Leadership on the other side of the fence

Through the last articles I investigated some of the studies and narratives about management and leadership, and how the West was lost to that particular style of management that can be wrapped up under the Neo-Taylorist label (See for example here… )

In this article we will pursue the topic a little further and try to make a comparison between the two main styles of management in question. Actually I will prefer to reserve the term Management for the Neo-Taylorist view and use the term Leadership for the approach “on the other side of the fence”, this is what we have come to call Agile Lean Leadership. Lots of writers and thinkers have coined terms like Radical Management, Management 3.0, Managing for complexity, Beyond budgeting etc. to illustrate points of the subject.

This is then a humble attempt to extract a collection of comparisons, statements and explanations to give an overview from my present viewpoint. I will often refer to Dave Snowden’s complexity model, Cynefin, and its four-five domains: Obvious (Simple), Complicated, Complex and Chaos plus the unfortunate Disorder, where we have not realized which domain, we are in. I will be arguing that many of the problems stems from misunderstandings of the domains we operate in, effectively operating from the Disorder domain with failure as a result. Cynefin will be discussed in a later article.

The two sides of the fence

Here is then a list of features and properties of Neo-Taylorist Management (NTM) set against those of Agile Lean Leadership (ALL). It is inspired by many different people, I have tried to make a sweep across the spectrum and collect 10 top points to make. Several other points could surely be made with equal validity:

1. Organize primarily along the lines of the customer

  • NTM with its roots in scientific Management and mass manufacturing seeks to create the organization as the perfectly suited “machine”, running at the lowest cost with maximum utilization of “resources” – be that machinery or people.
  • ALL has its primary focus on the customer or the client, it tries to create an organization that can discover and create value for the beneficiary (in commercial settings the customer, the only real source of income into the system), and is geared to be able to change rapidly as new nuances of needs, opportunities or threats surfaces.
  • Comment: The technical or factual skills of people and their utilization are still important i ALL, but it is more important to create organizational structures that has a direct line of sight to the customer. The skill based disciplines becomes a secondary – yet still important – structure.

2. Organize for management or leadership

  • NTM has a tendency to view Management as a separate, specialist and generalist profession. With the right education a person can manage anything without deep insight into the subject matter. There is one right way of doing things and the expert (typically a financial expert) can find or design that.
  • ALL claims that in order to lead effectively a deep understanding of the domain and the players is necessary. A leader must be able to articulate the top level goals and the vision of the organization, the same goes for the fundamental values that govern the organization. These two things are what primarily binds people together in an ALL organization, not rules, regulations and procedures.  A leader must constantly work on and create systems to discover the needs of those served – the customers. In the same way the leader must constantly work on and create systems for enabling the growth and learning of the people in the organization.
  • Comment: It follows that NTM will focus on implementing and ensuring compliance with plans and procedures coming from the expert top, exemplified by Prince2’s catchphrase “Plan-Delegate-Monitor-Control” (See here for example here…). It is a consequence of the assembly-line, task-based thinking inherent in NTM.ALL on the other hand is more preoccupied with discovering the true nature of things, people and needs hitherto only fragmentarily known to us, exemplified by the Deming Cycle: “Plan-Do-Study-Act” (See here for example here…). This is because, NTM assumes that in normal conditions, we can assume to be in the Obvious or the Complicated domain, whereas ALL realizes that we mostly operate oscillating between Complex and Complicated with a lot of fragmented knowledge, having to build knowledge up as we go along.

3. Organize for efficiency or learning

  • NTM has (following from point 1) a very pronounced focus on “efficiency”, mostly reduced to simple monetary questions and full utilization of resources. The lowest cost, the shortest lead time and the least slack is the best.
  • ALL has its eyes on “effectiveness” – doing the right thing in order to generate sustained value for all parties concerned, always looking for improvement of the whole system of delivery. This implies always to be on the look-out for learning. Any defect or impediment is seen primarily as an opportunity for learning, not primarily for blaming.
  • Comment: This requires a special kind of culture, where speaking your mind, admitting mistakes, seeking help and suggesting improvements is encouraged and not punished. Read Amy Edmonson’s articles for example here… It is the responsibility of the leadership to create the structures and the organization that fosters this kind of culture, it all starts with creating psychological safety for people.  “Allow people pride of workmanship” said W. Edwards Deming, who is widely recognized as a the great-grandfather of what we call ALL.

