Articles
The End of "Scientific Management":
Replace the Traditional 3C's With Corporate Creativity
Dean Robb, Ph.D.
In the recent book The Innovator's Solution, the authors observe
that "to our knowledge, no company has been able to build an engine
of disruptive growth and keep it running and running." What the
authors are referring to is the deeply challenging problem of continuous,
profound innovation — the kind that turns the tables upside
down and shakes things up — the kind that enables sustainable
profitable growth.
There are definite reasons why this challenge is so intractable.
And, there is a very definite path out of the woods. But to fully
understand why those critical elements are so critical, one must
first understand the exact nature of the problem.
Historically, the basic principles that drive most of today's companies
— their "design DNA," so to speak — can be traced back
to two key past events: the scientific revolution during the 18th
century, and the development of "scientific management" during the
early years of the 20th century.
The scientific revolution, which began during the Enlightenment
period in the 18th century, marked the ascendancy, and later the
absolute domination, of pure reason, and belief in absolute and
unchanging laws of nature. During that period, the analogy of a
"clockwork god" or "god the watchmaker" became prevalent. This led
to a growing worldview of the universe as a giant machine, with
unchanging laws and unchanging components. This gradually led to
the belief that man could control the world through science, and
that basically, "progress" amounted to a gigantic technological
design and engineering project!
It also led to development of the traditional scientific paradigm,
which emphasizes a purely rational, empirical understanding of the
world, gained through the use of objective data and analytical thinking.
Eventually, it established the left-brain — the sphere of
rationality, logic, analysis, mastery of details, planning, prediction
and control — as absolute monarch in nearly all spheres of
human endeavor (in Western cultures).
Vanquished, the right brain — the realm of creativity, imagination,
intuition, emotion, seeing the big-picture (pattern recognition),
and soul — became more-or-less banished to the societal dungeon.
Right-brain capabilities became regarded at best as irrelevant,
and at worst as dangerous irrationality that could lead only to
chaos and darkness. As a by-product, right-brained people became
societally and organizationally marginalized. In an era when innovation
has become priority #1 on the agendas of CEO's, this is problem
#1!
Scientific Management
Fast-forward a century or so: at the dawn of the twentieth century,
President Theodore Roosevelt urged all state governors to give high
priority to what he called "national efficiency." In response, Frederick
Taylor, the "father of scientific management," had this to say:
"It is hoped ...that the same [scientific] principles
(used by engineers and managers of industry and manufacturing)
can be applied with equal force to all social activities: to the
management of our homes, farms, the business of our tradesmen,
churches, philanthropic institutions, universities, and governmental
departments."
This thinking launched a management revolution that eventually
yielded the "design DNA" for nearly all of our companies and social
institutions. Following are some of its key assumptions, which are
still deeply embedded in our legacy DNA:
- Like the world, organizations can be understood and managed
as efficient machines — mechanized production lines, to
be specific.
- Non-executive jobs should be broken down into streamlined, coordinated,
routinized, repetitive tasks — i.e. into cogs in the machine.
- Only a small, elite corps of senior executives is capable of
long-range, developmental tasks like visioning, innovation, design,
and planning. In other words, executives design and run the machine;
regular employees serve as cogs in the machine.
- An underlying assumption of stability and continuity (because
machines don't change); or, that change is a very gradual phenomenon
(carefully initiated, planned and orchestrated by management,
of course!).
In terms of organizational designs, these assumptions yielded the
classic bureaucratic model of 20th century corporations. In terms
of basic management tools, the traditional "3 C's" emerged: compliance,
control, and conformity. How?
The 3 C's: Compliance, Control and Conformity
When the overarching goal is a smooth-running production machine
with workers as cogs, concepts like individual contribution, initiative
and creativity were anathema! In a production environment, individuality
and internal differences represented a major headache because they
threatened the status quo. So, in connection with the classic management
task of aligning workers with the organization's current task (and
their own individual task), the goal was behavioral compliance:
task execution according to specs.
Compliance was ensured through an array of management controls.
Control was an overarching value, with prediction as its goal. Surprise
and the unexpected — anything that deviated from management
expectations — were viewed as errors to be ferreted out. This
led to social controls on the workforce like command-and-control
management methods, steep power hierarchies, performance management
systems, punishments and rewards, and the like.
Since most twentieth century organizations were founded on principles
that emphasize standardization, routinization and repetitive production,
"difference" was interpreted as a problem. This mindset extended
into corporate culture. Great emphasis began to be placed on creating
a high performance workforce through a "strong culture." In practice,
this amounted to conformity — i.e. on shaping collective thought,
perception, attitude and behavior along relatively narrow lines
believed by leadership to foster sustained performance excellence
(founded on routinized, repetitive behavior — i.e. strategy
execution).
When you add all this up, the problem becomes clear: our legacy
organizational DNA completely lacks any "innovation genes." Machines
can only execute repetitive tasks; they cannot learn, innovate or
change. More problematically, our legacy DNA generates organizations
that actively (if unwittingly) stamp out the sources of innovation!
