The system worked because it was designed to ensure that each of its members had the information he needed to do his job.
The best example of a large and successful information-based organization, and one without any middle management at all, was the British civil administration in India. The British ran the Indian subcontinent for two hundred years, from the middle of the eighteenth century through World War II. The Indian civil service never had more than one thousand members to administer the vast and densely populated subcontinent. Most of the Britishers lived alone in isolated outposts with their nearest countryman a day or two of travel away, and for the first hundred years there was no telegraph or railroad.
The organization structure was totally flat. Each district officer reported directly to the “COO,” the provincial political secretary. And since there were nine provinces, each political secretary had at least one hundred people reporting directly to him. Each month the district officer spent a whole day writing a full report to the political secretary in the provincial capital. He discussed each of his principal tasks. He put down in detail what he had expected would happen with respect to each of them, what actually did happen, and why, if there was a discrepancy, the two differed. Then he wrote down what he expected would happen in the ensuing month with respect to each key task and what he was going to do about it, asked questions about policy, and commented on long-term opportunities, threats, and needs. In turn, the political secretary wrote back a full comment.
Knowledge workers must take responsibility for managing themselves.
Knowledge workers are likely to outlive their employing organization. Their average working life is likely to be fifty years. But the average life expectancy of a successful business is only thirty years. Increasingly, therefore, knowledge workers will outlive any one employer, and will have to be prepared for more than one job. And this means most knowledge workers will have to MANAGE THEMSELVES. They have to place themselves where they can make the greatest contribution; they will have to learn to develop themselves. They will have to learn how and when to change what they do, how they do it, and when they do it.
The key to managing oneself is to know: Who am I? What are my strengths? How do I work to achieve results? What are my values? Where do I belong? Where do I not belong? Finally, a crucial step in successfully managing oneself is FEEDBACK ANALYSIS. Record what you expect the results to be of every key action or key decision you take, and then compare ACTUAL RESULTS nine months or a year later to your expectations.
We have an approach that relates economics to human values.
Tomorrow’s economics must answer the questions: “How do we relate the way we run a business to results? What are results?” The traditional answer—“the bottom line”—is treacherous. Under a bottom-line philosophy, we cannot relate the short run to the long term, and yet the balance between the two is a crucial test of management.
The beacons of productivity and innovation must be our guideposts. If we achieve profits at the cost of downgrading productivity or not innovating, they aren’t profits. We’re destroying capital. On the other hand, if we continue to improve productivity of all key resources and improve our innovative standing, we are going to be profitable. Not only today, but tomorrow. In looking at knowledge applied to human work as the source of wealth, we also see the function of the economic organization. For the first time we have an approach that makes economics a human discipline and relates it to human values, a theory that gives a businessperson a yardstick to measure whether she’s still moving in the right direction and whether her results are real or delusions. We are on the threshold of posteconomic theory, grounded in what we know and understand about the generation of wealth.
“Philosophy is the queen of the sciences,” says an old tag. But to remove a kidney stone, you want a urologist rather than a logician.
Knowledge workers can work only because there is an organization for them to work in. In that respect, they are dependent. But at the same time, they own the “means of production,” that is, their knowledge. The knowledge worker sees herself as just another “professional,” no different from the lawyer, the teacher, the preacher, the doctor, the government servant of yesterday. She has the same education. She may realize that she depends on the organization for access to income and opportunity, and without the investment the organization has made, there would be no job for her. But she also realizes, and rightly so, that the organization equally depends on her.
No knowledge “ranks” higher than another. The position of each in an organization is determined by its contribution to the common task rather than by any inherent superiority or inferiority.
In learning and teaching, we do have to focus on the tool. In usage, we have to focus on the end result, on the task, on the work. “Only connect” was the constant admonition of a great English novelist, E.M. Forster. It has always been the hallmark of the artist, but equally of the great scientist. At their level, the capacity to connect may be inborn and part of that mystery we call “genius.” But to a large extent, the ability to connect and thus to raise the yield of existing knowledge is learnable. Eventually, it should become teachable. It requires a methodology for problem definition—even more urgently perhaps than it requires the methodology for “problem solving.” It requires systematic analysis of the kind of knowledge and information a given problem requires, and a methodology for organizing the stages in which a given problem can be tackled—the methodology that underlies what we now call “systems research.” It requires what might be called “Organizing Ignorance”—and there is always so much more ignorance around than there is knowledge.
Specialization into knowledges has given us enormous performance potential in each area. But because knowledges are so specialized, we need also a methodology, a discipline, a process to turn this potential into performance. Otherwise, most of the available knowledge will not become productive; it will remain mere information. To make knowledge productive, we will have to learn to connect.
A knowledge organization has to be both a learning organization and a teaching organization.
Knowledge workers must have continuous learning built into their tasks. And a knowledge organization has to be both a learning organization and a teaching organization. Knowledge today, in all areas, changes so fast that knowledge workers become obsolete pretty soon unless they build continuous learning into their work. And that is not just true of high knowledge such as that of the engineer, the chemist, the biologist, or the accountant. It’s increasingly just as true of the cardiac nurse, the person who handles payroll records, and the computer repair person. But also, a knowledge organization depends on knowledge specialists understanding what their colleagues are doing or trying to do. And each of them has a different specialty. Knowledge workers need, therefore, to hold themselves responsible for educating their colleagues, especially when the knowledge base of their own specialty changes.
This means that knowledge workers are well advised to sit down and answer two questions:
What do I need to learn to keep abreast of the knowledge I am being paid to know?
And what do my associates have to know and understand about my knowledge area and about what it can and should contribute to the organization and to their own work?
The test of any policy in management … is not whether the answer is right or wrong, but whether it works.
The GM executives believed that they had discovered principles and that those principles were absolutes, like laws of nature. I, by contrast, have always held that principles of this kind, being man-made, are at best heuristic. This has been the one point on which my approach to management has always differed from that of the writers or theoreticians on the subject—and the reason, perhaps, that I have never been quite respectable in the eyes of academia. I do believe that there are basic values, especially human ones. But I do not believe that there is “one correct answer.” There are answers that have a high probability of being the wrong ones—at least to the point where one does not even try them unless all else has failed. But the test of any policy in management or in any other social discipline is not whether the answer is right or wrong, but whether it works. Management, I have always believed, is not a branch of theology but, at bottom, a clinical discipline. The test, as in the practice of medicine, is not whether the treatment is “scientific” but whether the patient recovers.
Measuring quality in knowledge work sounds formidable. In practice, it defines itself.
In some knowledge work—and especially in some work requiring a high degree of knowledge—we already measure quality. Surgeons, for instance, are routinely measured, by their success rates in difficult and dangerous procedures, for example, by the survival rates of their open-heart surgical patients. But by and large we have, so far, mainly judgments rather than measures regarding the quality of a great deal of knowledge work. The main trouble is, however, not the difficulty of measuring quality. It is the difficulty in defining what the task is and what it should be.
The best example is the American school. Public schools in the American inner city have become disaster areas. But next to them—in the same location and serving the same kinds of children—are private schools in which the kids behave well and learn well. There is endless speculation to explain these enormous quality differences. But a major reason is surely that the two kinds of schools define their tasks differently. The typical public school defines its task as “helping the underprivileged”; the typical private school (and especially the parochial schools of the Catholic church) define their task as “enabling those who want to learn, to learn.” One therefore is governed by its scholastic failures, the other one by its scholastic successes.
