The New Role of Managers: Increase Variation

So much of what we call management consists in making it difficult for people to work – Peter Drucker

For 100 years, the role of managers has been to increase consistency of performance. Executing a proven business model in times of stable growth demands a focus on consistency, simplicity and efficiency. Managers have prospered through a focus on command, process and centralized decision making.  In an era of global networks, we have entered a new domain.  The role of managers in the future of work must be to increase effectiveness through leveraging the potential of their people and the learning opportunities in complex networks & systems.

Beyond Efficient Simplicity to Effectiveness

Management has a bias to the simplicity because simple actions can be executed efficiently and consistently. From before Adam Smith described the pin factory, managers have been breaking down tasks and processes in pursuit of an ever simpler and more efficienct mode of execution. Great strides in performance and productivity have been made in the use of this model. We have extended it further through global outsourcing, global supply chains and increasing automation.

However, as we have extended this model we have encounter an increasing realization that efficiency in a process is not always correlated with effectiveness of the outcome. Customer experiences are delivered by entire business systems. Societies are complex interrelationships of many systems not just simple business processes scaled up. At a global level we can increasingly see the disconnect between the simple and the needs of the system. Personal purpose and the purpose of our organizations calls us to look to the effectiveness of the system, not the efficiency of a process.

As many innovators have demonstrated embracing the complex systemic view can achieve a step change in effectiveness for both consumers and the business.  Embracing systems thinking, complexity and variation, creates new ways to disrupt business and meet consumer needs. Variation is not a cost. It is a signal of a new potential for effectiveness.

Beyond Predictability to Experimentation

The central planning model of most organizations driven by strict budget processes placed a heavy emphasis on predictability of outcomes. Managers were valued for their ability to consistently deliver outcomes, even if that merely represented a consistent ability to game the system. A focus on predictability drove a concentration of decision making in the hands of those with the most expertise and information to make decision.

Innovation is not predictable. Innovation recognizes that there is now too much information for any one person’s knowledge or expertise. Organizations need to embrace learning through experimentation. This process of learning by experimentation in complex systems can be hypothesis driven but it is not predictable. The test is no longer how one manager decides but how the entire system of an organization experiments and learns. The pace of adaptation driven by experimentation will be what drives an organizations effectiveness and competitive position.

Beyond Automatons to Autonomy

An expert manager focused on consistency seeks to replicate best practice in simple processes to be executed with minimum variation by automatons. If they can’t be robots, then they should be people with the greatest consistency of skill and the minimum discretion. Individual talents and ideas are sacrificed to scaling consistency of performance. Command and control is a path only to scaled consistency of performance, ask any traditional military structure.

In complex networks & systems, agents need autonomy to react to the variation circumstances that confront them. For all the focus on command and control, even the military recognizes that in battle the ‘plans rarely survive first contact with the enemy’. To achieve effectiveness, our organizations need to enable employees to respond to the circumstances that face them, to experiment, to learn and to adapt.  Great managers need to become coaches of this agility. they need to foster the variation of autonomy to find new paths to effectiveness in the system.  The key role of a manager is no longer direction. The role of a manager is alignment of the autonomous agents to realize the purposes of the organization and the team.

Beyond Competency to Capability

Consistent processes demand a focus on known competency levels. In an ideal case for a manager focused on consistency, this competency was so low that people could either be recruited with the skills or they were quickly acquired. Development of people in this environment by managers involves lifting an individual to the required proficiency and reskilling where processes change.

Managers in the future of work are now leaders of a continuous process of capability development of which human capability is only one part

Beyond Assessment to Empathy

Traditional managers role was to assess performance against a predetermined standard of consistency. The tails of a bell curve of performance were either rewarded or cut. The focus of management was a continuous process of objective assessment. This experience of assessment through performance assessment processes became the most alienating experience of management. Performance was a transactional experience focused on consistency without consideration of systems, relationships, diversity or effectiveness.

Great managers in the future of work understand that effectiveness is the scaling of personal effectiveness. They begin with empathy, not objective rationality. Discovering an individual’s personal purpose and objectives, developing their individual talents where ever they may lead and staying connected to an individual’s human experience and potential are key points of effective performance. At the heart of this approach is embracing the diversity and variation inherent in any group of people.  The transformation of performance through this approach is a step change compared to the plus or minus 10% model of traditional consistency performance management.

Variation is the Key to Value Creation

Risk and return are correlated. As much as management science has pretended to break this axiom, it has largely shifted risks elsewhere in the pursuit of higher return. Value creation opportunities come from exploring the variation in human society and its networks. We need managers who can embrace and foster variation in the future of work. Too many managers can be replaced with robots because of the predictable nature of the algorithm at the heart of their work.  Worse, those who suppress variation in their teams will be left behind in the disruptive economies ahead.

If you would like help to improve the effectiveness of your managers and teams, please get in contact for a conversation about how this applies in your business.

Thanks very much to Luis Suarez, Jonathan Champ and Janet Fouts for their contributions to the Twitter conversation about yesterday’s blog post on email and meetings. This post is inspired by that chat.  We learn through debate and discussion in the future of work.