Taylorist Buildings

He made the fascinating observation that Taylorist offices influenced by Scientific Management, with its unremitting focus on efficiency, have resulted in unsustainable workspaces that are under‐occupied and unsuitable for emerging business conditions. Dr Duffy calls office buildings ‘misleading and obsolescent units of analysis’ and wonders why self‐reliant people should be constrained by them. Knowledge nomads use their clout to choose how, where, when and with whom they work. They are certainly not constrained by walls and place.

Taylorist Management

It is not only building design that is having to escape the strangling dominance of Taylorist influence. Despite unstoppable and converging forces in the external business environment, management practices and attitudes, also significantly influenced by a century of Taylorist approaches to management, remain stubbornly resistant to change. The parallels between under‐utilised workspace and under‐utilised human intelligence and creativity, arising from the separation of thinking and doing, is striking.

Taylorist IT Deployment

Taylorist attitudes are also influencing IT deployment in the UK. Although take-up of information technologies in the UK is high, one of the publications from the Future of Work, a six-year research project involving twenty two universities, drew attention to the fact that business have the choice of using ICT as an enabling technology deployed in combination with high‐performance HRM measures or as monitoring tools to control workforces. At the time the research was being reported on five years ago, the authors of Managing to Change? commented that the trend toward control without workforce participation was “deeply disquieting”. In their view, there is a substantial risk that low cost, automatically generated monitoring and control information, not shared with those being monitored, would be likely to become damaging and divisive.

Something’s Got To Change

IT, HR and FM need to mobilise urgently. The functions need to be having conversations internally and across professional boundaries. Stepping back to think about how things might be done better is not easy. The drag of the status quo is a major obstacle and of course businesses tend to become more controlling in recessionary conditions such as we are currently experiencing. Nevertheless, concerted effort at dialogue and understanding is now urgent. We have communication and collaboration tools at our disposal like we have never had before, and highly effective techniques for visualisation and decision support. There are no excuses – only the will to recognise the pervasiveness of the Taylorist stranglehold and to overcome it.

As Darwin was reputed to have said, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”

Benkler wrote of GM:

“They monitor people below and incentivise people above”

To my mind, this needs to be exactly the other way around but, like turkeys voting for Christmas, why would senior teams willingly subject themselves to scrutiny? I think many would, at least many of the ones I know would.

What Set Me Off?

An item on the BBC Radio Four news this morning about the ineffectiveness of Boards of Enquiry following the failure of ageing aircraft, with associated loss of service personnel lives. The point being made was that these boards repeatedly missed systemic failure. What was also said was that the boards are subject to interference from top military personnel.

I have been thinking for a while about senior management influence on organisational culture. The testimony of Paul Moore, ex-head of Group Regulatory Risk at HBOS plc to a government select committe makes a great case study. Mr Moore says:

“I strongly believe that the real underlying cause of all the problems was simply this – a total failure of all key aspects of governance. In my view and from my personal experience at HBOS, all the other specific failures stem from this one primary cause.”

The testimony is really very detailed. Mr Moore claims in his statement that he and his team “experienced threatening behaviours by executives .. in overseeing their compliance with FSA regulations.” He reports being prevented from having some things properly minuted by the CFO. He also said:

“But sadly, no-one wanted or felt able to speak up for fear of stepping out of line with the rest of the lemmings who were busy organising themselves to run over the edge of the cliff behind the pied piper CEOs and executive teams that were being paid so much to play that tune and take them in that direction.”

It is not often we get to hear what apparently goes on in some companies. I have however seen and been on the receiving end of vile management behaviour implicitly sanctioned at the top.

I have also been thinking about agency theory and stewardship theory in influencing executive behaviour but I will leave that for another post.

What’s this post about? I am musing on how the blogs and sources I read are rich in parallels, loops and connections. Several articles from this week changed my view on the future of large corporations.

Future Of Higher Education

I was responding earlier this week to an article in Fast Company entitled How Web-Savvy Edupunks Are Transforming American Higher Education. Asking what business schools are for now that quality content is free and widely available, I said that business schools create the opportunity for shared experience in a place and time. Strong networks and personal bonds develop. There is also the prestige associated with many institutions. For these reasons, there will always be a demand for expensive business school education.

Then later in the week @josiefraser sent a link via Twitter to a blog from George Siemens reflecting on the the future of universities. George asks a similar question, “What does higher education look like when all content is freely available?” He goes on to say:

The importance of university reform should call us to do our best thinking. But, what is the response by our community and quasi-researchers like Don Tapscott (see The Impending Demise of the University)? Primarily rhetoric with a blend of nonsensical proclamations.

Universities aren’t going anywhere. They are not going to disappear. Recent UNESCO (here and here) and World Bank publications (here) speak to the centrality of universities in international competitiveness.”

Christensen’s concept of disruptive innovation does not apply. Business schools and universities are in no way threatened by edupunks and open education, but what the edupunks do offer is wider choices from among increasingly innovative alternatives. Higher education will be both traditionally taught and open.

Future Of Large Corporations

I had been thinking recently that large corporations might be under threat. This is what I said:

“Why do valuable knowledge workers need to be employed at all?  Social media and digital communication technologies are enablers. But it is other trends and shifts that are tipping the balance of power in favour of knowledge workers becoming self-determined. “

Then another interesting link came to my attention via Twitter from @markgould13. In Why We Need Big Organisations, John Hagel, John Seely Brown and Lang Davison ask:

“So, corporations increasingly need talented individuals to survive. But why would talented individuals join or remain in large corporations? Why wouldn’t they simply strike out on their own and leverage the digital infrastructure to connect with other individuals?”

They predict that “large-scale corporations will remain a prominent feature of our professional landscape: because they will be best positioned to develop and support scalable, long-term, trust-based relationships”.

