Thought leaders

To Thrive In Modern Economy, Forget Doing Things the Old Way

During his business career, Lars Kolind was group chairman of Grundfos, the world’s largest manufacturer of water pumps. It might sound like a staid business, but this role led Kolind to groundbreaking epiphanies. First, manufacturing water pumps isn’t really about the pumps; it’s about something much more fundamental. And today’s employees are motivated by being seen as freethinking partners rather than interchangeable cogs in a corporate machine.

“The best people will simply not accept conventional management, which basically tells you what to do and gives you all sort of quantitative incentives and thus kills creativity and learning and humanity,” Kolind tells getAbstract.

Kolind and his co-author, Danish consultant Jacob Bøtter, distilled their thinking in UNBOSS. Kolind spoke to getAbstract about his management philosophy.

UNBOSS was published in 2012. How has the world of work and management changed since then?

Kolind: Of course, a lot has changed, but the fundamentals have not changed. The UNBOSS book was a response to the fact that business becomes more knowledge-intensive, and there was an increasing need at that time for engaging staff, for turning staff resources to more rapid learning and also more innovation. That trend has only strengthened. I daresay if there was a need for that book in 2012, there is a much greater need for it today.

The US unemployment rate just hit a 50-year low. Amid intense competition for labor, how can companies use your strategies to find good people?

Kolind: It’s maybe one of the most important aspects of this. I see this clearly, all over the world. I have served for the last six years as a professor in leadership and strategy in Shanghai. My job has not been really to teach students but to interact with large Chinese companies at board and management level. Their challenge is that the traditional Chinese management philosophy just doesn’t work. It doesn’t work in China, and it doesn’t work outside of China. The best people will simply not accept conventional management, which basically tells you what to do and gives you all sort of quantitative incentives and thus kills creativity and learning and humanity.

What I see is that this is an absolutely essential realization for companies in the US and everywhere who want to attract and maintain the best possible talent.

They just aren’t happy with being told what to do. It’s not a good strategy to tell a highly intelligent, creative, motivated person to work on a specific problem unless the person understands the context. Why is it important? Conventional management usually divides and rules. This is our department, this is our project, this is our budget, these are our timelines, etc. The best people just don’t accept that. They want to be co-creators of value. They want to work in a greater context. The word context is essential. The why is essential to engaging people. Why is it important? How does it fit into the bigger picture? Let’s say you’re manufacturing water pumps. People need water pumps because they need clean water. That is the why of what you’re doing. Nobody cares about water pumps, but they care about clean water. The essence of UNBOSS is engaging all stakeholders behind a higher purpose – and by doing that, you can make a lot of money.

Photograph: Kristine Funch

Photo: Kristine Funch

You mentioned Chinese culture. Do you see differences in cultures behind the perception of the why? Is it more important for some cultures and less important for others?

Kolind: Yes and no. It’s difficult to generalize, because there are enormous differences everywhere. For most Chinese companies, they perceive their why as making money and making their owners rich. That is why they create a conflict between the managers and the employees. The employees are seen as an instrument to make the owners rich, and the best employees will just not accept that. The management culture in China conflicts with the culture of the best talent. If you go to Europe, obviously a lot of companies are just in it for the money. But I would say an increasing fraction – and indeed the best companies – are in it for more than the money. They want to make a positive contribution. They’re in it for a higher purpose. By engaging their employees, plus their suppliers, plus their customers, plus the general public, behind the why, they become successful. I see that happening more intensely and more frequently in Europe than anywhere else. It is very difficult to generalize in the U.S. There are some companies that are incredibly money-driven, and there are others that are incredibly values-driven.

Can you point to any real-world examples of companies that followed your advice and moved to an UNBOSS culture? What happened?

