Bank Indonesia Training Program May 5th 2003, Jakarta – Indonesia

organized by RENA FOCUS

Agenda for Today

Introduction   Revisiting Management and Leadership Theories   Characteristics of the New Era   Future Challenge for Intelligent Managers and Leaders

Movie about the World in the Future:   Japan 2003   United States 2020

Discussion and Q&A

Managerial and Leadership Fundamental

Part 1

Management

  The process of planning, organizing, leading, and controlling the efforts of organization members and of using all other organizational resources to achieve stated organization goals (Stoner, 1991)

Management

Planning Organizing Leading Controlling

Implementing Evaluating Actuating Directing Appraising

Controlling Staffing Coordinating Reporting Budgeting

Leadership

  Persuading others to set aside for a period of time their own concerns and pursue a common goal that is important for the responsibilities and welfare of the group (Homan)

  Ability to anticipate, envision, maintain flexibility, think strategically, and work with others to initiate changes that will create a visible future for the organization (Ireland & Hitt)

  Leadership is an influence relationship among leaders and followers who intend real changes that reflect their mutual purposes (Joseph C. Rost)

  Leadership involves influencing the behavior of others in an group or organisation, setting goals, and creating social norms in the group (Lundstedt)

  Leadership is a way of focusing and motivating a group to enable them to achieve their aims. It also involves being accountable and responsible for the group as a whole (Demarco et al.)

  Leadership is a result of the interaction among the superior (leader), the subordinates (followers), and the organization environment (work and the work situation) (Braden, 2000)

!  The ability to influence people toward the attainment of organizational goals.

Leadership vs. Management

Management Power: *  comes from organizational structure. *  promotes stability, order, and problem solving within the structure.

Leadership Power: *  comes from personal sources, such as personal interests, goals, and values. *  promotes vision, creativity, and change.

The major differences between the LEADER and the MANAGER

relate to their source of power and level of compliance .

Sources of Power

POSITIONAL É  Legitimate Power: power coming from a

formal management position. É  Reward Power: stems from the authority to

bestow rewards on other people. É  Coercive Power: the authority to punish or

recommend punishment.

PERSONAL É  Expert Power: leader’’s special knowledge

or skill regarding the tasks performed by followers.

É  Referent Power: personality characteristics that command subordinates’’ identification, respect, and admiration so they wish to emulate the leader.

Managers vs. Leaders

Stable Volatile

Certain

Uncertain NEED

LEADERS

NEED MANAGERS

ENVIRONMENT

MIS

SIO

N

Leadership vs. Management Qualities

again.

MIND Rational

Consulting Persistent

Problem solving Tough-minded

Analytical Structured Deliberate

Authoritative Stabilizing

Position power

SOUL Visionary Passionate Creative Flexible

Inspiring Innovative

Courageous Imaginative

Experimental Initiates change Personal power

MANAGER LEADER

Type of Leadership Theory

  Universal –  Traits [1]

–  Behaviors [2]

  Contingency –  Traits [3]

–  Behaviors [4]

Theories in Leaderships: 1.  Leadership Traits [1]

2.  Basic Leadership Style [2][3][4]

3.  The Blake and Mouton’’s Leadership Grid [2]

4.  Fiedler’’s Contingency Theory [3]

5.  Hersey and Blanchard’’s Situational Leadership [4]

6.  Path-Goal Theory [4]

1. Leadership Traits

  Physical characteristics

  Social background   Intelligence and

ability   Personality   Social

characteristics

Leaders vs. Non-Leaders

  Drive   Desire to lead   Honesty and integrity   Self-confidence   Intelligence   Job-relevant

knowledge

1. Continuum of Leadership Traits

Employee-Centered Leadership

Boss-Centered Leadership

Autocratic Participative Democratic

Use of Authority by the manager

Area of Freedom for Subordinates

Consultative Democratic

Manager makes

decision and

announces it

Manager ““sells”” decision

Manager presents ideas and

invites questions

Manager presents tentative decision subject

to change

Manager presents problem,

gets suggestions,

makes decision

Manager defines limits,

asks group to make decision

Manager permits subordi- nates to function, within limits

defined by superior

2. Basic Leadership Styles

  Category 1 –  Initiating Structure –  Job-Centered –  Concern for Production –  Task-Oriented –  Directive

  Category 2 –  Consideration –  Employee-Centered –  Concern for People –  Relationship-Oriented –  Supportive

  Autocratic –  Centralized Authority –  Boss-Centered –  Perform when Leader is

present –  Hostility may arise

  Democratic –  Delegates –  Subordinate-Centered –  Perform well even when

the leader is absent –  Positive feelings

3. Blake and Mouton’’s Leadership Grid

High

High

Low

Low

Concern for Production

Con

cern

for

Peop

le

1,9 Country Club Management Thoughtful attention to the needs of people for satisfying relationships leads to a com- fortable, friendly organization atmosphere and work tempo.

