Taylorist management vs. Lean management

- The first person to write about a scientific approach to managing people was Frederick Winslow Taylor. He wrote a book about scientific management, as he called it, in the beginning of the 20th century. Frederick Winslow Taylor became famous by doing time and motion studies, looking at how workers completed their tasks, finding inefficiencies in their tasks, and finding ways to make their tasks more efficient so they could do more work in less time. He taught managers to apply scientific principles to plan their work so that workers could perform work as efficiently as possible. He believed in rewarding workers for the amount of output they created, and this approach was very effective when the work was essentially algorithmic, which is to say, work that follows a pre-approved plan where simply following the plan would achieve the desired effects. That's great in great in very simple manufacturing processes but it's not effective in modern knowledge work where humans have to solve problems as well as perform tasks. What we saw later on was a whole school of thought on how to manage people doing more complex knowledge work. One of those people was W. Edwards Deming. He was an American statistician who helped create the total quality movement in Japan, which was one of their factors that enabled Japanese manufacturers to completely destroy the U.S. auto industry by producing high quality cars that were cheaper and brought to market faster than their American competitors. Edwards Deming has 14 points for management, which he talks about in his book, "Out of the Crisis," and I really recommend reading his 14 points, because even today, they're controversial and challenging. His seventh point says "Institute leadership. "The aim of supervision should be to help people "and machines and gadgets do a better job. "Supervision of management is in need of overhaul, "as well as supervision of production workers." Point number twelve says, "Remove barriers "that rob people in management and in engineering "of their right to pride in workmanship. "That means, inter alia, abolishment of the annual or merit rating and of management by objective." So management by objective is still very common today and people think that it's reasonable to reward people according to that measure. But typically what that leads to is people behaving according to perverse incentives rather than doing that they should really be caring about, which is building a quality product that they can feel pride in. Deming's focus instead of on managers telling people what to do, was on people being able to be involved in their work and having the power to control their work product and build quality into what they were doing. And this idea, that actually the people doing the work should actually have control over their work, and should have the ability to change their work in response to what they learn, is at the core of the lean approach to management. In his 1960 book, "The Human Side of Enterprise," McGregor introduces another important distinction, the poorly named Theory X versus Theory Y. Theory X and Theory Y are attitudes that managers hold about the people who work for them. The Theory X attitude is that people are fundamentally motivated by carrots and sticks. They don't have intrinsic motivation, they're just fundamentally motivated by money and other extrinsic factors. Thus you have to punish people who do badly and reward people who do well. Theory Y managers, in contrast, believe that people are fundamentally motivated in an intrinsic way, by things that they enjoy doing and love doing, and that the job of the manager is to help them develop their own personal capabilities and find ways to align that with the purpose of the organization and help them improve. The interesting thing about Theory X and Theory Y is that managers get what they believe. The managers attitudes impacts the people who work for them and causes them to behave the way that managers expect. So a Theory X manager will get Theory X workers, who fundamentally are checked out of their job and just respond to their monthly paycheck, whereas Theory Y managers will get people to behave in a way that is much more joyful and where people actually care about their work. You get what you expect in this case. Fundamentally, the economy is dividing into two. What we're seeing is on one side of the economy a small proportion of people who are doing knowledge work, they have problem-solving skills, they can't be replaced by computers, they're earning high salaries, they require expensive and long educations, and then a much larger group of people who are doing service jobs where they're fundamentally replaceable, there's no investment in their development and education. I think this is extremely negative in many ways for our society, but certainly for knowledge work, it's impossible to behave in that way. If you fundamentally believe, as you should, that your people are your competitive advantage, because after all, IP, intellectual property, can be stolen or replaced. What's critical is the ability of your people to develop new intellectual property and new ideas in response to the changing economy and changing market conditions. If you fundamentally believe that, then you need to invest in your people, you need to treat them in a Theory Y way, you need to invest in developing their capabilities, you need to assume that they're not actually completely replaceable but actually you do need to invest in them and develop their career, and help them align what they want to do and their passions with the purpose of the company. That's the work of management. So here are some exercises. Do you do regular one-on-ones with your employees, your direct reports? How often do you do them? Do you know what motivates your people, both professionally and in their wider life? What can you do to find ways to align their passions and their motivations with the work that you have available? How can you help them develop their careers? Do you know what their goals are for the next year, or for the next three years? Have you discussed how they can develop their careers in pursuit of their goals in a way that is aligned with what the company needs?