Now that is a seriously interesting statement. And it immediately links in my mind to a key reason I think people will continue to pay for expensive business education. It is partly about access to networks and the creation of long-term trusted relationships, which are additionally associated with institutional prestige and belonging.

This post is getting far too long. The comments on the Hagel et al article are thoughful and thought-provoking. One is from Daniel Pink, who says:

“My sense is that organizations, like so many things*, are going bimodal. We may be seeing an ecosystem of the very large and the very small — nation-straddling megacorps and folks in their home office — and not much in between. The ends grow, the middle hollows.

*See http://www.wired.com/wired/archive/11.05/start.html?pg=2″

Final Thoughts

Business schools and large corporations are changing but they are not going away.

Just as ‘edupunk’ companies expand options for business education, so there is increasing choice for knowledge workers. My own experience as an independent knowledge worker is that I have the possibility of developing long-term relationships with people in a number of large institutions, giving me the benefit of ‘belonging’ while retaining independence.

(1) Literature, art and history tell us that humans have always been connected.

(2) Social media give us new and evolving ways to connect, discover and inspire.

Evidence From The Middle Ages

I am currently reading Roads To Santiago: detours & riddles in the lands and history of Spain by Cees Noteboom. He describes a book he sees in the museum attached to the cathedral in El Burgo de Osma. He specifically describes a map of what they thought the world looked like in 1086. Noteboom says:

“This Codex Beato is Carolingian in its colouristic treatment and ornamentation, Arabic in the application of yellow and ivory and geometric patterns, Lombardian in the interlaced arabesques and animal motifs, Irish in the spiralled braiding, Islamic in the predominance of red and black, while eastern influences manifest themselves in the Mozarabic stylisation…

But we know how profound the pollinating influence in those days was, that the world was already a world, that people communicated and saw each other’s art, that artists and craftsmen travelled and inspired one another.”

Evolution Of Social Media

I was alerted to Om Malik’s post about the evolution of blogs through a Twitter micro-message, a Tweet, by Jon Husband. Om says:

“Today most of us walk around with newfangled smartphones that are nothing short of multitasking computers, essentially content creation points.

And they’re networked, which means creating and sharing content is becoming absurdly simple to do. With the increased number of content creation points –- phones, camera, Flip video cameras, Twitter -– we are publishing more and more content.”

Applications like AudioBoo and VideoBoo allow us to “capture information at the point of inspiration”, as Ajit Jaokar and Tony Fish proposed three years ago in their book Mobile Web 2.0. The iPhone and applications being developed for it now given us a glimpse of what is possible to do, create and share using smart phones.

Discovery And Inspiration

I wrote a post a while back called Thinking About Discovery. I have been thinking about that a lot lately. Until recently, my dominant feelings have been frustration and incomprehension that we know about effective, smart working and managing and yet so much of this knowledge is overlooked in businesses. Talent, skills, knowledge and willingness to contribute are going to waste.

The view I am choosing to take now is, “Great that means a journey of discovery for businesses and enterprises stuck in old attitudes, ways of managing and working”.

Like the medieval artists who travelled, discovered and were inspired by each other, we now have amazing tools and technologies that let us discover and inspire each other. What an opportunity businesses now have to create learning architectures and social collaborative environments where people can experiment with insights gleaned from beyond their organistional boundaries, learning and being inspired from different practices and cultural influences.

Trying to explain and describe new ways of working doesn’t work. Like trying to explain the business value of social media, you just have to explore, discover, experiment – and experience.

If you are in any doubt about the business value of Twitter, this is an example of how it can be used to share business intelligence and keep on top of trends. I digress.

From the Fast Company article:

” “The Internet disrupts any industry whose core product can be reduced to ones and zeros,” says Jose Ferreira, founder and CEO of education startup Knewton. Education, he says, “is the biggest virgin forest out there.”

Ferreira is among a loose-knit band of education 2.0 architects sharpening their saws for that forest. Their first foray was at MIT in 2001, when the school agreed to put coursework online for free. Today, you can find the full syllabi, lecture notes, class exercises, tests, and some video and audio for every course MIT offers, from physics to art history. This trove has been accessed by 56 million current and prospective students, alumni, professors, and armchair enthusiasts around the world.”

The article goes on to point out that despite making quality content available for free, MIT are still are able to charge “upwards of $189,000″ and outstanding student-loan debt in the US is $714 billion.

What Are Business Schools For?

Well, it is not for quality content. Apart from institutions like MIT making their content available online and for free, state-of-the-art reseach is no longer restricted to higher education institutions. The internet is awash with free corporate and government-sponsored research. And yes of course there may a danger of corporate bias. Even taking that into account, there is so much quality stuff available that patterns quickly become visible from freely available meta-evaluations of studies.

If not content, then what?

A huge advantage of business schools is that they create the opportunity for shared experience in a place and time, an intensive experience at that, from which strong networks and personal bonds develop. There is obviously also the perceived prestige associated with many institutions. And it is for these reasons that there will always be a demand for expensive business school education.

Business Schools And Edupunks

Business schools also teach people how to think. This capability, experience and knowledge is no longer confined to higher education institutions. The UK-wide criteria for postgraduate learning, which particularly interests me, is published and available. Using these criteria, the subject knowledge, wide experience and academic training of people in my partner network, plus the sort of social technologies referred to in the article, it is now possible for The Smart Work Company to offer another way to participate in a Master’s-level learning programme, the mb*MBA.

I had intended to talk about Christensen’s concept of disruptive innovation. On reflection, The Smart Work Company and the businesses mentioned in the article are not disruptive in the sense that business schools are in any way threatened. They will will not be displaced. They continue to be attractive and will in time adapt the way they do things. What the edupunks do offer is wider choices from among increasingly innovative alternatives.