Impoverished Management Exertion of minimum effort to get required work done is appropriate to sustain organization membership. 1,1

9,9 Team Management Work accomplishment is from committed people; interdependence through a “common stake” in organization purpose leads to relationships of trust and respect.

5,5 Middle-of-the-Road Management Adequate organization performance is possible through balancing the necessity to get out work with maintaining morale of people at a satisfactory level.

Authority-Compliance Efficiency in operations results from arranging conditions of work in such a way that human elements interfere to a minimum degree. 9,1

4. Fiedler’’s Contingency Theory

4. Fiedler’’s Theory in Action

Good

Poor

Performance

Favorable Moderate Unfavorable

I II III IV V VI VII VIII Good Good Good Good Poor Poor Poor Poor

High High Low Low High High Low Low

Strong Weak Strong Weak Strong Weak Strong Weak

Task-oriented Relationship-oriented

Category Leader-member relations Task structure

Position power

5. Hershey and Blanchard Situational Leadership

S3

S4

S2

S1

High

Low High

Style of Leader

Rel

atio

nshi

p B

ehav

ior

Task Behavior

High relationship and low task

High task and high relationship

Low relationship and low task

High task and low relationship

High Moderate Low High Moderate Low

R4 R3 R2 R1 Able and

willing

Able but un- willing

Unable but

willing

Unable and un- willing

Follower Readiness

Dele- gating

Partici- pating Selling

Telling

6. Path-Goal Theory

  Directive Leadership –  They don’’t know what to do

  Achievement-Oriented Leadership –  They don’’t view the task as challenging

  Supportive Leadership –  They don’’t think they can do it

  Participative Leadership –  They don’’t consider the reward worth the effort

Fundamental Principles on Theories

  Fiedler: –  you cannot be both task and relationship oriented –  People’’s leadership style cannot be changed much

  Hersey and Blanchard –  Match leader style to the follower characteristics

  Path-Goal Theory –  Leader’’s responsibility for motivation

Characteristics of the New Era

Part 2

OLD ERA

Managers Leaders

NEW ERA

Manager Leaders

Transition

The Transformation

Four Ms Plus

Men

Machines

Materials

Money

Information

The Balance of Resources

  Resources for production   Raw materials of knowledge

Transforming Production

  ““Information technologies, data communication and data processing technologies are tools for thought that amplify brainpower in the way the technologies of the industrial revolution amplified muscle power….They are tools to manipulate, organize, transmit, and store information in digital form. ””

““Penghasilan

Sebesar-besarnya dengan

Pengorbanan Sekecil-kecilnya””

The Principle of

WEALTH MAXIMIZATION

  It requires strategy because of the scarce resources

  Resource = consist of atoms which are limited by time and space

Economy Principle

10010001 atom bits

text audio video image voice data knowledge information process

real things abstract things

Bits characteristics: - easy to duplicate - cheap to produce - fast to restructure - good to represent

unlimited resources digital economy

Digital Technology Philosophy

Knowledge

Digitization

Virtualization

Molecularization

Integration/Internetworking

Disintermediation

1

2

3

4

5

6

Convergence

Innovation

Prosumption

Immediacy

Globalization

Discordance

7

8

9

10

11

12

New Economy Characteristics

THEME ECONOMY ORGANISATION

Knowledge Knowledge becomes an important element of products

Knowledge work becomes the basis of value, revenue, and profit

Digitization Products and services’’ forms are transformed into ones and zeros format

Internal communication shifts from analog to digital

Virtualization Physical things (institution and relationship) can become virtual

The business transformation into virtual corporations type company

Molecularization Replacement of the mass media into molecular media

End of command-and-control hierarchy, shifting to team-based, molecular

structures

Internetworking Networked economy with deep and reach interconnections of economic entities

Integration of modular, independent, organizational components for network of

services

Disintermediation Elimination of intermediaries and any stand between producers and consumers

Elimination of middle managers, internal agents, etc. who boost the communication

signals

New Economy Characteristics (continue)

THEME ECONOMY ORGANISATION

Convergence Convergence of computing, communications, and content

Convergence of organizational structures responsible

Innovation Innovation becomes the key driver of business success

The only sustainable advantage is organizational learning

Prosumption Gap between consumers and producers blurs in a number of ways

Consumers of information and technology become producers

Immediacy It is a real-time economy that occurs at the speed of light

Required a new real-time enterprise that can adjust to changing business conditions

Globalization Knowledge knows no boundaries, there is only a world of economy

The new enterprise enables time and space independence

Discordance Massive social contradictions are arising Profound organizational contradictions are arising

New Economy Characteristics (continue)

Future Challenge for Intelligent Managers and Leaders

Part 3

What the Aftermath of Reengineering ?

