The Year of The Metal Rat

Merging Leadership and Management Models 

by Amr Ismail

Asia is today’s world leader in economics, business and technology, and China is left right and center at many levels in the heart of that economy. With a workforce of three billion people, Asia dwarfs the US and the EU combined workforce which stands at just over 800 million. The four outstanding management models of Japan, China, India and Korea represent the four pillars of Asian management systems. With the numbers of Asian higher education graduates, economic and productivity growth outstripping the rest of the world combined, new management systems and leadership philosophies are being practiced out of today’s management compendium, while American and European practices are bound for a very harsh self-assessment and retreat.

Not since Max Weber’s and Jurgen Habermas’s studies of the protestant ethic and the rise of Capitalism, that we are re-writing the playbook for economics and management (except for a very brief period in the eighties when Japan challenged the American universal management model). This unprecedented shift has been taking hold for more than 25 years and has coincided with a gradual departure from western economic, and from management and leadership theories, first by the very economies that preached them and then by many other economies. The phenotype of the global economy is under the surgeon’s knife in 2020 due to the coronavirus pandemic, but this is a loosely connected event though very relevant; the new economics, leadership and management playbook has been in the making for quite some time now.

In 1984, and as a 20-year-old university student, I was already into my third job as an intern in Esbjerg, Denmark; On my fourth day, I arrived at the company – Viking an hour earlier than the first three days, I took my bicycle to the garage, and while I was tinkering with the bicycle drums, I heard a voice behind me saying hello with a commanding accent, I turned around and found myself facing a man in his fifties in an elegant business suit parking his bicycle. He extended his hand and welcomed me with a genuine smile and immense curiosity. We shook hands, and he introduced himself with his first name only – Jens, then as we were walking to the office, we had a friendly ten minute chat about Denmark, my time in Esbjerg, how I was adapting to the social and work life in a town of less than 50,000 inhabitance where Viking is the flagship international company in town, and we talked about my office work. As he was about to head to his office, I asked him which department he is in, he again produced the same genuine smile and told me that he was the CEO. I then produced a smile of a shocked intern and accepted his invitation for lunch, in what later transpired into a series of conversations about work and life. What a culture shock! This was the distinguished long serving CEO of the company Jens O. Bjerre-Madsen, who was ranked one of the top business CEO’s in Denmark. I rushed to my mentor Katty Tørnæs shortly after, to get some feedback on working with the CEO and the board. That encounter was my first management lesson in humility which is emblazoned all over my management and leadership philosophy. Today, I continue to be a student of culture and its role in comparative management.

(Left to right: Amr Ismail, Jens O. Bjerre-Madsen , Atsushi Matsumura. 1984)

As if the management lesson in humility wasn’t enough, conversations with Jens defined my direction in work and life. Two years after, I was in my first International job in Belgium. What Jens was able to accomplish in business, life, and his heart-felt humility is the leadership model that is long lost in both business and social life. What I also picked up in my conversations with Jens is that real satisfaction can’t be attained by focusing on the material, fame, power or by following somebody else’s. Focusing on my own human development as the objective, brings the highest rewards, and it always pays. Thirty six years after, having worked for best-of-breed companies including a brief stint at Deloitte; having lived, studied and worked under management and leadership models in Europe, North America, and Middle East (both African and Asian sides), and having affinity with the Egyptian and Canadian culture by citizenship, in addition to the French, Scottish and Serbian cultures by marriage, I have learnt to see the world with the biggest lens I could find and from so many different and sometimes sharp contrasting perspectives. 

Lately, I haven’t been able to keep up with leadership failures in business and politics, or to seek remedy for a much less than optimal education system that has been failing generations and contributing to less than productive workplaces. Armies of corporate trainers, consultants, learning organizations, coaches, transformation experts have been no match to the power of inefficiency in management and leadership for more than 30 years. Perhaps because they lost their way and began to focus on the detail, the insignificant and the mundane, forgetting about real human development and fundamental business practices. Those armies have a choice today to either change their ways and comprehend the change environment they are in, or they’ll immediately fall in the “have been” category.  

So, I will concern myself in this article with management and leadership philosophies and will treat economic systems and rising alternative finance systems in a different article. From now on, any management and leadership practitioner who sticks to the old will look ridiculous when trying to apply archaic concepts. This will be a depressingly brief period of time for many to make adjustments and avoid falling through the cracks.

