Page 36 - Chapter One

4 The Management Shift

faster commercialization of ideas. However, embracing these new manage-
ment approaches requires a shift in mindset, which is not easy to
achieve, and the majority of organizations today are still managed using
conventional, Newtonian management approaches.
As John Mackey, CEO of Whole Foods, and Professor Raj Sisodia state in
their inspiring book Conscious Capitalism: 3

...the world urgently needs a richer, more holistic, and more humanistic
philosophy and narrative about business than the one we have
encountered in economics textbooks, in business school teachings, and
even from the mouths and pens of many prominent business leaders.

This new approach to business and value creation is now more important
than ever, as we are facing unprecedented challenges, as outlined in the
following section.
We have a problem!

Organizations, institutions and societies are going through a major
crisis. Performance, whether measured through Return on Assets (ROA)
or Return on Invested Capital (ROIC), continues to decline; US firm’s
ROA has progressively dropped 75 percent since 1965, despite rising
Only 25% of the workforce
4
labor productivity. In the last 50 years, the average life expectancy
of Fortune 500 companies has steadily decreased from 75 to
15 years. Furthermore, data shows that only 25 percent
5
of the workforce is passionate about its work, despite
the plethora of techniques and resources spent on is passionate about its work
Learning and Development (L&D), and global
figures for engagement show that 80 percent of
employees are less than fully engaged at work.
6
7
The report “Management 2020” launched by the Commission on the
Future of Management and Leadership and Chartered Management
Institute in July 2014, reveals problems with management and leadership in
the UK. For example, it is estimated that the cost of poor management
8
in the UK is over £19.3 billion per year in lost working hours;
9
productivity output in the UK is 21 percent lower than the G7 average;