The Harvard Business Review and a European conference site about the Drucker Forum are posting blogs by speakers to the Vienna conference taking place later this week, and I’m reviewing them. Back in May, Dambisa Moyo asked “Will Technology Support Global Growth?“. More specifically, Moyo asked if it would boost economic growth in developing countries, and points out two competing paradigms.
First, that transformation will transform livelihoods through info transfer, connectivity and communication leading to improvements in tech-enabled-health, education access, and expansion of use of mobile phones in gathering real-time market information.
Second, that transformation will also transform livelihoods through disruptive automation/robotics/AI leading to erosion of low-skilled jobs, reduced opportunities for young workers, and increased gaps in wages and between countries.
While those paradigms are well-argued, the conclusion is less clear i.e. that the private sector will already create new industries and opportunities on its own, so it is really public policy and government that need to pick up the pace to deal with the negative aspects of disruption.
I don’t have any real problems with the opening paradigms, but the jump from “private sector will do its part” for growth, and therefore the government has to do its part to deal with the downside is extremely one-sided. Presumably private, public and not-for-profit sectors have a role to play on all the fronts. Great opening to the article, it just didn’t go anywhere interesting.
I’m reading through a series of blogs on the Harvard Business Review and a European conference site about the Drucker Forum that will happen in Vienna later this week. Steve Denning wrote back in May about how The Internet Is Finally Forcing Management to Care About People. Denning’s position is summed up pretty well by the title of the article, namely that digital transformation will help drive humanist management.
Overall, Denning starts with a lament that all the humanist ways of thinking about management over the last 40 years have pretty much led nowhere because rewarding CEOs for shareholder value creates an impetus for command-and-control management over humanism. In Denning’s view, the shift of power from seller to buyer, from producer to consumer, will create pressure to create “new and better ways to delight customers”, beyond just price and volume. He also sees the digital transformation in the workplace, as it “shreds vertical supply chains”, and forces the businesses into the world of virtual meeting places and horizontal management rather than vertical command-and-control structures. With those premises in mind, he argues:
While armies of dispirited bureaucrats, driven by command-and-control, simply can’t get this job done, the enabling management practices and metrics of humanistic management are well suited to it. When the goal is the inherently inspiring goal of delighting customers, managers don’t need to make employees do their job. With managers and workers sharing the same goal—delighting customers—the humanistic management practices of trust and collaboration become not only possible but necessary.
I’m not as optimistic as Denning. Command and control structures do not simply exist because it was backed by a focus on the bottom line. Command and control, generally, is a direct result of the complexity of organizations and attempts by individuals to force order on apparent chaos, to bring their internal environment to heel. Government is a perfect example — many Departments are fully seized with their “clients”, partly because there is no profit metric to measure. It’s all about the client. Yet command and control, and bureaucracies in general, are rampant throughout these organizations.
In addition, Denning argues that “Education systems must support greater entrepreneurial skills and life-long learning to prepare people for the new world of work” while “Greater support must be provided for individuals to start their own businesses.”. In some ways, these are in direct opposition to each other — one, a service provided by the state; the second, a DIY mentality for business.
He also feels that the argument for treating customers with respect is already won. In fact, I would argue the exact opposite. If Amazon’s business model has taught people anything, it is that ruthless dehumanizing of the client is incredibly profitable. Sure, they make fast delivery to “meet their needs”, but their customers are not being “respected”, just ruthlessly served because it’s profitable, particularly if you can increase volume and decrease purchase friction.
Early this past week, I came across a series of blogs on the Harvard Business Review about the Drucker Forum that will happen in Vienna later this week. HBR and some European sites are hosting guest blogs by many of the major speakers to the forum, a mini-preview of some of the issues on their mind. Each one has been awesome so far, at least in terms of my interests…management, technology, human interactivity, etc. Not surprising since the theme of this year’s forum is Claiming Our Humanity — Managing in the Digital Age. So, I thought I would take a peek at some of the blogs in a bit more depth.
The first one out of the gate was Richard Straub, who back in April wrote Managing in an Age of Winner-Take-All. The post is well-written, including allusions to computers and digital connectivity augmenting brain-led human development as much as mechanical improvements augmented brawn-led development. I’m a little more skeptical when, despite the commitment to Drucker’s management work, Straub describes the modern organization and management practices as constituting a “social technology” construct, but I don’t dispute it’s transformative nature.
With the new technology comes a lot of disruption, and while Straub sees companies like Apple, Amazon, etc. all running towards “winner-take-all”, I’m not sold on those outcomes. I think they will reap whirlwind profits, but even Apple’s music dominance is giving way to newer players like Spotify. I do however agree that old-style management theory isn’t going to work in business management that is dealing with hard-core changes:
Consider management actions such as cutting jobs and investment as a response to currency fluctuations and the resulting accounting impact of those cuts on earnings per share (EPS). These types of cuts are applauded as canny, even heroic, by stock markets — despite their damage to the longer-term value-creating capacity of the enterprise. Share buybacks are preferred to investment in innovation, entrepreneurship, and value creation. And internal innovation often obsessively targets cost cutting instead of the search for new ways to delight customers or to enable employees and partners.
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The digital revolution — the “mother of all technology developments”— marks a fork in the road. One path invites us to depart from industrial-age management practices and mindsets and use the power of information-age technology to augment humanity’s role and importance in business. The other tempts us to apply the new abundance of data and expertise in creating software routines to automate the old logic of organizations, effectively hard-wiring the most dysfunctional rules managers relied on in the past.
Despite my misgivings about Straub’s constructs, I can’t disagree with his conclusions — too often, the new discussion is about “big data” or “new data” or just plain “more data”, but not whether that data tells us anything. Similarly with tools, we opt in organizations for automation without first evaluating whether the current business model that we’re automating is the one we want tomorrow, or if the tool will just anchor us to the past even further, rigidly planting our feet in cement while the world changes around us.
Where Straub leaves me behind is in the belief that private sector managers are, as Drucker put it, “society’s main leadership group”. I think they are one force, but perhaps because I am a government person first and foremost, I don’t look to the private sector to lead me anywhere I likely want to go.
But as a first blog in a series of posts on managing in the digital age, it does raise provocative questions.
