Recently, I started a keynote with a hatchet in my hand.
You might think i was being theatrical. The actual purpose of starting a talk with a tool in my hand was to point to a time when responsibility for a shared goal was built into the community.
4 Economies & How They Shaped Management:
Back in the “old days”, when we lived in smaller communities, people bartered for goods and services. If I wanted to extend my plantings and I need to fell some trees to create a clearing, I would go to the local blacksmith to get a sharp hatchet. And in return for getting a product that works, I would return the results of product performance in the form of wheat or corn to feed the blacksmith’s family. The blacksmith, the farmer and the larger community all knew what “success” looked like, because each party would know what responsibilities they needed to deliver and meet them. Because of the size and nature of the ecosystem, work embodied personal responsibility.
When we moved on into an industrialized era, accountability shifted as we made things like cars. At the height of car production, humans were considered a cog in the wheel of the system. Specs were defined and written, and humans were simply executors of those specifications. We managed the era of production with what has been labeled scientific management. During that time, our focus in management was how to increase efficiency. We asked questions like: would a longer shovel yield higher productivity? This division of labor from the scientific method continues today with a strong focus on roles being neatly described, and the predominant focus of rewards still focused on whether each person does what they are assigned to do. We got efficiency and scale, but accountability was shifted from the individual person to the organizational specs.
We moved beyond the manufacturing era to create really interesting things like chips and phones. An example of something we create today is an HTC phone co-branded by Google using Android. The chip is made by Marvel, designed mostly in the US but then created in China, HTC is an Indian-based company, the product is assembled in Portugal from parts made around the world. Marketing is done in social context in forums like Twitter; much of customer service is done peer to peer in online forums like Get Satisfaction. The apps created for the Android platform are the creative notions of many 80,000 application developers worldwide. The complexity of this example shows that we no longer make things per se, as much as we make information that ultimately shows up in the form of things. As managers, we know humans are central to creating this kind of information. So we try and figure out how to keep employees “happy”. Besides intuition, we know that workers are happier when we pay attention to them, otherwise known as the Hawthorne effect. The notion of accountability has best been captured in MBO tools where we try and capture what each party is going to do and how we might reward that particular area of responsibility. In other words, we have moved back to personal accountability in one way: we measure the performance of the person, but are limited by what we can measure rather than a measure of value of creativity itself.
There is one other set of economies that has emerged, probably best represented by a Starbucks Mug. It is the e
xperience economy. People will pay a premium to stay at
hotels, fly
particular airlines, experience
shows or get their
daily caffeine fix based on what feeling customers get by engaging it. As we serve and participate in the experience economy, we recognize a premium for
how we work and create rather than what inputs fuel a supply chain. Perhaps the best embodiment of the experience economy is captured by the
catastrophic gains in value by Apple as they created the iPod, iPhone and iPad as compared to certainly technologically comparable devices for MP3 players, smartphones and information devices. There is a certain magic tied to the experience economy and how managers can fuel better and more results when it is fundamentally tied to brilliant people doing great work. Certainly the return of Howard Schulz to Starbucks and Steve Jobs to Apple or of Richard Branson’s continued leadership at Virgin suggest that some of the magic is simply this:
the visionary embodies ownership and accountability. Because the vision of each company is centered on experience, they are inherently people-driven businesses. Creating the culture has happened but it is hard to figure out how to duplicate it. Just like Southwest doesn’t have manuals to tell people to be funny, we consumers know the experience is unscripted. We see and believe in the genuineness of the actions.
Management in the 21st Century
So what does all these different economies have to do with 21st century management?
The good: As we moved away from self-sufficiency and began to collaborate, combining our talents, the consequences were and are far-reaching. We create amazing things from the HTC phone, to wifi at 30,000 ft, and funny stewards tossing peanuts at us. Oh, and let’s not forget, the amazing experiences we have at Starbucks. Our work allows us to create amazing things efficiently.
The not so good. And, as we moved towards complex systems that gave us efficiency and scale, we’ve learned to manage by focusing on the concreteness of the things we can measure discretely rather than the things that measure any full value creation. We continue to measure what each role must do discretely rather than what we must do together. We lack a way to measure the shared aspiration.
And that gap is significant. We need a way to have each of us own “the total experience”.
We Are Seeking
So the question is not “how do we return to the past” but rather: how we do manage in the 21st century world in such a way that blends the best of all 4 of these economies: personal accountability, efficiency, creativity, and creating unbelievable human experiences?
In net, how do we define that which is immeasurable and how to do we get the skills necessary to co-create rather than silo our work. And how do we do that so it enables organizations to thrive, human beings to engage, and our larger economy to benefit?
I’ve been an advocate of the word
collaboration as a way of describing the thing that measures the shared goal, the shared outcome. My own experience of collaboration is that when people own the whole picture, they co-labor towards those goals that brings the best of them. Working with companies as diverse as Adobe, Nokia, HP, I’ve seen how when a shared goal is co-created, the ownership level and such is high. (Mind you measurement of this is missing besides the intuitive results). It’s been nearly a year since the
NewHow came out and I’ve come to see that the word collaboration itself is either so poorly understood or so caught up in other hoopla that it apparently doesn’t translate to others with the same meaning I define. But I do think the concept of co-laboring points us to a direction — that we
imagine owning a
shared future, to
think together (and do separately), so we
co-create better outcomes and results.
The question is what is the management language that we can all agree on?
And how can we start to measure more than individual results of the doing, and start to measure the results of the co-thinking?
Let me know if you have ideas. I’ll help you spread those elsewhere.
Hi Nilofer, From my perspective you are writing about the shift from mechanical thinking to systemic thinking. Please take a look at the article “A Better Decade Require the End of the Prevailing Style of Management” at the link http://bit.ly/8xQmIz and tell me what you think.
Wonderful ideas. Very helpful as I think about “substitutes for leadership” (Kerr’s ideas). Looking forward to reading the work mentioned by gmh_upsa. Systems approach: yes, but we need to be sure it’s the full system where tech, org, and people are considered at the same time.Link to Kerr & Jermier http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B7J20-4D5WPPG-WN