Tuesday, October 23, 2007

McKinsey on innovative management

The McKinsey Quarterly just released an interview with Gary Hamel, author of The Future of Management (see previous post), and Lowell Bryan, author of Mobilizing Minds: Creating Wealth From Talent in the 21st Century Organization, on the future of management. Here's part of the abstract summary:
The authors discuss how traditional management models do not enable businesses to adequately respond to today’s competitive forces. In a new environment that places a premium on collaboration and talent, they view old organizational structures as impediments to innovation and creative strategy
It is well worth registering to read the whole thing, but here are a few excerpts which caught my eye and seem particularly relevant to OpenTeams and The Entrepreneurial Organization:

The Internet is making it possible to amplify and aggregate human capabilities in ways never before possible. But most CEOs don’t yet understand how dramatically these developments will change the way companies organize, lead, allocate resources, plan, hire, and motivate—in other words, how new technology will change the work of managing. Throughout history, technological innovation has always preceded organizational and management innovation.

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I think the technological revolution that occurred in the past 15 years was basically equivalent to the industrial revolution—a fundamental discontinuity. And just as technologies have S curves, the technology of management also has an S curve.

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The availability of powerful new tools for coordinating human effort will profoundly change the work of management over the next few years.

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Highly talented people don’t need, and are unlikely to put up with, an overtly hierarchical management model. Increasingly, the work of management won’t be done by managers. It will be pushed out to the periphery. It will be embedded in systems. I think we’re on the verge of what I would call a postmanagerial society. The idea that you mobilize human labor through a hierarchy of overseers and bureaucrats and administrators is going to look extraordinarily antiquated a decade or two from now.

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The outlines of the 21st-century management model are already clear. Decision-making will be more peer based; the tools of creativity will be widely distributed in organizations. Ideas will compete on an equal footing. Strategies will be built from the bottom up. Power will be a function of competence rather than of position.

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I don’t think you shuffle your way from one S curve to the other. You have to jump. Frederick Taylor often talked about the need for a mental revolution when he was trying to move organizations from the craft-based model to the factory model. Today we need a new mental revolution.

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Assuming you’re well managed, the direction that most companies need to go in is improving how they enable their people to collaborate with one another at much lower cost by dramatically reducing unproductive search and coordination costs. And that means deploying such devices as talent marketplaces, knowledge marketplaces, and formal networks to make intangible assets flow throughout the company, as opposed to going up and down vertical chains of command.

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Ideas are being monetized in ways never before possible, and the world is a richer place. I’m not just talking about creating financial wealth; I’m talking about a much more stimulating work environment, with more interesting jobs for employees to create more valuable products and services for the world’s consumers. It is just an incredibly exciting time to be alive.

Hear, hear!

2 comments:

Jesse Kliza said...

Hi Tory,

This was an incredible interview. I posted a little about it at my blog at: http://blog.metricz.com, and saw that you had done the same.

Your product looks excellent as well. I think I've come across it in the past, but I'm going to register for a free trial and take a more in depth look.

Have you read Gary Hamel's new book yet?

Tory Gattis said...

I have, and it is excellent. I took many pages of notes. Highly recommended if you haven't read it yet.

I appreciate your post - it was definitely a powerful interview about the future of mgt.

Hope you find OpenTeams interesting. Would love to hear your feedback. I can be emailed at tgattis (at) openteams.com