RE-INVENTING MANAGEMENT IN THE KNOWLEDGE ECONOMY

Dr. Austin Nweze

We live in a very interesting period in human history. The rate of change has been dramatic in human, political, social and business or organization spaces. Mergers and acquisitions are happening all over the world. In fact, a recent McKinsey & Co, a US-based consulting firm, report showed that in 2006 alone mergers and acquisitions activities globally summed up to about $4 trillion.

In Doug Reynold’s opinion: “the current business climate is driving mergers and acquisitions to new heights, and creating unique environments for businesses. M & As are a time of incredible uncertainty, both for those in charge of forging ahead with new strategies, and the employees who will be affected – perhaps positively, perhaps negatively – once the chips fall where they may. And it’s a period where decisions have to be made at blinding speed, and under intense scrutiny.”

The waves of change sweeping the world today are creating opposing tensions. These tensions include digitalization, demographic shifts, migration, and rapid degradation of social and natural capital. The pace of change is somehow faster, and that is part of the reasons why speed has been described as one of the characteristics of the new knowledge-based economy.

It is important to note that in this era, the frequency and aptitude and amplitude of restructuring and reforming are significantly greater than they were in the past. It does seem like the pathways of emerging future are less predictable than they were in earlier times.

Surprisingly, management has not really changed dramatically as other areas have changed. I know that organizations have evolved over the years from autocratic organizations to hierarchical organizations to learning organizations and now to teaching organizations. Though these changes have occurred within organizations but management has not kept pace. Almost the same management principles and tools still prevail.

Frederick Taylor and his co-travelers in management theory and practice would be turning in their graves right now wondering why the snail pace in changing or introducing new ways for managers to manage. I’m wondering too why no dramatic change has occurred in management and not many management tools have been invented safe for the ones invented in the 1800s and 1900s.

Those CEOs who ran organizations in the 1950s and 1960s for instance, will not so much feel out of place running today’s organizations.

The reason is quite obvious. You still find that hierarchies still exist in organizations, though some are flatter now than before. One aspect that has greatly improved in organization is the amount and frequency of training going on. Customer service has been introduced and constantly improved upon by training the front-line staff. But decisions are still made by senior executives and employees are still expected to take orders. In some cases, some are not allowed or empowered to take initiatives.

To illustrate, there was a young man I once interviewed for employment many years ago in a company I worked for. I asked him why he wanted to leave where he was working to join us. He explained that he was not allowed to think or take initiatives about things concerning his job. Each time he came up with any idea, he was not allowed to carry it out except what the manager wanted done. He complained to the manager and sought to know why. He was shocked when told by the manager that he was employed to carry out instructions given to him and not suggest any idea since he was not “qualified” to do so. I was surprised to hear that some manager in his right senses could believe and even say such a thing. How can such a company grow? What if the owner manager dies? That means the company will die alongside the owner-manager. Anyway, that’s the nature of management in some organizations.

In his new book, The Future of Management, published in 2007, Gary Hamel took a look at the history of management and said: “Most of the essential tools and techniques of modern management were invented by individuals born in the 19^th century, not long after the end of the American Civil War. Those intrepid pioneers developed standardized job descriptions and work methods. They invented protocols for production planning and scheduling. They mastered the intricacies of cost accounting and profit analysis. They instituted exception-based compensation schemes and set up personnel departments. They created sophisticated tools for capital budgeting and by 1930, had also designed the basic architecture of multidivisional organization and enumerated the principles of brand management.”

From the foregoing, we can see that management scientists did not invent much in the 20^th century. The 21^st century will be different. New inventions will come on stream and new work methods developed. The 21^st century is one in which all work is knowledge based. The foundations have been laid, and I believe by the middle of this century a dramatic change will happen in the management arena. Currently, managers are having challenges managing knowledge workers. They are not to be completely blamed though because they were not prepared for the change. If you ask me, the current global war on talent does not mean that the world lack talents. The universities the world over are graduating thousands of people every year, some of which are very bright and talented. All they need is some exposure and experience in the work environment and you will see them manifest. I’m also aware that not many engineers and science students are graduated today unlike in the past, but one can still find talents more than is being projected.

