Karl Moore: This is Karl Moore of the Desautels Faculty of Management at McGill University, talking management for The Globe and Mail. Today, I am delighted to speak with Ed Lawler, who is a professor at the Marshall School [of Business]at USC [University of Southern California]and the director of the Center for Effective Organizations. Good morning, Ed.
Ed Lawler: Good morning.
KM: Ed, you told me earlier that you are thinking about a book on Management 3.0. What do you mean by Management 3.0?
EL: Fundamentally, we need to think of a whole new approach to managing complex, large organizations. We certainly have the "command and control" era, which started way back with scientific management, and progressed over decades, really, to greater and greater levels of sophistication and expertise in how to make it run. That seemed to fit a certain kind of production-driven economy.
Clearly, starting in the 1950s, we began to say it has its limits, we have to use our workers differently, our employees differently, and I think that generated Management 2.0, which was around employee involvement, participation and moving more knowledge and information and power downward in the organization so people could add more value. And I think generally, it did impact the way most corporations operate.
The problem, of course, is that I think we are yet in another era. The economy has changed radically since then, the work force has changed radically since the sixties and seventies, and of course the economy has changed … globally, and everybody knows all those points.
So it's kind of surprising, in many ways, that Management 1.0: command and control, or Management 2.0: high involvement or high performance, and various names for it, were [still considered]suitable.
I think we do need a Management 3.0, which recognizes the impact of information technology, different work forces, diversity in the workplace, and so forth. So what I have been trying to do in a new book is say what that looks like, and yes, I have incorporated certainly some of the things that we did in Management 1.0 and Management 2.0. I think it really has to have a different philosophy and a different orientation with respect to both organizational design, how we treat the work force, how we think about the work force and basically how we lead in this kind of economy and in this kind of competitive environment.
KM: Ed, that is very interesting, but I need to know more about 3.0. What is it? Tell us about it so that we can begin thinking about it as managers.
EL: In many ways, to zero in on it, you can pick particular areas on how you would do that differently, or how you would manage, or general philosophy. Let me just pick one and carry it out: leadership, for example.
With the movement away from command and control management to high involvement management, we became fascinated with leaders and ascribed a lot of the effectiveness of organizations to the behaviour of leaders and so forth, and I think that has gone way too far.
We have lost a lot of the managerial blocking and tackling that people in supervisory positions have to do in order to make organizations effective. It seems to me that, if you are going to have a valid, viable 3.0, it has to include the right blend of leadership behaviours. Yes, where you inspire people by a sense of mission, sustainability, accountability - but also have a valid management approach which deals with fundamentals like goal setting and work specifications and product evaluation produced by employees. So we do not want to lose some of the key managerial skills as we have, I think, in searching for these magical leaders who are going to inspire and direct people.
KM: It is kind of a balance between leadership and management in these people: You have to be a leader but also, if you are not a manager at the same time, I think it's Henry Mintzberg who talks about it, it's dispiriting.
EL: Yes, I think that is exactly right, it is the balance. We have spent a lot of time training people on leadership, which some people learn and some people don't, to be frank, and we have lost a lot of the fundamental manager skills or [they]were never developed. We still see managers doing terrible basic management - like performance reviews are done just awfully and the answer seems to be, "Well, let's just eliminate them." Well, to me, that is just insane. How are you going to direct and control behaviour if you do not have some kind of accountability and some sort of reviews that look at people and give them feedback and give them a sense of direction?