Management

Management

The future of management is talent development

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What is the major difference between the scientific management framework that informed so many of our work practices, and the new management requirements for the connected enterprise in the network age?

Frederick Winslow Taylor started with a basic assumption about the difference between labour and management. Labour was stupid and management was intelligent.

Now one of the very first requirements for a man who is fit to handle pig iron as a regular occupation is that he shall be so stupid and so phlegmatic that he more nearly resembles in his mental make-up the ox than any other type. The man who is mentally alert and intelligent is for this very reason entirely unsuited to what would, for him, be the grinding monotony of work of this character. Therefore the workman who is best suited to handling pig iron is unable to understand the real science of doing this class of work.-  F.W. Taylor in Principles of Scientific Management (1911)

This attitude still permeates our organizations, whether we realize it or not.

Taylorism-derived job analysis, evaluation and measurement are the tools (along with their underlying assumptions) that are used to create the skeletal architecture of hierarchical organizations, the pyramid we all know. – Jon Husband in Knowledge, power, and an historic shift in work and organizational design

The assumption of an organizational hierarchy is that the further up the organization chart you go, then the more educated and intelligent you are. But what happens when the work at the bottom of the pyramid gets automated or outsourced? Taylor assumed that only management could see the whole system. In the connected enterprise, everyone has to see the whole system, all the time. This makes many of our assumptions about how work should be organized completely irrelevant, and perhaps even dangerous for any organization where its outputs are important to society, investors, management, or workers.

Network management assumes human creative potential can be realized in supportive and challenging environments by engaging everyone.

We need creativity at the company level to respond effectively to increasing competition and uncertainty. We also need creativity at the worker level to define jobs that will be augmented, rather than replaced, by machines … The reason for the firm to exist now? Talent development. Firms will exist so that workers can learn and grow much faster than they could on their own. – John Hagel in Wired: Here’s How to Keep the Robots From Stealing Our Jobs

A focus on Talent development means growing and supporting customized work and letting the robots do the Labour. It requires some fundamental organizational redesign, from compensation, to competencies, and even redefining management. Network management focuses on Talent development. Everything else is superfluous.

future management

 

How to work in the creative economy

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Gary Hamel says that we are moving from an Industrial to a Creative Economy, which requires more independent workers with initiative, creativity, and passion.

What other changes will this creative economy drive? I see changes on several levels.

  1. Core ideas about valued work:
    1. from producing tangible goods to intangible services;
    2. from looking for best practices to constantly developing emergent practices;
    3. from standardized jobs to being transparent in changing work practices as one learns while working.
  2. The underlying technology that enables work:
    1. from centralized factories to distributed and dynamic workplaces.
  3. Organizational models to get work done:
    1. from centralized physical workplaces, to decentralized and dynamically changing ones.
  4. Distribution and sharing of knowledge about how work is managed:
    1. from schools of business, removed from the workplace, to communities of professionals learning as they work.
  5. The ideology behind business and work:
    1. from the principles of scientific management based on:
      1. hierarchies
      2. standardized practices
      3. specialized tasks and jobs
      4. planning and control
      5. predominantly extrinsic rewards
    2. to an understanding of complexity and the necessity to continuously Probe-Sense-Respond and engage workers by enabling autonomy, mastery and a sense of purpose.

work is changing

Social Business Needs Social Management

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Social business has the potential to change the way we work, but for the most part it has not. The social enterprise is not yet here, though many talk about it, and confuse it with using social tools. For that, we can blame management.

As many people, from W. Edwards Deming to Gary Hamel have observed, management is what really differentiates organizations. It was better management that allowed Japanese automobile manufacturers to dominate the North American market, using the same raw materials and work force. Most management practices have changed little since the beginning of the millennium. We still have many vestiges of early 20th century industrial management — hierarchies; work standardization; job specialization; planning; and control. Extrinsic rewards are then dispersed by management based on these principles.