The Smart Work Learning Place

One of the things I want to do with The Smart Work Company is to build on this experience and create a learning network for senior executives online. And so The Learning Place is just about ready. Well, the software has been ready for a while. It has taken me some time to sort out practicalities, like Terms and Conditions and membership criteria.

Who Is It For?

The profiles of the people I have in mind are modelled on the sort of senior people I have been working with since 2000. They are all executives, in public and private sectors nationally and internationally, who have a specific strategic thing they need to do. This is probably something they have not done before, and there are significant consequences for their enterprise and for them personally. Examples in the past three years are from sectors as diverse as construction, engineering design, energy, retail banking, public sector, executive search and telecommunications. The executives who become members of The Learning Place will have their own unique and widely diverging strategic challenges they are dealing with in their workplaces.

What Is It For?

The Learning Place is an online resource for busy executives to challenge their strategic thinking and action during a time of change. This is what the recent press release said:

“In fast changing times – senior managers and directors need time to think. Sadly, a relentless schedule of travel, meetings, emails, phone calls and deadlines leaves little time for reflection and independent feedback. A lull may happen within an airport lounge, between meetings or at some random time of the day.

The Learning Place is waiting for the member to log in and think in a way which suits them. The Learning Place gives the member time to breath, learn, think and reflect in their own time and in their own way – on their own and with peers. They are helped along the path with tools, techniques and resources which are right for them. There is no set course or ‘one-size-fits-all’ format. This is learning and development as it should be – social, natural, flexible and human.

What Topics Will Be Addressed?

That will depend on the executives who are members of The Learning Place. I have structured The Learning Place into four ‘lounges’, as a way of loosely sign-posting conversation and resources on:

Smart Working

Smart Strategising

Smart Collaborating

Smart Managing

I have also condensed my knowledge of research and theoretical insights on organisational dynamics, enterprise responses to them and current workplace trends into 5 ‘first principle’ modules: Smart Basics. This content and structure is suggestive to get things going. Members will add content and direct conversations.

Won’t People Be Too Busy?

That of course is a danger. The conversations and content on The Learning Place will need to provide real value to attract and keep the attention of busy, high-profile people. This is just some of the value I hope will be created:

• Emotional support. Listening to my friends, many of them are worn-out. We have all experienced temporary insanely busy periods. It appears that this has become widespread and unrelenting. Recession, threat of redundancy, overwork – how can people be expected to innovate and be effective under these conditions?

• Getting different perspectives and ideas is energising; I know this from my experience of co-facilitating the Global Mobility Network.

• Access to research. Of course the professional institutes are a source of current research. What The Learning Place offers is an inter-disciplinary research perspective. IT, HR and Facilities Management need to be working together much more than they currently do.

• Most valuable of all, perhaps, will be the opportunity to explore the practical implications of workplace trends, smart processes, and tools and methods.

I am obviously interested in hearing from you if you think you might fit the profile I have described, and you think you could gain value from The Learning Place. Membership is by application and will be free until the end of December, 2009. After that, an annual subscription fee applies.

I am also interested to hear from you if you think you have experience of implementing strategic change in finance or pharmaceuticals. Please contact info@thesmartworkcompany.com if you are interested in knowing more.

In my last post, I said that I would explore in this one why I think looking back at the first wave of smart working helps us to see how we can respond to current workplace trends.

I also quoted Gary Hamel’s pressing challenges for the future of management, two of which are:

• the need to make innovation everyone’s job

• creating highly engaging work environments.

It just so happens that these are core attributes of lean manufacturing. Effective lean manufacturing systems make innovation everyone’s job through continuous improvement (CI) and problem-solving. They also incorporate physical layouts of machines, uncluttered working environments, and management systems that support CI and collaboration across sub-process and organisational boundaries.

There is an abundance of research telling us what works and doesn’t work in building engaging physical and organisational work environments that enable learning cultures where making innovation is everyone’s business.

DISCOVERY

At this point, I had intended to take two specific examples of the implications of current workplace trends – distributed work implying workforce autonomy, self-determination and self-organisation plus enterprise fragmentation implying cross boundary collaboration and integration – and show how principles from lean process management show us how to do this.

Then I realised something. I was boring myself writing this post. I felt like I was going on and on. Yak, yak, yak. So what? And if I was bored writing it, the chances would be very high of your being bored reading it.

I have a friend who said to me recently, when I was regurgitating some piece of research, that he didn’t care what anyone else has said and done. He values discovery and finding things out for himself. My response was ‘But that means re-inventing wheels and not learning from experience’. The more I thought about it, the more I realised that he is right. Which of us learns from other people’s experience, without trying things out for ourselves? I mean really learn and understand?

ABUNDANCE AND SCARCITY

I enjoyed reading Confused of Calcutta’s reflections on abundance and scarcity. In this context, it seems to me that the scarcity is experience of taking other people’s insights, trying them out and either rejecting them or adapting them to make them work personally and uniquely. Other people’s insights are abundant.

This blog post really has been emergent. I did not mean for it to lead so neatly to the next post but it does. Although I have spent a long time, at least the past three years, monitoring workplace trends and creating a sort of curriculum (a series of short modules I am calling Smart Basics), I am not in the content development industry. I am in the service industry, helping top teams and senior executives to discover what works for them in making the transition to new ways of working and strategising.

So more about that next time.

So here is an edited version of the proposal in instalments.

