Friday, February 14, 2014

Industrial Management Meets the Knowledge Economy

An interesting theory: the reason many long-standing firms struggle to remain competitive in the present day economy is that their paradigm of organizational management remains stuck in the Industrial era.   That seem a bit glib to me, but not entirely inaccurate.

In the industrial era, and likely throughout history up to that point, management was largely spreading the work of one mind to many hands.   This is illustrated in the "pin factory" example of the division of labor - in which each worker was shown a simple and specific task (draw the wire, cut the wire, sharpen the tip, etc.) that he would perform exactly as demonstrated, over and over, to create a standardized product.   He does not need to solve problems or to think, merely to follow procedures and perform to standards, and if any problem arose to call over a foreman, who was the only worker on the floor authorized to make decisions.

Such jobs still exit in the present day, but are becoming far fewer in the domestic (US) economy because the manufacturing tasks of mass-production factories have mostly been shipped overseas.  However, the mental and problem-solving work - deciding what products to make, how to make them, how to market them, etc. - are what remains in most manufacturing organizations.    In that economy, the worker does not follow procedures, but must do knowledge-based tasks that involve problem-solving, which is a completely different kind of work.

In such an environment, there is no standard procedure for accomplishing tasks - there is no standard procedure for discovering the solution to a problem, and if one is defined it is only a rough approximation of what is actually done.   One a solution is discovered and a blueprint is crafted for the work that must be done to effect it, it can be (and often is) handed off to the drudges who perform tasks.   But even "the drudges" do not follow the same pattern, in the way that the laborer who sharpens a pin does the same thing every time, but must apply knowledge and skills to effect an outcome that is described but a process that often is not.

Hence, the problem with older management techniques being used in the modern economy is that they simply were not designed for the kind of work that is done anymore ... yet few seem to realize this or, if they do, to act upon it consistently.   Unfortunately, it seems that many who recognize this have only snake-oil to offer by way of a solution - misty and nebulous suggestion of techniques that seem to work, without a systematic examination of the reasons they do work in some instances (and fail miserably in others).

I'm not really sure where this was going ... or if it's gotten anywhere ... but there it is.

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