The first elephant in the social room is compensation. As Gary Hamel describes:

… compensation has to be a correlate of value created wherever you are, rather than how well you fought that political battle, what you did a year or two or three years ago that made you an EVP or whatever.” —Leaders Everywhere: A Conversation with Gary Hamel

If compensation was really linked to value, then salaries, job models, and other ways of calculating worth would have to be jettisoned. As it stands, in almost all organizations, those higher up the hierarchy get paid more, whether they add more value or not. It is a foregone conclusion that a supervisor has more skills and knowledge than a subordinate. This has also resulted in the requirement for more formal education as one goes up the corporate ladder, whether it’s needed or not.

The other elephant in the room is democracy. For management to work in the network era, it needs to embrace democracy, but we are so accustomed to existing structures that many executives would say it is impossible to run a business as a democracy. But hierarchy is a prosthesis for trust, according to Warren Bennis, and trust is what enables networked people to share knowledge and innovate faster. A key benefit of social tools is to share knowledge quicker. Trust is essential for social business but management can easily kill trust. Democracy is the counterweight to hierarchical command and control.

org chartAs more people work in distributed networks they are beginning to realize how little they actually benefit from standard management practices. In an economy based on trusted knowledge networks of individuals, the organization should revert to merely a supporting role.

A hierarchy is nothing more than a centralized branching network. It is inadequate for the complex challenges facing all organizations today. Decentralized networks, based on intrinsic motivation, are a much better vehicle for rewarding work than hierarchies can ever be. Any organization driven by external direction, with social tools or not, cannot innovate as fast as self-motivated and hyper-connected workers can. Democracy in the workplace therefore makes for more resilient companies.

A stated commitment to democratic principles is often lacking in descriptions of social business practices. But without compensation for value in an open network, social initiatives likely will be seen in hindsight as just another management buzz-word. “Lipstick on a pig,” I believe is the term.

So what’s next in social business? A serious look at its foundations is needed. While social business may have changed the way some of us work, it has not changed the way most organizations are managed. As networked, distributed work becomes the norm, trust will only emerge in workplaces that are open, transparent and diverse.

In these trusted environments, leadership will be seen for what it is — an emergent property of a network in balance and not some special property available to only the select few. Leadership should be drawn from an aggressively intelligent and engaged workforce, learning with each other. Social business requires social management that marinates in and understands the work culture. This cannot be done while trying to control it.

Social business will become reality when management lets go of command and control, makes work transparent so that value is visible to all, and treats workers as adults, engaged in democratic work practices. We are a long way from that until management is reconnected to the work being done. People naturally like to be helpful and get recognition for their work. Leadership in a social enterprise is based on this assumption.

Connected leaders need to foster deeper connections with the entire enterprise, often through meaningful conversations. This is an ongoing process, not a “town hall” meeting from time to time. They have to listen to and analyze what is happening in order to help set the work context according to changing conditions, and then work on building consensus. Given the constantly changing conditions in hyper-connected work environments, a much higher tolerance for ambiguity is becoming a critical leadership trait.

This article was originally published in CMS Wire

Greater task variety means no more standardized work

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The resurrection of American manufacturing will require more than simply bringing back production to America. Global manufacturing is at the cusp of a massive transformation as the new economics of energy and labor plays out and a set of new technologies—robotics, artificial intelligence, 3D printing, and nanotechnology—are advancing rapidly. Together these developments will spark a radical transformation of manufacturing around the world over the next decade. The winners in the rapidly changing world of manufacturing will be those firms that have mastered the agility needed to generate rapid and continuous customer-based innovation. – Steve Denning

I have often said that anything that is simple enough to be automated will be, and that any work that is merely complicated will be outsourced to the lowest cost of labour. But a funny thing is happening with manufacturing in the 21st century. It is becoming complex. Manufacturing today requires interdependent workers with initiative, creativity and passion. The new manufacturing workplace has higher task variety, which is based on a greater percentage of tacit knowledge and requires more informal and social learning. This is not Ford’s assembly line, nor is it based on F.W. Taylor’s Principles of Scientific Management.
standardized work
The new manufacturing, like new businesses everywhere, will have fewer people. Computers and software are replacing people, especially information processing jobs. This is the new reality. There will be more work variety (for what used to be called jobs) because there will be more task variety. That means there will be fewer plug-and-play jobs. We will have to create our roles in the 21st century workplace. They will not be created for us. This is liberating but scary for generations who have tried to fit in to the existing job structure. Younger people seem to get it. Generations caught in the middle may find it difficult.