4. A zero-sum game or not?

  • NTM will perhaps not always explicitly state that it bases everything on the idea of a zero-sum game, but in its practices, this is often what we see. That is, there is an underlying assumption in NTM that if somebody wins, there has to be losers, it has to be at the expense of somebody else. Life is all one giant competition over the same pie.
  • ALL claims that there is such a thing as increasing benefit, quality and market in a balanced way for all stakeholders: customers, employees, society at large and shareholders. This can be gradually uncovered although we only have fragmented knowledge to start with.
  • Comment: It follows that NTM has a propensity to foster adversary relationships. Michael Porter’s five forces in market analysis is a clear consequence of this thinking. With ALL, the relationships with clients, suppliers and employers tends to be focused on improving and learning together and finding ways of sharing the upsides and the risks. The Toyota Way is a clear example of this. It also follows that NTM often will promote a rather naive concept of competition in an almost Darwinian focus on promoting survival of the fittest: “If only we let total competition out of its cage, everything will develop to be better!

5. Control or Communication?

  • NTM is normally deeply rooted in trying to get and maintain control, superiority and decision right. Those who attain that position are normally seen as being in a desirable position. And since they are also as a rule lavishly compensated, it is understandable that people find this desirable.
  • ALL on the other side is constantly occupied with expanding skills, knowledge and understanding so that more value can be created. In the Complex domain those who can communicate, create new relations and learn can innovate and keep delighting their customers. Decisions are not automatically made by people in higher positions, but by “the best man on the job”.
  • Comment: It follows, that NTM has tendency to foster organizations, where there is a lot of scrambling for position, where there are winners and losers, where there is quite a bit of fear, and where there is consequently a loss of transparency. Such an organization can fail catastrophically in a crisis, critical information does not reach the right people. An ALL organization is exactly opposite, it has constant focus on generating value and it is normally quite resilient and can react with great agility in a crisis.

6. Specialization or Teamwork?

  • NTM is very focused on the specialist. Work is most likely structured as a series of tasks designed by superior experts to be performed by specialist workers in series one after the other. This follows from the heritage from Taylor’s fascination both with the expert and the detailed planning of consecutive tasks.
  • ALL is operating under the assumption that we are dealing with complex scenarios and fragmented knowledge, therefore successful big upfront planning is impossible. The preferred approach in ALL is to put together a small cross-functional team to find solutions through experiments and learning through self-organizing. Instead of single-skilled specialists, PI-shaped (π) workers are preferred. That is, people with a broad base of knowledge and a couple of specific areas of acquired expertise.
  • Comment: In order to promote ALL’s different view of desirable profiles of staff, the whole promotion and compensation scheme must be revised. If the old structures from NTM are kept in place, change in behavior will not happen or at least not be persistent for long.

7. Extrinsic or Intrinsic Motivation

  • NTM assumes that people are primarily driven by personal extrinsic (external) compensation of sorts: money, perks, status etc. Therefore elaborate bonus schemes, targets, KPIs and such are designed to try to motivate people, scare them to comply to plans and improve their performance.
  • ALL realizes that most people are really driven by intrinsic motivation (at least when basic material needs are covered). That is, they feel motivated by the goals and values of what they do, having some autonomy and by being respected and trusted, and they value to be able to learn, be creative, contribute and be proud of what they do.
  • Comment: Winslow Taylor was convinced that the expert should create the necessary tasks to get the job done by the lesser worker, provided you have enough carrots in front of them and enough sticks behind them. On the contrary, when working with complex problems where knowledge (especially the gathering thereof) is the key, you have to work with people as volunteers. Dave Snowden says: “Knowledge can only be volunteered it cannot be conscripted“.

