Knowledge Workers — Their impact on organisational design and management
by Dr. Reg Butterfield
Earlier, we introduced a brief outline of organisational history. Throughout history there have always been at least two types of workers, those employed because of their physical strength and those who practiced a skill or trade. The former tended to be considered as members of lower levels of society whilst the latter were often treated as being of a higher level as members of the artisan society, yet still below the owners and privileged society. However, the industrial ages changed this as skilled work was increasingly reduced to standardisation and mass production through mechanisation. Artisan workers still exist to some limited extent in certain trades: blacksmiths, fine jewellery production, and stone masons are just some common examples today.
When focusing on the nature of work as the core of organisational design and management, an important distinction to be aware of is worker differentiation, which was first introduced by Upton Sinclair in 1920. He referred to the ‘blue-collar’ workers and the new ‘white-collar’ workers, the latter referring to those who worked in the office as opposed to undertaking physical labour. Whilst this differentiation is still spoken of today, something very important happened in 1959 that has probably become something far greater than considered at the time. The term ‘knowledge work’ was coined by Peter Drucker in his book “The Landmarks of tomorrow”. He returned to this theme in a Harvard Business Review article in 1992, “The New Society of Organizations”, where he laid out the case for knowledge as work, hence the term ‘knowledge worker’ is increasingly replacing the ‘white-collar’ worker role, which had already become a group far larger than the ‘blue-collar’ workers who have powered economies through production, historically.
This move from predominantly blue-collar workers to a majority of white-collar workers, and the increasing volume of knowledge-workers today has occurred in line with the changes in technology that enabled the shifts in the nature of work. Anecdotally it may also be in line with the increase in people with higher education degrees.
Whilst Drucker was not able to foresee in detail what this shift meant, he was clear that knowledge would be the primary resource for individuals and for the economy overall. He went on to explain that the economist’s traditional factors of production (land, labour, and capital) will not disappear, but become secondary. Specialised knowledge is only productive when it is integrated into a task, which is the purpose and function of all organisations, business, and non-business.
So, what is a knowledge worker and what makes this shift so important for the future of work and management?
A commonly used definition of a knowledge worker is, “Knowledge workers have high degrees of expertise, education, or experience, and the primary purpose of their jobs involves the creation, distribution or application of knowledge.” (Davenport T. H., 2005, “Thinking for a living”, p14.).
At its most basic level, knowledge workers are responsible for sparking innovation and growth in an organisation. They invent the new products and services, design the marketing programs, and create the strategies. Probably, they are also the most expensive members of the workforce. If they are so important and expensive, how many are there? Gartner, Inc., predicts the number of knowledge workers at over 100 million in the U.S. and over 1 billion globally, representing 32% of all workers globally by 2021.
In July 2021, Braintrust, a US talent network organisation, published what is considered to be the first study around the subject of knowledge worker employment. They analysed open knowledge worker positions and surveyed skilled freelancers:
· An analysis of 150,000 knowledge worker job openings that uncovers how and where the biggest US companies hired during the second quarter of 2021
· A qualitative survey analysis of over 800 workers that highlights the top job characteristics knowledge workers are looking for
They identified that the search for knowledge workers is surging and that consumer and technology enterprises account for the majority of vacancies (35% and 25% respectively).
A major twist to their findings when compared to the rhetoric around remote working that we discussed in a previous newsletter, is that only 3 out of every 50 knowledge worker role vacancies were for remote workers, the rest were linked to and for traditional office situations. Those who were allowing remote-minded employment all share something in common, they are technology focused businesses. Even then, the actual numbers that allow remote working is far less than those who require working in the office.
Whilst much has been published in the media around the increase in demand from workers for more remote working across a wide spectrum of work and businesses, this survey indicates that organisations are not ready for this change overall. In our newsletters of May 8 and May 22 we challenged the rhetoric around remote working and that the debate is far from just simply replacing one workplace for another.