I think where the challenge is more is in the management of these available talents. Since more work has become knowledge-based, new set of management tools need to be invented to manage. The few that have mastered the new techniques of managing knowledge workers have become gurus or champions and the ones being sought after.

Knowledge workers have innate abilities which require management skills to harness. Managers need facilitative skills to draw out the best in people without lording it over them. In this dispensation, knowledge workers are managed differently. The traditional way of managing (for example, command and control) can’t work any more. The challenge before the 21^st century management scientist is to re-invent by inventing the modern corporate or industrial organization. This can be achieved in this dispensation.

The old and still the current practice of leaving strategy and leadership to those at the upper level in organizations will have to change. Another thing that will change is the issue of leaving hiring decisions to those at top levels. I have always argued that the person who should be working with the new employee should have a greater input in deciding who or what kind of person he wants to work with him. Most times hiring is done by the top-level manager with little or no input from the low-level manager.

As regards strategy and leadership I have also argued that they should not be reserved only for those at the top. Debra Meyerson in her book, The Tempered Radical, argued that leadership could be provided by all employees at all levels in the organization. She predicted, by this argument, what to expect in the future in terms of managing. In the same token, if leadership can be provided at the lower-level, strategy can be crafted by those at the lower-level as well. In addition to crafting functional and/or operational strategies, lower-level people could also participate or make inputs in the crafting of corporate strategy. In traditional organizations, corporate strategy is a no go area for lower-level people. Corporate strategy has been left as the exclusive preserve of top executives.

Gary Hamel argued that you don’t need to install a new management system from the ground up. “What you need is a methodology for breakthrough management thinking. While innovation can never be entirely scripted, it is possible to increase the odds of a eureka moment by assembling the right ingredients – starting with a disciplined process for unearthing and challenging the long-standing management orthodoxies that constrain creative thinking.” Take UBA for example. When little and unknown but aggressive STB (Standard Trust Bank) merged or acquired UBA, which was by then Nigeria’s third largest Bank, many pundits were surprised and didn’t give the union a chance to survive. But the story is different today. The UBA that was almost moribund pre-consolidation has been turned around, through the creative thinking of the new management and the introduction of innovative products plus calculative risk taking, to the behemoth “Africa’s global bank.” UBA’s contemporaries have been left behind to do catching up. They can only catch up if hey remove or unearth the existing management orthodoxies.

Getting pass these management belief system is not an easy task. Gary Hamel gave us a set of four questions that are helpful in getting beneath the surface of long-held management beliefs: First: is this belief worth challenging? Is it debilitating? Does it get in the way of an important organizational attribute (like strategic adaptability) that we’d like to strengthen? Second: is this belief universally valid? Are there counter examples? If so, what do we learn from these cases? Third: how does this main belief serve the interest of its adherents? Are there people who draw reassurance or comfort from this belief? Four: have our choices and assumptions conspired to make this belief self-fulfilling? Is this belief true simply because we have made it true – and, if so, can we imagine alternatives?

No matter how good and efficient a system, a process, and even a policy are, employees should be given the latitude to tinker it. Risk taking should be encouraged. Employees should be empowered and encouraged to innovate – try out new ways of doing things. Most organizations are afraid of letting employees take certain risks of either tweaking the process or the policy. I don’t really blame them much because a standardized process takes time to establish. Not only that, it cost effort and money too. So, letting employees change what has worked for years is not a palatable decision to make. But to make real progress requires constantly innovating the process. I believe in giving people freedom with responsibility to carry out their tasks. This does not take away intervening if need be when things are not working out right.

Without change, progress cannot happen. People should have the freedom to do their work the best way they think will achieve the best results without constrain within the corporate policy. Again, policies should be constantly changed to suit new work methods that enhance productivity. The essence of having a policy is to facilitate work process and productivity and not to hamper or hinder it. The point is that for any meaningful progress to place organizations must create the environment for innovation and discipline to co-exist within it.

To be continued next week.

Dr. Austin Nweze is of the Lagos Business School, Pan African University.

austinnweze2002@yahoo.co.uk OR anweze@lbs.edu.ng