We’ve had two eras of management, and I think we’re at the start of the third.
We’ve moved from the era of scale to specialization, and now an era where Imagination is key. This has HUGE implications on what management and leadership is and how companies should operate.
ERA ONE – A FOCUS ON EXECUTION AND SCALE
The industrial revolution changed society and business by introducing new technology and production techniques. The focus was first on execution and scale, and owning assets became crucial for growth and profitability.
To manage larger organizations, the concept of managers was introduced. This era saw the advent of the specialization of labor, standardized processes, and quality control.
Bureaucracy, with its focus on procedural regularity and rigid rules, was also born.
Business management was simple, with the goal of achieving scale and market dominance.
Technology served as a lever to amplify physical work, and productivity followed linear rules. Management focused on record keeping and coordinating labor.
ERA TWO – A FOCUS ON EXPERTISE AND SPECIALIZATION
As businesses and marketplaces evolved, new consumer needs emerged. The range of products and advances in material sciences led to increased wealth and demand for products.
Smaller companies were able to compete with larger dominant ones. Management shifted towards quality and adding value, and theories like management by objectives and Six Sigma were developed.
The organization became more complex and globalized, with improved communications and a focus on constant improvement.
Management techniques evolved, including monitoring key performance indicators and real-time reporting. Work was still based on a set time and place, and companies were primarily focused on production.
Today, most companies are still oriented around the factory. Most c-suite roles are about reducing the cost of goods, reducing the chance of litigation, improving factory conditions, training staff better, almost no companies actively look towards consumers as being the primary focus, they are simply the end destination.
ERA THREE – A FOCUS ON IMAGINATION AND EMPATHY
Good ideas can be worth billions and cost nothing and take little time.
In 1959, Peter Drucker coined the term "knowledge work" to describe work that creates value through the use of information. While in prior eras output correlated to time,suddenly working hours matter less than the quality of those hours.
As knowledge work grows in importance, managing knowledge and knowledge workers challenged traditional management theories.
Executives' roles are shifting from control and authority to coaching, and leadership principles replaced management.
New theories of management now emphasize engagement, motivation, and inspiration.
The nature of organizations is changing, and power is shifted from hierarchies to networks.
The role of empathy and imagination in business is now the main driver of value.
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