Community and organizational leaders will need to figure out how to adapt to the transition period, which will continue to see high employment while conversely witnessing instant millionaires who create the next mobile app. Times are changing, and we will need new methods to manage and organize work. Even those who understand this cannot see how much things will change. We are like the early generations that witnessed the power of the printing press, without understanding that it would lead to years of religious wars.

As Steve Denning concludes in his Forbes article:

Success in this new world of manufacturing will require a radically different kind of management from the hierarchical bureaucracy focused on shareholder value that is now prevalent in large firms. It will require a different goal (delighting the customer), a different role for managers (enabling self-organizing teams), a different way of coordinating work (dynamic linking), different values (continuous improvement and radical transparency) and different communications (horizontal conversations). Merely shifting the locus of production is not enough. Companies need systemic change—a new management paradigm.

It will require even more.

Principles of Networked Unmanagement

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Cooperation

Collaboration is working together for a common objective, while cooperation is openly sharing, without any quid pro quo. Cooperation is a necessary behaviour to be open to serendipity and to encourage experimentation. In networks, cooperation trumps collaboration. Collaboration happens around some kind of plan or structure, while cooperation presumes the freedom of individuals to join and participate. Cooperation is a driver of creativity.

As we shift to a networked economy, our organizational frameworks have to change. While collaboration inside the company and with partners may have worked in a market economy, cooperation amongst a greater variety of network actors is now necessary. We are seeing this with customers getting involved in product design and marketing becoming more “social”. Shifting our emphasis from collaboration, which still is required to get some work done, to cooperation, in order to thrive in a networked ecosystem, means reassessing some of our assumptions about work.

Cooperation in our work is needed so that we can continuously develop emergent practices demanded by increased complexity. What worked yesterday won’t work today. No one has the definitive answer any more but we can use the intelligence of our networks to make sense together and see how we can influence desired results. Cooperation is a foundational behaviour for effectively working in networks, and it’s in networks where most of us, and our children, will be working.  Cooperation is the future, which is already here, albeit unevenly distributed.

Since cooperation presumes the freedom of individuals to join and participate, people in the network cannot be told what to do, only influenced. If they don’t like you, they won’t connect. That’s like being on Twitter with no followers and never getting “retweeted”. You will be a lone node and of little value to the network. In a hierarchy you only have to please your boss. In a network you have to be perceived as having some value by many others.

Teamwork

Most of us have seen those fancy teamwork motivational posters on workplace walls, and almost every job description includes teamwork as a critical competency. Teamwork is over-rated, as it can be a smoke screen for office bullies to coerce fellow workers. A big economic stick often hangs over the team; “be a team player or lose your job”.

Teams promote unity of purpose, not openness, transparency and diversity of ideas, essential for building trust in networks. Think of a football team, a common business metaphor in North America. There is only one coach and everybody has a specific job to do while “keeping their eye on the ball”. In today’s workplace, there’s more than one ball and the coach cannot see the entire field. The team, as a work vehicle, is outdated.

As much as organizations advertise for “team players”, what would be better are workers who can collaborate and cooperate by connecting to each other in a balanced manner. There are other ways of organizing work. Orchestras are not teams; neither are jazz ensembles. There may be teamwork on a theatre production but the cast is not a team. It is more like a social network. Teams are what we get when we use the blunt stick of economic consequences as the prime motivator. In a complex world, unity can be counter-productive.

Jobs

The high-value work today is in facing complexity, not in addressing problems that have already been solved and for which a formulaic or standardized response has been developed. Most workers are paid to do only one thing – solve problems. When dealing with work problems we can categorize them as either known or new. Known problems require access to the right information to solve them. This information can be mapped, and frameworks such as knowledge management help us to map it. We can also create tools, especially electronic performance support systems (EPSS) to do work and not have to learn all the background knowledge in order to accomplish the task. This is how simple and complicated knowledge gets automated.

