s where you make your money. That’s where the processes and the procedures are pretty linear. They’re repeatable. They give you the same thing again and again and again because that’s how you make your money. You sell your customers Products services and experiences that they can rely on. But that’s not very innovative. So on your platform, you’ve got to have something called the edge. Now as you go from the middle to the edge, the rules become less strict.

It’s less linear. The edge is completely non-linear like life is. We never know what’s going to happen next, we can’t predict it. Life is like that. Life is completely non-linear. But we run our businesses as if we can predict the future. We can’t. But we need predictable processes in the middle So we can produce consistent results to make a profit.

So this new era of management is operating in this hybrid space, Where it takes new ideas and brings them to the middle of the core, so you can make money out of them. When Drew started with the 6 people, It was a very tight call, but it also had an edge because they were being creative and innovative.

But there were only 6 of them. So communicating wasn’t much of an issue. They could speak to each other. They could see each other. The new function of management is about designing the platform so that you can be hugely innovative on the edge, but you can be brilliantly linear, and mechanistic, and reproducible in the middle. So how do you do that?

Well, I call it a social contract. We heard the word social maybe a bit earlier, but a social contract is two things. Firstly, it’s about how we behave with each other, how we interact with each other, how we communicate. And the contract bit is that we sign up to it. We say, I’m in. We commit ourselves to it. So the platform is built around this social contract.

And the members of that platform have said, I’m in. And they’re demonstrating they’re in by the way of the work they do. And once I have that platform and that social contract, now I can start to develop teams, and teams are teams. And each team might have a slightly different version of that social contract, aligned with what they’re doing.

And that social contract is always based on four principles. It’s based on the financial names of the company. It’s based on the Ethics of a corporation, corporate ethics, is based on the strategy of the company, and it’s based around the principles of developing people. Now, the manager’s job is also to govern the platform. That does not mean governing people.

It is governing the environment, taking, and managing the environment. And you can have different levels of platforms. So if you have a large organization, you can have an organizational platform. And within that, you could have divisional platforms. And then within divisional platforms, you could have teams, or teams of teams, operating on different segments of the business in an autonomous way. And for us, the smallest team is what we call a micro team.

Now a micro team is like from 3 to maybe 12 people at the top. And in a micro team, you have complete autonomy of what you’re doing in that team within The framework of the organizational platform. But we have to remember, that culture is in control. So the culture of 6 people was interactive, free, it was open.

But as it grows, suddenly, Something starts to change. Performance in a business is always a function of the culture. So if you have a culture in a hierarchical business, it’s quite disciplined, maybe a bit manipulative, then the performance is going to reflect that.

People aren’t going to be there wanting to work. They’re going to be there. They have to work because they’re being bullied to work, and manipulated to work. But if you have a culture where people are excited, and they love the fact that they can get to work, and it’s really exciting for them, then in that culture, people are going to want to go to work. Culture is also the strongest barrier to any change.

Now, if you have a really strong culture in a company, let’s say a company has been around for a long, long time. That has got a really strong culture. You try and introduce change to that, That culture is going to kick you out pretty damn quickly.

That’s why any top-down approach always fails because it hits the culture point. But the interesting thing about culture is it emerges from the conditions that exist in the business. Now, the culture of 6 people emerged, which was great, And then the business started to grow. And as I said at the beginning, as you start to scale, the conditions change. So the culture starts to change, but you haven’t designed that.

It’s just happening. A newer culture emerges From the new conditions that start to arrive because you’ve got more people, more customers, more business going on. The thing is you can’t predict What that new culture will be. Because we have these wonderful things called human beings involved. And we’re independently intelligent. And you can’t tell us what to do.

We think for ourselves. Even if you’d like to think you can tell us what to do, we think for ourselves. But you cannot change the culture itself. Cookie analogy for you. Culture is like a cake, you’ve got a chocolate cake, but you want to change it to a lemon cake. Anyone in the room, can you tell me how to change a chocolate cake to a lemon cake? Because you’re going to make billions.

You can’t do it. The result, the cake, is the culture. So if I want to not have a chocolate cake anymore, and I want to develop a lemon drizzle cake culture, I’ve got to go back to the ingredients. I’ve got to go back to conditions and cook a new cake. That’s the same with culture. What we’re trying to do is make change successful.

