 "Leaders should be responsible for organisation and co-workers: Prof. Massimo Magni")
In September this year, news media reported, that Richard Branson, the founder of Virgin Group, was contemplating to abolish fixed holiday entitlements and allow employees to take time out as often and for as long as they want. He wanted to entrust employees to decide for themselves the time they want to spend in office for doing their jobs well. This is what Massimo Magni, Professor of Organization and Human Resources Management, SDA Bocconi, Italy, calls an act of responsible leadership – e.g. empowering people to balance work challenging goals with personal life.
According to him, given the present globalised business environment, command and control type of leadership has no relevance (except for extreme situations). Prof. Magni - an expert on leadership, organisation culture, and team behaviour - is a staunch advocate of an empowering leader. A leader who is responsible for the future of the organisation as well as for the future of co-workers. With traditional hierarchies being done away with and flat-structured organisations being the trend, leaders should be able to boost intrinsic motivation of the employees and encourage them to contribute in a globally networked environment.
In this freewheeling chat with Rakesh Rao, Prof. Massimo Magni, throws light on leadership style, modern HR practices and organisational behaviour.
What are the factors influencing the organisational behaviour of today’s companies?
If you think organisational behaviour as people behaviour within the organisation, then there are two major factors. First is related to the leadership and its relation with the employees. Leader is the first person that affects the behaviour of the individual (besides inherent characteristics of the employee).
The other critical aspect that affects organisational behaviour is the culture of the organisation. The way organisations shape the culture affects the behaviour of the individual. Increasingly, companies are looking to tweak the environment or culture to align it with their business objectives. There has to be a right fit between people strategy (or HR policies) and business strategy to reap maximum benefits to emerge as winners in the highly competitive market place. If there is a mismatch, it could prove disastrous for the company.
How has globalisation changed the way organisations structure their hierarchy?
Hierarchy will remain as there has to be a strong sense of accountability. On the other hand, due to globalisation, organisations have become flat in terms of hierarchy with mangers needing to work/coordinate with employees across various functional businesses. So, today’s organisations are more horizontal in their working style.
Today’s leader has to work in a networked environment spread across the globe and this requires effective coordination skills. It is important for organisations to intrinsically motivate employees so that everybody is committed to the organisational goals and take on their respective responsibility without the need for continuous monitoring. This way, coordination challenges can be surmounted with intrinsic motivation.
Leaders should be able to boost intrinsic motivation of the employees and make them feel that they are part of the organisation, assist quick learning, and contribute in a globally networked environment. So in addition to functional/technical skills, today’s managers have to be adept at soft skills as well.
Does location, (i.e. country) play a role in shaping the culture of the organisation?
The country (from where the company originates) does have an influence on the culture of the organisation. But, if you want to globalise, then you should have international mind set. In case of multinational companies, most of them have global culture that recognises specificity of each country that they operate in.
With quite a few cross-country mergers and acquisitions taking place, how do organisations prepare themselves for changes within an organisation?
During mergers, cultures of two organisations have huge bearing on the success of the merged entity. Cultures can integrate or clash. It is important to start managing the cultural clashes of two organisations before completing the merger deal.
Is there a difference in the culture when you compare family-run businesses and professionally run organisations?
Indeed, there is a difference. It is challenging, to change the culture of the organisation when making a shift from family-run businesses to professionally run (managerial like) ones. In family business, family values have an impact on the organisation’s culture as they consider the organisation as a part of their extended family. It is the strength of these firms as they have shared identity between family and employees. However, when the family-owned businesses expand to overseas markets it is difficult to maintain the cultural values across the organisation; then you require a globally-oriented culture. That does not mean family should step back. It only means that family run businesses should make changes by being sensitive to the cultures of the countries that they are venturing into. Family-owned businesses have to be receptive to managerial culture as it helps them be in tune with the changing global environment.
How does this shift affect the behaviour of the top management and the employees?
Normally, such changes are aligned with a rejig. Some of the positions held by family members being replaced with external managers. With this, the company opens up for valuable inputs from non-family members on how to run the firm. New managers bring with them processes, business tools, policies, etc. that are considered as benchmark in the industry.
Ever since 2008 financial crisis, the global economy has been witnessing uncertainty. Does this have an impact on organisational behaviour of companies?
The crisis has challenged the way managerial or leadership roles are performed.With lower liquidity (compared to pre-2008 period) in the market, managers have to motivate people with fewer resources to take the performance to the next level.
