The (r)evolution of management

All of this presents a new challenge for how we think about and practice Management… and how we develop leaders that can excel in this brave new world. But before we look at the future, let’s take a look in the rear-view mirror and see how we got to where we are today:

1910s-1940s: Management as Science

Management as Science was developed in the early 20th century and focused on increasing productivity and efficiency through standardisation, division of labour, centralisation and hierarchy. A very 'top down' management with strict control over people and processes dominated across industries.

1950s-1960s: Functional Organisations

Due to growing and more complex organisations, the 1950’s and 1960’s saw the emergence of functional organisations and the Human Resource (HR) movement. Managers began to understand the human factor in production and productivity and tools such as goal setting, performance reviews and job descriptions were born.

1970s: Strategic Planning

In the 1970’s we changed our focus from measuring function to resource allocation and tools like Strategic Planning (GE), Growth Share Matrix (BCG) and SWOT were used to formalise strategic planning processes. After several decades of 'best practice' and 'one size fits all' solutions, academics began developing contingency theories.

1980s: Competitive Advantage

As the business environment grew increasingly competitive and connected, and with a blooming management consultancy industry, Competitive Advantage became a priority for organisations in the 1980’s. Tools like Total Quality Management (TQM), Six Sigma and Lean were used to measure processes and improve productivity. Employees were more involved by collecting data, but decisions were still made ​​at the top, and goals were used to manage people and maintain control.

1990s: Process Optimisation

Benchmarking and business process reengineering became popular in the 1990’s, and by the middle of the decade, 60% of Fortune 500 companies claimed to have plans for or have already initiated such projects. TQM, Six Sigma and Lean remained popular and a more holistic, organisation-wide approach and strategy implementation took the stage with tools such as Strategy Maps and Balance Scorecards.

2000s: Big Data

Largely driven by the consulting industry under the banner of Big Data, organisations in the 2000’s started to focus on using technology for growth and value creation. Meanwhile, oversaturation of existing market space drove to concepts such as Blue Ocean Strategy and Value Innovation.

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After a century of trying to control people, processes and information, we have come to a point in organisational history where we need to recognise that what worked before just simply isn’t enough anymore. Traditional Management is fine if you want compliance, but if you want innovation and growth, you need to engage your people on a whole new level.

In our research, we looked specifically at the evolution Management Approach and Approach to Innovation/Problem Solving and how these will develop in the future (see figure below):

1. Management Approach: the style of top management, ranging from:
   1. Control (i.e. your boss tells you what to do and how to do it).
   2. Set Goals (i.e. your boss sets goals and expectations, but you have more freedom with regards to how you achieve them).
   3. Inspire (i.e. your boss gives you scope and freedom to innovate on both the what and the how).
2. Approach to Innovation / Problem Solving: how leaders solve strategic problems and develop new products and services. This ranged from:
   1. Top Down (i.e. solutions are created and come from the top)
   2. Top Down with Bottom Up Data (i.e. the rest of the organisation contributes information and experiences, but solutions are still created at the top).
   3. Participatory (i.e. solutions are created collaboratively, and throughout the organisational levels).

Organisations of the future are neither consensus driven nor top down. They aren’t dictatorships nor are they anarchies. They’re not merely occupied with increasing shareholder value or making their people happy. Leaders of the future know that the two go together, and that happy and productive workforces is not about team building exercises or lucrative benefit packages, but about creating a working environment that offers purpose, mastery, challenge and autonomy, and in turn, creates more business value than the traditional approach.

Last month, Steve Denning wrote about The Management Revolution that’s Already Happening for Forbes.com. In it, he discusses organisations like Apple, Zara and Wholefoods that have successfully forged ahead despite the increasingly challenging environment. “None of these organizations has arrived at any final state or equilibrium: in each case, management practices continue to evolve. Nor are any of these organisations perfect, as they have to cope with a context that is filled with contradictions. Their virtue lies in the creative energy with which they are pioneering new ways of adding value.”

Steve makes some excellent points about the need to constantly reinvent ourselves, but I’m not sure if the revolution is already happening. In fact, I think it might be more of an evolution. And herein lies the problem. We need a revolution, not an evolution. As HR professionals we are armed with tons of research that support a more holistic, human way of doing business. It is up to us to stop simply following best practice and translate our knowhow into how we develop leaders and organisations that are more agile, innovative and purpose-driven… and in doing so, breed the pioneers and market leaders of tomorrow.

 About the author

Therese S. Kinal is the CEO and co-founder of Unleash, a disruptive innovator in the management education and consulting industry. She is the co-author of Unleashing: The Future of Work  and writes, runs workshops and works with clients on a range of management issues, including: The Future of Organisations, Leadership Development, Organisational Change, Adaptive Strategy Execution, Living Brand, Complex Problem Solving, Innovation and Entrepreneurship. Read her blog or follow her on Twitter.