The Slow Birth of Entreprenocracy: Part II

Pročitano u 2005. godini

Continuing the debate on Murray’s End of Management foray in WSJ recently, I would say that the true changes brought about by openness have been here all along. Whether we have put them to use depends on the culture. In Norway, an egalitarian country, health informatics is not just something the IT industry tries to push on doctors. The Oslo Innovation Clinic Offers Treatment for Ideas, writes Gaurav Bhalla in a Harvard Business Review guest blog:

The first-of-its-kind Clinic of Innovation at Oslo University Hospital works a lot like an outpatient health clinic, but treats ideas rather than patients. Ideas walk in, are diagnosed, and are treated or referred; some are sent home with a prescription for further development, and an appointment for a follow-up visit.

The underlying solution, developed by the up-and-coming Norwegian IT company Induct, is brilliantly simple. Anybody can submit an idea or a challenge which goes onto their service-based platform that allows companies to easily practice true “open innovation” through the creation of corporate Innovation Communities.

Creating structures that motivate and inspire workers is correctly pointed out by Murray as a contemporary challenge for any corporation. However, knowing how to inspire is a challenge equally huge in the cases of Wikipedia or Linux. When it comes to motivating the next generations of volunteer programmers to contribute to Linux or individual hobbyist online lexicographers to contribute to Wikipedia, this is not easy. A very slim percentage of the online population is actually an online participant or creator in a significant way, the largely self-serving web 2.0 crowd included.

Where Murray excels is in providing a summary of the elements of the “new model” that he feels has to emerge. Truthfully, though, the new model is emerging as we speak even without him. But let’s give him the benefit of the doubt: he has described some valid trends. These are things like fostering entrepreneurial spirit in all work, delegating authority, culling ideas from outside the company, increasing the importance of team work and peer relationships, and making investments in the welfare of workers in their workplace. So far, such initiatives have often boiled down to providing services like food, cleaning, or massage for free or subsidized as part of the work day.

However, clearly, all organizations will constantly need to get more creative in trying to retain their skilled labor force, whether or not they are for profit, not for profit, or part of the new phenomenon Ashoka‘s Bill Drayton has coined, that is, hybrid value chains where profit and non profit is intermeshed.

Murray’s thoughts are interesting but not as carefully worded as they should have been, perhaps. For instance, he ends on the observation that “ The old methods won’t last much longer”. However, calling management a “method” is fine when referring to Peter Drucker‘s version of management science. It is not fine when it applies, as it does, to the practice of managing people as such. I would be willing to bet that need will never go away.

Management is, perhaps, becoming less important, or it at least appears so. Certainly, leadership is becoming more important, that is, if we define management as handling tasks and leadership as handling people. Management, in that view, is purely the aspect of efficient resource allocation, whereas leadership is related to motivating individuals to actually carry out the tasks needed. However, even this simplistic definition of these two terms leaves Murray with conceptual problems. It is actually better to say that management lives on, and leadership challenges increase at the same time.

However, leadership has its own limitations as a concept. The new model Murray talks about would will have to reinvent leadership, too. For instance, the thought that there would be a particular group of people who could provide vision and others who would follow or get inspired by that vision is profoundly shaken and stirred.

In the age of web 2.0., inspiration comes from many places. Yet, the very process of inspiring somebody follows the model aptly described by Seth Godin as “recruiting your tribe”. Whether you work in a corporation, in government, for a non profit, or simply act on something from your own living room as a consumer, a parent, or some other type of social role, you do need to do the very same thing. You need to let your voice be heard, enlist allies, and build some kind of consensus in a relevant social group.

You might need to build momentum with new people on ad hoc basis, or you may need to take into account existing groups and navigate their interests. However, you cannot change anything alone. Not even the internet provides you with that opportunity.

The Slow Birth of Entreprenocracy

Tux, the Linux penguin

Image via Wikipedia

In a recent Wall Street Journal article on The End of Management, Alan Murray claims corporate bureaucracy is becoming obsolete and that managers should act like venture capitalists. Maybe so. But management trends do not necessarily mean that the old mores disappear. The two may integrate. Or, the new trend might be just ephemeral. Very often, things regress towards the mean. Is he running the risk of calling a live phenomenon obsolete? Is he slightly overconfident in the venture capitalist attitude? Yes to both. Here is why.

