A while back, I watched this fantastic video, in which Dan Pink points out the huge gulf between what science knows and what business does. Later, I shot publicity photos for a community production of The Glass Menagerie, which reminded me of one of my favorite sayings: “When your only tool is a hammer, all of your problems start to look like delicate glass figurines.”
Obviously, that’s a curmudgeon’s take on Abraham Maslow’s observation, “if the only tool you have is a hammer, you tend to see all of your problems as nails.” In business, traditional top-down management is the hammer, and the tool is often inappropriate for the variety of challenges before us. Pink makes the case that management in general – and incentives in particular – no longer fit the workforce we employ or the type of work we do in the twenty-first century.
Flaws in the prevailing view of management were obvious by the middle of the twentieth century, and people like David Packard saw this clearly. As Pink points out in the video, management is an invention, not a natural phenomenon, and other human inventions, like democracy, are also available as management models.
If your work would not benefit from an engaged, creative, and self-motivated workforce, by all means continue to use top-down mandates and carrot-and-stick incentives to “control” your workers’ output. If, on the other hand, you rely on your coworkers’ brains as well as their hands, take note of the fact that traditional incentive schemes hinder work that requires “even rudimentary cognitive skills.” If you’re not convinced by the numerous studies proving this point, have you at least noticed that the industry with the biggest bonuses (finance) is the industry that recently destroyed the world economy?
Finance runs on ideas, and ideas are not widgets. Before “widgets” became the name for computer desktop applets, the term was used in business school to denote any product of a hypothetical manufacturer. An old joke holds that cavemen believed the moon was a superior being, and they may have been right, because the moon is still here, but you hardly ever see any cavemen around. Well, Industrial Age America believed that command-and-control management was some kind of superior being, and sure enough, command-and-control management is still here, but you don’t see much manufacturing nowadays.
We have called a huge segment of the population “knowledge workers” for decades, but most companies still treat people as if they were churning out widgets on an assembly line. Management clings to ritual and hierarchy rather than embrace invention and engagement, slowing the creative destruction that drives Capitalism forward. Democracy is a versatile management tool that adapts to a wide variety of situations – more Leatherman than hammer – but that is not the point I wish to emphasize. Rather, I want people to recognize the distinction between producing widgets and producing ideas, and the importance of choosing the right tool for the job at hand. Which management structure would best fit your organization’s goals?