INNOVATION EVERYONE’S JOB

The global business environment is evolving simultaneously on many fronts : economic, technological, demographic and organisational. How equipped are businesses to deal with these potentially overwhelming changes, which require radical adaptation of management attitudes and methods to cope with increasingly uncertain and unpredictable business environments? In his agenda for management innovation, Gary Hamel proposes that three of the most pressing challenges facing businesses today are:

“adapting to the pace of change, the need to make innovation everyone’s job, and the need to create a highly engaging work environment that inspires employees to give the best of themselves”.

International research shows that a large number of business leaders are failing to create learning environments and quality jobs consistent with meaningful work, which people find engaging. It seems that skills, eagerness to contribute, knowledge and creativity are being wasted.

This squandering of talent is wasteful at any time but is suicidal in the face of challenging global business conditions and competition from the emerging economies. Business leaders who do manage to set the initial conditions and create engaging working environments and ways of working will be the ones that succeed in staying ahead of the game.

SMART WORKING

The term ‘smart working’ has in recent years been associated with flexible and mobile working, that is ‘anytime, anywhere’ ways of working enabled by communication technologies. Another view, broader than the narrow focus on location and time independence, is that smart working is about flexibility and autonomy in where, when and how people work.

In my view, smart working is the outcome of designing and putting in place systems, working environments and governance principles that are known to be associated with effective business performance, including workforce autonomy and self-determination, and which seek to maximise opportunities to use and develop people’s knowledge, skills and ability to connect.

There are no best practices to replicate and slavishly roll out. Rather there are theoretical insights, management principles, and working and managing practices which, taken together, provide guidance for action. Understanding and skillfully applying these insights as inputs is a fundamental prerequisite to the dynamic outcome of smart working. Although nothing is for certain, these smart inputs increase the probability of effective work outcomes.

FIRST WAVE SMART WORKING

The tendency in the management literature to talk of 21st century management and new paradigms, a “delusion with novelty”, risks overlooking fundamental insights of trail-blazing theoretical thinkers from decades ago, from years of academic research, and lessons learned from manufacturing business process innovation that took root in manufacturing from the 1980s onwards.

I am calling the systems of management and business process innovation practices from that time the first wave of smart working. The next post summarises why I think that looking back at this first wave helps us to see how we can move forward into the future.

Anyone interested in the full text of my arguement about how the past informs what we do now, including all references and sources, can read it in Getting Ready For The Next Wave Of Smart Working.

Am in reflective mood, having had a break from work. One of the things I am thinking is – why do I blog? It is hard work and takes up a lot of my time. Would anyone care if I stopped? On a good day, I know I blog to help me work out what I think. On a not so good day, like today when I have far too many urgent things to do, I feel I am wasting my time. And yet I feel compelled to file my weekly post.

AMPLIFICATION – TAKE 2

I said here that systems retain viability by developing requisite variety, which enables them to handle the complexity coming at them from their external environments. An amplifying response for an enterprise would be to recognise, elicit, value and deploy the brain power of its workforce and customers. Social computing technologies create phenomenal opportunity and potential to build on what we already know about this sort of amplifying response from the business process control and innovation techniques of lean manufacturing.

ATTENUATION

The other mechanism for achieving requisite variety is attenuation, which is about taking action to reduce or diminish the effects of factors that threaten system viability. Enterprises try to attenuate through systems, processes and structures. Now I may have got this completely wrong but the following two thoughts strike me:

The dominant business response is largely attenuation rather than amplification.

Attenuation tends to be focused in the wrong direction, which is towards controlling people and their behaviour – the very people whose knowlege and collective intelligence are so essential for competitive fitness.

What is my evidence for making those assertions?

Evidence for the first statement is summarised in my last post, which linked to David Guest’s summary of the key elements of high-performance work systems. High-performance work systems are amplifying responses to environmental complexity. Despite growing research indicating the business benefits of high-performance work systems, their adoption in the UK has been poor. I suspect the UK is not alone.

What about attentuation being focused in the wrong direction?

For me, there is enormous advantage in looking backwards. Doing that in the management literature on control is a bit of an eye-opener. I have written about this in How Organisations Work (And Don’t Work). Control has been a dominant concern for business over the decades. Tannenbaum* wrote in 1968:

“the theoretical analysis of control in social systems has a long and venerable history … control helps circumscribe idiosyncratic behaviours and keep them conformant to the rational plan of the organisation.”

Since then, a ‘considerable literature’** has emerged on control and continues to be a management preoccupation. According to a 2007 McKinsey article***, informal networks in organisations ‘typically fly under management’s radar, they elude control’ and ‘the greatest limitation of these ad hoc arrangements (informal networks) is that they can’t be managed’.

FINAL THOUGHTS

There is, it seems to me, a tension between amplification and attenuation. Of course control is an entirely valid management concern. It is how control processes are designed and monitored that matter. Threats to system viability from the outside needs agile and effective internal systems (attenuating responses) to support amplification through innovation and knowledge management. People are the answer, not the problem. Although they quickly become a problem if they are micro-managed and not trusted. See How Organisations Work (And Don’t Work) for a summary of destructive shadow systems.

REFERENCES

* Tannenbaum, A.S. (1968). Control in Organizations. McGraw‐Hill Inc., New York

** Selto et al ( 1995). ‘Assessing the organizational fit of a Just‐In‐Time manufacturing system: testing, selection, interaction and systems models of contingency theory’. Accounting, Organization and Society, vol 20. Nos 7 & 8, 665‐684

*** Lowell, L et al. (2007). Harnessing the Power of Informal Employee Networks, The McKinsey Quarterly, No. 4

Skimming articles in a futile attempt to keep up with workplace trends, I discovered a gem of a paper by Professor Sir Michael Marmot. Published in the Lancet in 2006, the article is entitled ‘Health In An Unequal World’ and is the text of a lecture given to the Royal College of Physicians. In the article, Professor Marmot is clear that social environment is a crucial influencer and determinant of health. He says:

“The unnecessary disease and suffering of disadvantaged people, whether in poor countries or rich, is a result of the way we organise our affairs in society. I shall argue, in this oration, that failing to meet the fundamental human needs of autonomy, empowerment, and human freedom is a potent cause of ill health … the challenge is to understand how position in the social hierarchy is related to health”.