In the case of management as such, or corporate bureaucracy in particular, lots of things have happened since the phenomena first appeared. Well, we might first want to discuss when it actually did appear. Is Murray talking about the practice of management, which is as old as humans have formed groups and civilizations? Or, is he talking about the post-war formulation of management science and case studies of its practice at western business schools? Although Murray mentions that business guru Peter Drucker has called management “the most important innovation of the 20th century”, and Murray continues to say that management, as a perspective, cannot survive the 21st century, the article is unclear.

The article’s author, Alan Murray, is the WSJ Deputy Managing Editor, and is actually pitching his new book, “The Wall Street Journal Essential Guide to Management“. I sympathize. Books need pitching, even for somebody with WSJ as their speaking platform.

Murray is correct in characterizing contemporary corporations as bureaucracies. This is a point often lost on business pundits who criticize government. Somehow, in their opinion, private sector has the solutions whereas public sector needs to reform their bureaucracies by taking private solutions on board. With Murray’s lens an entirely different picture emerges. Both governments and corporations are bureaucracies. They are both outdated. Bold claim. It makes him sound 20 year younger, but not necessarily right.

Where Murray completely loses the grip is when he starts trying to characterize the new phenomenon he uses as a straw man for the current condition of permanent and constant change:

“Complicated enterprises, like maintaining Wikipedia or building a Linux operating system, now can be accomplished with little or no corporate management structure at all.”, he asserts. Has Murray looked into these two very complex organizational ecosystems? Has he ever contributed to any of them? Does he know anybody who does? His kids? Grandchildren?

In the example of Wikipedia, let’s just remind ourselves that the site has gone through several management upheavals and policy changes. There are now much stricter rules on who gets to post what. All authors are logged and can be retraced by any reader or Wikipedia staff at any time. If you look at how even a fairly simple entry is created, you will find that there are numerous layers of bureaucratic structure involved. There is a main, originating author. There are people who just point out a spelling error here and there. There are people who add significant updates over a long period of time. In short, there is a hierarchy, there is an implicit allocation of authority, and there is respect for these things. I will not go into detail, since Wikipedia’s operation is commonly known for all who know anything about the web, but suffice to say that short of the payroll, Wikipedia is like any other corporate system, and only slightly more nimble. That does not mean I am against it, simply that I refuse to take it as an example of anti-corporate evidence, whatever Jimmy Wales may say.

In the example of the Linux Operating system, I would say, its emergence has been hierarchical from day one. Linus Torvalds towered over its development in the beginning. Yes, he did accept help from others. That is the entire point, and not one lost on corporations either. However, here’s the thing. You cannot simply start changing the Linux kernel without permission from the code owners and overseers. It goes through numerous iterations before changes become permanent. In short, the process is quite complicated, even bureaucratic, some would say.

Instead of a completely new phenomenon that must be understood without reference to the past, what we have in Wikipedia and Linux is two different ways of reproducing the organizational phenomenon Weber over a century aptly characterized as a bureaucracy. He did not set a fixed number, but he was pretty clear that the phenomenon arose with increasing complexity and size. In fact, he wrote volumes to prove this fact and describe its emergence. So, it seems that once a process reaches a certain size, complexity increases, compelling its participants to organize themselves in a more meticulous manner, and introduce hierarchical structures, not necessarily compensated monetarily, but through other symbolic means. In the case of Linux, I might add, the corporate component has only increased in the last decade. For instance, it is commonly known that two thirds of the contribution into the Linux kernel is now done by programmers affiliated and paid by traditional corporations like Dell, IBM, HP, Oracle, Novell, and Nokia.

Wikipedia and Linux are not very similar, but for the purposes of tearing down Murray’s logic, they are similar enough. Both are highly managed, although in loosely coupled ties. Both include financial aspects. Yes, collaboration is also done virtually. Yes, these two enterprises are very different from the legal definition of an enterprise. However, there are a lot of commonalities, many more than Murray sees. Not seeing these and not accounting for them in an analysis of change, is a major oversight. Fine. He has a grander scheme in mind, perhaps? Well, where is it?

Little, if anything, can actually be accomplished without management structure, even in the Internet age. In fact, it is not the management part that has changed, it is the speed with which networked interactions complement and extend existing power structures. Occasionally, technologies will also disrupt hierarchies, or at least alter them, but that is actually a more rare occurrence.


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