IE Focus - People ManagementIE Focus | By Kenneth Dubin, Professor at IE Business School

In an environment marked by uncertainty, scant resources and a lack of interconnectivity, people management should be based on structures that are more horizontal and less formal coordination systems.The present crisis should mark a before and after in human resources management. Politicians and social players will (or may not) reform the employment market and the labour relations system. However, for businesses and managers (and also for employees), the change is a must: yesterday´s competitive strategies have expired and taken with them the (bad) habits we acquired in people management.

The current situation is defined by uncertainty, the shortage of financial resources and the revolution of inter-connectivity; new business commitments in both SMEs and multinationals must be quick, flexible and innovative. This means working by project and generating value through knowledge rather than capital resources. Projects require collaboration between the functional areas of the company and also between the company and external agents (suppliers, other businesses and, more often than not, clients) and who may be located far from Spain.

These interdisciplinary and inter-organisational projects will be the main source of value-added in the 21st century, but only for leaders who are capable of reinventing the way they work: projects involve more horizontal organisations and less formal coordination mechanisms than the ones we have used so far.

These flexible structures mean that contributions from every member of the project can be maximised. However, this variable geometry also hinders communication, coordination and mutual understanding. As a result, the role played by the leader becomes that of fostering constant conversation between the team members so that they can understand each other, feel identified with the project targets, capitalise on others´ knowledge and anticipate and solve unavoidable problems together. The result: greater commitment, greater productivity and business success.

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