Over-simplifying a bit, the foundations of innovation can be traced
to two key factors: the right-brain, and inclusion of internal differences.
The scientific revolution banished the right brain; and in the interests
of production efficiency, scientific management banished differences!
The Path Forward: A Climate of Corporate Creativity
In the today's hyper-competitive global economy, all of the assumptions
outlined above have become major impediments to sustainable growth.
Change is fast and furious. Increasingly, American business leaders
are not the initiators of change but rather the reactors to change,
initiated by competitors scattered around the globe.
As global competition accelerates, non-strategic left-brain functions
(activities utilizing defined, repetitive, linear, knowledge-based
routines and rules, like programming, accounting, production, etc.)
increasingly will be outsourced to developing economies. Right-brain
functions — like creativity, imagination, pattern recognition,
lateral thinking, emotional and relational competence — will
take center stage, becoming increasingly rewarded and hugely influential
in businesses capable of sustaining profitable growth.
Further, a transformational change is required in the relationship
between executives and the workforce. Here's an illustrative quote:
"The person who figures out how to harness the collective genius
of his or her organization is going to blow the competition away."
— Walter Wriston, former Chair/CEO, Citicorp/Citibank
Mr. Wriston put his finger on the wave of the future. Implementing
this idea, however, requires turning a couple of old beliefs upside-down.
The first is the legacy assumption that real genius resides exclusively
in the executive suite — in the small, elite corps of highly-educated
leaders/managers. Under this exclusionary mindset, senior executives
often become insulated and isolated from their people and their
customers, both of whom are generally most deeply in touch with
the day-to-day, changing realities of the marketplace and other
phenomena that need to be integrated into organizational sense-making
activities.
This gene in our legacy DNA originated at a time when the vast
majority of Americans were lucky to have finished grade school.
In the 21st century, it is far from uncommon for large numbers of
employees to possess stronger backgrounds and deeper functional
competence than their managers and leaders!
The second element that needs upending is the "3 C's" of compliance,
controls and conformity. These breed pervasive fear, resentment,
apathy, disengagement and subversion. It is quite unrealistic to
expect sustained performance excellence if an environment fosters
employees who couldn't care less about their company, because they
have decided their company couldn't care less about them. It's equally
unrealistic to look for sustained profound innovation in an environment
where differences are repressed.
A New Leadership and Management Paradigm: All Hands on
Deck!
A new leadership and management paradigm is needed; it must satisfy
two primary objectives:
- Performance: Delivering excellent
performance through disciplined, coherent execution of the current
business model and strategy, which must be aligned with current
marketplace needs. Moreover, to successfully execute, the workforce
must be in alignment with core purpose, strategy and goals. Alignment
is key to performance.
- Innovation: Continually creating
and launching new business models, strategies, products and services.
Systemic innovation capability depends critically on making room
for, and constructively harnessing, internal variety and differences.
This new paradigm might be labeled "All Hands on Deck!" Its purpose
is to build a workforce primed for sustainable high performance
and innovation founded upon an ultra-high-engagement, ultra-high-inclusion
culture.
Achieving this requires a transformational change: as leaders and
managers, we must give up the illusion that somehow we "deserve"
the right to dominate and control other adult human beings; that
somehow we are smarter than the people we lead and manage. Instead,
we must join into community with the people we lead, learning to
acknowledge and treat our employees as independent, highly-capable,
unique, individual adults.
A Community of Individuals
The enterprise must work toward something paradoxical and qualitatively
new: maximum social variety coupled with maximum social integration
(alignment). Social systems must encourage and support maximum diversity
and maximum individuality simultaneously with maximum community
and a sense of belonging.
The goal is a high degree of internal coherence and alignment based
not on the external, social pressures of control, conformity and
compliance. Instead, the enterprise will need to build authentic,
individual-level commitments toward a shared purpose and goals.
The old "one-size-fits-all" approach to management is thrown out,
replaced by unique, individual relationship between the enterprise
and each employee.
The Social Glue
Many leaders are reluctant to let go of traditional controls and
of giving power away to individuals. They fear the organization
will fall apart, spin out of control. Under the old paradigm, control
and compliance were the "social glue" that held the whole thing
together, yet so tightly and rigidly that change was like steering
the Queen Mary. Today a speedboat is needed, calling for a different
sort of social glue: mutually shared "deep purpose."
"Deep purpose" goes to the spiritual and ethical core of enterprise's
identity. It's an existential question: why are you (the organization)
here? How are you going to make a contribution to this world —
via service to your customers, stakeholders, employees, and society
at large? These questions include, but go way beyond, shareholder
return.
Admittedly, shareholder return is a necessary reality but when
shareholder return is the ONLY purpose of the enterprise, existentially,
this places the enterprise in an inherently exploitative relationship
with customers, employees and community. In this setting, the relationship
— at its deepest root — is a one-way street: customers,
employees and community exist to serve US... no mutuality!