Change from 6 people to 600 people. Are we going to do that? We need to do it for an organization to be able to scale. We’ve got to make change successful if we want to successfully scale a business. It’s gonna require a new culture of management. Not the hierarchical version.

We know that doesn’t work. If the conditions for management must change, then don’t assert the question, how are we going to change the conditions for management to change? That’s a segment of my business. It’s not a new product or process, it’s a segment of the business. As I said, top-down change always fails.

Because we’re pushing down into the organization. And we meet the point Of resistance, where the buy-in to the changes ends. Normally, somewhere around middle management in large organizations. In smaller organizations, it could be anywhere. And when you hit that point of resistance, no amount of energy from the top is gonna make that change any easier. It makes the resistance even stronger. I think that Japanese thing where, you know, you push, You get more resistance, but then you start walking backwards and they come with you.

That sort of mindset. So what are we gonna do for successful change? We’ve got to start small, and we’ve got to start at the edge, away from the core, away from the processes that make the Profit. So it could be a project or a small team.

And we’re going to create that small team, and we’re going to develop the people, including the management, to be able to cope with That new project, that small team, within our existing organization. And then we’re gonna get to work. And when we get to work, is it gonna go perfectly well? That was a question. Of course, it’s not.

Things are gonna go wrong. So what you gotta do is you gotta play at it. You gotta mess with it. You gotta test and experiment, and adjust. And you’ve got to do that because to do that, you need to have fantastic communication between that team of people. When it was just 6, that was easy. Because I could see them around the room. And we could scream and argue at each other and get it all worked out. But now I’ve got 600.

Not so easy. But once I’ve got that team working, I’ve proved the concept, I can show that I can get this team to deliver the outcome I expected, and I’ve gone from 0 to 1. I’ve now got 1. Now I can improve on 1. Or, I can start another one, which is how we work. Let’s look at platform technology for further organizations.

This is what we call it. So there’s our organization. We’ve got the edge, we’ve got the core, we’ve got this space in the middle, the hybrid space, the space of management. So you have this new project team, a small project team, and it comes up with an idea. And then it goes through a process of developing that idea until it gets to the core. Now we’re gonna introduce it To the workings of the business. Now we’re going to introduce it to the core of the company.

For that to happen, the culture at the core Has got to change. The conditions at the call have got to change so that it can accept this new thinking, this new idea, this new process, This new way of working. If successful, the core will adapt, and that new process is now included in the core. So we now have a new management process in this business. It hasn’t affected the rest of the business, but it’s now included. It’s accepted. And if it’s successful, other people are gonna say, hey. We like that.

Can we do that too? Well, yes, you can. But where do you start? You start at the edge, and you work your way into the core. And then another group will say, please, can we do that? We’d like that too. And slowly but surely, you’re changing the ingredients of the cake, one team at a time. Who thinks that sounds slow? Well, It’s not.

Because when you do change from the top, when do you start to see the benefits? When it gets to the bottom when it’s gone through the resistance, when enough people have been kicked. This way, you start at the bottom. Each team is producing results from day one. So each time you add a new team, you’re adding new results, you’re adding new processes to the business, You’re adding new possibilities. Now and again, you’ll have something that shows up that doesn’t quite fit. Let’s think about tennis for a minute. So the group comes out with lots of ideas to play tennis better.

You know they come up with double backhands and jumping up in the air, and all sorts of things. But then somebody says, no, no, no, I want to play badminton. But our business is a tennis court. You can’t play badminton on a tennis court. It’s a nice idea. It’s got a racket. It’s got something you hit. It’s got lines and a net, but they’re all different to the tennis court.

So now do I include that in my business, or do I create a separate business? At that point, I could create a separate business, the badminton business. Or I might create a badminton division within my business if it was big enough. But that’s what management has the opportunity to decide. So those innovations don’t get lost. They get either created into something new, sold off, or Separated away. This role of the manager I’m talking about, in this idea of going from 6 to 600, It’s managing the conditions, not the people.

Not trying to control the people, but creating multiple autonomous teams. And if we start with 6, Why not make a rule? All teams shall be 6 people. You might vary it occasionally because certain teams need to be more, but that might be a guideline. You’ve got to develop the people. You know, if you introduce a new process into a business, and you don’t develop the people, those of us who did in that workshop upstairs with Trenton just now, you’ve got to develop the people. You’ve got to give them the new skills knowledge and information that enable them to operate in this new environment.

