"We are working in a sector that is very exciting and challenging and offers great opportunities: There is the 'new networked economy'; the internet economy; knowledge management; E-commerce; and the list goes on.

However none of it will mean much if we do not deal with some basic things - like leadership, management and good governance - in general and particularly in the ICT field.

And its not only an issue in SA - but in developed nations as well. The only difference is that in developed nations they can afford to make mistakes and get away with it. In developing countries such as ours we only have a small window of opportunity and can't afford to make to many mistakes.

In a report by the Minister of Public Service and Administration to the Legislature, the Minister noted that:"...we expected too much of public service. Yes - there has been progress in making public service more representative, but Government underestimated the difficulties of transformation and tried to achieve too much too fast. We have failed to develop management cadre capable of implementing new policies - complexity of new policies and change. Time frames are over optimistic. We are caught up in issues and crisis, there is very little strategic planning, solutions are piecemeal, with no coherent strategy - no visionary management takes place in practice."

The need for good management and governance is also echoed in all over the world and can be assisted by the application of new technologies, applications and services. But these do not replace sound management and good governance.

So I am going to talk briefly about the digital economy and the knowledge economy and the implications for organisations of the future and their characteristics. What the characteristics of healthy organisations are, and what the implications will be for leadership and management.

But back to the knowledge economy! Back to what is knowledge? Knowledge is information effective in action, information focused on results. Knowledge is highly specialized and a society structured on knowledge is structured on knowledge people as specialists. This is what gives them power.

In a knowledge economy there is a continuing improvement of process, product and service. This reached its ultimate in Japan where the term Kaizen described the continuous process of improvement. It is the continuous exploitation of existing knowledge to develop new and different products, processes and services. It is based on genuine innovation.

Well what kind of organisations will succeed in the knowledge economy and what are the implications for leadership and good management practice?

Well the organisation will have to be reframed.

Hierarchical organisations will have to change from roles, rules, chain of command, accountability, and specialization's to networking and organising around capabilities.

Organisations will have to spend less time on formal planning and more on making things happen. Worry less about organisational charts and structures and more about how to get work done. Focus on how results were achieved as well as results themselves.

Leaders will be measured by the extent to which they create unique and definitive capabilities within organisations. And organisations will look for leaders with personal charisma, but also the ability to create sustainable capabilities.

Management style will also have to change and will have to practice living consciously - which includes respect for facts, being present and open. Workers will also have to practice self acceptance - a willingness to own, experience and take responsibility for thoughts, actions, feelings without evasion and denial.

Charles Handy describes organisations of the future as organisations not visible or tangible places - in which the 1/2 x 2 x 3 formula will apply - half as many people will be employed for twice as much (working twice as hard), producing three times as much.

In such organisations power will come from relationships not structures - those with established reputations will acquire authority. Organisations will be nonlinear, always slightly out of control. Hierarchies, control, grading systems, job descriptions, or career spanning will not apply. Transformation in such organisations must be led from the top.

Organisations will only survive by being loyal to customers and employees are assumed to be mature, capable and self-reliant adult. The company will not promise to take care of the employee - it only owes opportunities and possibilities to leave more knowledgeable.

Such organisations will be driven by its unique culture, values, ethics, beliefs, or vision. As Francis Fukuyame has pointed out organisations which rely on trust as the principal means of control are more creative, more effective, do better economically.

Healthy organisations will have a strong sense of purpose and will be managed against visions of its future. They will operate on a "form follows function" mode - using multiple structures - pyramidal, horizontal and team, project structures and temporary structures. They will employ team management as the dominant mode, will have respect for customer service as a principle. Its management will be information driven - large amounts can be received and processed in seconds and will encourage and allow decisions to be made closest to customers.

Communication will be relatively open throughout systems and reward systems will be congruent with work and support individual development. The organisation will operate in a learning mode and will make explicit recognition for innovation and creativity and will have a high tolerance for different styles of thinking and ambiguity in all things.

Implications for leaders are equally profound. In the pre and immediate post WWII period a leader or manager was "someone who is responsible for the work of subordinates" - and it denoted rank, power. In the 1950's a manager was "responsible for performance of others". Today it is someone "who is responsible for the application and performance of knowledge". Since knowledge is the essential resource - land, labour, capital are important chiefly as restraints. The key to competitive advantage is knowledge and leaders will have to assess what is the key to competitive advantage, what are core competencies required for competitive advantage and recruit, train, pay and organise with core capabilities required uppermost.

Leaders will also have to be systems thinkers and have the capacity to conceptualize and synthesize the whole, see the connections and imagine the future. Leaders will have to have inter-cultural competence - globalization, dependence on other cultures. Leaders will have to be a doer, and thinker - "half yogi, half commissar". That is perhaps what the Minister of Public Service and Administration had in mind when she noted that (we had) failed to develop a management cadre capable of implementing new policies - able to deal with the complexity of new policies and change and who are caught up in issues and crisis, with very little strategic planning, piecemeal solutions, no coherent strategy, no visionary management taking place in practice."

By Mohammed Bhyat
This is an extract from the speech delivered by Mohammed Bhyat, Head of Corporate Informatics in the Office of the Gauteng Premier at the LINK Centre graduation ceremony at the Graduate School of Public and Development Management, Wits University in July.