Then only today @markgould13 posted this on Twitter. It is from Jeffrey Pfeffer, who I have long admired. Pfeffer says:

“Although much of the research and public pressure concerning sustainability is focused on organizational and economic effects on the physical environment, companies and their work practices affect the human and social environment as well … there is evidence that high performance work arrangements are better for both financial performance and human sustainability.

We need to embark on a project to reduce the illness and death being caused by companies and their management practices.”

Reduce the illness and death being caused by companies and their management practices? Wow. That is a very strong statement, which resonates with me for personal reasons.

Social Environment And Performance

So what are these high-performance work arrangements that Pfeffer mentions? Professor David Guest is good on summarising the key elements of high-performance working, which systematically incorporates structures and processes that enhance competence, opportunity to contribute, motivation and commitment.

Competence includes ability and motivation for continous learning, and learning is social in today’s networked and connected world. This means commiting to a holistic view of organisational learning, which is built into all supporting IT, HR and facilities management systems.

Opportunity to contribute is closely aligned to continuous learning. Guest says:

“The core mechanism for ensuring that competent workers have an opportunity to contribute is job design … jobs should be designed, either singly or in team-based groups, to provide sufficient autonomy, control and responsibility to make full use of knowledge and skills, and to permit on-going learning and adjustment.”

Despite the performance benefits of high-performance work arrangements (the evidence is that these work practices need to be implemented as mutually supporting systems) their take-up in the UK has until recently been poor.

The CIPD in partnership with Cap Gemini carried out a research study on smart working last year. How Smart Is UK plc? reported that only 9.6 % of respondents ’strongly agreed’ that their companies deliberately designed roles that embrace smart working concepts, with 35.2% ’somewhat agreeing’. The author(s) comment that ‘building autonomy and innovation formally into job roles is still an aspiration.’ Guest attributes the lack of take-up of high-performance working to ignorance, inability and doubt about financial benefits.

This is set to change. The developments in the external environment, which I have been writing about in the past few blog posts, are driving new ways of working and increasing workforce autonomy and self-determination. As with general health, the organisational and social environment is an influencer of workplace health and performance. Creating working environments that are good for business and good for people is fast becoming a not-so-secret unfair advantage for enterprises willing to design jobs, processes and structures around employee autonomy and self-determination.

We know what works. We know how to do it. It is all to play for.

I have written elsewhere in this blog about leadership and my diffident attitude towards it. I recoil from people who would set themselves up as leaders while recognising that visionary leadership encourages others to achieve great things, which they may have felt unable to do on their own. Cognitive dissonance? Guilty as charged.

Euan Semple has written a great post about The Price of Pomposity, in which he says:

“I would argue that pomposity represents a real, and nontrivial cost to the business world.”

Euan’s post ties in with something I have been thinking about. This is the coming to an end of a successful and innovative academic programme I have been involved with, and that has been running for the past three years. Innovations from the programme have been incorporated into an Executive MBA, which the market understands more easily.

Reflective Leaders

One of the most notable features of the programme has been the sort of executives drawn to it. These senior people could easily have been persuaded by the allure of the institution’s existing MBA, which is seen as a market leader. They chose to do something different. As a result, I have been privileged to work with people who are thoughtful, reflective, respectful and the farthest from pomposity you can imagine.

Going back to my ambivalence about leadership, the executives that joined the programme have one thing in common. They do not aspire to to be leaders as a prime objective. Rather, they have a specific thing they need to do (set up new business units, get into new markets, diversify products, deal with post-merger cultural integration etc). The excutives want to do it in a way that is good for them as individuals, for the business and for their employees.

The Executive MBA will continue to attract thoughtful and reflective people, of that I have no doubt. But there is something a bit special about pioneers who take a risk on an academic programme that many in the UK regard as an innovation too far.

I am looking forward to graduation in July. Party!

“The history of modern business is the history of GM, and vice versa … if the success of GM defined the management agenda for 20th century, then its failure defines the management agenda for the 21st.

The rash of commentary on GMs’ troubles is obviously linked to its iconic status; it represents a metaphor for the mighty fallen. There is shock that this could happen to an apparently invincible corporation.

One of the most productive plants in the US has been NUMMI (New United Motor Manufacturing, Inc.), a joint venture between GM and Toyota set up in 1984. According to Yochai Benkler, “as of the numbers last year, it continued to be one of the three most productive plants in the U.S.”

NUMMI emerged from the embers of a failed GM plant, which closed and the re-opened with the same people, same unions but different values and busines processes. I first came across NUMMI in an HBR article, Time and Motion Regained, by Paul Adler, when I was doing my doctoral research. I was intrigued by the account of what had happened at NUMMI, which was that a form of Taylorism had apparently been introduced and accepted.

A faculty member at Babson College in the US puts it well:

“In effect, they gave Taylorism to the workers. It taps into three sources of adult motivation -the desire for excellence, a mature sense of realism, and a positive response to respect and trust”

It’s Been A Long, A Long Time Coming

The joint venture was set up in 1984. That is 25 whole years ago. What exactly did GM learn from the joint venture? Not much it would seem. Yochai Benkler characterises GM as driven by management practices that monitor people below and incentivise people above, attempting to extract everything from relationships. Here is Gary Hamel’s assessment:

“GM’s failure isn’t the result of one spectacularly ill-conceived decision—the company didn’t jump off a cliff. Instead, it meandered into mediocrity, one small short-sighted step at a time. Like a two-pack a day smoker, GM committed suicide in degrees.”

