How the West was lost #2

The first article on this subject was a bit short and I would like to give some more background and detail. Before 1900 there was not much theory or anything about management or leadership, the only large institutions known in the West were the royal courts, the military and the Catholic church – all quite top-heavy.

The late 1800s in the US were characterized by a proliferation of industrial robber barons, exploiting every man and his dog. The situation had been the same 75 years earlier in the UK, famously described for example in Charles Dickens’ writings. But many industrialists were not like that and took social responsibility for employees and society to some extent.

The first two thirds of the 20th century represented the golden age of American business including a fairly enlightened leadership style, that took a sad turn for the worse at the end of the century, ending in the rise of the Imperial CEO. We cover the story here:

The Background

Frederick Winslow Taylor (1865-1915) was the world’s first management consultant, he started business in 1880. He ended up having a profound influence worldwide – capitalist America, Stalinist Russia, Nazi Germany and Thatcherite Britain. He called it “Scientific Management” although there was nothing scientific about it, but he hit the world with the message in an era where everything with “science” was good, and stopped all arguments.

Taylor wanted to change, not only the way work was done, but in fact the whole of society, with his extreme focus on the “expert”, we most notably think of the “work-study-men” in white coats, carrying stopwatches. Everything could be quantified, analyzed and planned by the right expert, that is why Stalin, Mussolini and Hitler liked Taylor so much, it appeals to the inner centralist in each of us. At the heart of Taylor’s approach was contempt for the ordinary working man, probably also a reason why the aforementioned bad guys liked him so much.

In the first half of the century another new creature came into being, the MBA (Master of Business Administration). It was however difficult to figure out exactly what it was that they could do in organizations, so before WW-II not much was heard of MBAs.

The Sweep

Later in the 20th century, beginning after WW-II a neo-taylorist wave swept through industry, education, healthcare and the rest of the public sector. Some of it would be called “New Public Management”, everywhere with a focus on experts, some of them external, this gave rise to a flourishing consultant industry.

This sweep was generally pushed heavily by business schools, who needed their MBA programs to look like something real. MBAs became the fast track to the top.

It also was helped forward by the large number of young men returning from the war, that had not had the traditional training in companies servicing customers and creating products, but instead had at a very young age had command over life and death on the battlefield. They needed something challenging to do quickly, huge numbers went to the business schools.

This decoupling from actual work gave rise to the (relatively absurd) idea that in order to manage an organization, you did not have to understand what the organization was doing, you just needed to know how “to manage” without domain knowledge. Management became accepted as a discipline in its own right often above the mission of the organization. A huge part of this “management” dealt with financial and legal wizardry, to a lesser extent with the so-called brand-value a very fluffy concept.

I once held a Scrum training course for a very prestigious leadership organization, during debrief after the course the lady CEO said: “Yes it was OK, and our people liked it, but it was a bit operational. I have to say, that normally we don’t get down to the level, where the work is done”. I found it hard to believe my own ears at the time.

This neo-Taylorism, the Cult of the (so-called) expert, have been much more damaging than Taylor himself, as he luckily died at a fairly young age. What are the attributes of this phenomena?

  • The first and most important thing is that measurement is everything. Managers are those who have been “scientifically” taught how to set goals and measure. Everything that has to managed has to be quantified and measured. The obsession with dodgy statistics and prognosis disguises the absence of domain knowledge.
  • Secondly came an obsessive preoccupation with credentials and certification, as the only means of telling an expert from a non-expert is his credentials. We have never had so many certifications before, often based on bogus testing procedures.
  • Thirdly management automatically became top-down. What could the non-experts (the lower existences) possibly give to the expert other than raw data. The expert who was assumed to have answers, would then process and let his answer be known rippling down the often long chain of command.
  • Fourthly, responsibility was inevitably spread on many experts (financial, sales, marketing, human resource and a host of consultants), so no one was really responsible for anything concrete.
  • Fifthly, it came to be believed that you could solve major problems by declaring a certain expert responsible for them, they came to be known as “Czars” of certain things, totally decoupled from the line operation of the organization.

This lead to a number of things:

  • Experts (including the new imperial CEO, who is the top dog of the experts) tends to be compensated based on some measurable personal contribution to the organization, this leads to a preoccupation with said numbers, which often can be tweaked or faked.
  • It also led to the rise of the teflon-man (him to whom no s**t sticks), whose first concern is to make sure that he could not be blamed for anything.
  • The focus on numbers gradually left to the belief that the only thing that mattered were the financials, later that the only thing that matters was profit. The business schools pushed the wave by forcing the concept of shareholder-value as the highest goal on businesses. Rampant greed became not only acceptable but even admirable, “Greed is good!”, Gordon Gekko in “Wall Street”, 1987.
  • The almost total separation of management and ordinary work have led to bizarre situations. I have had people, whom I was mentoring and coaching, literally crying in desperation of a new boss, who boldly claimed that she did not need to know anything about education to run a college, she was a manager, laid plans, that were to be followed.

The Takeaway

I have lived my educational and professional life in this neo-taylorist period, in fact I thought that was how things just were. I tried to be like that – with immense inner tensions as a result, because intuitively, I felt, it was completely wrong, but I was always afraid that a more likely explanation was that I was not fit for the modern world.

When I stumbled upon Scrum in 2005, it was a minor revelation to me. Ken Schwaber dared to call for a show of cards in his 2001 book “Agile Software development with Scrum”. It was all really the emperor’s new clothes, there was a better way and it was there a long time before this other stuff as well, it was Lean, Agile and Scrum. What have this Cult of the (so-called) expert brought on us? Here are some things:

  • Individual targets and KPIs, that should foster healthy competition, but instead they prevent teamwork and collaboration and lead people to tweak or fake numbers.
  • Middle managers that have no responsibility apart from budgets, following up on these plus other KPIs and shifting information up and down the organizational ladder, with the predictable loss of real content of around 20-25% for each handover. As you can imagine basing top-level strategic decisions on this sort of distorted view of reality really qualifies for a diagnosis.
  • Top managers that live in a special layer in the atmosphere that suitably could be called the “managosphere”, and after a while can only exist there with their peers. They cannot breathe the air in the lower layers and consequently never go there.
  • People, who do the real work for the real customers are driven into anxiety or apathy, watch Amy Edmondson here…
  • The rise of the accountants and the legal staff to the ruling positions, in the end leading to the financial wizard manager, whose main contribution is to play financial and/or legal stunts that games the stockmarket (or his own compensation) instead of focusing on servicing the client.

The Epilogue

I am amazed that someone like Taylor, a failure as a manager and borderline insane, came to have such huge influence. Well, it wasn’t him alone, he died already in 1915, but his followers, that for various reason found comfort in believing that this Expert will solve everything and that everything can be quantified and measured.

Read the two other articles in the series here: #1 and #3.

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