Managing In The Info Era In the knowledge-based economy, workers will be valued for their ability to create, judge, imagine, and build relationships.
By Geoffrey Colvin

(FORTUNE Magazine) – 'Now one of the first requirements for a man who is fit to handle pig iron as a regular occupation is that he shall be so stupid and so phlegmatic that he more nearly resembles in his mental makeup the ox than any other type."

Hey, who's calling whom stupid? How dumb do you have to be to say something like that? In the iron business or any other business, who could honestly expect to get good work of any kind out of anybody by saying he really should be stupid as an ox?

The nearly incredible answer is that the quotation comes from Frederick Winslow Taylor, the most influential business guru of the 20th century. Yes, that Taylor, father of Taylorism, of "scientific management," of the time-and-motion studies despised by the workers of the world.

His views matter because the story of management in FORTUNE's first 70 years (and in the 20th century) is the story of business people flocking to Taylor as a savior, then figuring out that his attitude was wrong and later that his world had vanished, and eventually doing something about those realizations--which turned out to be extraordinarily hard. Indeed, the story of management in the 21st century is that the job isn't done.

I know--you're skeptical. Taylor as the century's top business guru? The guy with the stopwatch? To the readers of FORTUNE's first issue his status would have been obvious, and even today the case is a slam-dunk. Taylor's ideas increased productivity so dramatically in so many industries for so many years that our prosperity today is unimaginable without him. His concept of arranging work (based on careful analysis of the component tasks) is so embedded in our lives that we don't think of it as hated Taylorism. Peter Drucker, the century's No. 1 management writer, called Taylor's thinking "the most lasting contribution America has made to Western thought since the Federalist Papers."

And yet Taylor was wrong. People are not oxen! And they never were. What we might call modern management began as business people got that message in the 1920s and 1930s through workers' often furious and violent response to scientific management and through the writings of psychologist Elton Mayo and humanist writer Mary Parker Follett, among others. (For a highly readable tour of 20th-century management thinking, see Stuart Crainer's The Management Century, to be published in March by Jossey-Bass.) Inconvenient though it was, business admitted, workers were human.

At the same time, the whole world was changing. Taylor's achievement was to increase the efficiency of manual processes, but whether manual laborers were fragile humans or dense animals didn't matter much once most work was of another kind: knowledge work. Such work years ago became the basis of most Western economies, and you don't get very far putting a stopwatch on an investment banker.

We long ago reached the point at which most managers accept that people are complex human creatures and that they are most likely knowledge workers rather than physical laborers; more recently, organizations have come to be regarded more like organisms than machines. What is so astonishing in 2000 is that most companies still find it almost more than they can bear to adapt their structures and practices to these universally accepted realities.

Instead we tinker around the edges, which is how we usually fail in trying to imagine the truly new. Remember The Jetsons? Here was a 1960s view of 21st-century life, including business life. George Jetson, you recall, worked for Spacely Sprockets, which competed ferociously with Cogswell Cogs. Sprockets and cogs--except for everyone's having a personal spacecraft, the 21st-century economy looked a lot like the 19th.

We fall into the same trap when we try to imagine truly new ways of managing. The big issues managers are wrestling with now--what really attracts and motivates the best knowledge workers, the value of teams, organizing by projects, using infotech wisely, the flattening of hierarchies--those were seen quite clearly by the best management thinkers decades ago (yes, decades). Yet for all we read about bold companies managing in new ways, most enterprises continue to noodle with functionally organized, many-tiered hierarchies, the mechanistic model of a century ago. And in truth, if you talk to employees candidly, you'll find that many still feel they're treated like oxen.

Why? Because human nature doesn't change very fast; much of what we're trying to do feels uncomfortable in some deep way. Most basically--and this is a bit shocking at the beginning of the 21st century--we're still struggling with the requirements of working in large organizations. Remember that the big business organization is a 20th-century creation, and making it go is the problem that led to the concept of management as a distinct job--a purely 20th-century concept, and mid-century at that. Henry Luce's prospectus for FORTUNE said nothing about its being a magazine for managers, and that first issue 70 years ago included nothing specifically about or for management. All those business schools, like Harvard's, that were founded early in the century? They granted degrees not in management but in "administration," a very different idea. FORTUNE's tenth-anniversary issue (editor: Peter Drucker) identified America's managers as a group but said their less than exalted mission was to "coddle 56,000 capitalists," meaning the principal shareholders of large companies. Yet by 1966 FORTUNE could assert, "Almost unrecognized in 1900, management has become the central activity of our civilization."

Today's managers would do well to recall that until the 20th century the only really big organizations were religions and armies. There you find the two forces that have historically enabled people to function in large organizations for long periods: iron authority and shared values (and of course both kinds of organization have relied on both forces). Iron authority has its uses, but it has serious problems as a way to manage a fast-moving, adaptable, creative enterprise.

That's why we hear ever more talk about values as the basis of managing the 21st-century corporation. Yes, making money for the shareholders is the object, but we know for sure that this isn't what gets people out of bed in the morning to go fight the company's battles. That takes deeper issues. We also know (through millenniums of human experience) that lots of people with aligned values constitute an awesome power. And so in this emerging new era when so many people can work for whomever and from wherever they like, coalescing around shared values becomes a logical, effective organizing principle for a business enterprise. Creating, articulating, and sustaining the organization's values thus become one of management's most important jobs.

This very human-centered view of business success is worth remembering as we try to make sense of other trends in the economy. The frictionless economic model in which millions of free agents zoom around cyberspace selling their knowledge-worker services hyperefficiently to such organizations as may require them from moment to moment, and in which buyers and sellers of everything connect for near-anonymous transactions at that instant's mutually optimal price--that is awfully close to bloodless 20th-century scientific management, applied to the whole 21st-century economy. Now as in Taylor's day, we can see what technology and learning have made possible--we can see glorious visions of stunning efficiency that truly could enrich humanity beyond our dreams. But we make a foolish and ancient error if we forget that quirky humans, who haven't evolved significantly in 20,000 years--and who still very much need interaction, recognition, and relationships--will have to make it all happen and are also supposed to be the beneficiaries.

It's been a remarkable journey, painfully slow, from the days in which companies succeeded--and for a time they succeeded stupendously--by denying employees' humanity. Henry Ford talked frankly about "the reduction of the necessity for thought on the part of the worker." Today GE's Jack Welch talks frankly about the need to fire managers who don't live the company's values, even if they deliver results. We've come a long way.

The message for business people at this century's dawn, just the opposite of 100 years ago, is that management is a human art and getting more so as infotech takes over the inhuman donkey work--the ox work--of the world. Most managers now seem to understand that they will find competitive advantage by tapping employees' most essential humanity, their ability to create, judge, imagine, and build relationships. The champion managers of the Infotech Age will be those who do it fastest and best.