I’m normally an optimistic kind of guy. Each month when I receive Harvard Business Review, I open it up thinking that maybe, just maybe, there’s been a change of heart. Maybe they have moved on from 1965. Not much to ask, after all. I become even more optimistic when I read the headline like this month, “Get the Best From Your People”. This, I think, is certainly timely, given the studies that show that only one in five people are fully engaged in their work.
But then I go to the article to which the headline refers. As I read it, I have a growing feeling of horror. There has been no change of heart. There is no heart at all. We are right back in the world of manipulating people with numbers. In fact, we are no longer in 1965. We have regressed back to 1911. We are now in the world of Frederick Winslow Taylor.
The world of Frederick Winslow Taylor
In 1899, Taylor became fascinated by a simple question: How many tons of pig iron bars can a worker load onto a railcar in the course of a working day? Management theorist Paul Stewart depicts the situation:
“Taylor was forty-three years old and on contract with the Bethlehem Steel Company when he began thinking about pig iron. Staring out over an industrial yard that covered several square miles of the Pennsylvania landscape, he watched as laborers loaded ninety-two-pound bars onto rail cars. There were 80,000 tons’ worth of iron bars, which were to be carted off as fast as possible to meet new demand sparked by the Spanish-American War. Taylor narrowed his eyes: there was waste there, he was certain. After hastily reviewing the books at company headquarters, he estimated that the men were currently loading iron at the rate of twelve and a half tons per man per day.
Taylor stormed down to the yard with his assistants (“college men,” he called them) and . . . found a “high-priced man,” a lean Pennsylvania Dutchman whose intelligence he compared to that of an ox. Lured by the promise of a 60 percent increase in wages, from $1.15 to a whopping $1.85 a day, Taylor’s high-priced man loaded forty-five and three-quarters tons over the course of a grueling day—close enough, in Taylor’s mind, to count as the first victory for the methods of modern management.” (Stewart, P. “The Management Myth.” Atlantic Monthly, June 2006. 80-89 at 81.)
After Taylor was let go from Bethlehem Steel in 1901, he went around the United States regaling audiences with stories about the Pennsylvania Dutchman he called “Schmidt” and the improvements in productivity that were achieved through “scientific management.” In due course, his thinking was adopted by an emerging breed of management experts. In 1909, Taylor’s principles of scientific management were introduced into the curriculum of the newly opened Harvard Business School.
In 1911, in The Principles of Scientific Management, Taylor issued his ominous, prescient declaration: “In the past, Man has been first. In future, the system must be first.”Although at times Taylor occasionally professed an interest in improving the lot of workers, he was well aware that “the system” was ultimately about making more money for the company. As he wrote in Shop Management, “The full possibilities of this system will not have been realized until almost all of the machines in the shop are run by men who are of smaller capabilities and attainments, and who are therefore cheaper than those required under the old system.” And so the practice of dumbing down the workplace and outsourcing jobs was born.
The Time-Warped World of HBR
Fast forward to the HBR of October 2010, and the cobwebs of 1911 still festoon the thinking. The “system” has now become translated into “talent analytics”. How do you get the best from your people? You use analytics to pick out the better performers and squeeze more out of them. The analytics are used in six different areas –human capital facts, HR data, human capital investment analysis, workforce forecasts, the talent value model and the talent supply chain. The clever manager uses the numbers to identify the bright spots and ruthlessly cut out the fat and the waste.
How or why some parts of the organization are more productive than others is of no concern here. How any manager should actually interact with those doing the work so as to get the best from them is a subject is no more relevant than it was to Frederick Winslow Taylor back in 1911.
There is a one-sentence aside to the effect that “the success of any initiative depends on its leaders”. But what that kind of leadership might consist of is not a subject for the clever manager to be concerned about. Instead, the clever MBA trained manager resolutely squeezes the best out of people by studying the numbers. Heart, conversation, interaction, communication—none of this enters the picture. It’s all about the numbers.
The fact that HBR trumpets this article as the key to “get the best from your people” shows the mindset of the senior editors of the journal. This is about doing things to people, rather than doing things with people. It’s not that there isn’t an occasional sensible article with a contemporary feel that somehow slips into HBR. There is: the Peter Senge interview (p.70) in the same issue might be seen as an example. But what is perceived as important and central to the challenges of management by the magazine’s senior editors is managing by the numbers. Making more money by doing things to people.
In such a world, who should be surprised that only one in five workers are fully engaged in their work? Or that the life expectancy of a firm in the Fortune 500 has declined to just 15 years, and is heading towards five years, if nothing changes? Or that the rate of return on assets is only a quarter of what it was in 1965?
