To successfully transform our organizations and adopt new ways of working, we need to understand how we got here. The study of management is a social science. It influences our thoughts, management practices, and organizational behaviors.
Social sciences provide valuable insights. But they are not always testable, timeless, or universally applicable. Adam Smith’s “Wealth of Nations” (1776) and Karl Marx’s “Das Kapital” (1867) are influential works but are not immutable. By contrast, the physical sciences present verifiable facts. The Law of Gravity has not changed since Sir Isaac Newton (1665) observed that objects fall at a speed of 32 feet/second2.
People are examples of complex adaptive systems. Their responses to stimuli can be observed but are not absolute or always predictable. Most people flee a burning building, but firefighters rush in. The Hawthorne Effect demonstrates that humans may alter their behavior when being observed.
Management theory is evolutionary and is influenced by social and economic factors. Understanding the history and context opens the path for the critical analysis of deeply held beliefs. Outdated, century-old theories still affect how we lead and manage our teams. Understanding the evolving nature of work and management theory will allow us to become better leaders.
The age of mass production began at the dawn 20th century and is represented by Frederick Winslow Taylor and Henry Ford. Taylor passed on attending Harvard and started his career as a machinist. He observed that his colleagues were pacesetting and established a leisurely cadence. When promoted to foreman, he increased productivity by standardizing work and performance metrics.
Auto manufacturing was originally a craft with small teams building an individual car. Ford employed Taylor’s Theory of Scientific Management to build the first production line. Cars moved down an automated line where the pace was set by management and the workers executed repetitive tasks. These practices reduced the time required to build a single car from over 12 hours to just 90 minutes, and a new car rolled off the assembly line every 3 minutes.
Taylorism established the organizational model that dominated management thinking for the next hundred years. Management made decisions and pushed productivity by setting the pace and output quotas. Labor was just a factor of production that needed to be optimized. Industrial relations were characterized by (sometimes violent) conflict, with employees demanding better conditions and management suppressing their activities. Amazon’s warehouse and delivery performance standards and accounts of drivers urinating in bottles are reminiscent of this dynamic.
The nature of work began to shift after the Second World War. Over 8 million veterans received educational benefits under the GI Bill and 2 million attended college. Peter Drucker heralded knowledge work in his 1959 book, “Landmarks of Tomorrow.” Doctors, academics, and accountants were examples of knowledge workers who used critical thinking to do their jobs. Knowledge workers created value with their brains, not their brawn. They had skills that were hard to replicate and domain knowledge that their managers did not possess. This shifted the labor-management dynamic.
Around the same time, Douglas MacGregor described Theory X and Y managers. Theory X managers characterized the traditional industrial model where workers were not to be trusted. Management’s role was to provide oversight and control. Theory Y managers were the antithesis. People wanted to do a good job, and the role of management was to create an environment where people could succeed.
W. Edwards Deming was an American statistician who helped Japan rebuild after the World War. Deming introduced Systems Thinking, which encompassed: understanding the end-to-end value stream, building quality-in, continuous improvement, and empowering line workers. Japanese manufacturers came to dominate their industries by the 1970s by applying these practices.
Deming’s theories and practices were critical of the American industrial model and mostly ignored in the United States until the 1980s. Following the decline in American manufacturing in the 1970s, Deming and his associates were rediscovered, sparking the quality American movement with its focus on building quality-in, worker empowerment, and labor-management collaboration. Ford launched its Quality is Job #1 campaign to herald its embrace of this ethic.
Knowledge work now dominates the U.S. labor market. The dominance of the information economy is the next evolution in management theory. Unlocking the intrinsic motivation and creativity of workers is now a primary focus. We have learned that traditional rewards often motivate the “wrong” behaviors and stifle creativity.
Abraham Maslow first described the Theory of Human Motivation in the 1940s. He outlined a hierarchy of needs. Physical (food, clothing, and shelter) and psychological needs (belonging and self-esteem) formed the first levels of his pyramid. Once those needs were fulfilled, people could self-actualize and transcend. Self-actualization and transcendence are described conceptually. In practical terms, it is reaching a state of psychological safety where creativity and innovation can be achieved.
David McClelland developed Needs Theory and described people as motivated by the desire for achievement, affiliation, and power. Achievement is realized by being recognized for completing a challenging task. Affiliation is the need to be part of and accepted by the group. And people may also seek personal or institutional power.
To solve today’s complex problems, Dan Pink argues that intrinsic motivation is needed. Financial incentives only improve performance for simple tasks but lead to poor outcomes for activities requiring even minimum cognitive abilities. Knowledge workers are motivated by autonomy, mastery, and purpose.
Autonomy Is the desire to be self-directed. People want to solve problems without being told what to do. Mastery is the desire to learn, improve, and build skills. And purpose is doing something that matters.
Agile is built on these modern management theories. The Agile Manifesto states, “Individuals and interactions over processes and tools,” which recognizes the value of people collaborating to solve complex problems. Processes and tools create the framework but not the magic. Two of the Agile principles describe empowering and motivating the team. The role of management is to create the right environment where people can thrive. Also, those closest to the work will develop the best solutions.
The Harvard Business Review article (1986), “The New, New Product Development Game,” influenced Scrum, which described how the best product development teams worked in a collaborative, cross-functional environment. Disciplined Agile embraces the principle of “being awesome.” Recognizing everyone wants to succeed and be part of a successful team. Successful teams create psychological safety, a value shared with the Scaled Agile.
Management theory is like the ocean and is subject to currents, crosscurrents, and riptides. Even in the information age of self-organizing teams, we see management behaviors that harken back to earlier times. Recent efforts to track the online productivity of professionals threaten to stifle the creativity of knowledge workers by mistaking activity with progress.
© 2022, Alan Zucker; Project Management Essentials, LLC
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