Race Against the “Management” Machine

Race Against the “Management” Machine

Posted by: on Nov 4, 2011 | No Comments

Race Against The Machine by Erik Brynjolfsson and Andrew McAfee of MIT, is generating a lot of commentary and concern about the apparently ineluctable replacement of labor by technology. This is already well underway in manufacturing and is now taking off big time in services, leading to the so-called “management machine”. More robotized factories may indeed succeed in winning back business from China, but the lines at the unemployment office will still continue to grow.

No student of history should believe this scenario for a moment, nor do the professors from MIT. From hunter-gathering to farming, then to manufacturing, and now to services, creative inventors and risk-taking entrepreneurs have discovered opportunities to satisfy new needs, drive demand for labor, and grow wealth. Technology makes each leap forward cost-effective and opens up new avenues for human flourishing. We just can’t see it yet, especially in the current dismal economic environment. You can hear the authors themselves discuss this in a lively interview on the NPR radio program On Point, When Machines Do The Work, our Pick of the Week. Check out the related discussion on the WSJ.com, either in print or video, if you have access.

The interesting question for our readers is how these trends will shape management innovation and, in particular, strategic alignment. Joe McKendrick raises these issues in his post, Does information technology create or destroy jobs? Or is this even the right question?, on SmartDataCollective.  It is not simply that the ranks of executives and middle managers that will be depleted by Watson and Siri-inspired intelligent assistants and decision robots.  Rather, these emerging technologies will prompt and enable the adoption of new management principles, processes, and roles to replace traditional bureaucratic practices — the promise of the Adaptable Org. This week’s other selections reveal some of the mounting trends.

Purpose-driven organization

The first trend is the continued emphasis on clarifying business purpose. John Baldoni makes the case for clarifying purpose as central to the role of leadership and key to engaging employees in his presentation, Leading People and Organizations with Purpose (with audio), on Rypple’s In the Loop (along with a short summary by Nick Stein).  Paul Hobcraft in Designing Tension into Innovation argues that “coherence of purpose” is central to innovation and “adaptiveness” — the ability to establish the context and coordination for the adaptive learning cycle that enables innovation to fill performance gaps. For both authors, clarifying purpose is the new role for leaders who want to inspire and align the innovative capabilities of the organization. This focus on purpose — encompassing vision, mission, and values— represents a growing trend away from top-down strategic planning. By clarifying business purpose, management creates the space for eliciting multiple stakeholder inputs to strategy evolution and for harnessing the self-organizing insight and energy of the organization to execute, experiment, and adapt.

Hypothesis-driven measurement

The second trend is the continued reappraisal of the role of measurement. Measurement in the traditional sense of “what you measure is what you get” is seen as too control oriented — appropriate for machines but not for humans. Instead, measurement should be hypothesis-driven. Measures are the way scenarios, experiments, and assumptions are tested and improved. This view of measurement is increasingly seen in the literature about BI, analytics, and decision support discussed elsewhere on Adaptable Org. The world of information and emerging technologies recognizes the fundamental need to establish purpose and context before data becomes truly valuable to decision makers.

Steven Wunker explains this for managers in his article on HBR Blog Network, Why Peter Drucker Distrusted Facts.  Good decisions come from good questions, not from good facts. Questions and the competing opinions of management — hypotheses — should drive fact gathering, not the other way around. This puts the premium on dissenting views and using measurement to test the validity of alternative hypotheses. Dissent requires openness to alternative opinions from across the organization. Instead of viewing alignment as flowing from measurement, agreement on the right questions leads to consensus on what should be measured.

A practical example is provided in Steve Denning’s review (in Forbes) of The Ultimate Question 2.0 by Fred Reicheld – the inventor of the Net Promoter Score. Acknowledging the great value of NPS in helping companies understand whether they are truly delighting their customers, he also shows how the measurement is often misused. Denning’s detailed critique of how Philips used “relative NPS” to avoid asking the right questions is both fascinating and a cautionary tale for others (The “Relative NPS” Trap: Why Philips Isn’t Delighting Its Customers).

Because the organization is not truly aligned with the business purpose, what you measure is quite often NOT what you get.  Likewise, because management has neither asked the right questions nor posed useful hypotheses, what you measure will NOT get you what you need.

Leave a Reply