In an excellent article, The New GM – a first look, in Automotive World, CEO Fritz Henderson is reported as as saying:

“the “New GM [will be] dedicated to building the very best cars and trucks – highly fuel efficient, world-class quality, green technology development and with truly outstanding design. Above all, the New GM will be re-dedicated in its entirety to our customers.”

The article pithily observes that “quite why this wasn’t the case with the old GM will no doubt become the subject of many books and academic theses to come”.

A Change Is Gonna Come

The business environment BC, that is before credit crunch, was already turbulent, with significant economic, structural, technological and demographic developments causing uncertainty. The global financial crisis has taken this existing uncertainty into another dimension. Businesses need urgently to review and adapt their working and management practices, to ensure their continued viability.

Organisational cultures and management practices can be extremely resistant to adaptation. GM gives us a powerful symbol of rigidity and a clear example of what can happens to the mightiest of companies. As I said in my last post:

“Decline is associated with inability to sense and respond to changes in the external environment. Path dependency strongly commits businesses to past decisions. “Sticking to the knitting”, one of Peters and Waterman’s eight indicators of excellence, as an exhortation to concentrate on core products and services might need clarifying and expanding on?”

Yes, change is gonna come -  one way or another. That doesn’t mean that it is going to come in ways that are advantageous to business.

P.S.

What about NUMMI? The Automotive World article says:

“A large question mark hangs over the future of GM’s 25-year old Californian joint venture with Toyota, New United Motor Manufacturing Inc (NUMMI). The operation builds the Pontiac Vibe, and the Toyota Tacoma and Corolla. The confirmation that the Pontiac brand will be wound down by the end of 2010 leaves GM’s role in the joint venture at best unclear; it is difficult to see the plant, and the joint venture, being of any relevance to a lean New GM.”

In Search Of Excellence

This is how Tom Peters summarises In Search of Excellence, the book he co-authored with Robert Waterman:

“You could boil all of Search down to one idea: Soft is hard. Up until then, everybody assumed that hard was hard. “Hard” numbers told you everything that you needed to know about dealing with hard assets, such as factories, machinery, and buildings. But Search said that everything soft is hard. People, customers, and relationships — they make up all of the soft stuff that determines what really gets accomplished and how well it gets done. It turned out to be a revolutionary message.”

The claim that they ‘faked the data‘ (which Peters denies) has not diminished the book’s popularity and despite the well-documented poor performance of some of their ‘excellent’ companies after it was published, there is ample research to support what Peters and Waterman said.

Another more recently popular book in a similar vein is Jim Collins Built To Last: Successful Habits Of Visionary Companies. Steven Wheeler from the University of Southern California’s Centre for Effective Organisation, participating in a roundtable discussion on the life cycle of great business ideas, says that:

“if you had taken the 18 companies that were profiled in the book and invested in each of them over the next 10 year, you would have got about a 150 percent return. That is not too bad – until you compare it with an S&P 500 index fund, which would have given you a 250 percent return. And if you had the foresight to pick up a copy of Fortune’s 100 Best Companies to Work For each year, you would have gotten a 600 percent return.”

Wheeler goes on to comment that one way to build a successful business is to create an environment where people enjoy their jobs and are eager to work. All so far so good, and consistent with Peters and Waterman.

When Good Companies Go Bad

In the FastCompany article linked to above, Peters dodges the question of why some of the excellent companies subsequently performed so poorly. He says such criticism is ‘missing the point’. I have read the Fastcompany article back to front and I cannot see how it is missing the point. What accounted for the poor performance, especially if the companies cited conformed with Peters and Waterman’s eight indicators? Whether or not this is a good question, it is one I want to ask.

Jim Collins is back with another book, How The Mighty Fall: And Why Some Companies Never Give In. I have not yet read it but from the product description on Amazon, the first stage of decline is hubris born of success, taking businesses outside of their core.

This article from the FT concludes that:

“Organisations fail not because they stray from their core, but because they stick to it too closely as circumstances shift … the idea that focusing on the core is the best defence against failure is too simplistic for these complex and turbulent times.”

Now we are getting somewhere. Decline is associated with inability to sense and respond to changes in the external environment. Path dependency strongly commits businesses to past decisions. “Sticking to the knitting”, one of Peters and Waterman’s eight indicators of excellence, as an exhortation to concentrate on core products and services might need clarifying and expanding on?

Again from the FT:

“GM executives were so focused on cross-town rivals that they underestimated the threat posed by Japanese carmakers … once a trajectory is set, subsequent commitments reinforce the status quo. These can be bet-the-company decisions or incremental steps refining current technology”

Peters is obviously well aware of this. He says, again in the FastCompany article:

“The CEO of General Motors announced that GM wasn’t in the business of making cars, it was in the business of making money. (This came as a shock to most of GM’s customers, who were in the market to buy a car – or even a better way of life – not to spend money.) That may account for the rise of Japanese automakers, who most certainly were in the business of making cars … that customers would definitely want to buy.”

The trajectory set by GM, of which Peters was so disapproving, has culminated in General Motors filing this afternoon for bankruptcy protection.

I want to finish with another question. What is it about Peter Drucker that makes him such a baddie in Tom Peters eyes? That’s me got more reading and probing to do

Jon Husband kindly alerted me to Umair Haque’s blog post The Beginning Of The End Of Business As We Know It. Haque proposes that the economy is in a state of institutional collapse and says that we can possibly escape “this death-with-a-whimper” through behavioural innovation, creating new sources of advantage by reconceiving value-creation and the costs and benefits we respond to. His suggested five pathways to behavioural innovation are: stewardship, trusteeship, guardianship, leadership and partnership. He aligns leadership with challenging the status quo, which brings me to an academic article that impressed me when I first read it’s prescient observervations.

