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Twenty-First Century Management

Managers occupy roles with authority over others. But when knowledge workers manage themselves, management is a process in which all can engage. Yet, in our efforts to define management, we persist in calling it a role, thus for managers only.

Industrial age organizations are formal hierarchies made up of roles. But a focus on roles puts all the power in the hands of managers, making management a top-down, controlling function. Industrial age managers governed employees by planning, organizing and controlling their work.

But today we talk of managing one's boss, relationships with strategic partners, suppliers and customers. If partners can manage their relationship with each other, then management cannot be a one-sided controlling activity. Also, if you can manage your boss, then management isn't restricted to the use of authority to control people reporting to you.

Management is much broader than what managers do to get work done through employees. We can manage ourselves, our time and many other activities that don't require being in a formal managerial role or managing people. The function of management, as distinct from the role of manager, is now everyone's business.

The truth is that the role of manager is only a particular application of management, not the whole story. A broader perspective avoids the negative connotations so commonly attributed to management. Moreover, employee engagement, especially of innovative knowledge workers, cannot happen until we move beyond our industrial age preconceptions.

In modern, post-industrial organizations, all employees need to manage. Self-managing teams use complex systems to help them manage their own work. Precise performance measures are openly accessible. Knowledge workers not only don't need to be told what to do, they often know better than their managers.

Modern Management Defined

Management can be defined as a way of achieving goals that adds the most value1. It's about being sufficiently organized to identify the right goals and the best means of achieving them.  To take a simple example: whenever you set priorities for yourself, you are managing your time.

Prioritizing means deciding what activities are most likely to achieve a goal and what tasks are most urgent or important now. Management is thus like investment: a process of allocating resources to obtain the best return, even if those resources are just your own time, knowledge and experience. Clearly, it is possible for all employees to manage their own time and other personal resources without being in a formal managerial role and without managing people.

Management is closely linked to goal achievement. Suppose your goal is to develop a cure for a rare disease.  You could achieve this goal in one of three ways:

  1. By luck - you could stumble upon a cure while looking for something else.
  2. In a disorganized, wasteful manner, exceeding your budget and alienating stakeholders.
  3. In a cost-effective, inclusive way that makes best use of all resources.

If you prefer the third approach, then you are opting for management over luck and chaos. Everyone has goals: personal, career, business, financial, social, learning and leisure among others. Without being regimented, you will achieve more with a managed approach.

Front-line employees with no one reporting to them need to achieve multiple targets in tight timeframes. This is only possible if they manage key aspects of their work and time. Clearly, they can manage a lot of things without authority over people or a management title.

An immediate benefit of this perspective is that we can derail the call to banish management. Even without the complexity of the modern world, no one can live without management. Complexity simply makes management all the more vital. Today we have self-managing knowledge workers and teams. As a result, the role of manager needs to change but the function itself is essential.

The hue and cry to get rid of management is really a call to dismiss managers. Setting tradition aside, we need to separate management from managers. Industrial age thinking equates them which is why management has been tarred with the same brush as managers. In any case, we need to see that managers are just as critical as management itself.

Management is not totally friendless, but even some of its champions are helping to sustain its industrial era image. Henry Mintzberg's latest book, Managing, equates management with the role of manager thus simultaneously distorting the role and overlooking how non-managers manage themselves and their own resources.

Julian Birkinshaw, attempting to reinvent management2, uses the Wikipedia definition: " the act of getting people together to accomplish desired goals and objectives." The reference is clearly to managers thus ruling out self-management, not to mention the management of money or other non-human resources.

But we need to rid ourselves of industrial age management, not managers. As organizations evolve to meet new demands, management must be upgraded accordingly. Industrial age managers need to be replaced by modern managers, however, not by leaders.

The Role of Manager

Industrial age managers operated with the metaphor of the organization-as-person where the "head" thinks and the "hands" do. It is no coincidence that employees were once called "hired hands." The implication of this metaphor is that managers do all the thinking and managing. The vision of employees as unthinking "hands" to be moved around at will by a remote mind is unsustainable in an age of empowerment and employee engagement.

