THREE:
MANAGERS Generate Efficiency and Profits

That’s what scientific management is all about, isn’t it? We have specially educated, professional managers (who are more capable of making decisions than the rest of us) to assure that our organizational machines run smoothly and al-ways spend less than they take in.

The duty of managers is to guarantee their bosses that their organizations are operating consistently, predictably and under control. By doing that, they assure that each of the company’s units is making a profit by spending less than it earns. But do managers actually generate that profit? I think not, even though they do measure it, account for it and take rewards for good bottom-line performance.

It is because American organizations are managed so well (or so much) that they have such problems generating constant innovation and significant change.

We consistently find that traditional, generally accepted management techniques get less out of organizations – and people – than people are able to contribute:  most employees want to do more, give more. The management approach ends up controlling a lot of small jobs that do lots of “stupid work,” making people dream about escaping to a good job. While management techniques can almost always make small, reasonable gains annually in every measured area, we have found that in certain collaborative systems without professional managers, ordinary employees can make huge gains, far beyond what previously was thought possible.

It’s time to give managers honest, important work. People who work in today’s organizations can manage themselves. After the fierce downsizing of management ranks in the 1980’s and early 1990’s, employees must manage themselves. Much of management work is score-keeping, record-keeping and analysis; appropriate information technology in each employee’s hands is making that work obsolete.

The domain of managers has been the Profit and Loss statement. Make your numbers there and you earn your annual bonus. It’s a month-to-month existence that estranges managers from the people who are actually making those numbers. Let’s give the responsibility – and rewards – for doing business well to small, self-managed groups, and redirect the managers we have left to more important is-sues like the Balance Sheet.

In this Information Age, we’re led to believe that a company’s most important as-set is not its real property, or its production machinery, or even its people. The most important asset is Knowledge Capital. Doesn’t that reside in the people of the company? Yes, but it doesn’t have to.

In the 1980’s and 1990’s huge corporate gains were created by fundamentally re-designing the work of most employees. But, James Champy (Reengineering Management, 1995) confesses his disappointment in the reengineering revolution he launched with his partner, Michael Hammer. He reported that most reengineering efforts were halted as soon as they reached management ranks.

It’s time to finish the job. Management can build wealth.

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