Socially Responsible Strategising

Called Taking Strategy Seriously: Responsibility and Reform for an Important Social Practice, it was published in December 2003 in the wake of Enron. The authors argue that it is time to take strategy seriously in a number of ways including “building more heedful interrelationships between actors within the field, particularly between business schools and practitioners”. The article makes the case for strategising as a multi-actor, socially responsible activity. Its analysis is detailed and pulls no punches.

It identifies as actors management teams, consulting firms, gurus, financial institutions, business schools, business media, state institutions and pressure groups. Gurus and the business schools they are associated with are criticised in the article for being “implicitly enrolled” in endorsing Enron, as are prestigeous business journals for publishing unquestioning and uncritical accounts of Enron’s apparent success. Stock market analysts and investment banks also get their collars felt for “pumping up the stock with recommendations that flew in the face of conflicts of interest”.

Challenging The Status Quo

In the UK, we are hearing increasing admission from Members of Parliament of the need for parliamentary reform. MPs’ behaviour is being loudly challenged by the force of public anger, leading to a number of them saying that they will not stand for re-election at the next election. Two things strike me as notable. One, for all the talk of the end of newspapers, it is a prominent newspaper, The Telegraph, that has led the charge. Second, ‘behavioural innovation’ from MPs has certainly not come about because they know it makes sense. They are not easily prized from the fruits of vested interests and entrenched attitudes of entitlement.

And so it is within the eco-system of institutions that oil the wheels of business. Institutional reform rarely comes from within, even in crisis conditions. Can we as individuals do anything to contribute to institutional reform? Can we influence and curtail the sort of mutually reinforcing behaviour displayed by the actors who fuelled the Enron myth? I think we can but not as lone voices. We need to use social media for more than self-promotion and entertainment. We need to come together as communities of critical consumers of what we are being told, with voices as loud and as powerful as those that criticise products and services.

Maybe then we will begin to see the beginning of the end of business as we know it.

I am re-visiting the meeting of 35 of ‘the world’s most progressive thinkers on management and organisation’ in May 2008. The output from the meeting was a list of twenty five stretch goals for management, Management Moonshots, ten of which were ‘regarded as uniquely critical.’

I have been worrying away at this like a dog with a bone. I happen to agree with a number of these stretch goals. It is possible to map many of them against classic texts from management thinkers I respect, some of whom were there at the meeting.

All this thinking has been available for a long time. And there’s the rub. If these fundamental insights have been around for so long, what makes anyone think they are going to be taken up and actioned now? Because we have crisis conditions? I don’t think so.

And another thing. Just because this august gathering came up with their twenty five stretch goals, are these the most pressing issues for management practice?

Applause to the group for raising and publicising the issue of management practices and their fitness for purpose in 2009. I do think, though, that the way in which the management reformation movement is being promoted is distinctly Management 1.0. At the end of his WSJ article, Gary Hamel asks, “which of these moonshots do you think is the most important to address now? And why?”

Not “Have we got it right? What have we missed? What would you propose?” I am probably being ungenerous and unfair. But there you go. That’s how it feels to me.

Reinventing Strategy

The ninth of the ten uniquely critical stretch goals is summarised as:

“Reinventing strategy making as an emergent process. In a turbulent world, strategy making can no longer be a top down activity. What is required instead is a strategy process that reflects the biological principles of variety, selection, and retention.”

Variety in a system is requisite when it is at as least as great as the complexity it is attempting to regulate. Anyone who knows me professionally knows that the social psychologist, Karl Weick is one of my thought-heroes. He says in The Social Psychology of Organising:

“It’s because of requisite variety that organisations have to be preoccupied with keeping sufficient diversity inside the organisation to sense accurately the variety present in ecological changes outside it.”

Management Reformation

So far it feels to me like the strategy for management re-invention is being approached in a manner akin to top-down, privileging and promoting the views of prominent thinkers to the exclusion of the experiences and collective intelligence of managers at the sharp end, practitioners, consultants and thousands of academic foot soldiers researching new management practices.

Transforming management practices, if it really happens, will emerge from vast mosaics of local action, experimentation and failures. The enormous complexity of the undertaking, following the principle of requisite variety, will require complexity of perspectives much greater than those possible from the group that convened in 2008.

So while I agree with many of the stretch goals, are they correct and sufficient? At the very least, management transformation demands wider debate and needs to include multiple perspectives. Even if consensus does begin to emerge around the stretch goals, what then? How do businesses go about making the transformation to new ways of working and managing? Again it has got to be collective transformation, learning, sharing, experimenting and failing together.

And Finally

Anybody else want to join me in proposing alternative priorities for the transformation of management?

Sadly, no-one has told the patient.

We live in a connected world, where competition from clever and cost-effective talent is not going away. Businesses really need to value people’s knowledge if they want to stay in the game, creating work environments that let people collaborate and learn together.

We have been here before. Continuous Improvement (CI), problem-solving and cross-functional collaboration are the hallmarks of successful lean manufacturing. They represent the first wave of smart working. Collaboration and social computing technologies present businesses with enormous opportunities for a second wave. Building on what we already know from the first time around, it is now possible to tap into deep reserves of collective intelligence, both inside and outside of the enterprise.

The Smart Work Company

The Smart Work Company helps enterprises transform performance by changing management cultures and processes. We do this by blending action learning and new management thinking, where ‘new’ is in fact putting into practice management methods that have been known about for a long time and have yet to become mainstream.

How We Do It

We start with a strategic challenge a senior executive wants to address. Together we determine what needs to be done, who needs to do it and how. Learning is through action, experience and reflection, alone and with others. Conversation, collaboration and sharing experience with peers is a crucial part of the learning process. It is about collaborative transformation – changing together.