Peter Drucker, the father of modern management formulated five questions that define the course of leadership and organizational development, and BOD management strategy, and can be found in the American Management Association literature:

1. What is your mission? Why does your organization exist in the first place? What are you trying to accomplish for your customers?

2. Who are your customers? Describe the person you wish to satisfy with your actions.

3. What does your customer value? What is it that you do especially well that you are uniquely suited to provide to your customers? How can you exceed the standards set by your competition?

4. What results are you trying to accomplish? How do you measure success?

5. What is your plan? How do you go about satisfying your customers and getting the results that are most important?

Every business formulates its own management and leadership model, yet the model is always sprung from practices, culture and beliefs of a particular region that the business belongs to, or from a global leader with a dominant model that others follow.

The Chinese model is not the outdated family business, nor the old state enterprise that adopted “made in China” policies, but it is the modern Chinese innovation and technology driven model. Although the perception in Europe and the US of Chinese management is one that only works in Asia or even just China, both large and small Chinese companies who have been global challengers and leaders for quite some time have successfully built global management models with Chinese characteristics. That’s not to say that these models will exercise dominance over management and leadership models in other regions of the world. In an emerging multi-polar political world, management and leadership philosophies are much more influenced by regional culture than by any one dominant management and leadership philosophy. For example, in order for me to set up an organizational development strategy for an organization today, it is imperative for me to define and operationalize culture and its influence on organizational behavior, in addition to having a full grasp of the role of culture in comparative management, an area that’s underdeveloped in management science, with only a hand full of people who can claim deep knowledge of.

A global strategic mindset is the signature of the undisputed business leader of today. In my opinion the ultimate global cultural experience is not just about being an expat in a foreign country, working with other nationalities, travelling, or speaking a foreign language, it is much more than that; it begins by having an acute intellect and great aptitude for studies of culture, personalities and work ethics of different regions of the world. It also begins by physically and psychologically transcending national barriers, be open and curious to learn and apply different practices, delve into what is insecure, broken, unfamiliar or vague. We need to acknowledge that such experience can’t happen entirely in a work context. Mastering a cross culture mindset is by no means only dependent on work or studying experience, but initially on personal traits which enable the individual to develop in this direction. The impact of the cultural behavior in management and on the technical side is immense, and I foresee 2020 as the end of universal management led by American parochialism.

Let’s look at the Chinese business management and leadership models which revolve around four questions:

1.     How to manage vision, mission and objectives? What is our focus on social responsibility and sustainability?

2.     How to manage people? How do we learn, work together, and execute strategy?

3.     How to manage change? How to foster entrepreneurship, innovate, align with public policy?

4.     How to manage relationships? How to manage global relations, have strong national identity and work ethics, maintain humility?

Chinese management and leadership models are having their day under the sun. what will determine the advancing of Chinese models even more, and placing Chinese role models globally are their performance on sustainability, environmental policies, management innovation and human development success. Growth and globalization play a big role in defining Chinese management and leadership models, yet the foundations of the models are rooted in Chinese philosophy and culture, just as private Capitalism has roots in protestant ethic, or Islamic banking and finance which has roots in Muslim culture and ethic, or Japanese management and leadership models which have roots in the Japanese culture of collectivism. Chinese models are supported globally by the Belt and Road project representing China’s hard power, and we are currently witnessing the cementing of the soft power. And just as the Japanese management models (TQM, JIT, Lean, Six Sigma) were adopted by companies around the world, Chinese management and leadership models are bound to be adopted also around the world bringing innovation and business process improvements.

In Europe, the outcome of the political and economic turmoil the EU is broiled in, is likely to result in dismantling of the European institutions in its current form before the end of the year, which may lead to a new form of economic union that is not invasive to local culture, doesn’t advocate universal management and doesn’t strip member states of their sovereign rights. Many observers could see this coming for a while.

US dominance in management sciences for the past 60 years has contributed to the absence of competing leadership and management models in Europe, however the European management and leadership style will adapt better, at least in the short term, to the new normal. Although Europe hasn’t done a good job fostering creativity and human development and focused instead on basic skills and knowledge needed to do current jobs, European companies have a better record in CSR and in work-life balance than their American counterparts. The best way forward for European countries is to pick up the pieces and begin integrating non-western management and leadership models in their management practices and leadership style. And not without fostering creativity, entrepreneurship and research, that the economic wheel begins to spin again. Success in leadership and organizational development will depend on how fast European member states can integrate new leadership and management models, overhaul education curriculum in economics, business, social sciences, leadership and international relations. There is a lesson to learn from business leaders in Asia and other parts of the world, given the fact that most of them were educated in Western (or Western style) universities and managed to find the right equilibrium between the management practices they learned and their respective culture. 