1.  Work units change   From functional departments to process

teams 2.  Jobs change

  From simple tasks to multi-dimensional work

3.  People’’s role change   From controlled to empowered

4.  Job preparation changes   From training to education

5.  Focus on performance measures and competition shifts

  From activity to result 11.  Advancement criteria change

  From performance to ability 12.  Values change

  From protective to productive 13.  Manager change

  From supervisors to coaches 14.  Organization structures change

  From hierarchical to flat 15.  Executives change

  From scorekeepers to leaders

  The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance such as cost, quality, service, and speed

New Leadership Approaches

1.  Transactional Leader - A leader who clarifies subordinates’’ role and task requirements, initiates structure, provides rewards, and displays consideration for subordinates

2.  Charismatic Leader - A leader whose personality motivates subordinates to transcend their expected performance

3.  Visionary Leader - A leader who is able to imagine how the future could be and inspire followers to work toward creating that future

4.  Servant Leader - A leader who works to fulfill subordinates’’ needs and goals – as a means to achieve the organization’’s larger mission

5.  Interactive Leader - A leader who is concerned with consensus building, is open and inclusive, and encourages participation

6.  Transformational Leader - A leader distinguished by a special ability to bring about innovation and change

Intelligent Leader/Manager Characteristics

  They understand about the importance of knowledge   They are not scared of new technology

  They will be learners

  They will be good at helping others to learn (coaches)

  They will be leaders rather than being managers

  They will be effective members of self-managing teams

  They will be hunter gatherers of information

  They will be effective decision makers in the absence of certainty

Why Information ?

Business Facts

Data

Information

Knowledge

Intelligence

+ procedure

+ context

+ experience

+ wisdom

INTELLIGENT PEOPLE

Role of Information Technology

Business Facts

Data

Information

Knowledge

Intelligence

+ procedure

+ context

+ experience

+ wisdom

INTELLIGENT PEOPLE

EXECUTIVES

LINE MANAGER

SUPERVISOR

STAFF

1. H

elp

Crea

ting

the

Inte

llige

nce

2. H

elp

Empo

wer

ing

the

Peop

le

The Indrajit Model

KKnnooww tthhee PPaarraaddiiggmm

IImmppaacctt RReeaaccttiivvee AAccttiioonn

HHiigghhllyy PPoossssiibbllee OOuuttppuutt

YYeess YYeess YYeess SSuurrvviivvee

YYeess YYeess NNoo TThhrreeaatt

YYeess NNoo YYeess OOppppoorrttuunniittiieess TTaakkeenn

YYeess NNoo NNoo AAddddiinngg KKnnoowwlleeddggee

NNoo YYeess YYeess BBoooommeerraanngg

NNoo YYeess NNoo DDaannggeerroouuss

NNoo NNoo YYeess GGaammbblliinngg AAddvveennttuurree

NNoo NNoo NNoo NNiiccee WWaattcchheerr

Model Characteristics

1.Technocratic Utopianism A heavily technical approach to information management, stressing categorization and modeling of an organization’’s full information assets, with heavy reliance on emerging technologies

2.Anarchy No overall information policy, leaving individuals to obtain and manage their own information

3.Feudalism Information is managed by individual functions or departments, which define their own information needs and report only limited information to the center

4.Dictatorship The board defines information categories and reporting structures, and may not willingly share information with the wider organization

5.Federalism Information management is based on consensus and negotiation about information flows

Information Culture

Role Description

User department

The user will identify the tools that can help his/her do the job effectively

Influencer cross-department

The influencer will seek to ensure that his/her team has the best tools to support them in their work

Advocate cross-company

The advocate will seek to influence how the wider organization uses the new technologies

Expert best practice

The expert is someone who can design the best information system and technology for the organization

Deciding the Role to Play

Intelligent Leader/Manager Candidate

Technofiles 24%

Enthusiastic about technology in a general sense and also show a high level of interest in the applications of new technology

Aspirational Technofiles 22%

Excited in the general sense about technology but are much less interested in its applications

Functionals 26%

Uninterested in technology, but are not actually hostile to its applications

Technophobes 28%

Hostile to technology at all levels and are skeptical about whether technology can offer anything new

Managerial and Leadership in the New Era

  Know your preferred STYLE of leadership

  Know and care about your FOLLOWERS in the organization   Know and care about the TASK within the management framework   Understand the ENVIRONMENT in the new era affecting you and your

followers

Fit your STYLE to your FOLLOWERS, the TASK, and the NEW ENVIRONMENT

Enhance your REFERENT and EXPERT power by using INFORMATION TECHNOLOGY

VISUALIZE the future and prepare your followers for it

Thank You

Richardus Eko Indrajit

http://www.indrajit.org

eko@indrajit.org indrajit@post.harvard.edu

Q&A