The 21st century seems to be harkening the dawn of a new way to manage people, if not the employer-employee relationship itself. For most of modern capitalism, we have treated human capital in a similar manner to physical capital. In other words, we have viewed individual humans as mere interchangeable widgets to power repeatable processes to produce goods and services. With that “widget based” approach to managing human capital, we have created a very unidimensional and “machine-like” approach to people management.
We’ve all experienced this type of management. Where managers indirectly or directly make their direct reports feel like they are expendable spare parts versus valued employees. Investment banking, accounting and consulting are the most commonly used examples.
There is a reason for this as the model has had decades of proven success. The number of successful investment bankers, accountants and consultants that have been produced over the decades cannot be disproven. Individuals were provided with the appropriate standardized training and structure that worked remarkably well in the stable economic environment that they developed from. Unfortunately, the standardization is increasingly misaligned with the new dynamic economy and the demands from a more knowledgeable workforce.
Every individual has watched some form of reality television where a well-respected industry celebrity tears down failing businesses and their respective owners to begin the process of rebuilding. Reality television examples included the US and UK versions of Kitchen Nightmares with Gordon Ramsay and Bar Rescue with Jon Taffer.
In many respects, these shows take the “drill sergeant” approach to managing people where it is necessary to break down an individual and rebuild them into successful business owners. While it may be necessary to do so in some instances and makes for great television drama, it is not a work dynamic that most individuals in today’s dynamic economy want to work in.
In many respects, the “drill sergeant” approach worked in an economy where, for the most part, the economy was relatively standardized. There was a set and uniform path in terms of career advancement that most people more or less understood. It was a standard process that did not have to take into account the individual nuances and personalities of their individual employees.
There can be no doubt that such an approach to human capital has proved beneficial to overall societal growth. It has provided us with the means to provide goods and services through mass production and ensure that the standard of living globally is available to a wide swath of society versus a small segment. However, in today’s dynamic economy, the “drill sergeant” approach is providing decreasing returns.
For an ever-growing percentage of the workforce, the work they do increasingly is relying on different skills that cannot be instilled via the “drill sergeant” approach. Indeed, there has been an increasing realization from both employers and employees that the management style of the past isn’t going to work anymore.
If one were honest, for too long businesses have relied on “dehumanizing” human capital as a form of management. The focus of businesses has been and continues to be maximizing the throughput of its human capital. Whether it is motivating through financial or non-financial incentives, the old style of management was driven on a strategy that human capital was interchangeable and replaceable. But does that premise still hold?
The nature of work is changing for employees. Instead of doing repetitive and mundane tasks, they are being asked to be creative and adaptable in a constantly changing economy. The concept of economic stability has given way to constant innovation and change.
Indeed, the innovation and change that we’ve seen in business in the past few decades has resulted in the further empowerment of individual employees. Thanks to a combination of changing market dynamics and technology, individuals are able to increasingly strike it out on their own create their own brands and businesses without the need to conform to traditional norms. With the power of individual creative and dynamic employees growing, where does this leave management in the 21st century?
It is increasingly apparent that the “drill sergeant” approach to management will no longer be tolerated by an increasing number of employees. Strict conformity and adherence to rigid processes or rules is rapidly losing favor amongst the best and the brightest. If this is the case, what will replace it?
To adapt, management needs to take a hybrid model. One that still drives towards holistic company performance while understanding that employees have their own individual personal and professional goals they wish to achieve. It is a style that leverages frameworks while at the same time enables individualism without driving robotic conformity. In other words, management needs to “humanize” itself.
Leave a Reply