Management matters. What happens in management determines—for better or worse—the quality of life for most people for most of their waking hours. Without management, no people are clothed or fed or housed, no children are educated, no health services are delivered, no communications take place, no travel happens, no entertainment or ballet or drama or movie is presented, no museums are run, no books get published, no science is possible, no firms make money and no government can be run. In any society, management is the biggest single determinant of the quality of life of the people in that society.
In any society, if management is of the wrong kind for its time, most of the people are miserable most of the time. That includes the people doing the work, the people for whom the work is done and the rest of society who are affected by the way the work is done. If management is right for its time, most of the people live lives that are inspired and energized and rich with meaning and fulfillment.
In our time, we suffer from management that is wrong for its time. The kind of management that is pervasive in our big institutions has become dysfunctional. It is not only that most of those doing the work are not fully engaged in what they are doing. Even on its own terms, management is failing: it has generated widespread “bad profits”, undercut firms’ sustainability, destroyed whole industries, undermined the capacity of entire sectors to compete internationally, and even undercut the economy recovery since 2008. These are serious shortcomings.
For too long, people have assumed that this situation is simply the way things have always have been and will continue to be, come what may. It has been taken for granted that there is no other way to run big institutions. The 20th Century approach to management—hierarchical bureaucracy aimed at making money—is seen as the only viable modus operandi of the workplace, as inevitable and unchangeable as the weather. This is known to be true, because people can see that efforts to improve management never result in any permanent betterment: after brief episodes of reform and initiatives and reorganizations and changes in personnel, the firm always reverts back to the old ways.
Redesign, not repair
In reality, efforts to improve management failed because management was suffering from a dysfunction, not a malfunction. Repairing a malfunction can succeed: with repair, the organization can resume functioning the way it was meant to. But when institutions suffer from a dysfunction, simple repair can’t work. Today’s organizations are functioning precisely the way they were designed to function. What is wrong with our institutions is the very design. To deal with the dysfunction, our management and institutions have to be designed differently.
As Roger Martin told me, “Malfunction is doing the right things wrong, something that Peter Drucker argued is quite fixable. It is a shame to waste energy on doing the wrong things right.”
What we need is not better management of the same kind, but rather management of a different kind. Fortunately, we now know what this different kind of management comprises. It has different goals, different ways of organizing and coordinating work, different values and different ways of communicating from the way organizations were run in the 20th Century. It entails different ways of thinking, speaking and acting in the workplace. It is not only better for those doing the work and for those for whom the work is done: it is vastly better for the organization itself and its shareholders. Firms operating in this different are extraordinarily profitable.
It is a shift from simple, technical, linear thinking (“place rod A in slot B”) to an acceptance of the complexity of the genuine management challenge that we face: how to profitably inspire customer delight. Given changes in the marketplace, firms that remain in the former mode will not survive; the economy will continue to sputter, stumble and periodically crash, while political issues will continue to be unfixable. Firms that can master the new mode of management will thrive and prosper; if enough firms get into this new mode of management, society will enjoy a Creative Economy with benefits for many.
Management in the Creative Economy is different. It’s a transformation as fundamental as the Copernican revolution in astronomy—a shift from the view that the sun revolves around the earth to a view that the earth revolves around the sun. The Copernican revolution in management is similar: as Joseph Bragdon wrote in Profit for Life (2006): “We are finally waking to the fact corporations are not the center of our economic universe, with people and Nature orbiting around them. In fact the opposite is true.”
Once we make the Copernican shift in management, everything looks and feels different. It involves a different understanding of how the world works. It’s not a gradual shift from one perspective to the other. The shift is fundamental and abrupt and discontinuous. Just as the reptiles and dinosaurs became birds, not by becoming better at crawling or walking, but by acquiring feathers and wings and learning how to fly, so managing in the new mode involves not merely becoming better at managing in the old ways, but living new mindsets, attitudes and values and acquiring new capabilities.
The Great Awakening
Making the shift in management entails a Great Awakening. Are today’s managers and leaders ready for make the transformation? Are they ready to liberate themselves from their mental conditioning and undertake the paradigm shift in management? Can they escape the gravitational pull exerted by decades of management experience on how to think and act? Can they see that their true future and prosperity lies in thinking and acting differently?
This is not the first time that some of these issues have been presented as possibilities. At those times, the transformation didn’t happen. The reasons are various. Exemplars of the new way of managing didn’t exist. The thinking was still embryonic. The requisite technology was not ready. All but a tiny minority of visionaries continued with the simplistic, technocratic linear thinking that killed the creativity of the economy and dispirited most of those involved in it.
Now the situation is different. Many well-known large-scale highly successful exemplars of the new way of management exist. The concepts, principles and practices of the new way of managing are now well understood and fully articulated in a canon of management literature that is growing by the day. The requisite technology is now cheap and available and ever-present. As a result, a Great Awakening is taking place.
Around the world, millions of people are beginning to insist, not on better management, but on different management. Millions of people are becoming aware that the way things have always been and the way the powers-that-be say they have to be is not the only way. There is another way, thoroughly tested, fully articulated and readily available. These people have begun to glimpse the possibility of liberation from the conceptual prison in which they have been living so long. There is a growing recognition that because traditional management is self-inflicted, we can simply opt to liberate ourselves and do things differently. We are on the brink of something different.
I spent the first four decades of my life gazing at the vast and somber edifice of the Soviet Union. Grim, impregnable, and despotic, it seemed destined to last forever. Yet economically it was rotting from within. When the Berlin Wall came down, the edifice abruptly collapsed.
The vast and somber edifices of our big institutions still stand. Grim and impregnable, they also seem destined to last forever. Yet despite these appearances, and record profits that are fueled by cheap government money, these firms are rotting from within. The despotic management practices that are causing the decline are anachronisms from a former era. It is only a matter of time before they come to be seen as uneconomic and intolerable as despotism in the political sphere.
The shift in management is thus part of a larger story, an emerging process of societal change, in which the structures that we build are adjusted to enhance rather than strangle the living part of our lives.
Management is not simply a menial set of technical directives. At its best, it clarifies and magnifies human capacity. By opening those pathways by which human beings become productive, it brings an increase in existence for those doing work and those for whom the work is done. Through creating the space where we can live mindfully and wholeheartedly, it enlarges what may be known, what may be felt, what may be done.
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