The Wall Street Journal has had a big week of "endings". On August
16, they published a piece entitled "The End of American Optimism".
The WSJ announcing the end of American optimism is the UK announcing they are
getting rid of the Queen. You can read my take on that piece here.
The "end of American optimism" piece by Mortimer Zuckerman gives a fairly accurate summary of the travails of the US economy. We are not just in a trough of the business cycle. We are in the midst of a phase change of some kind. The main recommendation for doing something about it seems to be give more visas to foreigners. Sensible though this is, it's not going to go very far towards solving the problems of the US economy. The idea that something is amiss with management itself didn't make the cut in that article.
However by week's end, the light had dawned. In the WSJ's "end of management" piece by Alan Murray, there is a recognition that 20th Century management has come to the end of its useful life:
“…everything we learned in the last century about managing large corporations is in need of a serious rethink. We have both a need and an opportunity to devise a new form of economic organization, and a new science of management, that can deal with the breakneck realities of 21st century change.”
The article suggests that allocation of resources is a major
problem for today's organization. The new organization will need to be “flexible, agile, able to quickly adjust to market developments, and ruthless in
reallocating resources to new opportunities.”
In effect, it will have to be good at continuous innovation, which is partly an issue of resource allocation.
“In corporations, decisions about allocating resources are made by people with a vested interest in the status quo. ‘The single biggest reason companies fail," says Mr. Hamel, "is that they over-invest in what is, as opposed to what might be.’”
However the article—I think rightly—sees the issue more broadly as going beyond economic decision-making in terms of resource allocation. It sees “an even bigger challenge” in creating structures that motivate and inspire workers.
“The new model will have to instill in workers the kind of drive and creativity and innovative spirit more commonly found among entrepreneurs. It will have to push power and decision-making down the organization as much as possible, rather than leave it concentrated at the top. Traditional bureaucratic structures will have to be replaced with something more like ad-hoc teams of peers, who come together to tackle individual projects, and then disband.”
It also notes that the new organization will have to be ultra responsive to customers and to shifts in the marketplace.
“New mechanisms will have to be created for harnessing the "wisdom of crowds." Feedback loops will need to be built that allow products and services to constantly evolve in response to new information. Change, innovation, adaptability, all have to become orders of the day.”
So the new organization will have to be:
1. Good at continuous innovation
2. Able to inspire workers
3. Responsive to customers and clients and to shifts in the marketplace
In other words, this is sounding eerily like radical management.
This is an excellent article, but it is not served well by its title or its subtitle.
The article is not really talking about “the end of management” as its title suggests, but rather the birth of a radically different kind of management that can do things that traditional management couldn’t.
Equally misleading is the article’s subtitle in suggesting that “managers should act like venture capitalists,” because venture capitalists are only good at one dimension of radical management—resource allocation. They are not generally known for their ability to deal with the other dimensions of the new management.
The management that is needed is thus multi-dimensional. We need high productivity and continuous innovation and job satisfaction and client delight, all at the same time. This is not about finding individuals with super-human capacities, but rather a radically different mental model of how you go about the task of management.
To learn more about radical management, go to: https://www.stevedenning.com/Books/radical-management.aspx