If you don’t, they’re floundering. And what they’ll probably do is make up the ideas themselves, which will be not very helpful. You’ve got to build effective relationships between these people. Now, very few people in my experience in business have ever learned how to Intentionally create relationships.

Relationships are always by accident. But if you’re intentionally creating relationships, you’re creating a relationship for a specific purpose, And you define that purpose, and then the relationship has a specific dynamic, which would include ways of communicating and dialogue.

The ways you handle information. And what you’re then able to do is influence the desired culture. You can’t predict it, But you can keep your eye on it, and every time something changes, go back to the sailing analogy, you can just adjust your course a little bit. You can trim the sails a bit more, let the sails out more, Take them down, put them up, and turn on the engine. All of those things are possible in sailing.

So the function, The new function for management is releasing managers from this historical command and control environment. It’s giving managers a new opportunity to use all their strengths, and their abilities, and their knowledge. They can start to contribute their full potential. They’re no longer policemen, dictating what you should or shouldn’t do. They’re understanding what you want to do and creating the conditions around you so that you can achieve it. They’re starting to contribute something to the business.

And what you end up with is highly motivated and engaged teams, because suddenly their manager isn’t someone who’s telling them what to do. Their manager is saying, so what do you need? What can help? Or I can introduce you to so and so. Can I link you to this person? Can we create a new set of conditions So that your project can succeed? We end up with participation, contribution, and if the management is good, Appreciation of the contribution that’s made. Who likes to be appreciated for what they do? Okay. Who doesn’t? Hello. Natural law of people. We all want to participate.

We want to contribute to something that matters. You take a crisis, any crisis that happens anywhere in the world, what happens? Loads of people come in to try and help to contribute. We had a huge example of that in Turkey just recently. People grab bits of rock with their hands to try and save people. That’s what we do in a crisis. We come and contribute. We come and do whatever we can to help. That’s a natural human desire for everybody. But how often are we given the opportunity? And how often are we allowed to contribute to something we care about?

So if I’m allowed to contribute to something I care about, and somebody appreciates me for it, that might include Paying me, but more importantly, it’s about appreciating me. Saying thank you, and telling me why what I did made a difference. Do you think I want to do it again?

Of course you do. You do it again, and again, and again. That’s the most powerful thing, the natural law of people. And for management to change, to take on this new fit we think, the champion has to come from management. You know, I’ve often wondered why Joe, in sales, Thinks the company should change, and nothing happens.

Nothing happens because Joe has no authority. Joe has no voice in a place in the company that says, hey, I’ve got some good ideas. There’s got to be a champion who has the authority to make the change possible. And that’s the person that we always try to work with. If you achieve this, scaling an organization becomes a transformative way of working.

What do I mean by that? It means that every day people wake up, instead of trying to figure out, how to stay the same. They think of, how we scale. They’re thinking of how to bring in new ideas. How do we include new people? How do we make new systems? How do we do better than we did yesterday? What that does, and this is our sort of banner of life, Is it makes work a much more worthwhile experience for everyone involved.

Just imagine what it would be like in your company or the companies you work with If everyone went home at the end of the day, and got to their partner, their friend, or whoever it was, and said, God, today was a worthwhile day at work. How many of you experience that every day of your life? How many of you experience it most days of your life? Some days of your life? Never?

We’re a boutique consultancy. There are 2 of us within that boutique. One of us is in Canada, and one of us is here in England. And we work with small teams. It doesn’t matter how big the organization is, from Monsanto to BP to AMEC, To the Borden Borden regeneration project. The teams may be between 5 and 1,000 people, but we do the same job. We work with teams. We work with small teams.

We don’t work on them. We don’t need hordes of consultants to come in and say, this is what you must do, and here’s my manual. We come in and ask questions, and work with and for people to create their solutions. And when we leave, We leave behind the skills to enable people to transform their organization themselves, so they become a truly transformative organization.

You can watch Adrian’s keynote address here and read his book review on “The Power of Management” here.

About the author

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I am a business consultant, coach and mentor. I have spent 7 years in the corporate world, 19 years as a business owner and 14 years consulting small and medium-sized businesses. I teamed up with my friend and mentor Michael McMaster to create a Joint Venture called McMaster & Brown.