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Created on 14.11.2019

Digitization: have classic management approaches had their day?

Which management approaches are suited to meeting the current challenges in technology-driven companies? And do classic approaches make sense at all nowadays? An article by Christoph Negri, Head of the Institute of Applied Psychology at the Zurich University of Applied Sciences (ZHAW).

Today, a great many companies are technology-driven. As a result, tasks are becoming ever more complex, and the speed at which new products and services have to be brought to market is increasing all the time. Companies are reacting to these developments with new approaches such as agile project management. Originating in IT, these methods are increasingly finding their way into other sectors. The introduction of new processes and approaches is not the end of the story, however. A new mindset is required, and this raises the question as to how companies and their divisions should be managed in order to deal with the rise in complexity. Do we need new approaches in certain areas? And where are the classic approaches still more effective? 

Classic management models are always hierarchical

The distinguishing feature of classic management models is that responsibility and power are concentrated in a single person. This person takes all the important decisions and assigns tasks to employees in order to achieve the goals that have been set. Classic management models are always characterized by hierarchies. If there are too many levels in the hierarchy, this can make the system rigid and slow to react to new developments.

New approaches to management distribute responsibility and power

By contrast, new management approaches share the responsibility and decision-making power among two or more people. These approaches include models such as co-leadership, shared leadership and part-time leadership arrangements, under which the managers of a department or a company share leadership responsibility or hold it on a part-time basis. But democratic approaches such as holacracy and sociocracy are becoming increasingly prevalent, too. Teams with a holacratic or sociocratic structure work with a high degree of self-organization and self-management.

Coaches instead of supervisors

New management models compel managers to let go of the notion of constant oversight and control over all processes and information. Under the new approaches, managers adopt the role of coaches who relinquish power and are able to hand over the reins. This becomes apparent even with arrangements such as remote working. It is no longer a matter of giving employees instructions and supervising them but about helping them to work in a self-organized manner. 

A single leadership culture no longer exists

But which management models are suitable for a particular company or for individual sectors? The more technology-driven and the less routine the tasks, the better suited they are to new management models. However, it always depends on the team members, too. As employees, we want structures and objectives, but also self-determination. When it comes to defining a suitable management model, it is therefore essential to carefully consider how the team can cope with the various options. Companies with just one management team are becoming increasingly rare. In certain sectors, classic management approaches – provided they enable staff members to treat one another as equals – will continue to make sense in the future. Other departments may be able to make much greater progress if new management approaches are used to support the new working models. It is already possible and also common for different leadership cultures to be adopted within a single company. 

About the author

Industrial and organizational psychologist Christoph Negri is Head of the The link will open in a new window Institute of Applied Psychology at the Zurich University of Applied Sciences (ZHAW). In 2019, he published the The link will open in a new window practical handbook “Führen in der Arbeitswelt 4.0” (Leadership in Work 4.0) with the Springer Verlag publishing house. It provides an overview of the psychological aspects of management and developments in Work 4.0.

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