Following WWII, the US was positioned for exponential growth in manufacturing as it shifted its war-time production capacity over to civilian products such as cars and appliances. After the war, soldiers were recruited into business schools where the role of the manager was reinvented from that of stewardship of an organization’s resources or society’s ethical concerns, to logistics involving people, supplies, facilities and production. Logistical coordination between public, private, and military was a key aspect of winning a modern war, and this new manager became a perfect reflection of his military counterpart, including taking up a fixed role in a hierarchy of power. As corporations grew into larger and larger conglomerates, the managerial positions became further removed from the organization’s core activities, and increasingly geared toward delivering commands from higher-ups and exerting control on others who occupied subordinate roles.
Prior to this, managers were positioned alongside the physical assembly lines or in walled departments where they could oversee their workers; and thus, a chart of managerial positions would correlate to and follow the manufacturing or assembly route. Afterwards, the organizational chart would come to illustrate the direct-report relationships between managerial levels — that now corresponded only to positions of power sustained by disciplinary measures. Now only role dependencies could be traced through the organizational chart, and work routes had to be illustrated elsewhere, such as in Gantt Charts, which had been used almost exclusively by the military.
As modern economies shifted away from manufacturing and toward information and knowledge, the function of management changed again. Work processes were no longer designed in clear linear fashion, as along an assembly line. Rather what needed to be accomplished came in from and flowed out in all directions. There was no longer a way for managers to position themselves along the route of the work itself and they became less associated with front line workers and more associated with a professional managerial pool. Management became a separate “science” with its own tools and techniques for modelling, mapping and measuring. In this new era of professionalism, the function of managers became more and more based on generalized abstractions of people as human systems that could enable them to exert control from a distance.
The modern organization in the information age now had two distinct organizational structures — roles that conformed to power relations, and roles that corresponded to operational tasks. Since managers had the power to set compensation policy, wages and earnings came to depend more on power roles than the talents, skills and value created through operational activities. As a consequence, organizations became biased toward managerial functions such as more complex abstraction, measurement, regulatory control, policy-making, contract writing, etc… and the “race to the top” meant building ever more complexity into the system. These were the functions that managers awarded each other with unprecedented levels of compensation — because it was the kind of work they were good at. Increasingly management schools fed into this process by escalating the complexity of management theory in highly academic contexts.
By the mid 1980’s what managers did at work had become increasingly based on irrealist or idealist notions constructed in the minds of other managers and academicians and fed back into them. People hired from the professional class were less likely to have had any experience with the actual task demands that the people they were supposed to be overseeing were responsible for. Front line workers were caught in the crossfire between playing the game of role and power, and focusing on doing good work. Not surprisingly, as a result of the compensation bias that managers themselves maintained, front line workers steadily improved at gaming the system with the most promising rewards.
Inadvertently a cognitive arms race was born between human resource managers and employees who were getting better and better at strategizing their own roles in the workplace, and the “system” evolved together, escalating complexity.
Eventually researchers from Harvard were discovering that managers were “falling in over their heads” and psychologists were studying higher and higher levels of cognitive complexity required to run an organization, even if the task demands of the value creating activities were technically relatively simple. Human resource trainers began teaching double and triple loop learning techniques and managers took workshops designed to move them into 4th and 5th order levels of consciousness — a feat that less than 1% of today’s managers has been able to accomplish.
Rebooting the system
As a result of systemic polarization and escalation of complexity, US companies had become bloated both on the side of management and on the side of labor. In the 1980’s they faced the need for a complete overhaul. Japanese car companies were starting to outcompete US car manufacturers and interest in their team approach to management and lean operational frameworks soared. The Japanese companies continued to innovate production with leaner methods that were designed specifically to eliminate both role and route dependencies in the production process. These methods were inspired by the kinds of teamwork visualization boards that the agile software developers used to speed communication and decision making.
At the same time, innovations in information technology disrupted the need for organizations to hold onto a managerial sector to centralize information everyone in the company depended upon. Although computers had for a long time been available to store and organize information, managers were still called upon to search and retrieve the information people needed to do their work. Decision making processes still followed the same chain of roles up the organizational hierarchy. Yet managers came to occupy roles that functioned less like political power positions, and more like information hubs. The typical organizational chart now primarily traced how information was aggregated into larger strategic wholes which depended on generalized abstractions and increasingly complex systems thinking.
However, it wasn’t long before web browsers became more efficient than people at searching for relevant information, and innovations in user-interface allowed people to retrieve all the information they needed by themselves. With the explosion of technology companies into the service sector, a company could have a complete IT infrastructure installed in a very short time.
Managers became obsolete overnight.
More significantly, innovations in IT allowed people to track details that were relevant to their local context. This gave front-line teams the ability to make strategic decisions on the spot, without managerial intervention. These decisions proved to be more responsive in environments of rapid change, and gave companies a great advantage in an increasingly global economy. A revolution in organizational life was well underway.
In 2014, Frederick Laloux, a former consultant with the global management consulting company McKinsey, published a book called Reinventing Organizations, in which he described several companies that were working with radically new approaches. These approaches focused on self-organization, team leadership, distributed decision making, transparency, and participation of the whole person beyond their formal organizational roles. Two years later, Deloitte published Global Human Capital Trends which identified organizational redesign as the top priority for corporate leaders, outscoring the perennial issues such as leadership and learning, while workforce management placed last in the list of ten.