Complex, new problems need tacit (implicit) knowledge to solve them. Furthermore, as more work becomes automated & outsourced, exception-handling becomes more important in the networked workplace. The system handles the routine stuff and people, usually working together, deal with the exceptions. As new exceptions get addressed, some or all of the solution gets automated, and so the process evolves. The 21st century workplace, with its growing complexity due to our interconnectivity, requires that we focus work on new problems and exception-handing. This increases the need for collaboration, working together on a problem; as well as cooperation, sharing without any specific objective.

One challenge for organizations will be getting people to realize that what they actually know, as detailed in a job description, has decreasing value. How to solve problems together is becoming the real business imperative. Sharing and using knowledge in new ways is where business value lies. With computer systems that can handle more and more of our known knowledge, the 21st century worker has to move to the complex and chaotic edge to get the valued and paid work done. There are many people who will need help with this challenge.

Networks

Workplace leaders everywhere need to help the current and upcoming workforce enter the 21st century network economy. Another change to manage will be getting people to work more transparently. Transparency is necessity for effective networks. For instance, a major benefit of using social media is increasing speed of access to knowledge. However, if the information is not shared by people, it will not be found. With greater transparency, information can flow horizontally as well as vertically. New patterns and dynamics can then emerge from interconnected people and interlinked information flows, and these will bypass established structures and services. Working transparently and cooperatively is much less controllable than many managers will be comfortable with. But in this network era that we are entering, the increase in complex work, and rise of networks as the primary organizing framework, will create an even greater need for cooperation.

“In the long term, +N [network] dynamics should enable government, business, and civil-society leaders to create new mechanisms for mutual consultation, coordination, and cooperation spanning all levels of governance. Aging contentions that “the government” or “the market” is the solution to particular public-policy issues will eventually give way to new ideas that “the network” is the optimal solution.” — Ronfeldt

We, collectively, are the solution to our problems. We just have not figured out how to get optimally organized. Network theory can provide many of the answers. The first step is seeing that we have a problem and that our current work models are inadequate. Doing the same things better will not help. Looking outward, beyond our organizations, can enable cooperative behaviour. Casting off old management models, like jobs and organization charts, is another step. Shifting to a networked economy is going to take cooperation, and that only happens when we let go of control, just the opposite of Taylor’s principles of scientific management* which have informed us for the past century. Here are my introductory Principles of Networked Unmanagement:

It is only through innovative and contextual methods, the self-selection of the most appropriate tools and work conditions, and willing cooperation that more productive work can be assured. The duty of being transparent in our work and sharing our knowledge rests with all workers, including management.

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* Here are F.W. Taylor’s Principles of Scientific Management (1911)

It is only through enforced standardization of methods, enforced adoption of the best implements and working conditions, and enforced cooperation that this faster work can be assured. And the duty of enforcing the adoption of standards and enforcing this cooperation rests with management alone.

How we will manage

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Is Google an indication of the how organizations will manage in the 21st century?

Experienced managers who join Google from other companies can find it difficult to operate in a culture where power over subordinates is derived from one’s ideas and powers of persuasion, not job titles, says May. Decisions on promotions and raises are often made by consensus among peers and superiors. An employee isn’t necessarily going to obey a manager just because he or she is a manager. This is radically different from most traditional corporations, which have a top-down, hierarchical style of management. —eLearning

This sounds like a wirearchy, “a dynamic two-way flow of power and authority based on information, knowledge, trust and credibility, enabled by interconnected people and technology.”

Perhaps we are seeing the future of work appear on the edges of the economy, as Google is definitely a new economy company. Freedom (democracy) seems to be a requirement for success in the network era, as Jason Fried writes about an experiment to let employees decide what they do for a month at 37Signals.

How can we afford to put our business on hold for a month to “mess around” with new ideas? How can we afford not to? We would never have had such a burst of creative energy had we stuck to business as usual.

Bottom line: If you can’t spare some time to give your employees the chance to wow you, you’ll never get the best from them.

 John Hagel shows that standardized work is obsolete.