When we talk about Asia’s management and leadership models that are gradually being applied globally, we are in no way limited to China. The models of human development of ASEAN countries (10 States), for example, heralds the unseating of human resources (HR) and instating human development (HD) as the new model that governs the relationship between people and an organization. This model will represent the future of HR as we know it today. I’ve worked through personnel management, human resources management, people management, and I expect the HD model to be one of the most influential globally. Human resources as an administrative function to manage people as a resource is dead and gone. Process management and all HR administrative functions are automated and managed by artificial intelligence (AI), while some administrative functions are done by employees themselves. The crux of the function today is human development. The same applies to India which has a long history in management thinking and thought leadership. So, again, in order for me to be a human development expert as I deliver organizational development and leadership solutions; I have to fully understand that people are not resources but agents in need of all kinds of personal and professional development; I have to work with employees’ aspirations and values instead of currently used economic criteria. Building capabilities is at the center of leadership development and organizational development.

In 2020 rules of engagement for BOD agenda, CSR, organizational development, leadership development, human development, organizational behavior, business culture, building capacity and skill development are taking a different turn from what most have learned in the past. A new manual is being written, it is a great leap forward for management and leadership development.

Important Footnote

I am aware that some views expressed in this article can be very unsettling to some people; but facts and numbers speak for themselves, I am merely forecasting and connecting all the dots.

A good forecast is unbiased, which is the key word here. And the role of the forecaster is looking at how hidden currents in the present signal possible changes in direction for companies, societies, or the world at large. So, the primary goal is to identify a full range of possibilities, to map uncertainty, because our actions in the present do influence the future, uncertainty is opportunity.

Predictions may not have logic, but forecast must have a logic to it. The forecaster must be able to articulate and defend that logic. My reader understands enough of the forecast process and logic to make an independent assessment of its quality by looking at opportunities and risks. I expect participation and critique from whoever reads me.

And just as a good forecast is unbiased, the reader should also be unbiased and able to distinguish between a good forecast and bad one. In a world of uncertainty, a good decision maker falls back on intuition and judgement. The forecast helps your understanding by revealing overlooked possibilities and by informing your intuition. Human nature being what it is, it’s only natural that many are likely to overreact to an unexpected set of assumptions

Change hardly unfolds in a straight line, and it is gradual, slow sometimes, but then it accelerates and can suddenly explodes. So, a good forecaster can understand when a moment is ripe for an inflection point and can avoid overestimating the short term and underestimating the long term. When the inflection point arrives, people generally underestimate the speed of change. And for a good forecaster, timing is imperative.

People commonly shy away from failures and anomalies, they dislike uncertainty and they are preoccupied with the present, they tend to ignore signs and indicators that don’t fit into their comfort zones or familiar boxes. Anew won’t fit into an existing box no matter what.

Forecasting has a lot of navigation to it, like steering a ship. A good forecaster also knows when not to forecast. For example, I forecasted global economic growth for 2019, and not this year, because my evidence-based analysis indicated possible extraordinary events in 2020 and I decided against making one.

So, what is unsettling in the analysis presented in this article?

-A shift from universal management to a new model. And no details of new models are presented,

– A complex change management program for EU institutions, 

– A shift in management and leadership theories.

That’s a lot for many people to digest. I get that. And it is difficult for many people to envision how they will organize their lives around it. I get that too.

I don’t forecast turbulence, what I forecast is a historic shift in management leadership models. I can easily understand fear of change in a company change management program, so I can imagine a higher level of fear and insecurity when we discuss changing management and leadership models.

Unbiased forecast is commonly a hard pill to swallow, so it’s always up to you to figure out how to be an unbiased participant, start by:

Understanding that real leaders and innovators have no fear,

Asking the right questions,

Making an effort to get the big picture in everything you do,

Not ignoring facts in favor of personal opinions, it’s mentally draining,

Staying positive and curious about change,

Accepting that happy talk is good but straight shooting is better.

You can’t see the future by looking in your rear-view mirror.