3 Management Models of The Past, Present, and Future: Part 1

Photo Credit: blog.edx.org

​“A bureaucracy is no democracy” --
​Julian Birkinshaw & Jonas Ridderstrale, Fast/Forward
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​By William Ballard
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​Anyone who has ever been in some type of leadership role knows that there is more to managing subordinates than just barking orders and telling people what to do.

In fact, every organization operates under four primary components or elements: Position, Knowledge (or competency), action, and emotion.

For example, the Army’s leadership approach is based on their core principles of “Be, Know, Do.” Be refers to character development and position. Know refers to competency, skill, and expertise. Do refers to action or behavior.

In order to manage an organization or department effectively, it’s important to emphasize each of these four components at various times. Let us look at how these four components compare to management at the individual level, and to the organizational level.
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​Four Components of Management

At an individual level, position refers to one’s title or status. Knowledge has to do with one’s background, expertise, or educational level, otherwise known as competency. Action has to do with what an individual actually does on the job. Emotion is all about how someone feels about the job, including how they feel about their interaction with others on the job.

When we talk about management at the organizational level, position has to do with a formal structure that defines who reports to who. A chain of command, if you will. Knowledge is all about collective competency that an organization possesses industry wide (i.e. every organization has it’s core competencies that separate them from their competitors).

Action, at the organizational level, is all about what a team of employees does on a day-to-day basis in regards to projects and processes — the flow of daily operations, if you will. Emotion is all about the culture and climate of the workplace environment. It is the collective feelings and values of each employee and team member.

With this better understanding of these four components, let us look at them in turn as they relate to the three main management models of the past, present, and future. 

In this article, we will first touch base on the management model known as bureaucracy. 
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Bureaucracy: The Management Model of The Industrial Age​

Alfred P. Sloan. Photo Credit: Menway, Interia

Who is the most important business mind of the last hundred years? Believe it or not, it’s not Henry Ford, Thomas Edison, or even J.D. Rockefeller.

Certainly, the winner could be debatable, but let’s consider nominating someone whom you may not be familiar with. Alfred P. Sloan was the president of General Motors between 1923 and 1937.

​He is not as famous as the other figures mentioned above. There is no product or brand associated to his name.

​However, he actually did something that was more impressive. He created a new form of organization known as the Multi-Divisional Form (M-Form) — the defining management model of the Industrial Age.

As the president of GM, he structured the organization into five different brands (Chevy, Pontiac, Oldsmobile, Buick, and Cadillac) and appointed a General Manager in charge of each one, while retaining the financial and strategic control at headquarters.

In short, he demanded individual accountability from each General Manager by putting the responsibility of the profits and losses of their particular division solely on them.

​Moreover, he had a strong conviction for professional expertise and business education. In other words, he favored competency (knowledge and expertise) over anything else.

Now, while Mr. Sloan never used the word, he can be considered the grandfather of the prototype management model known as bureaucracy.

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Greek Sociologist, Max Weber. Photo Credit: Encyclopedia Britannica

The actual term was first used by the Greek Sociologist, Max Weber, who noticed a depersonalized method of operations in which coordination was achieved through standard rules and procedures, and viewed as being superior to action and emotion.

It was because of this type of management structure that GM was able to lock in the leadership position of the world auto industry between the 1930s and 1970s.

​Mr. Sloan’s influence, however, expanded beyond that of the auto industry. In fact, the M-From structure is considered to be the de facto standard for most large organizations. The truth is, it’s hard to find any large organization that does not have some element of Sloan’s M-Form principles embedded its DNA.
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The Narcissistic Tendencies of a Bureaucratic Leader

Let us go one-step further in defining the core ideas of a bureaucratic organization. The key element of a bureaucracy is hierarchy, which implies one person has authority over another. In some circles, some may even equate a bureaucracy to that of a dictatorship.

In fact, Julian Birkinshaw and Jonas Ridderstale, in their book Fast/Forward (AFF), put it like this: “a bureaucracy is no democracy." In short, terms like front-line manager, subordinate, or reporting head all emphasize that formal position is what matters above all.

Prior to the Information Age, only the financial or socially wealthy had access to higher echelons of knowledge and information. In affect, this was also the time frame where the saying, “Knowledge is power” originated from.

