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Anthropologists tell us that anatomically modern humans (i.e., Homo Sapiens) emerged about 300 thousand years ago during the Pleistocene era on the African savannas. For over 95% of their history (until the present day), modern humans have been exclusively hunter/gathers, that is, they explored the bounty of nature in small bands, adapting their behavior as they encountered different environments. Few management skills were required other than communication and teamwork. The goal was the discovery and exploitation of food and other resources necessary for survival and continuation of the species.
While Homo Sapiens are not the first species that used stone tools, they took tool making to the next level to better extract value from, and survive in, different environments. In one sense, they were early knowledge workers. They developed and applied a body of knowledge about their environment to the search for food and other resources necessary for survival. A sense of freedom was available in this early form of group organization and management. Specialization of labor was likely along gender lines; the men did the hunting, while the women did the gathering (and nurtured the young).
About 12,000 years ago, horticulture and agriculture first emerged in what is called the Neolithic revolution. Key to this transformation was the domestication of certain plants and animals that could be produced using cultivation and herding practices. For example, the goat was domesticated about 10,000 years ago in Iran, emmer wheat about 11,000 years ago in the southern Levant, and rice about 10,000 years ago in China. The emergence of agriculture-based societies enabled permanent settlements and significant population growth. Whereas hunter/gathers survived with small team-based work groups, early agriculture-based settlements led to more formal types of organization. Early institutions undertook these functions (e.g., in the fertile crescent from Egypt to Mesopotamia) as irrigation, seed distribution, and grain storage were likely organized to avoid crop failure and famine. Widespread single-crop agriculture did not become common until the Bronze Age, about 6,000 years ago.
With settlements, further specialization of labor took place. Artisans such as the butcher, the brewer and the baker that Adam Smith idolized in his book Wealth of Nations (1776) became common. A series of industrial revolutions, beginning in the late 1700s in England and continuing into the 1900s, spread throughout much of the developed world as water power, steam power, and electric power were applied in turn to the production processes of factories and other venues.
The essence of modern capitalism is investment in, and the substitution of, capital equipment for manual work in the search for efficiency gains. By the early-1800s, a textile factory using a 100 HP steam engine could do the work of 880 men. One documented example ran 50,000 spindles, employed 750 workers, and could produce 226 times more than it did before the introduction of steam.
Still, up until the 1840s, US firms remained very small (just a few people). The owners managed, and the managers owned. At the time, transportation and distribution were facilitated by animals on the land, and by wind power on the seas. Commercial steamships were not common until after 1850. Bureaucracy was the new management technology of the mid-1800s and enabled the growth of large organizations, complete with middle management, such as the railroad and telegraph companies of the day.
So, is management best when it controls or when it enables freedom? If you look at the definition of management in the dictionary, you will come away thinking that it is largely about constraint — dealing with or controlling people and resources to achieve reproducibility and productivity. Since the Neolithic Revolution in agriculture, management has gradually imposed order and control on processes, in the service of normalization, standardization, and efficiency.
Certainty, management focused on efficient process control can provide benefits, depending upon environmental conditions. For example, total quality management (TQM) was a winning strategy for Japanese car companies that were conquering the American market in the 1970s and 1980s. Consumers of the time were looking for small, reliable, and efficient cars following OPEC-led gasoline price increases. So, normalization and standardization, and the reduction of defects that comes through various management approaches have been historically important beginning with the agricultural revolution, through the industrial revolution, and beyond. This thread of the story of management is primarily about efficiency gains, as well as meeting the demands of the market for quality.
Now, however, we are in the first half of the 21st Century. The environment has changed and is changing still. The introduction of the Internet in the early 1990s has served to disrupt the business models of many brick and mortar enterprises. Increasingly, large and formerly dominant organizations have become walking zombies as their business models have come under threat from upstart online competitors. For instance, Amazon, Netflix, and Airbnb are capturing, and bringing into their orbit, large portions of the transactions in various retail, entertainment, and hotel spaces, taking business from established brick and mortar players. Internet-based players are creating new intermediation models on a large scale, not tied to a specific location on the map but ubiquitous in cloud-based servers.
There has always been a tension between human agency, such as the individual’s freedom to act and to realize his or her dreams, and the organization’s need to control, normalize, and standardize processes to create reproducibility. Yet today, many workers are feeling trapped in their jobs, bound by bureaucratic processes and soul-draining performance management systems that prioritize adherence to key performance indicators (KPIs) over worker freedom and innovation. At a time when firms scarcest resource is innovation and creativity, management control remains heavy-handed (because it can). Gary Hamel notes that although most employees can purchase a $20,000 car in their personal lives, they need to get official permission to purchase a $200 office chair in their lives as an employee. What’s up with that?
Ironically, the hottest management trends of today (small agile teams using scrum techniques) are something of a throwback to the Pleistocene bands of early humans that exploited their environment through hunting and gathering techniques for survival. Exploring new environments and changing conditions requires freedom of action, and it is time for management to loosen control. Indeed, organizations could think of themselves as being in the Pleistocene again, in need of a modern band of knowledge workers to explore and understand the changing environment and identify new resources for survival. The next time you run into a C-suite executive that wants to impose KPIs on your unit, tell him or her to loosen up and go back to the Pleistocene. Homo Sapiens operated quite successfully in that way for over 95% of human history. It would be a return to our roots.
Unfortunately, today’s management philosophy and practice stand in the way. It is the programming and conditioning between our ears that holds us back. We can’t get to a better future if maximization of profit and shareholder value continue to be prime directives. In fact, these are merely arbitrary and self-serving goals that are unconnected to natural law.
A new management philosophy is required. From first principles, we know that an organization must find ways to exchange benefits with its environment if it is to survive. A new approach to management is emerging which acknowledges and accommodates this reality. It is called Management by Positive Organizational Effectiveness. It holds that the goal of every organization is the same, that is, to be effective within its environment. An organization becomes effective within this framework by serving its environment and being rewarded in return, exchanging different types of benefits in the process that are needed to survive and thrive. This approach places effectiveness above efficiency in the hierarchy of organizational performance.
When the goal of every organization is the same, management is no longer free to set objectives from the top down. Rather, teams at the periphery are empowered to ask, “how can I best serve my environment today.” Like the freedom of the Pleistocene bands, these new teams are set free to create a better future around specific product and service offerings, a future that not only benefits them, but that serves to strengthen the common good as well. Perhaps we have much to learn from our Pleistocene roots.
Charles G. Chandler, Ph.D.
[email protected]
Reference:
Chandler, Charles G. 2017. Become Truly Great: Serve the common good through Management by Positive Organizational Effectiveness. Powell, OH: Author Academy Elite.