When Managers talk of people they actually mean the Knowledge and experience they carry in their heads. However, since access is only through the ‘emotional interface’, the Knowledge interest is confused with what tempts people to voluntarily part with their Knowledge. The result is a dangerous loss of reality.
The conflict between people and their knowledge has arisen because of the rising importance of Knowledge in the past few decades. McKinsey studies reveal:
“…70 percent of all US jobs created since 1998—4.5 million, or roughly the combined US workforce of the 56 largest public companies by market capitalization—require judgment and experience.”
Knowledge is a possession. It is applied at the discretion of the owner. Drucker has defined the conventional wisdom on the application of Knowledge:
“The goal has to be to build responsibility for productivity and performance into every knowledge and service job.……In Knowledge and service work partnership with the responsible worker is the only way; nothing else will work at all.”
A method has yet to be found for the partnership to flourish. Uncertainty of action due to poor coordination in chaos, the growing gap between cause and effect, and work overload give free play to the incoherence in human thought (Bohm, Factor, & Garrett, 1991).
In the absence of control over the process of applying Knowledge, to assure itself of performance, the establishment has incentivised results achieved by the individual. The measure has produced results but perhaps at the cost of the society at large. The recent meltdown is an example:
- The genesis of the recent meltdown can be traced to the myopia that people must be managed for results. Bankers engaged in creating securities and instruments that had meaning only in the transaction world. They had powerful incentives for the success of the instruments created. At the first sign of reality the transactions turned worthless. They are referred to as bad-debts today, a word devoid of the convulsions that daily living was subjected to. Quite callously, the term disregards the bumper pay-outs made as bonus to the perpetrators of the transactions in the months leading to the meltdown.
Lafley, chairman of P&G in 2009, the year the world saw the bottom of the meltdown, made a telling point about Knowledge work and personnel when he pointed out in ‘Leadership lessons for hard times’: “Take trust. We only ever talked about it in relation to employees. But what matters most now is that consumers trust our brand, that shareholders trust our stock, that customers trust us to be the best supplier, and that suppliers trust us to be their best customer.” I interpret this to mean that the focus is not the happiness of the employee but the delivery of value.
The mess that Knowledge work is descending into is defined rather well by the observations of Pfeffer and Sutton in their Knowing Doing Gap (2000): Outdated culture, fear of change, false analogies, internal competition, empty talk, mindless measurements, etc.,and are common. They prevent conversion of knowledge as in best practices, insights, well laid plans, etc., to action, leading to billions in extra cost and failures….. Incentives can be counter-productive as they are prone to the ‘smart talk trap’.
It is quite clear that the future of Knowledge work cannot be identified with people. In fact it must be separated from them to give reality a chance. Leaders have become so adept at burying it! Enron, WorldCom, Satyam and the gamut of political scams are an example. It is possible they reflect the extreme. Yet they reflect a deep malaise. Most governments are run by the educated elite. They suffer from poor Knowledge application and can do far far better with the same resources.
Peter Scholtes has pin-pointed the symptom of the basic malaise rather well in his ‘The Leader’s Handbook’:
In the age of sound bites and bumper stickers we are encouraged to look for slogans and scapegoats, not the deep, system based explanations of what is happening and why.
Scholtes goes on to articulate the root cause in a blistering passage:
All of the empowered, motivated, teamed-up, self-directed, incentivized, accountable, re-engineered, and re-invented people you can muster cannot compensate for a dysfunctional system. When the system is functioning well, these other things are just foofaraw. When the system is not functioning well, these things are still only empty, meaningless twaddle.
What is this system that manages people and will set things right? What is its essence? Is it a culture where certain values and attitudes can be expected? The gurus proselytize about people rising beyond themselves and engaging in systems thinking to become better Knowledge workers as if listening can be practiced with a snap of the fingers or assumptions questioned as a matter of course without causing friction, and the reference framework expanded or contracted at will.