So, you have to work more on the internal part of motivation by interacting with employees, understanding their requirement, by valuing their work, etc.This requires lot of efforts, practice and experience in managerial skills such as listening to people, interpreting people behaviour, followed by action in order to motivate them intrinsically. Intrinsically motivated people are more likely to provide innovative solutions, which is a key to success in the uncertain and highly competitive marketplace. It is a challenge, but is also an opportunity.
Which are the non-financial rewards to motivate people?
Employees need to feel that they are a part of the organisation. Recognising people for their contribution in the growth of the company is one of the most effective motivation tool.
Second is by providing more career development opportunities (need not necessarily be vertical, but can be lateral as well) and exposing people to more challenging job, which enables them to enhance their skill set and contribute continuously to the organisation's growth. So, an organisation needs to provide employees more avenues to learn and grow as an individual.
According to you, which are the different types of leadership styles presently prevalent in the corporate world?
There are different types of leadership styles visible across the globe.The corporate world has changed a lot in the last couple of decades, and command and control approach of the leadership is no longer seen to be effective.
Leadership is about taking responsibility of the organisation and co-workers. Leaders should look at long-term goals and not just on short-term (quarterly) results. At present, most of the leaders are incentivised for short-term results, and hence there is a need to change this frame work. Without long-term goals, the organisation will be blind-folded to face the future.
Second, the leaders have to work on developing leadership skills of the employees so that they can take on additional responsibility and grow. A true leader is the one who is not afraid to groom (train) the next leader, who can shoulder more responsibility for the organisation. So, the leader has to be responsible for the future of the organisation as well as the employees. In order to support this new leadership framework, we developed the “SDA Bocconi Responsible Leadership” model in order to help leaders and firms to move to a leadership model that is more in fit with the current challenges of the competitive environment.
How has the role of HR personnel evolved in the last couple of decades?
It has changed a lot. Earlier, HR department was seen mostly in administrative and supportive role for an organisation. With organisations and its strategies becoming people oriented, companies have realised the importance of having good employee relationship and the role of HR manager has started gaining prominence within the organisation. Now the HR plays a pivotal role in supporting the alignment between employees’ behaviour and organizational strategies.
HR department, today has became a major force for bringing about changes in the processes and the culture of the organisation, thus acting as a critical link between organisation and people. For effective people strategy, organisations have to develop and motivate people through HR processes. With reporting structure in organisations becoming flat, it is the job of HR to keep people motivated to perform by designing career development path which is horizontal and cross functional.
According to him, given the present globalised business environment, command and control type of leadership has no relevance (except for extreme situations). Prof. Magni - an expert on leadership, organisation culture, and team behaviour - is a staunch advocate of an empowering leader. A leader who is responsible for the future of the organisation as well as for the future of co-workers. With traditional hierarchies being done away with and flat-structured organisations being the trend, leaders should be able to boost intrinsic motivation of the employees and encourage them to contribute in a globally networked environment.
In this freewheeling chat with Rakesh Rao, Prof. Massimo Magni, throws light on leadership style, modern HR practices and organisational behaviour.
What are the factors influencing the organisational behaviour of today’s companies?
If you think organisational behaviour as people behaviour within the organisation, then there are two major factors. First is related to the leadership and its relation with the employees. Leader is the first person that affects the behaviour of the individual (besides inherent characteristics of the employee).
The other critical aspect that affects organisational behaviour is the culture of the organisation. The way organisations shape the culture affects the behaviour of the individual. Increasingly, companies are looking to tweak the environment or culture to align it with their business objectives. There has to be a right fit between people strategy (or HR policies) and business strategy to reap maximum benefits to emerge as winners in the highly competitive market place. If there is a mismatch, it could prove disastrous for the company.
How has globalisation changed the way organisations structure their hierarchy?
Hierarchy will remain as there has to be a strong sense of accountability. On the other hand, due to globalisation, organisations have become flat in terms of hierarchy with mangers needing to work/coordinate with employees across various functional businesses. So, today’s organisations are more horizontal in their working style.
Today’s leader has to work in a networked environment spread across the globe and this requires effective coordination skills. It is important for organisations to intrinsically motivate employees so that everybody is committed to the organisational goals and take on their respective responsibility without the need for continuous monitoring. This way, coordination challenges can be surmounted with intrinsic motivation.
Leaders should be able to boost intrinsic motivation of the employees and make them feel that they are part of the organisation, assist quick learning, and contribute in a globally networked environment. So in addition to functional/technical skills, today’s managers have to be adept at soft skills as well.
