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For a business to meet the demands of society, it must obtain a competitive edge in the market. Competition can erode a company’s advantage, or share of the market, and reduce its profits. Competitive advantage comes through efficiency and effective management functions. For example, efficiency means improved processes such as the right staffing for the work, the right structure for specialization and integration, and quality work; effective management means the right style of leadership for the people, the alignment of core values of the company and people, the right skills for the tasks, and focus on the strategy. Effective and efficient management functions are important to the functioning of the organization.
In today’s information age, competitive companies are driven by technology or produce technology. The emergency of technology in business in the past two decades threatens the traditional management process. Technology is changing the way people are managed. People can communicate using technology that enables spans of control to increase significantly from supervisor to more self-management.
With technology, organizations still need to exist. One of the most common methods to measure organizational effectiveness was developed by McKinsey & Company, an international management consulting firm. The McKinsey Model 7S is used to help clients make substantial and lasting performance improvements and build a firm that is able to attract, develop, excite, motivate, and retain exceptional people. The organizational elements include strategy, skills, shared values, staffing, systems, structure, and style. By understanding the strengths and weaknesses of each of these organizational components, the business can define its future threats and opportunities for strategic planning.
When analyzing the characteristics and attributes of successful companies, general themes of the learning organization emerge: successful leaders promote thinking and acting at all levels by teaching decision making through example; the process of learning is as important as what the employee learns; innovation and creative thinking are practiced; the smartest people know how to learn from mistakes; collaborative management teams can produce powerful results; leaders aspire to serve; and leaders’ possible future and success depend on the ability to see and respond to a wide variety of alternatives.
There is a paradigm shift in America’s future from rewards based on individual performance to rewards based on company and team performance, and from blame and excuses to personal accountability, such as understanding that you and the cause of your problem are part of a single system.
Knowledge is the new source of power and wealth. Leadership style is the most valued characteristic for organizational effectiveness and knowledge development. The most significant contribution leaders can make is the long-term development of people who adapt, prosper, and grow. People have the ability to continuously learn. People can be taught how to work effectively in groups. It’s important for leaders to understand how they themselves think and react so that they can begin to understand how others might think and react. The style of leaders can make a difference.
Three common themes are important for effective leaders in the twenty-first century. Leaders must have caring and compassion for people, serve others and the community, and continue the development of Self. People who continue to learn are better able to implement and manage continuous change, meet customer expectations and needs, and lead an organization to success in the competitive economic environment.
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