New Management systems instead of a Zeus culture

Leadership and Organizational Development

Interview with PROF. DR. DIETMAR FINK

Prof. Dr. Dietmar Fink is the chair of consultancy and management development at the Bonn-Rhein-Sieg University of Applied Sciences and is managing director of the Scientific Association for Management and Consultancy (WGMB) in Bonn, Germany. He also did research and taught at the University of Oxford for many years. Professor Fink is regarded as a highly esteemed and critical observer in the consulting world. For 20 years, he has served as a sparring partner for companies such as McKinsey, Bain, BCG, Accenture and many others. He has written several books as well as multiple articles and editorials in print media, specialist literature and business journalism.

Prof. Fink, over 200 German global market leaders were surveyed for the Best Strategy 2018 study and asked about what makes them successful. Do you think there is something like a gene that world market leaders all have in common?

It would be great if there were a genetic factor, but I fear there isn’t. What does exist: particular industries that call for the competences and virtues which are a good match for the German mentality. When it comes to thinking up technical innovations and implementing them with great precision and craftsman ability, this is a task that harmonizes well with the German spirit. Wherever innovation comes from research work, where German engineers discover new products and can register new patents, we have excellent results to show for our work. If other things are involved such as beauty and aesthetics, well, we don’t seem to be born with these gifts in quite the same way. It is no coincidence that German companies are not leading the pack when it comes to the global markets of fashion and luxury labels. Germany is the cradle of Protestantism and the art of engineering, not of savoirvivre.

So if we do have any special genes, then we probably have a mechanical-engineering gene. And in many industries, it is exactly this constellation that leads us to outstanding performance: solid construction, precision processing, no nonsense. And lucky for us, these are usually fields which have a significant economic impact.

Can it be dangerous to see yourself as a global market leader? Could it be that in the worse-case scenario, this status makes people arrogant and sluggish?

Arrogance and sluggishness are obviously to be avoided at all costs. But I think it’s important to see the world as it really is. If that means that a company is a global market leader, then they have to see themselves as a global market leader. And if they don’t do that, they quickly run the risk of jeopardizing their standing. Having a leading role does not automatically have to result in arrogance and sluggishness. If you take the time it really requires to actively structure your own corporate culture, then a management position is the best source of self-confidence and agility

How can companies manage to continue questioning themselves despite their success? And how can they re-invent themselves as needed?

This is an issue that the entire organization has to address. The responsibility for the task, however, is in the hands of upper management. They have to establish a culture in which questioning the existing structures is not only permitted but encouraged. This means they have to give their staff a sense of orientation by illustrating new options on an ongoing basis and encourage this search for new options on every level of the company. Managers have to motivate employees to take these logical steps as well. And they have to give their employees the necessary qualifications for them to pursue that path. Combining orientation, motivation and qualification to strike a harmonious balance might sound trivial at first. But if you take this tactic seriously, there is both a lot of effort and a lot of potential involved.

As a university lecturer, you have the managers of tomorrow in your auditorium. What new characteristics and expectations does the next generation of managers have to offer? What is the difference between their interpretation of leadership and the one that is prevalent now?

I have been a professor of business administration for twenty years now. In my lectures and elsewhere, I can observe something that numerous studies have confirmed as being a widespread phenomenon. For about ten years now, we have been dealing with an entirely new generation that is fundamentally different from earlier generations. With your question, you are implying that my students are tomorrow’s CEOs. It used to be that many of the people in my lecture hall would have had such lofty goals. But today everything is different. Only a few are actually that ambitious. Most are looking for self-actualization and an attractive work-life balance.

“One thing is true:
you have to see the world as it is and not as you wish it were.”

PROF. DR. DIETMAR FINK, Managing director of the WGMB

Arrogance and sluggishness are obviously to be avoided at all costs. But I think it’s important to see the world as it really is. If that means that a company is a global market leader, then they have to see themselves as a global market leader.

prof. dr. dietmar fink, managing director of the wgmb

They want a job that offers them a very good income and even more in the way of flexibility. Neither of these things is an unstated wish, by the way: people are actively demanding them. At the same time, their willingness to offer proper performance in return is declining. Perhaps I am overstating things a little, but there’s no mistaking the general tendency. You can think what you like about this. But one thing is true: you have to see the world as it is and not as you wish it were. After all, if we close our eyes to this development, we will miss out on the opportunity to establish new management systems which will meet the needs of the new generation of managers that is coming up right now.

What influence does this transition have on corporate culture, which, according to the study, is a major lever for economic success?

Many German global market leaders grew up and became successful within the context of something the British management writer Charles Handy referred to as Zeus culture. There is a strict hierarchy, and at its head is the company founder who takes care of his employees as a benign patriarch, but he also clearly defines the conditions — no ifs, ands or buts. Right now the world is changing at an increasingly rapid rate, environmental conditions have rarely been as unstable as they are today, and an increasingly educated and mobile workforce is less and less motivated to adapt to the rigid structures of an organization.

This means that it invariably becomes necessary to question the existence of the Zeus culture. In the future, managers will have no choice but to relinquish power. The only people who will be able to motivate and empower employees of the next generation to make their own decisions will be the ones who can get them enthusiastic, win them over in the long run, and release their potential.

You are an academic and have intensively addressed the topic of gaps in knowledge and competency in Germany as a site of innovation. What about innovative ability in Germany? Will German global market leaders still rank at the top in five or ten years?

I’m an optimistic person, so I’ll say yes, in five or ten years, most of today’s global market leaders in Germany will still be going strong at the top of their markets. But that obviously won’t happen by itself. Companies will have to do a lot to make it happen. There are massive challenges to be handled, especially in light of digital technologies, aggressive competition from China, start-ups which position themselves as intermediaries between established companies and their customers, and last but not least, increasing geopolitical risks. This will only work if the leadership and motivation systems on every level of the organization ensure an agile approach to handling these challenges.

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