One of the most famous quotes in management is Frederick Taylor's maxim in his 1911 book. principles of scientific management“Up until now, people came first, but from now on, systems must come first.'' The Academy of Management selected this book as “the most influential management book of the 20th century.''
But today, Mr. Taylor's maxim is overturned by economic reality. The most valuable and fastest-growing companies are now increasingly focused on people rather than systems. How this remarkable turnaround happened reveals much about the future of management.
Scientific management has dominated for a century
Taylor's scientific management propelled management practices in the 20th century. This involves managers identifying the most efficient processes, training employees to implement them, and monitoring and controlling implementation to increase efficiency and generate more revenue. I was there.
The profits gained were enormous. Peter Drucker said: “Since Taylor's principles took hold at the end of the century, productivity has increased approximately 50 times in all developed countries. Improvements in both the standard of living and the quality of life in developed countries depend on this unprecedented expansion. I am.”
Key milestones of success include:
· Henry Ford's assembly line for the mass production of automobiles. By 1918, half of all cars in the United States were Ford Model Ts.
· Around 1960, the Ford and Carnegie Foundations began conditioning their funding to business schools on the rigorous adoption of scientific management.
· In the 1970s, Nobel Prize-winning economist Milton Friedman advocated adopting a “maximization of shareholder value” (MSV) system as the sole goal of corporations.
· In 1997, the Business Roundtable approved MSV as a corporate purpose.
· Scientific management promoted business process reengineering and Lean Six Sigma in the 1990s.
· Evidence-based management is implicit.
・Assumed by ISO standards for both management and innovation and by the World Management Survey.
Today, it is still treated as a truism by leading management experts. “Management is simply the tools, methods, processes, and structures we use to work together as humans to do things that we cannot do alone.”
Critics of scientific management emerge in droves
Meanwhile, Mary Parker Follett (1920s), Elton Mayo (1940s), Douglas McGregor (1960s), Smith and Katzenbach (1990s), and now Amy Edmondson and Katzenbach. Critics repeatedly argued that the human element ('human') was undervalued. Rita McGrath and many more.
However, in dismissing such appeals as “vague,” “unscientific,” and “lacking purpose,” proponents of the scientific process typically point to the human body's autoimmune system, which functions like the human body's autoimmune system. did. A discipline with a rigorous spirit of quantitative rigor. ”
Then suddenly everything turned around
At the start of the new millennium, companies that operate as systems of processes are driven by highly subjective concepts (mental models, values, attitudes, stories, passion, empathy, purpose) that scientific management has ignored. They began to earn less profit than new companies. in principle.
Initially, it appeared that scientific managers had little to worry about. The dot-com crash of 2000 showed that these companies were simply “technological advances in computing and communications” and that companies like Apple and Amazon “did not contribute to the real economy.” They were merely products of “their own powerful propaganda machine.”
But by 2011, the financial world realized there was a more fundamental problem at play. Marc Andreessen's 2011 WSJ article, “Why Software Is Eating the World,” suggested that some “fast-growing startups” were making significant profits. Ta.
Their value reached trillions of dollars by 2024, when companies like Microsoft and Apple asserted the centrality of human factors such as empathy and culture, especially for customers and knowledge workers.
At first, traditionalists said it was “just technology” and overlooked the fact that successful companies were in multiple sectors, including automotive, retail, pharmaceuticals, and even fashion.
In any case, all companies have access to the same technology. Calling these companies “technology companies” would be like calling successful companies in 1900 “power companies.” The important difference is not electricity or technology. The benefits of each era depended on how electricity and technology were used.
Game Change: The End of Scientific Management
What was wrong with managing processes as a system?
One reason was economic. As Peter Drucker explained in 1997:
“The productivity revolution has come to an end. When Taylor began advocating his principles, 9 out of 10 working people were doing manual labor…By 1990, this group By 2010, that share will be less than one-tenth. Improving the productivity of manual workers can no longer generate wealth by itself. The productivity revolution has become a victim of its own success. What will now be important is the productivity of non-manual workers, and this will require It is the application of knowledge to knowledge. ”
Luckily, the internet came to the rescue. The Internet first gave companies new possibilities for innovation, then gave customers more choice, and finally again gave companies the possibility of new business models based on network effects.
As a result, over the past quarter-century, when leading companies began to do the opposite of Taylor's words and make human interest the driving force behind their processes, practices, and methods, they grew much faster and experienced exponential growth. We were able to create a lot of value.
Scientific management was also a moral failure.
But the collapse of Taylor's scientific principles was not just an economic failure. Subjugating humanity to an abstract system for unspecified purposes was a potentially coercive, even fascist idea. Its defenders argued that it could be implemented in other ways to pay attention to human concerns. In fact, Taylor wanted most of the profits to go to workers. However, as the 20th century progressed, managers became increasingly concerned about their shareholders and their own interests, and even their workers and customers.
In politics, we understand these issues very well. We advocate democracy, not an imposed abstract system. We will do our best to prevent minorities from seizing democracy and imposing their will on us. It may not always be successful, but it is a clear goal.
In management, humans accepted the idea of subjecting themselves to a system because the economic benefits seemed so great. In effect, we accepted the tyranny of a management system in exchange for a pot of hot soup. When the hot soup was no longer available, it was natural to question the deal.
Discipline doesn't change overnight.
The ongoing leadership transformation is largely practitioner-driven and finance-driven. In fact, as new levels of performance become possible, you begin to need them. Unless companies can achieve this kind of performance, they risk being driven out of business by those who can.
We are now considering a fundamental change in management discipline. As the American physicist and philosopher Thomas Kuhn explained, this kind of change doesn't happen quickly. These he proceeds in three phases. First, work will proceed based on an agreed approach. In the second stage, a new paradigm begins to emerge. In the third stage, new assumptions begin to gain support.
It is difficult to accept the new paradigm in the third stage. Kuhn explains. “This stage involves both resistance to the new paradigm and reasons for individual scientists to adopt it.'' According to Max Planck, “the truths of a new science must persuade their opponents and make them Victory is not achieved by making people see the light, but rather because the opposition eventually dies and a new generation grows up who is acquainted with it.
We are currently in this third stage of management. The most valuable and fastest-growing companies are creating new management paradigms. The question is when, or if, the average company will be able to catch up.
Also read:
The management paradigm that powers the world's most valuable companies
Understand the dark side of the world's most valuable companies
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