Kolind: When Jacob Bøtter and I started the project, we were almost sure it would address large companies such as Novartis. We thought that was where there was the greatest need. We thought that was where they had the resources to go through the change. To our great surprise, this has been picked up much less by large companies, and much more by small companies. There are tens of thousands of small and medium-sized companies who have engaged with UNBOSS. Their challenge is much smaller. If you run a company with 100 people, the CEO can sense that by behaving differently, he or she can immediately have a positive impact on staff. Therefore, motivation comes much faster. In the large corporation, there is such a distance between management and staff. Although management thinks this is something they should do, they get frustrated about how they can motivate 1,000 or 10,000 or 100,000 people to do this. Large companies tend to promote people who are control-based executors. So there is a problem that this generation of CEOs and C-level executives of large companies are, generally speaking, people who would have the greatest difficulties adapting an UNBOSS leadership style. If you read the newspapers, you will see that the heroes are the cost-cutters and those who produce short-term results, rather than those who take their time over a lifetime and built a great company.

The end would be that you build a culture that is sustainable. You want a company where people stay, a company that can grow over years, and not just cut the budget and generate short-term growth.

Kolind: Exactly. What is the biggest challenge for companies? There is only one challenge: the C-level executives, and especially the CEO. For the CEO to become an UNBOSS does require the courage to trust the staff, and to trust that they will unite behind a common goal, which is the why. This courage to trust, there’s just not a lot of it around in the big companies. You have big companies with scandals, such as VW and the big banks. Then everybody says, “Look what happens if you trust people.” The exact reason why all this happened was that they did not trust people. They tried to create an atmosphere where the associates did not feel a co-responsibility to the company. They only felt a responsibility to do what their boss told them to do and to optimize their own situation.

Do you want to drop any names of success stories?

Kolind: This works best for companies who need to combine knowledge from different domains. You will be surprised when I name a cleaning company, but one that is doing a lot of this is ISS, the world’s largest cleaning company. Cleaning today is incredibly knowledge-intensive. You need to know about chemistry. You need to know about people. You need to know about hygiene. You need 10 or 20 different knowledge domains in order to clean effectively. ISS goes pretty far in anUNBOSS fashion. They know that they need to make people work together to combine knowledge. And no doubt Novartis will become the most prominent UNBOSS success story in the years to come. CEO Vas Narasimhan currently drives an incredible UNBOSS transformation at Novartis, which will stand out as the most important business transformation in this decade.

To a manager raised in a more traditional corporate environment, the concepts in UNBOSS can seem scary. How should an organization adopt some of the changes you suggest?

Kolind: First try UNBOSS in a certain small department. If it works there and you can prove its success, continue in other departments and gradually roll it out over the whole company. The best strategy would be to start top down, but companies are usually reluctant to do that, so try a separate entity first. If it is not successful there, it is probably because there is no real buy-in from the boss, meaning the boss doesn’t want to be UNBOSSED.

Are you working on another book? 

Kolind: Yes. I’m fascinated by the perception or assumption that management is different in different cultures. What I’ve found in my work experience around the globe is that many things are actually the same across cultures. Two things stand out. Firstly, people want to do something meaningful. That’s a rather universal urge. Secondly, people want to be treated with respect, love and care. I ask myself if I can modify the leadership principles from UNBOSS in a way to make them universally applicable across cultures. In a new book, I want to propose a set of principles for global companies. I can try to accomplish that, although I can’t promise I can achieve it.

About Lars Kolind

In his own words, Lars Kolind speaks “for impact, not applause.”  As a visionary entrepreneur, bestselling author and philanthropist, Kolind has founded more than 20 businesses and is a globally-recognized thought leader.  Kolind has written five books on leadership and strategy, which have been translated into nine languages.

Throughout his career, Kolind has pioneered organizational design. He created one of the world’s first paperless and truly knowledge-based organizations in 1991 where he demonstrated that through being more innovative, more flexible, more responsive, more efficient and more meaningful to employees, a company can simultaneously become more successful.

Kolind’s philanthropic work focuses on enabling young people throughout the world to act as global citizens leading positive change in their communities. He currently serves as Chairman of the World Scout Foundation, an organization that shares this vision and where he has been engaged for four decades.

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