We only started to disparage managers in the 1980's when the Japanese success in North  America ignited the call to replace them with leaders. Previously, management was regarded as a positive force in organizational life. But the 1980's bandwagon was a classic case of throwing out the baby with the bathwater.3

Managers used to have a choice of styles: "theory y" (people are responsible and can be trusted) or "theory x" (people aren't responsible and need to be controlled.) But the 1980's call to replace managers with leaders arbitrarily restricted managers to the "theory x" style while gifting leadership the "theory y" style. This move was made because we wanted leaders to take over the domain of managers of getting work done through people. This left us with no way to differentiate one from the other except through totally arbitrary style assignments.

A broader definition of management rids us of this negative image and supports two claims:

  1. All employees manage. Being more self-managing, they need to take more responsibility for ensuring that they obtain the best return on all of their efforts.
  2. If management simply means getting work done in a way that makes best use of all resources, then there is no implication of being rigidly controlling or mechanistic.

The Role of Manager Upgraded

The modern manager needs to get work done through engaged, self-managing knowledge workers, a far cry from industrial age "hired hands." The role of manager can be illuminated with analogies. Today's managers need to behave something like:

  1. investors
  2. customers
  3. sports coaches
  4. partners

Analogies are approximations; otherwise they would be identical to their comparison objects and not analogies at all. Thus managers share some attributes with investors, customers, sports coaches and partners without being identical to any of them.

1. Managers as Investors

Managers allocate resources to obtain the best return like investors. Their effectiveness is based on how well they use their resources. But managers differ from investors in two respects. First, knowledge workers want a say in what work they do so any allocation needs to be negotiated not decided unilaterally as an investor would do with money. Second, managers actively develop people so they are not as arms-length as financial investors.

2. Managers as Customers

As employees become more engaged they move from the status of hired hands to being more like self-employed business people supplying services to internal customers. In this relationship, employees can be more proactive to identify the needs of managers. Indeed, astute employees might see needs that managers overlook. This interaction involves two-way communication and negotiation not one-way, top-down directing. Also,  enterprising employees might devise new services to "sell" to their managers as a way of advancing their careers (building their business).

When high demand knowledge workers are in short supply, they have more power than their customer (boss). Such employees can easily move to new customers and, being knowledgeable, they might offer more advice to their boss (customer) than the other way around. So much for power residing only at the top and all direction flowing top-down.

3. Managers as Sports Coaches

Professional golfers have coaches and managers. The latter help them with their business matters, sponsorships and travel arrangements. However this manager cannot fire the golfer; it is the other way around. A sports manager is a facilitator, coordinator and advisor with no power to direct or control the golfer. Modern business managers are moving in this direction although they will always be able to fire the employees they manage. Still, when managing rare, expensive talent, they cannot fire them without carefully weighing the consequences. In any case, modern managers do more coaching and less directing so they need to behave more like coaches than like industrial age managers.

4. Managers as Partners

As the power of knowledge workers grows, they become more like partners than "hired hands". Toyota and other smart companies forge partnerships with external suppliers. Employees are, similarly, internal suppliers and partners. Still, suppliers and employees can be fired, unlike real partners who must agree a severance.

Facilitating versus Directing

In the industrial age, managers directed and controlled the work of "hired hands." In our post-industrial era, managers operate more like facilitators. Instead of passively allocating resources like hands-off investors, they bring the right people together, engage them in planning the work and coordinate execution. Like customers, they monitor the progress of projects but they may be in listening mode more often than providing one-way direction. In this context, controlling morphs into coaching, facilitating, nurturing and developing.

The conventional managerial functions of planning, organizing, directing and controlling become a shared activity or completely delegated depending on the context. Management adapts to meet current needs rather than hanging onto obsolete industrial age preconceptions.

