Hierarchies have no effects on complex processes

Management strategies with associated hierarchies, balanced scorecards and Lean philosophy work well to lead businesses that work with standardized processes, such as manufacturing products. For some time, however, we have seen that the emphasis in value creation is shifting from physical products to behaviors. New companies can create value through shares, likes and unique visitors. At the same time, the traditional businesses are trying to adjust our behavior - for example, the bank does not want customers to come into the office.

When we shifted from agriculture and crafts to industry, we needed management and hierarchies, but when we now shift the focus from things to behavior, a different model and a different leadership is required.

All major societal challenges are basically about complex behaviors, such as ill health, climate crisis, integration and gang crime. Point by point, we must address issues that no single player has the capacity to solve on their own. The ability for horizontal coordination - coordination between organizations - is crucial.

An illustrative example can be taken from healthcare where there are three common problem descriptions with associated cures:

• "There are no resources" – here, the solution is to add more money.
• "Healthcare operates under the wrong institutional conditions" - reforms such as queuing billions, outsourcing or privatization are needed.
• "Care is poorly organized" - caregivers can become more efficient by learning from the industry's flow orientation.

These three stories assume that the problems are at the operational level, ie at the individual health centers and wards. My analysis is instead that patients are often in the wrong place in the system. We know that there are many patients who stay in inpatient care even though it is not medically justified. They could be cared for just as well and safely at home by mobile teams, via a health center, in the nursing home or perhaps with the help of 1177 or some other digital solution. In order to achieve good care, we must apply an approach that takes into account the entire network of actors that make up Swedish care.

Automation Region and the other Vinnväxt environments around the country are building structures for collaboration, knowledge development and innovation. In many ways, these environments represent the horizontal leadership I am calling for. Therefore, I think it's great fun to be able to participate and contribute to the new education Capacity, which aims to support the leaders of the Vinnväxt environments - the process leaders.

Being a process leader is a rather special occupation - the task is to lead something that almost does not exist, perhaps an idea or a vision. Ordinary managers have various means of power at their disposal, they can, for example, influence salaries or claim a shortage of work if conditions heats up. The process leader, on the other hand, works with pure horizontal relationships where it is a matter of motivating and inspiring stakeholders. It can be small companies, large companies, new or old companies, universities, municipalities and interest groups - all with different cultures and driving forces.

Common metaphors for leaders are "captain", "director" or "general". These three have one thing in common - they presuppose leadership in a hierarchical environment. If we are to find a metaphor that suits the process leader, I suggest the "diplomat" instead. A leader in organizational spaces who can resolve conflicts and understand what motivates and moves people and organizations.

About the future, I think that diplomats will play an increasingly important role when it comes to leading complex processes and innovation in, for example, urban development, healthcare and digitization. Thus, I also see an increased demand for the education Capacity! I can even stick my chin out and say that in the long run the diplomats will be the new norm while the CEOs will be a strange exception.

Mats Tyrstrup
Associate Professor of Business Administration at the Stockholm School of Economics