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:
yeah truly a great site.I really enjoyed my visit.
Posted by: Health News | March 16, 2011 at 03:32 AM