JAY CROSS CHALLENGES THE CURRENT PARADIGMS OF BUSINESS AND LOOKS AT HOW TECHNOLOGY AND THE WAY WE COMMUNICATE IS TRANSFORMING LEARNING
Business firms evolve or die. Many organisations will not survive the journey from the industrial age to the network era.
Until a few hundred years ago, people lived in the countryside, farming the land with their families. Then the industrial revolution came along, and farmers became factory workers. Machines took over the physical work and managers improved efficiency. This is what most of us are accustomed to.
But brains are replacing machines. We are in the midst of a great transition to an era of networks and service. Einstein’s relativity has replaced Newton’s clockwork universe, not just in physics, but in the way we regard the world. Reality emerges from the interaction of complex adaptive systems; the future is unpredictable; nothing is certain. As in nature, everything is connected to everything else. Nothing is ever finished: the world is in perpetual beta, always evolving.
Ideas and relationships have become more valuable than tangible assets. Shareholders owned the factories; workers own their minds. Information spreading through network connections, empowers workers to take responsibility for their own decisions.
LOSE CONTROL AND LOOSE CONTROL
As Jan Carlzon wrote in Moments of Truth, "An individual without information can’t take responsibility. An individual with information can’t help but take responsibility."
Why would a manager want to give up control? Carlzon again: "Problems are solved on the spot, as soon as they arise. No frontline employee has to wait for a supervisor’s permission."
Hierarchies are like the children’s game of telephone, where a message is whispered from one person to the next, becoming unintelligible in the process. Networks enable direct, static-free, one-to-one communication.
Today’s executives grew up in a business world managed by industrial-age rules. Many pay unquestioned allegiance to the vestiges of the industrial paradigm. They believe in hierarchical organisation structures, top-down control, information hoarding, lack of collaboration, rigidity, formality, competition, and undervaluing intangibles.
In the opposite corner, most network age business people support flat organisations, shared responsibility, information sharing, extreme collaboration, Flexibility, informality, cooperation, and the importance of social capital and reputation.
The industrial-agers see the network folk as undisciplined techno-optimists. The network-agers think of the industry people as clueless reactionaries. The conflict between the two groups is building.
As young people accustomed to the internet join the workforce, they bring with them network technologies such as instant messenger and social networks. Imagine an old-style organisation where new hires in the local ranks swap information with colleagues in other silos and with customers. They will be better informed. As the saying goes, "networks subvert hierarchy."
This is not to say that networks should replace all hierarchies, for that leads to chaos. Someone has to sign the paychecks and mediate among the stakeholders. The organisations’ challenge is to achieve the right balance, applying command-and-control as appropriate for stability and networks when it improves performance.
LIQUID KNOWLEDGE
What is learning when knowledge is liquid? We used to learn in order to get along in the environments we take part in. Familiarity with how things worked enabled us to adapt, and adapting to one’s surroundings is still the goal of learning.
In The Future of Management: Gary Hamel writes, "The most bruising skirmishes in the new millennium won’t be fought along the battle lines that separate one competitor, ecosystem or economic bloc from another.
Rather, they will be fought along the lines that separate those who seek to defend the prerogatives, power and prestige of their bureaucratic caste from those who hope to build less structured, less tightly managed organisations that elicit and merit the very best that human beings have to give."
Hamel thinks business managers are acting like generals fighting the last war. When the musket was introduced, it took two generations and countless deaths for the military to change from the strategy they had developed to fight soldiers wielding axes and pikes.
Come with me up to the balcony, where we can look down on all this. From on high, we can see innovation in operations, products, and strategy formulation. But innovation in management methods is nil. We cling to a topdown world of dependent workers who follow instructions, the solo metric of cash return on investment, rewards for hours instead of accomplishment, the conceit that management has all the wisdom, and helplessness in the face of monumental change.
It doesn’t have to be this way. In one of his first staff meetings after joining IBM, Lou Gerstner flipped off the Powerpoint projector and said, "Let’s just talk about business." Candor replaced puffery. Small teams run each of Whole Foods’ hundreds of markets. They make buying decisions and decide how to present the goods. They are driven by pride of accomplishment and pay for performance. And every store has the feel of a local store.
W.L. Gore maintains small factories run by smaller teams. Factories are co-located to enable workers to cross-fertilise. The organisation is almost totally flat, and everyone is expected to innovate. Google hires the best and the brightest, and gives them lots of discretion to do their work. Seventy percent of an engineer’s time is dedicated to core assignments; thirty percent is spent on new product concepts. How does Google keep track of someone who works five days a week but then disappears for six weeks to work on a self·defined project? It doesn’t. Laissez-faire is more valuable than the cost of measurement and compliance, and the apparent lack of trust measurement suggests.
I know what you’re thinking. The UK is not America, and your company is no Whole Foods, Gore, or Google. Wrong attitude! Innovation of management practice is the road to survival. This train is leaving the station.
KEYNOTE THOUGHTS
At the opening keynote at the Learning Technology Conference, I plan to ask the audience a few questions to gauge their innovation and assess their use of technology for innovation. (After all, this is a technology conference.)
Ponder the accuracy of these statements for your organisation, and you will get more out of the conference:
- Our employees can access the entire internet from their desktops.
- Our people are learning and growing fa enough to keep up with the future.
- It’s easy to set up an online meeting
- We are so busy we don’t have time to reflect on our experience.
- We distribute information through podcasts
- It’s easy to set up a blog or wiki.
- My team talks about the trends that drive our business.
- Relationships between departments are cordial and effective.
- We learn something from every interaction with a customer.
Jay Cross is a strategist, speaker, consultant, designer of corporate learning and perform systems. Jay will be speaking at the Learning Technologies 2008 Conference and can be’ contacted at jaycross@interneffime.com
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