The (r)evolution of management

by External04 Jul 2013

After a century of trying to control people, processes and information, we have come to a point in organisational history where we need to recognise that what worked before just simply isn’t enough anymore. Therese S. Kinal provides clues as to the way forward.

Management is in need of a revolution. And not just one on glossy academic paper, but one that actually changes how organisations think and act. Despite the inspirational stories we read about companies like Zappos, Innocent Drinks and Google, the truth is that most of us are using out-dated management practices and failing to get the most out of our people. Not convinced? Consider this: 65%[i] of people are unhappy at work, only 14%[ii] understand their company’s strategy, and 75%[iii] are seeking jobs as we speak.

Today’s leaders face increased complexity and ambiguity, and employees and customers alike are demanding engagement, transparency and responsibility. One billion people are now on Facebook, and 500 million Tweets get sent everyday. Customers don’t want to be sold to. They want to connect with your brand and play a role in the development, sales and marketing of your products. If we ever thought we had ‘control’, it’s definitely gone now.

All of this presents a new challenge for how we think about and practice Management… and how we develop leaders that can excel in this brave new world. But before we look at the future, let’s take a look in the rear-view mirror and see how we got to where we are today:

1910s-1940s: Management as Science

Management as Science was developed in the early 20th century and focused on increasing productivity and efficiency through standardisation, division of labour, centralisation and hierarchy. A very 'top down' management with strict control over people and processes dominated across industries.

1950s-1960s: Functional Organisations

Due to growing and more complex organisations, the 1950’s and 1960’s saw the emergence of functional organisations and the Human Resource (HR) movement. Managers began to understand the human factor in production and productivity and tools such as goal setting, performance reviews and job descriptions were born.

1970s: Strategic Planning

In the 1970’s we changed our focus from measuring function to resource allocation and tools like Strategic Planning (GE), Growth Share Matrix (BCG) and SWOT were used to formalise strategic planning processes. After several decades of 'best practice' and 'one size fits all' solutions, academics began developing contingency theories.

1980s: Competitive Advantage

As the business environment grew increasingly competitive and connected, and with a blooming management consultancy industry, Competitive Advantage became a priority for organisations in the 1980’s. Tools like Total Quality Management (TQM), Six Sigma and Lean were used to measure processes and improve productivity. Employees were more involved by collecting data, but decisions were still made ​​at the top, and goals were used to manage people and maintain control.

1990s: Process Optimisation

Benchmarking and business process reengineering became popular in the 1990’s, and by the middle of the decade, 60% of Fortune 500 companies claimed to have plans for or have already initiated such projects. TQM, Six Sigma and Lean remained popular and a more holistic, organisation-wide approach and strategy implementation took the stage with tools such as Strategy Maps and Balance Scorecards.

2000s: Big Data

Largely driven by the consulting industry under the banner of Big Data, organisations in the 2000’s started to focus on using technology for growth and value creation. Meanwhile, oversaturation of existing market space drove to concepts such as Blue Ocean Strategy and Value Innovation.

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