Around the turn 20th century, Frederick
Winslow Taylor introduced the practice of scientific
management. He studied various tasks with a stopwatch, devised
more efficient ways of getting them done and developed standards to improve productivity.
In Taylor’s world, there was truly a “right way” and a
“wrong way” of doing things and managers were there to supervise. They
ensured that rules were being followed, standards for work were being met and
discipline was being enforced.
The rise of the knowledge
economy brought a different kind of management. Instead of
supervising, managers had to excel at choosing the right kind of work to be
done and motivating employees. Now, as the information economy takes hold and creates pervasive change,
managers will have to evolve once again. Those who don’t adapt, will not
survive.
The Age Of Organization
Generally, I’m not a fan of fast food. I’m not a
health nut, but I try to avoid greasy, unhealthy food when I can.
Nevertheless, when I first arrived arrived in Poland in 1997, I found
myself going to places like McDonald’s, Taco Bell and KFC a lot. It wasn’t
that I didn’t try local restaurants, but the fast food
chains were often a better choice.
Poland at the time was an emerging
economy, just recovering from 50 years of Communist rule and restaurants
were relatively new and unregulated. While I discovered some interesting
new dishes, I also got food poisoning with alarming frequency. At the
fast food joints, I knew that there were consistent standards for taste and
quality.
That, in essence, was what the Industrial
Revolution was about. It didn’t inspire genius, but it
protected you from idiots and delivered a decent product at a low price. I didn’t expect the cook at the local
McDonalds to be a talented chef, but I could be confident that he was following
procedures that were implemented worldwide.
That took an enormous amount of organization and
corporations became quite good at it. Management
techniques like Six Sigma and Total Quality
Management ensured that variation would be kept to a minimum.
Every aspect of the process was supervised and tightly controlled.
The Rise of The Wise
President George W. Bush considered himself a “decider.”
He did not profess to know every detail of every aspect in his
organization, but believed that his instincts, judgment and sense of the
overall picture made him a capable leader. In the knowledge economy, a good manager was a good strategist.
A successful entrepreneur I know
works in much the same way. He doesn’t pride himself on his skills—in
fact he doesn’t even use Excel or PowerPoint—but on his ability to see
opportunities and put the right resources in the right place. Each good
decision he makes will be leveraged across the efficient organization he built
for the industrial age.
Of course, the opposite is also true. While being
right creates prosperity, being wrong can bring ruin. The same qualities
of efficiency and standardization go in reverse, multiplying mistakes made at
the top all the way down the line. That’s why managers of the past prided
themselves on being risk takers. Every decision had a consequence.
Yet in today’s semantic
economy, those risks have become untenable. We should no
longer focus on being right, but on being less wrong over time. The organization itself must learn to adapt.
Rewiring The Software In Our Organizations
In The Second Machine Age, Erik Brynjolfsson and Andrew McAfee
describe how electricity required organizations to change. In the steam
age, factories needed to be organized so that the machines were near the power
source and work was centered around them. The first electric factories
were set up the same way.
Yet it was only when managers realized that was no longer
necessary that the true productive potential of the new technology was
unleashed. By capitalizing on electricity’s ability to distribute power,
factories could be designed around workflow, doubling or even tripling
productivity. Unfortunately, this took several decades to realize.
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