Changing How Decisions are Made

Like customers and investors, managers retain the right to decide whether and how much to invest or whether to use different resources. But they can no longer dictate if they hope to engage knowledge workers and reap the benefits of their full potential. Now, they have to ask "What do you think?" more than give orders. Instead of making all the decisions, they need to involve employees by asking questions to draw solutions out of them. This change in decision making style, however, is not just a tactic to better engage employees. It's facing the reality that employees know as much or more than the manager. Being more engaging and less directive is essential for making the best decisions.

Transformational Leadership or Managerial Motivation

The transformational leadership bandwagon was launched in the 1980's, not coincidentally at the same time that leaders were usurping the role of managers. We used to say that managers had to motivate employees. But once managers were cast in the bad guy role of controlling disciplinarians, we needed transformational leaders to inspire employees.

Transformational leadership, however, is an industrial age model because it emphasizes top-down influence. Modern managers help employees find motivation through coaching. They  help identify their motivation and strengths. Managers then provide the kind of work that best capitalizes on those strengths.

It's like doing a strategic review of a business where the manager helps employees discover their core strengths and then helps them channel their focus accordingly. Finding what motivates particular employees is a process of discovery very much led by the employee.

Transformational leaders and industrial age managers operate with a boss-knows-best mindset hence why they try to inject motivation into employees in a one-way, top-down manner.

Maintaining the Status Quo versus Innovation

Managers are often described as preserving the status quo and blocking innovation. This accusation may have been justified for industrial age managers. But, remember that the objective of managers is to achieve objectives in a way that makes the best use of resources. All organizations have two objectives: to execute today's business profitably and to create the future through innovation.

To achieve the second objective, modern managers act as facilitators and culture builders to foster innovation. They bring the right people and other resources together along with whatever support mechanisms are required to foster creative thinking.

It is often said that leaders are creative while managers are not. But this is industrial age thinking again (and a complete red herring) because it focuses on the individual in charge, consistent with a one-way, top-down mode of operating. The person in charge (leader or manager) does not need to be creative at all because the role is one of facilitating creative thinking in others. Managers can thus foster innovation with or without being personally creative.

Management versus Leadership

Management upgraded resumes its rightful place as a core driver of organizational success. But what is there left for leadership to do? Leadership is an influence process. Whenever any employee influences others to change direction, leadership has been shown, whether top-down or bottom-up. If leadership is an influence process, then it can't make decisions. Thus all decisions are managerial actions, even strategic ones3. A CEO shows leadership by promoting a new vision. A front line knowledge worker shows leadership by promoting a new product.

Why it Matters

To achieve the level of innovation required for competitive advantage today, we need a better balance of power throughout organizations. Employees need to be more fully engaged in making strategic decisions as well as doing more of the planning and organizing of their own work. To break the stranglehold of the organization-as-person metaphor, employees need to share in strategic thinking.  Such ownership is the only way to achieve deep engagement. As a result, managers need to do less telling and more asking "What do you think?" But operating as a facilitator is not leadership. This needs to be seen as a management technique.

Keep in mind how Martin Luther King, Jr. showed leadership. He didn't facilitate a meeting of stakeholders. He spoke over their heads directly to the general public. He challenged the status quo and called for change. He influenced people to change, not having any authority to decide anything for them.

Competitive advantage depends on ridding ourselves of industrial age notions of leadership and management. All employees can share in management and show leadership, but only in post-industrial organizations.

  1. Joan Magretta, What Management Is, Profile Books, 2003
  2. Julian Birkinshaw, "Reinventing Management," Ivey Business Journal Online, Jan/Feb 2010.
  3. Mitch McCrimmon, "Leadership and Management Reinvented," Ivey Business Journal Online, Jan/Feb 2010.

Note: A slightly edited version of this article was published in Ivey Business Journal, July/August, 2010 under the title: "A New Role for Management In Today's Post-Industrial Organization." 

See alsoMintzberg on Management and Leadership and Management Reinvented.

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