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SA still managing companies like it's the 1980s

Matthew Burbidge
By Matthew Burbidge
Johannesburg, 15 Jun 2017

A lot of organisations could benefit by being "tipped on their head".

This, and plenty of other things, such as clearing out middle management, and changing the boss's job description, if you take David Entwisle's advice.

Entwisle is a partner at McKinsey & Company's Johannesburg office, and has had plenty of experience in reshaping companies to become more effective, not least because he used to work in organisations that were anything but nimble.

Speaking at a gathering of the CIO Council of South Africa in Johannesburg recently, Entwisle said too many organisations, particularly in SA, were run along hierarchical lines.

Managers prefer to sit in their office: "'You need to come and talk to me, I'm not going to come and talk to you.' We need to get over ourselves as South Africans."

Culture shock

He believes some countries - in Europe or South America, for instance ? were less inclined to follow hierarchical structures, while others, in Asia or the Middle East, still followed this model.

"In South Africa, it's like we're still managing our companies like it's the 1980s," he says.

This can be a culture shock to younger people entering an organisation.

"A lot of the young people coming out of varsities are expecting organisations to be more dynamic and expecting to be able to make a difference earlier in their tenure, and they're finding they can't. You speak to a lot of young people and they're very frustrated."

Bosses, too, needed to stop telling people what to do, and rather empower their staff to make their own decisions as well as creating an environment in which people "can get on with it".

Most of Entwisle's client work happens at the "intersection of financial service and IT" and there will typically be a piece of software, or an application or a product, which needs to be rolled out to better serve customers.

Here, companies could benefit from Agile project management, which emphasises small, cross-functional teams, which work best if they're sitting in the same room, says Entwisle.

KPIs are a disaster

Another thing that happens in hierarchies is that once people are promoted they don't do any more work, other than attending meetings and receiving reports.

Entwisle said these people - usually middle managers - needed to get back to producing content, or 'rowing the boat'.

"What we start to see when people are scaling out Agile is that the role of middle managers starts to become quite redundant. So people either need to get back and do work again, or they need to get out, because they're not actually adding a great deal of value in an Agile environment."

KPIs - at least individual employee-based ones - were a "disaster", he said. Paying bonuses to people "doesn't incentivise them to work harder or do better".

"People are actually motivated by autonomy and feeling that they're making a difference in the world."

A better way of judging, and spurring performance, is to have team KPIs, such as increasing revenue on an insurance product, or gaining more customers. A team goal means members are part of a process of delivering an overall target, instead of "individual people worrying about their own little scorecards".

"Why is it that the young developers and IT people want to work in fintechs? It's not really for the money, it's actually because they have autonomy and get stuff done."

Entwisle said he didn't want to pretend that fundamentally changing the culture of a business is easy, and part of it was down to managers "letting go their desire for control".

"The reason that organisations don't get going is because the leadership are too scared. But actually all the developers on the ground are saying 'we know how to do this, and we want to work for a place where we're empowered'."

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