In a hyper-competitive world, this arrangement simply isn't good
enough. The difference between success and failure is frequently
razor thin, so the edge will be your people. This brings us back
to "deep purpose." For most people, sustainable levels of energetic
commitment and drive stem from being tapped into something deeper
and higher than themselves. The source most often is a feeling of
being of genuine service to the world.
When their desire to be of deep service finds a basis for alignment
with an enterprise that also is tapped into that same energy of
contribution (rather than exploitation), tremendous drive and commitment
are released. Embedded in an environment where employees are treated
like adult human beings, a veritable powerhouse for sustainable
levels of performance excellence and profound innovation is the
happy result.
Example
There is a successful example, drawn from the healthcare industry,
of how a company can tap into its original "deep purpose," and also
create a social system that simultaneously maximizes social differentiation
and social integration, to ignite performance, passion and unsurpassed
customer service. It happened at a hospital in Europe, in a joint
venture with a prominent American IT company. The heart of this
venture was a transformational change aimed at creating a truly
customer-driven operation. The two entities worked together to integrate
all of the hospital's disparate, legacy communications and database
systems into one seamless, integrated whole.
The heart of the new system is an integrated customer data record,
offering any and all individualized information, from administrative
data to purchasing history, to patient tests, to digitized X-Rays,
MRI's and everything else conceivable. All of this information is
now accessible to ALL relevant departments and managers, simultaneously.
As a result, the new data system became clearly customer-centered,
no longer fragmented by bureaucratic silos and departmental turf
battles.
In parallel with this data integration project, the hospital completely
redesigned its patient service delivery processes, from bottom to
top. The hospital created customer-focused service delivery teams
comprised of any and all relevant personnel, including testing,
nursing, doctors, surgeons, and whoever else was involved, and held
the team jointly accountable for the patient's welfare. Using the
newly redesigned data system, these multi-disciplinary patient teams,
including multiple physicians from different disciplines, could
now work together, viewing patient data simultaneously and assessing
it from a variety of different perspectives. An integrated perspective
could emerge, with improved diagnoses resulting that otherwise would
have been missed.
The resulting changes in the social system for this hospital system
have been enormous: though there is still a high degree of internal
differentiation (around disciplines and clinics), it's now coupled
with high degrees of internal cohesion and integration driven by
the patient needs. Since the hospital's flow of treatment activity
is so much more driven by its focus on maximum service to customers,
an attendant increase in staff sense of pride has also evolved,
born of knowledge of effectiveness and the confidence of a job well
done.
Trends and Implications
Due in large part to the leveling effect of the Internet, today's
customers are becoming increasingly sophisticated and knowledgeable
about their spending options, causing the balance of power to shift
from sellers to consumers. Simultaneously, as baby-boomers age,
they are becoming increasingly demanding, impatient... and, well,
fickle. Looking for innovative, high-quality products and services
that cater to them, they do not tolerate the frustration, inefficiency
and headaches of the old fragmented, turf-driven, internal bureaucracies.
Enterprises who can adapt to this emerging new landscape will thrive;
those that don't will wither and go extinct.
This new power structure demands truly consumer-centric business
models, and companies that can transform their internal information
systems, processes and job structures to provide fast, seamless,
high-quality, customer-centered service experiences and product
innovations.
It calls, too, for firms to work toward establishing common ground
between multiple, highly-differentiated disciplines and work groups,
and for highly-integrated cross-discipline service delivery teams
at the "front lines," empowered to meet the individual needs of
individual consumers. This must happen without having to work through
laborious, labyrinthine piles of red tape. Also, leveraging numerous
disciplines to create truly innovative, never-before-experienced,
services and treatments are becoming the order of the day.
Meeting these calls-for-action demands significantly higher levels
of workforce engagement and creativity than has ever existed in
business before. The 3C's only block such engagement and creativity.
Replacing them with a new paradigm of "All Hands on Deck!" offers
a powerful remedy for organizational success in the 21st century.
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About Dean Robb, Ph.D.
Dr. Dean Robb is Founder and Executive Director of the Center for
Corporate Renewal (www.ctrforcorporaterenewal).
Since 1994, he has helped numerous domestic and foreign business
leaders build high-performing, innovative, entrepreneurial enterprises.
His expertise combines 26 years of practical, real-world experience
in corporate America with in-depth research in human and organizational
systems.
The Center for Corporate Renewal helps senior executives build
the capability for:
- Strategic Focus: Make sense of a changing
environment and gain focus on the next right strategic move
- Disciplined Execution: Align and mobilize
the entire organization behind this new strategic focus
- Creative Renewal: Renew the entrepreneurial
spirit by repeating these two actions over and over again.
For information on how Dr. Dean Robb can work with your organization
to instill a spirit and ethic of renewable corporate entrepreneurship,
email him at drobb@ctrforcorporaterenewal.com
or call him at 908-757-4721.
Permission to reproduce this article is hereby granted, given that
the contact information is kept intact with the article.
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