Answer»
- Management systems. This country is experiencing a management crisis. For the last two hundred years, our productivity in MAKING and moving things has been going up, and that increase is what fueled the prosperity of the 50s, 60s, and early 70s. But today, 75% of the cost of goods is not in making them, but in managing information. Fully 75% of our work force is knowledge workers. The productivity of knowledge work is going down, not up, and that decline is what is fueling today's recession. We don't even know how to measure knowledge work productivity. It is not number of pages typed or keystrokes captured or letters WRITTEN or purchase orders processed or invoices paid. It is the amount of labor required to purchase things, approve things, plan and schedule things, budget things, track things. That measure of productivity is reduced everytime we add a new control process or management system.
- Information. The organization works on information. Traditional management information systems grew up based on two facts: Information had to be communicated verbally or on paper Some people had to have detailed information about a small area of work and others had to have big-picture information about the whole organization. In the traditional organization, no one could handle enough information to make detailed decisions that met the strategic goals of the organization without a lot of direction. So management hierarchies grew up, with the layers serving as filters and amplifiers of information. Today the opposite is true. Things are changing so fast that we don't have time for things to flow up and down. But ELECTRONIC information systems can provide instant access to all the information needed to make strategic decisions or take front-line action. The modern model has to be that of the orchestra, the hospital, or the CATHOLIC Church. A symphony orchestra has as many as 350 people under one conductor; a patient care team may have 20 or 30 professionals working as a self-managed team; and the Catholic Church 5 administers 6 million parishioners world wide with 4 layers of management. These systems work because everyone knows what the objective is and has the same sheet of music, the same patient chart, or the same bible to work from. Give people the information they need and point them in the right direction.
- People. If traditional control systems are too slow and too expensive, we need to replace them. Most high-performance organizations have found that the most effective replacement is employee trust and empowerment. Give people the ability to focus outward on customer needs and overall organization aims, and they will. Management is basically about the control of variances. Deming's revolution in production-floor quality was to put the tools, information, and authority to control variances as close to where they occur as POSSIBLE. Doing the same for knowledge work not only produces better control than top-down management, it is also the only way to increase the productivity of knowledge workers.
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