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Business leaders are being challenged to improve the effectiveness of their organisations by reinventing and changing the way they manage their companies and workforces.

Phil Jones, chief executive of Peterborough-based strategy and performance management consultancy Excitant (www.excitant.co.uk), says that at a time of continuing austerity, uncertainty and increasing competition, companies need to do more to strengthen their position to be fit to face the future.

Traditionally, says Phil, companies aim for performance efficiencies and profitability through cost-cutting, increased productivity and process improvements. But many companies have exhausted both the opportunities and the number of ways to reduce or optimise their operational processes.

He is convinced there is another way for companies to achieve continued success – by fundamentally changing the way leaders manage businesses to deliver radical improvements throughout their organisations.

Phil sets out his business leadership strategy in this month’s guest blog post on the website of Peterborough-based Metrix Marketing (www.metrixmarketing.co.uk).

“There is an alternative to yet more cost-cutting and process improvements. If we challenge our existing approaches and reinvent how we manage, we can improve the culture we create and therefore the effectiveness of our people and our organisations.”

Phil says that over the past 20 years there has been little change in the way organisations are managed.

“The 70s and 80s saw the introduction of structured strategy, planning and management. The 90s saw a dramatic increase in the information available to make decisions, through analytical tools, business intelligence and data mining.

“The dot.com revolution brought about superficial changes but wearing casual clothes, installing soft cushions and playing table football did not substantially change how we managed. Despite the clothes, a manager from 20 years ago would still recognise what we do.

“There have, however, been radical changes since the 1990s which have impacted on business – the internet, social media, technology and the way companies engage with people rather than markets.

“We have a new generation of people coming through to the workforce – a generation exposed to the internet revolution and social media explosion who expect greater connectivity and interaction.

“They want to work differently and be treated differently. Yet we have not seen a radical change in how we manage our organisations, resources and our people.”

He says that in some instances, management systems unintentionally remove authority and responsibility instead of empowering managers.

“To bring the best out of our people we have to focus on how we think about how we should manage; first challenging our own beliefs and behaviours, then challenging those of our people. When you change beliefs and behaviours, everything else follows.”