Scientific Management Is Dead

The key to working smarter is to keep improving

We need to work smarter, not harder; together, not separately. Where efficiency is about doing things right and effectiveness is about doing the right things, velocity improves when we do the right things in the right order in the right way.

 

Scientific management focused on visible, stand-alone, and repeatable factory work. Today’s work is invisible, interdependent, and ever changing. It is human, not mechanical. The need to apply the social sciences to improve velocity is consistent with Sir Winston Churchill’s observation that “To improve is to change and to be perfect is to change often.” We need to continuously, yet cross-functionally and systematically, change how we work and how we work together.

Systematically increasing velocity in our companies also has significant social implications. For more than a century, industrial-age productivity improvements funded the economic prosperity of the developed world. By producing goods and services with less effort, more people were able to enjoy a higher standard of living. This benefited consumers and producers alike.

Healthy productivity does not exploit or oppress. It generates economic surpluses that can be used to increase wages, profits, and tax revenues. If productivity goes down, then even flat wages will not be affordable for long. If productivity went up 100 percent, wages could go up dramatically and continue to be very affordable. When companies can’t increase velocity, they have to focus on the cost-oriented nature of efficiency instead of the wealth-generating nature of productivity. We cannot save our way to prosperity.

Working longer hours isn’t the solution. People have become more active without becoming more productive. The result has been low employee engagement and established companies struggling to compete. Drucker warned that this would happen if we couldn’t improve productivity in the knowledge economy. Manufacturing achieved a fifty-fold productivity increase in the twentieth century. Our trajectory for knowledge-based work is pathetic by comparison.
 
Bad systems produce bad behaviors, good ones result in good behaviors, and similar systems produce the same results. To increase our potential, we need to systematically move beyond the scientific-management techniques that were designed for the industrial age and use the social sciences to achieve better and faster cross-functional outcomes.

Knowledge is a resource that can be used and kept at the same time, making it possible to achieve the greatest productivity levels the world has ever seen. At the same time, knowledge has a short shelf life, and velocity matters greatly. Systematically increasing the velocity of people’s knowledge is the best way for companies to become more effective, identify and realize their potential, and create different organizations for a different future. If we can improve the productivity of today’s organizations even by a fraction of how our predecessors increased industrial productivity, we will significantly change the trajectory of our results. Employee engagement, corporate performance, and society overall will all improve as a result.