The Braintrust survey also raises the question of job expectations of the rising talent in society. The survey highlights the need to re-evaluate what work means, which is moving from centralised to de-centralised operations. Only 4% of respondents are interested in the traditional work benefits such as health insurance and that being in control of their time is more important. When moving to decentralisation it is seen as an opportunity to uncouple people from the traditional employment benefits and focus more on employee freedom. Knowledge workers were seen to have had to learn new skills in the previous year and that 85% of those who had spent some time as remote workers were now re-examining what matters for them.
One thing that is clear from all the surveys and research around the nature of work is that organisations will be using a mixture of traditional office bound workers and some form of remote and/or freelance workforce. The challenge is to harness the different approaches, which will then form the foundation for how the organisation works and is structured.
To some extent, this reminds me of Mintzberg’s Adhocracy model of organisation, which is task or project-based and must respond quickly and flexibly to changing demands. There is little formality, so direct supervision and defined processes are less important than in other organisation structures. However, I am more in favour of exploring Charles Handy’s, “The Triple I Company” that is based on information, intelligence, and ideas. As such, it may arguably be the home of the 21st century knowledge worker.
Its focus is to treat people as individuals, which is exactly what knowledge workers are saying they want. Handy indicates that there are two important factors to consider if the ‘the triple I company’ is to be successful from the worker’s point of view: opportunities to develop, and a sense of community. If they do not feel a member of a community, the workers will move on.
So, let’s unwrap this a little to ascertain just what the challenges of becoming a ‘triple I company’ are and whether it is feasible in today’s traditional hierarchical organisational structure and management system.
For the approach to be successful it means that managers should only place the lightest touch of control over the employees and on their decision making. The role of the executives or senior managers is to provide a sense of direction whilst allowing the employees to apply their own ideas and decisions to generate value for the organisation and its customers. The risk of allowing employees such freedoms is that everyone can go in a different direction or have competing directions, which can tear apart the organisation. This means that the challenge for managers and leaders is to corral the individual approaches in some way. This in turn means that the potential gains of individual power and decision making is superseded by the power and control of the managers, which then turns the ‘triple I company’ approach back into a traditional hierarchy of power and control. Perhaps this is the reason that Dr Ross Wirth and I have found so many previously designed approaches to organisations simply not taking root; it is just too difficult to break away from the traditional hierarchical models without looking at the power and control systems in some detail.
Organisations have always been in tension, just as society in general needs stability organisations need to destabilise to be successful. There is also the relationship between individual and organisation and the responsibilities to one another, the increased demand for socially responsible organisations, and the tension between specialists and performance of the team. These do not mean that the only solution is to control all behaviour or stifle ingenuity and freedom. To do so today will mean the end of organisations and the economic future of society as knowledge workers will not tolerate such an organisational approach.
I am reminded of the great Austrian American economist Joseph Schumpeter who said that innovation is ‘creative destruction’. To explain what this means I will use a quote from Peter Drucker, “…it must be organized for the systematic abandonment of whatever is established, customary, familiar, and comfortable, whether that is a product, service, or process; a set of skills; human and social relationships; or the organization itself. In short, it must be organized for constant change.” (Drucker, 1992).
Charles Handy uses the metaphor of elephants and fleas in his book ‘The Elephant and the Flea’. For those who are not acquainted with the metaphor, the elephants represented the giant organisations. Handy saw that the business world was turning into one where there are a lot more fleas. He saw the fleas as the innovators, the source of new ideas. The elephants needed them for these things. So, a symbiotic relationship existed. (Handy, 2002, pp. 30–32; Grant, 2002, p34).
In today’s world the elephants need fleas to keep them alive, the established organisation (elephants) needs the knowledge workers who are the new alchemists, the creative individuals, or groups (fleas) to introduce innovations and ideas essential to their survival
If the design of work is to be able to support the needs of the knowledge workers, who are increasingly the future of organisational success, we argue that we must find some novel way of ensuring that the traditional approach to power and control is replaced. What that means will be the subject of our continuing story with our next newsletter taking on the challenge of unwrapping the complexity of organisational power and control.
