Legendary management thinker Peter Drucker said, ‘culture eats strategy for breakfast’. This statement is becoming even more relevant as organisations deal with increasing complexity, pace of change, and are moving towards a creativity economy where creativity, innovation and resilience are crucial for survival. To survive and thrive in these changing circumstances, organisational culture needs to move away from Management 1.0 practices characterised by bureaucratic organizations, a hierarchical command and control mindset, standardization and specialization.
This approach worked well for driving productivity and efficiency in the production economy, but is detrimental to success of modern organizations. Instead, organisations need to move towards a culture based on Management 2.0 principles such as collaboration, transparency, meritocracy, purpose, community and autonomy, where authority is distributed and decisions are made on the basis of knowledge rather than a formal position in the organizational hierarchy, and organisational learning is embedded in organisational DNA.
Such organisations became genuinely authentic and trustworthy, pyramids are replaced with networks, command and control is replaced with collaboration and autonomy, fear and authority are replaced with higher purpose and authentic care. This will lead to better engagement, more innovation, better resilience, and ultimately more prosperity for all stakeholders including entire societies.
Vlatka Hlupic, CEO of the Drucker Foundation in the UK and professor of business and management at Westminster Business School