The Last Word

We know what to do. We know how to do it. The knowledge is there for the taking and now is the time to act.

Many thanks to Nigel Temple for helping me shape the words.

What is it about the phrase “renowned scholars” that irritates me? Well one reason is that now when the business world is in such a state, it is not the time to be impressed by renownedness. Now is a time for a bit of humility. As it happens, I have a lot of respect some of the scholars mentioned. Henry Mintzberg in particular. I have been shouting and cheering in support of his critique of MBA education. From his website,

“Mintzberg asserts that conventional MBA classrooms overemphasize the science of management while ignoring its art and denigrating its craft … this calls for another approach to management education, whereby practicing managers learn from their own experience.”

The Practice Of Management

Exactly so. But wait a minute. Wasn’t Peter Drucker saying something very similar back in 1954 when he was writing about The Practice Of Management? He says,

“The quality and performance of its managers is the only effective advantage an enterprise in a competitive economy can have”.

Well, that and the brainpower, largely untapped creativity, potential and willingness to contribute of every person working in the enterprise. But you get the idea. He also says,

“Management expresses the basic beliefs of modern Western society … It expresses the belief that economic change can be made into the most powerful engine of human betterment and social justice”.

So Drucker proposes a deeply human and humane view of managers and the potential of management practice.

Nothing New Under The Sun

Which brings me to the 25 Stretch Goals For Management. Of the twenty five statements, there is not one that has not already been thought of and written about. Jon says in his blog post,

“It seems clear to me that most of these “25 Stretch Goals For Management” can arguably be informed by the emergent organizing principle I call “wirearchy” …  any competent OD (organizational development) practitioner will have been talking to organization / management clients about these issues for at least the last decade.  The transformation of management is available and accessible from organizational development principles but probably needs some re-framing.”

Beware Bad Management Theories

I am grateful to my colleague, Professor Robin Matthews for bringing Sumantra Ghoshal’s paper to my attention. Professor Ghoshal said,

“Business schools do not need to do a great deal more to help prevent future Enrons; they need only to stop doing a lot they currently do … we need to own up to our role in creating Enrons. Our theories and ideas have done much to strengthen the management practices that we are all now so loudly condeming”.

I argue here that there is more research on how to achieve new ways of working and managing than you can shake a stick at. Thankfully there is so much of it that patterns of principles-in-practice can be discerned from a kaleidoscope of past and present research.

While the majority of the twenty five ’stretch goals’ cover familiar ground and seem uncontentious, I have already written about my unease over ‘rapid-fire’ invention. Innovation needs tempering with checks and balances; I have too often seen the consequences of maverick bosses whose innovative activities have been to the greater glory of themselves and to the detriment of their staff, whom they regard as their own private fiefdom.

P.S. What I meant to say is that businesses do themselves no favours slavishly following the utterances of “renowned scholars”. By all means listen to what they have to say but business leaders need to exercise judgement and understand their own operating contexts before deciding how they go about adapting their management practices.

I got back from Moscow two days ago and flicking through my passport noticed that my first visit was on the 2nd February 2006. The three years working on this programme with senior Russian executives have been a highlight in my working life.

The reasons for this are many. These director-level executives are highly experienced and, by anyone’s understanding, enormously succesful people.

What can my UK colleagues and myself possibly offer them? The truth is that I learn more from my Moscow colleagues than they learn from me. We learn together, really.

Recognising Urgency

“China and India are phenomenal innovators. We won’t just go down, we’ll go down big time if we don’t watch out. We have to think of the clever new ideas and be ahead of the game while we have the affluence and economic growth to invest in way-out concepts. That includes the way we work.”

This quote from Professor Cary Cooper in the Institute of Directors’ publication, Director, in 2005 communicates an urgency in recognising a changing economic order in the world. It is far from clear that the US and Europe still have the luxury of “affluence and economic growth”.

In an article in today’s FT entitled Why I Fear The West’s Luck Has Run Out, Luke Johnson says,

“So why should industrious Asians earn a tiny fraction of what citizens in the west earn? Especially when they have so much of the cash and productive resources, while we have deficits, high costs and poor demographics … for too long it has been more profitable in the west to finance consumption rather than production. That cannot continue.”

Perhaps the west is waking up from this collective madness and hopefully beginning to restore our focus on production, urgently recognising that expertise, knowledge and skills are core to economic value-creation.

Shifting Mental Models

It is not just China and India we have to worry about. One of the most refereshing things I have enjoyed about my Russian colleagues is that these experienced and successful people are willing to listen, think very deeply, challenge themselves and others, and act decisively.

They are phenomenal innovators, willing and able to step outside of their experience to consider different perspectives and possibilities. They are developing sophisticated critical and integrative thinking skills – integrative thinking is, according to Roger Martin “the ability to see a problem as a whole, resolve tensions among opposing ideas and generate innovative outcomes.”

Pettigrew and Fenton found this some time ago. This ability to navigate ‘dualities’ – apparent paradoxes or tensions – is common in innovating organisations.

By the way, the executives I am working with are self-selecting. The fact that they are on the programme demonstrates their willingness to change. Of course, not all Russian executives are willing to step outside their comfort zones – desire to carry on as usual in the face of crisis is I suppose a human trait.

Global Recession – Opportunity or Crisis?

So where am I going with this? Will the global economic crisis jolt some business leaders in the west into shifting their mental models, like my Moscow colleagues? I hope so. But already there are signs of the sort of risk-averse behaviour seen in previous recessions, where managements become more controlling and revert to old habits.

The opportunity to innovate is there for any business leader prepared to listen and act. We know what works. We know how to do it. There are no excuses.