Now, think about this. If we reduce work to highly specified and standardized instructions that can be performed efficiently and predictably, what have we done? We have reconceived work so that it can be performed by computers and robots. In fact, computers and robots are far more preferable than humans because we humans are ultimately unpredictable and have a really hard time following instructions to the letter, day in and day out.

We are moving to a new economy that does not value any work that can be automated & outsourced. Taylorism is dead. Stephen Gill describes how we have to focus on work that cannot be done by robots.

This new robotics “megashift” has huge implications for the workplace. Employers will need workers who are better educated, more willing to change, and more flexible in their schedules and work habits than ever before. These workers won’t be needed for simple, repetitive jobs. They will be needed for computer-assisted jobs and for jobs that require creativity, innovation, and teamwork. They will have to be continuous learners, keeping up with technology, globalization, and new ways of organizing work.

So what’s the point?

  1. Shared power is necessary in a networked economy.
  2. Autonomy is essential for an engaged workforce.
  3. The social contract for work needs to change.
How will we manage? We will manage by bringing democracy to the workplace.

The performance appraisal treadmill

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In The Paradox of Performance Pay, Allan Hawke shows how it has clearly led to decreases in organizational performance.

Peter Scholtes, who has researched and written extensively about performance, appraisal and pay, argues that such a performance ”management” regime is inherently the wrong thing to do because three faults are common to all variations on the theme:

  • It doesn’t work.
  • It’s wrong to focus only on individuals or groups, because most opportunities for improvement involve systems, processes and technology.
  • Performance ”management” is judgment, not feedback; it’s a hierarchical dynamic.

W. Edwards Deming called annual performance appraisals one of the five deadly diseases of management. Performance ratings are nothing more than a lottery, Deming said in 1984. This pertains to all levels in the organization.

ANNUAL RATING OF PERFORMANCE

  • Arbitrary and unjust system
  • Demoralizing to employees
  • Nourishes short-term performance
  • Annihilates team work, encourages fear.

Perhaps the performance appraisal treadmill is keeping organizations from testing out and adopting better management models for the networked economy. How could anyone possibly show progress in 365 days? It also makes one wonder about the effectiveness of publicly-traded companies that get a ‘performance appraisal’ from the market every quarter.

JFK Report Card 1930

Performance appraisals are like academic grades and keep the focus on the individual. In the collaborative, social enterprise this is counter-productive. There is no place for this practice in doing net work. In today’s enterprise, work is learning and learning is the work, and it has to be done cooperatively.

A world without bosses

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Can your organization work without bosses? In the documentary, Ban the Boss (one hour BBC video) Paul Thomas shows that most organizations can run just fine without bosses, or at least without traditional, hierarchical bosses who tell workers what to do.

Gwynn Dyer explained that historically, hierarchies were the result of a communications problem, in Why the Arabs can handle democracy.

A mass society, thousands, then millions strong, confers immense advantages on its members. Within a few thousand years, the little hunting-and-gathering groups were pushed out of the good lands everywhere. By the time the first anthropologists appeared to study them, they were on their last legs, and none now survive in their original form. But we know why the societies that replaced them were all tyrannies.

The mass societies had many more decisions to make, and no way of making them in the old, egalitarian way. Their huge numbers made any attempt at discussing the question as equals impossible, so the only ones that survived and flourished were the ones that became brutal hierarchies. Tyranny was the solution to what was essentially a communications problem.

We have been able to communicate with each other better and better for the past half century, and now with mobile communications we need even fewer intermediaries to get work done. Many bosses don’t have a clue what is actually happening at the front-end, as is clear in the BBC documentary, and as I wrote in network walking.

Bob Marshall alerted me, via Twitter, to this documentary that shows just how difficult it can be to change attitudes and beliefs about work. In this case, the obvious place to start a boss-purge was at the vehicle service bay, with nine skilled mechanics “supported by” eight managers. The workers wound up keeping one manager, but on their terms. Other departments were more difficult.