Does location, (i.e. country) play a role in shaping the culture of the organisation?
The country (from where the company originates) does have an influence on the culture of the organisation. But, if you want to globalise, then you should have international mind set. In case of multinational companies, most of them have global culture that recognises specificity of each country that they operate in.
With quite a few cross-country mergers and acquisitions taking place, how do organisations prepare themselves for changes within an organisation?
During mergers, cultures of two organisations have huge bearing on the success of the merged entity. Cultures can integrate or clash. It is important to start managing the cultural clashes of two organisations before completing the merger deal.
Is there a difference in the culture when you compare family-run businesses and professionally run organisations?
Indeed, there is a difference. It is challenging, to change the culture of the organisation when making a shift from family-run businesses to professionally run (managerial like) ones. In family business, family values have an impact on the organisation’s culture as they consider the organisation as a part of their extended family. It is the strength of these firms as they have shared identity between family and employees. However, when the family-owned businesses expand to overseas markets it is difficult to maintain the cultural values across the organisation; then you require a globally-oriented culture. That does not mean family should step back. It only means that family run businesses should make changes by being sensitive to the cultures of the countries that they are venturing into. Family-owned businesses have to be receptive to managerial culture as it helps them be in tune with the changing global environment.
How does this shift affect the behaviour of the top management and the employees?
Normally, such changes are aligned with a rejig. Some of the positions held by family members being replaced with external managers. With this, the company opens up for valuable inputs from non-family members on how to run the firm. New managers bring with them processes, business tools, policies, etc. that are considered as benchmark in the industry.
Ever since 2008 financial crisis, the global economy has been witnessing uncertainty. Does this have an impact on organisational behaviour of companies?
The crisis has challenged the way managerial or leadership roles are performed.With lower liquidity (compared to pre-2008 period) in the market, managers have to motivate people with fewer resources to take the performance to the next level.
So, you have to work more on the internal part of motivation by interacting with employees, understanding their requirement, by valuing their work, etc.This requires lot of efforts, practice and experience in managerial skills such as listening to people, interpreting people behaviour, followed by action in order to motivate them intrinsically. Intrinsically motivated people are more likely to provide innovative solutions, which is a key to success in the uncertain and highly competitive marketplace. It is a challenge, but is also an opportunity.
Which are the non-financial rewards to motivate people?
Employees need to feel that they are a part of the organisation. Recognising people for their contribution in the growth of the company is one of the most effective motivation tool.
Second is by providing more career development opportunities (need not necessarily be vertical, but can be lateral as well) and exposing people to more challenging job, which enables them to enhance their skill set and contribute continuously to the organisation's growth. So, an organisation needs to provide employees more avenues to learn and grow as an individual.
According to you, which are the different types of leadership styles presently prevalent in the corporate world?
There are different types of leadership styles visible across the globe.The corporate world has changed a lot in the last couple of decades, and command and control approach of the leadership is no longer seen to be effective.
Leadership is about taking responsibility of the organisation and co-workers. Leaders should look at long-term goals and not just on short-term (quarterly) results. At present, most of the leaders are incentivised for short-term results, and hence there is a need to change this frame work. Without long-term goals, the organisation will be blind-folded to face the future.
Second, the leaders have to work on developing leadership skills of the employees so that they can take on additional responsibility and grow. A true leader is the one who is not afraid to groom (train) the next leader, who can shoulder more responsibility for the organisation. So, the leader has to be responsible for the future of the organisation as well as the employees. In order to support this new leadership framework, we developed the “SDA Bocconi Responsible Leadership” model in order to help leaders and firms to move to a leadership model that is more in fit with the current challenges of the competitive environment.
How has the role of HR personnel evolved in the last couple of decades?
It has changed a lot. Earlier, HR department was seen mostly in administrative and supportive role for an organisation. With organisations and its strategies becoming people oriented, companies have realised the importance of having good employee relationship and the role of HR manager has started gaining prominence within the organisation. Now the HR plays a pivotal role in supporting the alignment between employees’ behaviour and organizational strategies.
HR department, today has became a major force for bringing about changes in the processes and the culture of the organisation, thus acting as a critical link between organisation and people. For effective people strategy, organisations have to develop and motivate people through HR processes. With reporting structure in organisations becoming flat, it is the job of HR to keep people motivated to perform by designing career development path which is horizontal and cross functional.