We associate factories with blue-collar work. White-collar workers – today’s knowledge workers – operate out of offices and laboratories. But Roger Martin, a professor and former dean of the University of Toronto’s Rotman School of Management, says they also are factory workers, toiling in “decision factories.”
His thinking was kindled by the factory-like layoffs that periodically hammer knowledge workers. Every so often, a company will announce layoffs of 5,000 or 10,000 people, most of them white-collar workers, after years of building up that knowledge corps. What astounds him is how few consequences these big layoffs appear to have on the organization.
That has led him to reflect on such binge-and-purge cycles, and to ponder what they tell us about knowledge work. Out of that have come some radical thoughts about how to reorganize decision factories.
It starts with understanding of what people do in such decision factories. He summed that up in a recent Harvard Business Review article with analogies to traditional manufacturing plants: “At desks and in meeting rooms, every day of their working lives, knowledge workers hammer away in decision factories. Their raw materials are data, either from their own information systems or from outside providers. … They engage in production processes – called meetings – that convert this work to finished goods in the form of decisions. … And they participate in post-production services: Following up on decisions.”
In regular factories, employees are consumed by repetitive daily tasks. But in decision factories, the focus is on project work. Whether it’s developing an advertising campaign or preparing a budget or coming up with a new product, knowledge workers operate in project mode. “You often hear in organizations the rhetoric that a project is taking away from the job. But most white-collar work is projects,” he said in an interview.
However, that isn’t recognized by companies or their staff. Instead of organizing work around projects, it is organized around jobs. Essentially, each job is based on the amount of work a person faces at their busiest moment – on projects, actually. But when that project is completed, workers aren’t immediately transferred to a new venture, since the just-finished project is seen as something they took on for a time. They return to their normal work, now quite reduced, between projects.
Mr. Martin drawns an analogy to power plants, which are built to handle peak demand on the hottest day in July, even though for much of the year they operate at much lower demand. “Organizations do that with people: They staff to peak load. Since people don’t want to seem not busy in slack periods, they fill it up with various initiatives. That’s why the day before the 10,000 people are let go, it seems like you need them all. But you really don’t,” he said .
In his article, he cited the example of a marketing vice-president, who is busy during the launch of an important project or when a competitive threat arises. But between those events, she will have few decisions to make, and may have little to do . The same is true throughout the knowledge factory.
The key to breaking the binge-and-purge cycle in knowledge work and making more efficient use of employees, Mr. Martin argues, is to redefine the employment contract and hire people for project work rather than specific jobs. He believes that in such a framework, we would need only 70 per cent of the people we currently have in a given decision factory.
So instead of being hired to handle a specific job for 52 weeks of the year, people would be hired for a specific level of work. They would still be working for the full year – they aren’t freelancers or contract workers – but would be scheduled to different projects and work with different leaders.
There might still be some people with jobs. Mr. Martin notes that at a consulting firm where organizing around projects is the norm, about 10 per cent of the employees might be in jobs, co-ordinating others. The vice-president of marketing might still have that position, but could simply be the top marketer at the firm – a level rather than a title – who is assigned projects by the CEO. (Mr. Martin has seen this mode of organization work effectively at Procter & Gamble, where he acts as a consultant, notably in its global business services unit.)
The barrier to this approach to staffing is that it’s radical, and human resource departments invariably want everyone who is hired to fill a job description, to work in a hierarchy, and to report to one person.
But as Mr. Martin sees it: “If you’re in a white-collar job, your life is projects. You would be better off embracing that life than be part of the next 10,000-person purge.”
Harvey Schachter is a Battersea, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online work-life column Balance. E-mail Harvey Schachter