When Max Weber introduced the concept of a bureaucracy there was, at least, some chance that the (one) leader of the organization could be an "expert" in most of the departments (if not all) within the entire operation.

Thomas Edison, for example, was known to have a deep understanding in all of GE’s technologies. However, due to the influx of the Information Age, this idea of an omniscient (all-knowing) leader is no longer valid.

You see, as more and more people have access to information and knowledge, organizations will need to adapt their management methodologies and learn to rely on the many rather than the few.

The truth is, however, there is a paradox to this increased access to information.

In short, while information is becoming more and more accessible, so too, does ignorance increase. The reason is because too much information, uncategorized and disorganized, creates more confusion than it does understanding — and it was King Solomon who said, “In all thy getting, get understanding.”

With that said, if people are becoming increasingly ignorant due to the immediate access of overwhelming amounts of information, how does that exclude top executives? The fact is: It doesn’t.
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I like what Julian Birkinshaw & Jonas Ridderstrale said in their book, “Fast/Forward: Make Your Company Fit For The Future.” (AFF)

Photo Credit: Stanford University Press

​“There are many reasons for the deficiency in a bureaucracy, but at the core of it all is the fact that division and specialization rarely produce a result greater than the input. Innovation usually requires a horizontal combination of competencies across silos. If you place your bets on vertical subordination, rather than horizontal collaboration, and you favor division over multiplication, don’t expect a continuous flow of revolutionary products that will wow the market.”

​To that end, I present my final point to that of the management model known as a bureaucracy.

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The Sociopathic Tendencies of a Bureaucratic Leader

The increasing importance of emotional belief and how it affects employee engagement interfere with the rationality implied by that of bureaucratic principles.

​In other words, a bureaucratic operating system cannot compute the emotional elements within itself. It will read it has being “bad code.”

The dictionary defines a sociopath as being “A person with a personality disorder manifesting itself in extreme antisocial attitudes and behavior and a lack of conscience.” Another source stated that, “Sociopaths are interested only in their personal needs and desires, without concern for the effects of their behavior on others.”

Now, with that said, it is also noted that most sociopaths lack the ability to feel certain feelings, such as remorse, grief, etc. Keeping all this in mind, there was a model presented by an American psychologist, Paul Ekman, who classified our emotions into six primary states; anger, disgust, fear, happiness, sadness, and surprise.

Psychologist, Paul Ekman. Photo Credit: Famous Psychologists

Combine this idea with the strong evidence from neuroscience, which suggests that the limbic system — the system that governs our feelings — always takes primary control over our neocortex — where logic and reason rest — there is but only one logical conclusion: You cannot not feel anything.

Some may try and debate this statement, but based on Mr. Ekman's findings, to claim that one lacks the ability to feel something is scientifically inaccurate. In other words, if someone claims the inability to feel something, there is an operating system error within that person’s neocortex and limbic system.

Now, during the time frame of Max Weber, a bureaucracy was a depersonalized, almost soulless/heartless entity in which formal standards and procedures ruled over actions.

However, there is just too much information and evidence that emotion cannot simply be switched off, like that of a light switch, within an organization.

​“Disregarding feelings means that instead of the organizational adrenaline so critical to execution and engagement, the end result is often apathy and disengagement." (Julian Birkinshaw & Jonas Ridderstrale, Fast/Forward AFF)
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Final Thoughts

In sum, bureaucracy, as a management model, has clear benefits and costs. It worked wonders during the Industrial Age, when organization and corporate success was based on efficient productivity and product distribution.

However, it proved less effective as we moved into the Information Age, when industries, the economy, and the immediate work environment became less stable, the future less predicable, knowledge and information increasingly dispersed, and competitive advantages — such as core competencies — no longer able to be ruled by a dictatorship type of corporate government (one omniscient leader that knows all and rules all).

This article was first published on Medium. 
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Hi, my name is William Ballard! 

​I'm the Founder and CEO of William Ballard & Associates, LLC, where we work with incredible business owners and entrepreneurs like yourself every single day. We are big believers in the fact that the key to business success is effective business planning and courageous execution. With that said, we encourage you to schedule a call with us to discuss your business goals, and to see how we might be able to help. ​

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