One of the issues which has puzzled me is the enormous gap between the rhetoric of management books and the organisational reality experienced by both staff and consumers. I found some answers recently in a book which came out a few years backs by Shoshana Zuboff and James Maxmin - The Support Economy: Why Corporations are Failing Individuals and the Next Episode of Capitalism (2004). Between 1988 and 1994, Zuboff used acaemic funding “to follow a group of visionary top managers and watched each one fall prey to corporate politics (which she compares to the 18th century French court), self-interested boards and the whims of financial analysts reacting to short-term fluctuations in a company's earnings"
For Zuboff, managerial capitalism was so successful because it focused inward on the production of products. Henry Ford’s staff wanted product differentiation for the rich consumers who were able to buy cars – Ford saw the potential of economies of scale in offering only one product. The new system created great wealth but it also allowed the development of layers of management. “Organisational narcissism” is the result. Management sits at the centre of this universe and we are on the outer rim of the solar system. We are treated as transactions; we are made to conform to the rules of the organisation. We are treated with indifference and contempt both as employee and as consumer (which is seen as weak and feminine – “production” is the word and the world which matters!)
An early section of the book spells out the nature and implications of the new society of individuals the new-found wealth and technology has created - complex people who want to take control of their lives and whose needs, the authors argue, can best be described in relation to “sanctuary", "voice" and "connection". These new people have outgrown the old organisations which remain rooted in their inward product focus ("dynamic conservatism" was the wonderful phrase used by Donald Schon almost 40 years ago).
This has created a chasm or “transaction gap” between new people and old organisations. A powerful chapter of the book shows the failure of the various “waves of the future” which have swept companies in the last 2 decades – reengineering, quality management, relationship management etc The basic DNA of the “standard enterprise logic” overwhelmed them all and made consumers and staff alike even more alienated. A very powerful case she describes is that of an airline official in Rome who made it her business to "go the extra mile" but was unable to continue this by the combination of new central diktats and superior disapproval. All too often, the new systems and technologies seem basically to allow more aggressive and intrusive marketing.
“The Support Economy” tries to map out a different system – called “distributed capitalism” in which the individual (thanks to the internet) is at the centre of the universe. Eleven principles are set out – in rather obscure language, it must be said. The essence of business is to supply us – through a system of federations - with levels of support that will allow us to live our lives the way we want to live them. The providers of support will be our advocates acting as intermediaries between us and the supply federations.
This part of the argument is not as convincing – indeed the language becomes very abstract and esoteric. I also missed any references to Richard Semmler - whose Semco company tears up the management books. Companies which remain private (ie not quoted on the stock exchanges) or which are cooperatives have, presumably, more hope. Zuboff does not address this critical issue. And a minority of change endeavours do succeed – that is clearly shown in the chapter which rightly points to the general failure of the various expensive management fads and fashions of the past decades. So, clearly, if preconditions and leadership are right, change does work. Surely that is the area we should be focusing on?
What are the implications of these arguments for those involved in the reform of government systems? After all, most government reforms (certainly advice from management consultants) of the past 2 decades have been based on the assumption of the effectiveness of private management and the positive lessons which are contained in quality management, performance management etc. At one extreme, people could argue that the public sector is better placed to make a success of these ideas – since it does not have the poisonous framework of boards and shareholders expecting short-term profit. But the behaviour of ruling politicians is more and more similar to that myopic framework – and, of course, it has always been more difficult in the public sector to develop measures of performance which (a) can be agreed and (b) don’t cause counter-productive reactions (see....).
British government offers an object lesson in what not to do – control things from the centre. “Strong” local government is needed – with electoral and dialogue systems which enforce prior consultation and debate. Independent foundations should carry out the comparative assessments which act as a spur to initiative. Neither officials nor politicians can be relied upon to work for the public good – rather do we need an understanding that professional associations, voluntary groups, parties and officials are four groups with different interests and perspectives between which a balance can and should be struck.
For Zuboff, managerial capitalism was so successful because it focused inward on the production of products. Henry Ford’s staff wanted product differentiation for the rich consumers who were able to buy cars – Ford saw the potential of economies of scale in offering only one product. The new system created great wealth but it also allowed the development of layers of management. “Organisational narcissism” is the result. Management sits at the centre of this universe and we are on the outer rim of the solar system. We are treated as transactions; we are made to conform to the rules of the organisation. We are treated with indifference and contempt both as employee and as consumer (which is seen as weak and feminine – “production” is the word and the world which matters!)
An early section of the book spells out the nature and implications of the new society of individuals the new-found wealth and technology has created - complex people who want to take control of their lives and whose needs, the authors argue, can best be described in relation to “sanctuary", "voice" and "connection". These new people have outgrown the old organisations which remain rooted in their inward product focus ("dynamic conservatism" was the wonderful phrase used by Donald Schon almost 40 years ago).
This has created a chasm or “transaction gap” between new people and old organisations. A powerful chapter of the book shows the failure of the various “waves of the future” which have swept companies in the last 2 decades – reengineering, quality management, relationship management etc The basic DNA of the “standard enterprise logic” overwhelmed them all and made consumers and staff alike even more alienated. A very powerful case she describes is that of an airline official in Rome who made it her business to "go the extra mile" but was unable to continue this by the combination of new central diktats and superior disapproval. All too often, the new systems and technologies seem basically to allow more aggressive and intrusive marketing.
“The Support Economy” tries to map out a different system – called “distributed capitalism” in which the individual (thanks to the internet) is at the centre of the universe. Eleven principles are set out – in rather obscure language, it must be said. The essence of business is to supply us – through a system of federations - with levels of support that will allow us to live our lives the way we want to live them. The providers of support will be our advocates acting as intermediaries between us and the supply federations.
This part of the argument is not as convincing – indeed the language becomes very abstract and esoteric. I also missed any references to Richard Semmler - whose Semco company tears up the management books. Companies which remain private (ie not quoted on the stock exchanges) or which are cooperatives have, presumably, more hope. Zuboff does not address this critical issue. And a minority of change endeavours do succeed – that is clearly shown in the chapter which rightly points to the general failure of the various expensive management fads and fashions of the past decades. So, clearly, if preconditions and leadership are right, change does work. Surely that is the area we should be focusing on?
What are the implications of these arguments for those involved in the reform of government systems? After all, most government reforms (certainly advice from management consultants) of the past 2 decades have been based on the assumption of the effectiveness of private management and the positive lessons which are contained in quality management, performance management etc. At one extreme, people could argue that the public sector is better placed to make a success of these ideas – since it does not have the poisonous framework of boards and shareholders expecting short-term profit. But the behaviour of ruling politicians is more and more similar to that myopic framework – and, of course, it has always been more difficult in the public sector to develop measures of performance which (a) can be agreed and (b) don’t cause counter-productive reactions (see....).
British government offers an object lesson in what not to do – control things from the centre. “Strong” local government is needed – with electoral and dialogue systems which enforce prior consultation and debate. Independent foundations should carry out the comparative assessments which act as a spur to initiative. Neither officials nor politicians can be relied upon to work for the public good – rather do we need an understanding that professional associations, voluntary groups, parties and officials are four groups with different interests and perspectives between which a balance can and should be struck.
