Managing in a knowledge economy

There’s a rich field of corporate irony in the collision of mindsets between engineers and executives. It’s paid Scott Adams’s bills for decades. This humor wears thin, however, as more and more of the people creating value in organizations think like engineers. 

Regardless of their academic training or background, knowledge workers in organizations think like engineers. Alan Kay recounted a tale from the early years of Xerox PARC that neatly captures this tension. 

Xerox PARC was situated in the heart of Silicon Valley, a continent away from Xerox headquarters in Connecticut. A team of executives was on site to review the work going on in Palo Alto. Alan and one of his team of software engineers walked through one of the research projects underway. Alan carefully explained that this was ongoing research; experiments were as likely to fail as to succeed and the goal was to learn something interesting that might lead to the next experiment. 

The suit from Stamford nodded along in approval. His closing remark was “I understand, but you’re only running the experiments that succeed, right?” In his universe, “failure is not an option” was not a motivational challenge, it was a risk to be avoided at any cost.

This disconnect is mostly amusing when innovation and invention is a small part of organizational success. For organizations where success is defined by industrial measures of predictable execution of processes, it can be enough to let a small handful of rebels color outside the lines and sprinkle in new ideas in carefully controlled ways. 

When innovation and invention is at the heart of an organization’s strategic design, the rebels are the system. Making the trains run on time is of secondary importance, at best, when success depends on laying new tracks or eliminating the tracks altogether. 

If rebels, the innovators and inventors, are the engine of the system, how does that change the managerial task? “Hire smart people and leave them alone” is no longer a viable approach. 

Hiring smart people is always a good strategy in modern organizations (Frederick Taylor was less of a fan of smart), but leaving them alone becomes an abdication of managerial responsibility. What you now must do is enable, empower, and employ the organization’s smart people.

The fundamental shift here is away from superior/subordinate to collaborator. Giving orders becomes explaining command intent. Plans and deliverables are jointly negotiated and designed not dictated. Organic mess replaces illusionary precision. Management control morphs into servant leadership.