Could you imagine if workers were allowed to vote their bosses in and out? Well they can now in Blaenau Gwent, Wales; as they have been able to do at Semco SA for decades. Listen to Ricardo Semler explain how Semco organizes work and “staff determine when they need a leader, and then choose their own bosses in a process akin to courtship”.

Yes, there is a different, and better, way to get work done, with fewer managers. If all you have are general management and supervision skills, your work days may be numbered.

From jobs to meaningful work

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The Company Men is a movie that “centers on a year in the life of three men trying to survive a round of corporate downsizing at a major company — and how that affects them, their families, and their communities.”  The movie is entertaining but I am most interested in how it showed the real work shift that is happening, not the effects of recession but the new nature of work.

[Spoiler Alert]

Movie synopsis on Wikipedia

Two factors appear to be at the root of the demise of this shipping company. Work is getting outsourced, as is obvious from the rusting shipyards, as well as automated, requiring fewer blue-collar workers. The worship of shareholder value is covered in detail, with the executives doing everything they can to drive up share prices, increasing the value of their stock options while delivering another round of layoffs.

Most of the movie centres on how a few managers/executives deal with losing their jobs. During this time they learn a couple of lessons.

  • Meaningful work is in creating something of value that delights customers.
  • A job is not the same as meaningful work.

When they finally embark on rebuilding a ship-building company, it is quite different from the original industrial era company.

  • All support functions, including sales and HR, are working collaboratively in the same room.
  • Everyone is committed and seems to have a sense of skin-in-the-game.
  • Management and employees are working together.
  • There is real communication among people who understand and respect each other, many having shared some tough experiences together.

The new company seems to have inverted the hierarchical pyramid, putting customers first, then creating an environment to support the front-line workers, understanding that they’re in a much more complex environment than before. This will be a smaller scale manufacturing enterprise, relying more on brains than brawn. Even though this had a bit of a Hollywood ending, it shows that the future of work in North America will be different.
titanic
In order to remain flexible, 21st century companies will be smaller. Workers will have to be more agile and will likely have to change companies more often, requiring more of a freelancer’s attitude. Everyone will have to be focused on the customer. Status hierarchies will crumble as everyone can ask, “What have you done for my company lately?”. The workplace will be less comfortable with less job security, but much more work will be meaningful. It’s obviously not that meaningful here and now at the end of the current industrial/information era, with 84% of workers wanting to change their jobs. It’s time for all of us — politicians, workers, managers — to stop thinking about jobs and create meaningful work. It will help us get on with the work of the century.

Schwerpunkt: Management

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Survey results from a 2009 Chief Learning Officer survey showed that 77% of respondents felt that people in their organization were not growing fast enough to keep up with the business. And what have the learning and development (L&D) specialists been doing about it? Not much it seems. Donald Clark reports that decision-makers at UK organizations feel that:

  • 55% claim L&D failing to deliver necessary training
  • 46% doubt L&D can deliver
  • less than 18% agree that L&D aligned with business

But let’s not blame just L&D. Human Resources (HR) seem to be out of sync with organizational needs as well, nicely summed up in a recent FastCompany article:

I think successful organizations are very rigorous and creative about getting profitable work from their employees, their managers, and their business units. The problem is, those organizations don’t expect as much from HR, hence HR is usually not overseen, not measured, and not judged for its performance. It’s the department no one wants to be responsible for. It’s the department that is not subjected to outcomes analysis.

But the real culprit is management and that’s what needs to change. Steve Denning blames the Harvard Business School mindset for holding back organizational progress and goes on to explain how senior management kills innovation in many areas, including knowledge management:

So even when an oasis of excellence and innovation is established within an organization being run on traditional management lines, the experience doesn’t take root and replicate throughout the organization because the setting isn’t congenial. The fundamental assumptions, attitudes and values are at odds with those of traditional management.

I’m seeing that all of our initiatives for increased knowledge-sharing, communities of practice, social business,  or networked learning are rather futile unless management itself changes. The real chasm at work is between the executive suite and the knowledge workers. I’m not sure how to change this, but the focus (or in German: schwerpunkt) has to be on three things — management, management, & management. Anything else is just rearranging the deck chairs on the Titanic.

Image: Wikimedia Commons