The real world of 21st Century management: doing things with people
In fact, the world has changed, unbeknown to the senior editors in HBR. Book after book arrives on my doorstep describing what’s actually going on in the real world of 2010. These are books like The Dragonfly Effect by Jennifer Aaaker and Andy Smith or Empowered by Josh Bernoff and Ted Schadler or Open Leadership by Charlene Li or Employees First, Customers Second by Vineet Nayar or Reinventing Management by Julian Birkinshaw.
All these books confirm that the mindset being pushed by HBR is deadly, both in the workplace and in the marketplace. It kills employees’ spirit, their innovation and their productivity. It leads to bad profits and destroys customer goodwill in the marketplace. Unless management is based on honest, open, human interaction and people are treated as people, nothing works. It’s not a question of setting aside the numbers. The numbers are always there. Measurement is central. But the numbers are measures of progress, not goals in themselves.
Curiously these books cite the same companies that the HBR article cites. Thus the HBR title page claims to reveal “the secrets from Google, Best Buy, Comcast and more”. However in the actual HBR article, the discussion of what’s happening in those companies focuses only on the measurement aspect. It turns the measurement into the whole ballgame. The heart, the honesty, the openness, the interaction that occur in those companies are ignored. As a picture of “how to get the best from your people,” the article is a travesty of how those particular companies are run or why they are successful. The HBR article has picked out a tiny sliver of people management in those companies and highlighted it as the whole story “how to get the best from people.”
It’s like saying the way to get the best out of your players on a sports team is to forget coaching and focus solely on the statistics. Of course, the statistics are an important factor. But they are only one of a number of factors. In sports, as in the modern workplace populated by knowledge workers, the passion of those doing the work is what’s driving the numbers. Any sense that they are being manipulated by the numbers kills their passion and productivity.
How did this fiasco happen?
What probably began life as a modestly sensible article about the role of data in managing people has now been turned by the editors of the magazine into the nonsensical claim that using the numbers to squeeze more out of people is the entire way to “get the best from people.” A ridiculous claim of course, but a viewpoint apparently still prevailing among the senior editors of HBR.
And why does this particular approach appeal so much to them? It’s part of a mental mindset to the effect that management involves doing things to people and the manipulation of them as things, rather doing things with people and interacting with people as adults. Manipulation is cleaner and less messy than human interaction. So that’s what gets headlined in HBR and trumpeted as the way to go. That’s what gets taught in business school. That’s what is still in most management textbooks. It’s a mindset based on manipulating people as things.
For much of the 20th Century, this worked well enough. It was possible to manipulate the workers and customers and get away with it. But the world changed. First, the work became predominantly knowledge work. As a result, the workers didn’t take kindly to being manipulated. Second, the balance of power shifted from sellers to buyers, who have good information of what’s available and many choices from which to make their purchase. They also didn’t take kindly to being manipulated. Finally, the advent of social media means that customers can fight back with a vengeance when they are being manipulated. As a result, what worked in the 20st Century doesn’t work in the 21st Century.
The editors of HBR are pretty smart and highly educated people. Why don’t they understand this? An interesting question. One reader, Pete Laburn, suggested to me Upton Sinclair’s insight: “It is difficult to get a man to understand something, when his salary depends upon his not understanding it.”
Yet I suspect the reasons go deeper and lie in the psyches of the kind of people who have climbed to the top of 20th Century organizations: they have a preference for inanimate things that operate in a linear fashion. In a linear system, optimizing one part of the system optimizes the whole. It makes manipulating it simple. These situations are easy to control. So there is a continual undertow pushing to see the world as it is inanimate—something that can be manipulated. The fact that the world no longer operates this way is beside the point. It’s more psychologically satisfying to see and treat the world this way.
The problem is that the modern organization is not a linear system. Optimizing one part of it (e.g. by cutting costs in one area can have a massive impact in other areas, both for those doing the work and those for whom the work is done.) The modern organization in a customer-driven marketplace is a complex phenomenon, where every action has multiple reverberations and implications for other parts of the organization and for the marketplace. If you manage this complex organization in a linear fashion, by using the numbers to look for things to cut, you get the results we see today.
What do traditional managers say to this? Simple:
“The life expectancy of a firm in the Fortune 500 has declined to just 15 years, and is heading towards five years, if nothing changes? Only one in five workers are fully engaged in their work? The rate of return on assets is only one quarter of what it was in 1965? No matter. If we work the numbers harder, we can squeeze more out of those human resources.”
Fortunately, there are a whole lot of books now are describing why this doesn’t work and why a radically different way of managing is already occurring in many organization, if only HBR would open its eyes to see.
My own book, The Leader's Guide to Radical Management , is being published over the coming month and gives further insights on how we are evolving from the lethal world of Frederick Winslow Taylor into a kind of radical management and leadership that is worthy of the 21st Century.