Loosen up if you want to get a grip

Only 4 per cent of directors and other senior executives believe that they are truly equipped to lead their organisations into the next century, according to research published last week.

The report, Vision 2010: Designing Tomorrow's Organisation, also finds that more than three-quarters of the managers questioned predicted that their organisations would change significantly over the next 10 to 15 years, creating a need for them to develop different skills. For example, more than 94 per cent felt they would need to develop more sophisticated communication skills, 77 per cent wanted to become better at building professional relationships and 73 per cent perceived a requirement for deeper cultural sensitivity.

The fact that most executives believed that organisations would have to become more flexible in the years ahead through such techniques as outsourcing and joint ventures will be welcome to Andersen Consulting, which conducted the global study with the Economist Intelligence Unit. In recent years, Andersen, in common with such rivals as EDS and Computer Sciences Corporation, has developed a significant business out of taking over non-core business activities for companies as varied as BP and Sears.

Until recently, such arrangements have been confined largely to information technology and finance, but Mark Otway, partner in charge of Andersen's UK outsourcing business, stresses that all kinds of functions are starting to be contracted out. For example, his firm is responsible for procurement and inventory management for a water company.

Mr Otway says the study backs up the firm's belief that successful organisations of the future will have a much looser structure than is the case now. Forty-two per cent of executives felt that their companies would, by the year 2010, meet the definition of a virtual company as one that "relies to a great extent on third parties to conduct its business". Twenty-two per cent expected to be working as part of a large network of companies, 17 per cent predicted that joint ventures of various kinds would be critical to their efforts, while 20 per cent expect team working to become more important. Only 30 per cent foresee their organisations retaining more centralised structures.

Such developments will create a whole range of management challenges, adds Mr Otway. Executives will be managing groups including people from other business cultures, while some of their own people will be managed by others. "Command and control is not going to work."

But if chief executives are going to have to learn "to communicate their purpose persuasively to a much wider community of employees and suppliers that are likely to be spread across the world", their employees are going to have to face up to a range of challenges, too.

While many will welcome the new freedom and chance to develop their careers, others will find the end of long-term employment with a single organisation stressful, admits Mr Otway.