What is Management for, Anyway?
Why the Hierarchical Organization is No Longer Suited For the Challenges of the Modern Economy.
Ever wondered how did the low-budget comedy Office Space earned its cult following? It’s become a generation-defining film not for a star-studded cast or great jokes, but because it held a mirror to the contemporary society and pinpointed a problem with the workplace culture that we have all long suspected. The idea of management, as it was inherited from the industrial era, has outlived itself.
The World Bank estimates the global workforce at about 3.5 billion, and by no means would I expect, much less advocate, that those who are employed today will transition into a management-free structure in the near or even medium term. At present, the vast majority of work involving human labor would still be best carried out in a traditional organizational structure.
The post-management era is just beginning to dawn. And it is the ever-accelerating pace of the technological progress, which is responsible for destroying the old paradigms.
In the world of VUCA (volatility, uncertainty, complexity and ambiguity), it is the tech unicorns who will be the early adopters of the post-hierarchical model. In fact, some have already embraced it.
Today’s competitive landscape is defined by one word: disruption. The ideas of incremental progress, continuous improvement, and process optimizations just don’t cut the mustard anymore. Those practices are necessary but insufficient. Enduring success, nowadays, is impossible without intrapreneurship, category-defining innovation, and unremitting business transformation.
The organizational dilemmas faced by ambitious disruptors is best exemplified by experience at Netflix. Their HR guru, Patty McCord, identified a problem that appears obvious in retrospect: as businesses grow, so does complexity. But that comes at a cost of shrinking talent density.
The slide deck she developed with the CEO of Netflix, Reed Hastings, went viral, and Sheryl Sandberg referred to it as possibly the most important document to come out of Silicon Valley. That said, Patty McCord did not earn her accolades by identifying the problems. What captivated everyone’s imagination were the unorthodox solutions that she offered: “Over the years we learned that if we asked people to rely on logic and common sense instead of on formal policies, most of the time we would get better results, and at lower cost.”
limit the tyranny of procedures, bring on board high-performers and let them self-manage in the environment of maximum flexibility.
The commentary on Netflix’s corporate culture often focuses on the concrete HR policies, such as self-allotted vacation, no travel expense reports, etc. But those examples are just derivatives of a larger vision — high business complexity needs not be managed with standard processes and ever-growing rulebook. Patty McCord advocated for the exact opposite: limit the tyranny of procedures, bring on board high-performers and let them self-manage in the environment of maximum flexibility.
The process of dealing with or controlling things or people is how we define management today. And if this is not a red flag to a CEO running something other than a widget factory, I don’t know what is. Controlling things no longer appears plausible, and controlling people is downright counterproductive. Steve Jobs hit the nail on the head when he said: “It doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.”
Apple’s cofounder is rightfully considered one of the greatest visionaries of our time, but had he been born in, say, the XVIIth century or even 50 years earlier than he was, and have uttered the same pronouncement, I doubt that it would have resonated with his contemporaries. The post-management era is just beginning to dawn. And it is the ever-accelerating pace of the technological progress, which is responsible for destroying the old paradigms.
Having smart people tell the landowners what to do in a pre-industrial society would not have led to better economic outcomes. In the best-case scenario, it would have invited ridicule. There was no evidence to suggest, at the time, that the production and population growth were not one of the same.
all work that requires supervision is being outsourced to robots and algorithms.
While the division of labor was the hallmark of the industrial era, it is becoming increasingly difficult today to parse out and allocate white-collar work in the form of specific/precise tasks. Regardless of how we describe the present, be it the digital epoch, the fourth industrial revolution era, or the second machine age, what it boils down to is that all work that requires supervision is being outsourced to robots and algorithms. Non-standard, creative, experimental work, on the other hand, doesn’t naturally lend itself to management.
The second fundamental shift we are presently witnessing is that the mantra of first planning and then executing is no longer a viable strategy. What used to be known as muddling through is now called adopting and adapting to the fast-changing environment. Strategy, as we know it, is dead. Dealing with uncertainty is the number one challenge and, as the cliché goes, it’s the number one opportunity too. If your company isn’t the disruptor, it’s a clear sign that the disruption is coming for it.
The bottom line is that outdated hierarchical model is no longer suited for the challenges of the modern economy. Every pillar of a traditional organization is now in flux, as was brilliantly conceptualized by Tanmay Vora
The status quo is often protected by the vocabulary: directors direct, presidents preside, and managers manage. But all those activities are much less value-adding than they used to be. They constrain innovation and stifle creativity in the pursuit of order.
Context Curator is the term I’d like to introduce into the business dictionary.
Contextual awareness, peripheral vision, design thinking, multidisciplinary approach, those are the terms trending in modern office-speak. And deservedly so. A project-based and titles-free organization — where yesterday’s team member is today’s team lead — can deliver the flexibility and agility that the businesses are yearning for.
Context Curator is the term I’d like to introduce into the business dictionary. To lead a project is not to assign tasks and monitor performance, but to empower, to define the broader context, and to organically link the work of one team with the rest of the business. Following the example of Netflix and striving for higher talent density is only half the battle. Curating the context for, as opposed to managing, high-performers is the key to unleashing their full potential.
Compliant with the Hollywood script-writing standards, Office Space boasts a great love story. The protagonist, Peter, bonds with a girl he liked, Johanna, “over their shared loathing of idiotic management and love of the television series Kung Fu.” The apocalyptically comical ending, where a disgruntled employee burns the office building down, offers a perfect metaphor for the looming risks traditional idea of management presents to the modern tech business. And you don’t have to watch the movie to guess what caused the disgruntlement.
Recognizing the inevitability of transition towards the new organizational structures, I find myself a bit anxious. Having built a career in a world of robust hierarchies, I struggle to imagine what it’ll be like to join a perfectly flat organization. But one person’s chaos is another’s creative process. As it goes with all conventions, it’s hard to let go, but when they are gone, one struggles to remember why we had them in the first place.
Have you read?
- We’re moving fast. But nobody knows where we’re going
- 5 Ways to Cope With The Workless Future
- What if everyone took a sabbatical?
Originally published at WEF
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