8. Local or system wide optimization

  • NTM typically advocates local optimization of departments, processes and people often by setting fairly arbitrary goals and targets. It seems to be a particular cognitive bias related to the “Illusion of control” bias, where people generally assume that they have much more control over external events than is warranted by reality. It is probably a resident evil from the unlimited confidence in the simplified scientific method focusing on particulars from more than 100 years ago. It assumes, that things can be understood by decomposing and understanding the components.
  • ALL realizes that the dynamics of any organizational system is way more complex than the textbook simplifications (especially the economic ones). Therefore you have to look at the whole system, and that is the responsibility of the leadership. It is their responsibility to involve all good people, not just the so-called experts, in understanding how things actually play out together. It is their responsibility to go to “gemba” (the real place) as the Japanese call it, to get real first hand knowledge before making a decision.
  • Comment: The literature is littered with examples, some funny, some tragic and some plain stupid of initiatives, laws etc. that were instigated to solve a certain problem and only ended up making things a lot worse, because nobody looked at the whole system. There is an abundant collection of cost cutting initiatives that ended up making everything much more expensive. Why is that? Often because some people were judged by the organization only on the local performance of their department or their project – local optimization induced by the structure of the organization, that led to huge delays or cost explosion elsewhere, because nobody in Management saw the connection.

9. Work on people or the system

  • NTM is normally borderline paranoid about measuring the individual, that’s why we have personal goals and KPIs, personal performance reviews and such. This is really a corollary of point 8. This is a sure way to create a climate of fear and distrust in the organization and prevent effective teamwork.
  • ALL realizes that the success of an organization has its roots in the whole, no individual can be judged alone, the net effect is always a result of a larger team, department or division. This is not a romantic or naive concept of everybody being equal. Some people will perform outside normal boundaries, and may need help, but that can normally not be discerned by simple numerical methods.
  • Comment: W. Edwards Deming said, that in an organization with fear “the numbers are cooked”, people always find ways of gaming the system and producing the numbers required by NTM. This is where it starts to get really out of hand with undesirable side effects. Deming also said most of the problems in organizations are due to the process and that is the responsibility of the leadership to create a culture capable of solving these.

10. Optimize short term or for sustainable value

  • NTM often goes hand in hand with a short term focus on profits. Often this is linked with the worshipping of an Imperial CEO or financial wizard who supposedly comes in and makes drastic changes that improve the bottom line. Management is judged on how quickly they can create financial results according to the books, often they stay only for a short period in each organization. The recent focus on quarterly stock market reviews, media, analysts and shareholder value has only aggravated this problem.
  • ALL: The goal of ALL is to maintain a sustainable value creation in a non-zero sum game for all parties involved: Customers, employees, society at large and shareholders.
  • Comment: A CEO can always improve the results in the short term, at least in a larger organization. There are investments or maintenance that can be postponed, training of people that can be dropped, quality that can be lowered or suppliers that can be squeezed. But most of it comes back and haunts the organization later on. But then again, then CEO is probably on to his next job and his successor will have to deal with the mess. This is local optimization in time, it will be damaging long term.

So is this good or bad?

Recently I took some extra education where the lecturer presented ways of working with Agile and Lean in large setups. He repeated several times, that he did not have any ethical views on good or bad, only on whether certain methods or patterns were useful in order to attain the objectives chosen to optimize for.

It is a noble goal to be totally objective, but outside pure mathematics it is something rarely seen with complete integrity. We all let our value systems shine through our arguments.

The writers and thinkers that have contributed to what we now call ALL, don’t try to hide the fact that they are considering not only “what is?”, but also “what ought to be?”, and that takes us into the territory of ethics.

We cannot claim that companies that are organized the NTM way will always lose. Big companies with incredible cash-reserves, unpleasant business practices and an exploitive attitude can be successful for a long time. Brute force rules very often, monopoly is a factor if customers or employees have no options to go elsewhere, people on business schools are taught how to create “customer-lock-in”, keeping the customer tied to a product or a service against his wishes. But it is a pressure-cooker heating up, some day in a crisis a revolt can erupt. It happens for the bully in the schoolyard, companies, and dictators.

The ALL principles keeps an organization a bit humble and focused on serving the customer, the employee, the society at large and the shareholder. It keeps everybody alert and prepared to react to the weak signals of change. It can still be hard and you can still lose, but your chances long-term are improved, and that is all man can ask for.

In the end you have got to ask yourself the question: “What style of leadership is it that I want to be in and be associated with?


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