Is it heresy to think of a System that will separate the flow of Knowledge from its ‘emotional’ ownership by people? It should not be as inconceivable as may appear from a cursory reading of Drucker. All that is needed is systematic capture of the genuine interactions of Knowledge workers: they must interact to emerge decisions just as any person must progress towards the finish line once she/he takes on the role of a long distance runner in a marathon.
Normally I would not have attempted this barrier for it has stood impregnable for too long a time and many hobby horses have developed around the sensitive topic of people. Gary Hamel has stated just 16% employees are engaged. It is a reality that has developed over years and has consistently defeated the gurus. They did succeed within their circle of influence but could not roll their wisdom out. Successful companies have a lifespan of just about 10 to 15 years with very few exceptions. We have given up on collective thinking which lies at the core of the value added by systems.
I have attempted this barrier because I came across a plausible answer to the core problem of collective thinking. It is the conversion of IT from a tool into intelligent energy for organizing and driving superior application of knowledge by a collective. Mr.Raj Kumar, the creator of the conversion, has summarized it in his hack ‘Compelling energy for a quantum jump in organization performance’. However, I must emphasize why I see it as an answer. Perhaps that is my only claim to originality in this write-up.
I see Systems as organization AND energy. Perhaps the last great System was the one run by colonials. Its development probably commenced under Phillip II of Spain after 1556. He insisted on direct control over his vast kingdom. It reached its zenith under the British in India. They used it to efficiently administer the vast and remote hinterlands of India. Any Indian businessman would be conversant with it for it runs India even today. Its engine is the Section, which performs all the organization and moves the Cases across the bureaucracy for opinion formation and a decision. The decision too is acted upon by the Section. Pandit Jawaharlal Nehru, the first Prime Minister of Independent India, is known to have once quipped that the Section perhaps ran the Government Of India. The Colonial System may have turned sluggish today but its effectiveness in its heyday, as pointed out by Mr.Raj Kumar, was lauded by Drucker in his review of a new organization for the 21st century. Drucker in fact concluded it was the best model for management in the 21st century.
Bill Nobles has presented a counter model for the conduct of management in the 21st century in his hack ‘Overcoming the management hierarchical control mindset—the key to re-inventing management and resolving 20 moonshots’. It is derived from the proven philosophy of David Packard ,Ken Iverson, and to a fair extent of Sam Walton, Max De Pree and Herb Kelleher. In effect it makes the mind and mental energy of the administrator the engine. Administrators become self-ordering, self-directed and self-driving units. The outstanding performance of Hewlett Packard, Nucor Steel, Wal Mart, Herman Miller and Southwest Airlines is presented as support. With such excellent support the validity of the model cannot be denied. However, the fact remains that the model has not lasted much beyond the driving energy of its top level support in the respective companies. It is a top down model that perhaps depends on its leaders for survival.
Finally, at the end of all this talk of barriers and Systems the need that must be satisfied is:
- People must choose to commit and work
- The organization must be able to mobilize the collective thinking and acting power of its personnel
- The responsibility for innovation is spread throughout the organization
- The organization must possess the confidence it is doing what is needed to get what it wants
In particular, the organization should not be hoping it will get there by gratifying its people.
After reading about intelligent energy I believe it is best placed to evolve managements and do it without disruption for all practical purposes. The beauty is that it is possible even Mr.Raj Kumar may not know what model for creative thinking the utter flexibility of his work will enable. He has only assured constructive evolution of management and leveraging of the accumulated wisdom with his concept of intelligent energy.It needs to be appreciated that in the change mix Power and Will are very capricious elements.
The System solution belongs to Mr.Raj Kumar but its interpretation for people and the place of people as secondary to the System that harnesses their Knowledge is mine. I have specifically mentioned the authors whose works I have leveraged to express my views. The McKinsey study referred by me is available at:
Peter Drucker: Coming of the new organization. Harvard Business Review, January-February, 1988.