By WSJ Staff
From Gary Hamel’s Management 2.0:
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The experience of growing up online will profoundly shape the workplace expectations of “Generation F” — the Facebook Generation. At a minimum, they’ll expect the social environment of work to reflect the social context of the Web, rather than as is currently the case, a mid-20th-century Weberian bureaucracy.
If your company hopes to attract the most creative and energetic members of Gen F, it will need to understand these Internet-derived expectations, and then reinvent its management practices accordingly. Sure, it’s a buyer’s market for talent right now, but that won’t always be the case — and in the future, any company that lacks a vital core of Gen F employees will soon find itself stuck in the mud.
With that in mind, I compiled a list of 12 work-relevant characteristics of online life. These are the post-bureaucratic realities that tomorrow’s employees will use as yardsticks in determining whether your company is “with it” or “past it.” In assembling this short list, I haven’t tried to catalog every salient feature of the Web’s social milieu, only those that are most at odds with the legacy practices found in large companies.
Most of the industrial pioneers who created “modern” management—individuals like Frederick Taylor, Frank Gilbreth, Henry Ford, Alfred Sloan, and Donaldson Brown—were born in the 19th century. These bold thinkers would no doubt be surprised to learn that their inventions, which included workflow optimization, variance analysis, capital budgeting, functional specialization, divisionalization, and project management, are still the cornerstones of large-scale management systems.
It is difficult for contemporary observers to appreciate the profound impact these revolutionary breakthroughs had on the organization of economic life in the early decades of America’s industrial revolution. In 1890, nine out of ten white males worked for themselves, and the ones who didn’t were referred to disparagingly as “wage slaves.” At the time, the average manufacturing company had four employees, and few factories had more than 100 laborers. Yet within a generation, Ford Motor Company would be making half a million cars a year, Sears, Roebuck & Company would be operating a continental-scale distribution system, and US Steel would be able to boast of a billion-dollar market value.
This transition from an agrarian and craft-based society to an industrial economy required an epical re-socialization of the work force. Unruly and independent-minded farmers, artisans and day laborers had to be transformed into rule-following, forelock-tugging employees. And 100 years on, this work continues, with organizations around the world still working hard to strap rancorous and free-thinking human beings into the strait-jacket of institutionalized obedience, conformance, and discipline.
But now, for the first time since the early 20th century, we may be on the verge of another management revolution, and it may turn out to be just as unsettling as the one that spawned the industrial age. There are three forces at work that make such a metamorphosis likely; three discontinuities that may end management as we know it.
The first of these is a bundle of dramatic changes that have made the business environment substantially less forgiving. Companies around the world are struggling to cope with a wildly accelerating pace of change, an onslaught of new, ultra-low-cost competitors, the commoditization of knowledge, rapidly increasing customer power, and an ever-lengthening menu of social demands. Traditional management models that emphasize optimization over innovation and continuity over change simply can’t cope with these unprecedented challenges.
The second driver is the invention of new, Web-based collaboration tools. For the first time in centuries, human beings have a new way of organizing themselves, via online, distributed networks. Markets and hierarchies, heretofore the two principle technologies for coordinating human effort, finally have a robust new competitor. In the coming decades, we can expect the Web to transform organizational life every bit as dramatically as it has already transformed life outside the workplace.
The third driver is the mash-up of new expectations that Generation Facebook will bring to work in the years ahead. If you’re part of the first generation in history to have grown up on the Web, you don’t think of the Internet as something “out there”—a tool you employ to reserve a hotel room, buy a book, or send a note to grandma. Rather, the Web is something you’re perpetually in—as ubiquitous and transparent as water is to fish. As a child of the digital age, the Web is the operating system for your life, the indispensable and unremarkable means by which you learn, play, share, flirt, and connect.
Over the coming decades, these forces will mostly destroy management as we know it. In my next posting, I’ll outline some of the ways this might happen.
Readers, for now, are there any other big trends that you think might compel a comprehensive overhaul of our legacy management practices? If so, please briefly describe these forces and the impact you believe they’ll have on the way we lead, manage and structure our companies.
1. All ideas compete on an equal footing.
On the Web, every idea has the chance to gain a following—or not, and no one has the power to kill off a subversive idea or squelch an embarrassing debate. Ideas gain traction based on their perceived merits, rather than on the political power of their sponsors.
2. Contribution counts for more than credentials.
When you post a video to YouTube, no one asks you if you went to film school. When you write a blog, no one cares whether you have a journalism degree. Position, title, and academic degrees—none of the usual status differentiators carry much weight online. On the Web, what counts is not your resume, but what you can contribute.
3. Hierarchies are natural, not prescribed.
In any Web forum there are some individuals who command more respect and attention than others—and have more influence as a consequence. Critically, though, these individuals haven’t been appointed by some superior authority. Instead, their clout reflects the freely given approbation of their peers. On the Web, authority trickles up, not down.
4. Leaders serve rather than preside.
On the Web, every leader is a servant leader; no one has the power to command or sanction. Credible arguments, demonstrated expertise and selfless behavior are the only levers for getting things done through other people. Forget this online, and your followers will soon abandon you.
5. Tasks are chosen, not assigned.
The Web is an opt-in economy. Whether contributing to a blog, working on an open source project, or sharing advice in a forum, people choose to work on the things that interest them. Everyone is an independent contractor, and everyone scratches their own itch.
6. Groups are self-defining and -organizing.
On the Web, you get to choose your compatriots. In any online community, you have the freedom to link up with some individuals and ignore the rest, to share deeply with some folks and not at all with others. Just as no one can assign you a boring task, no can force you to work with dim-witted colleagues.
7. Resources get attracted, not allocated.
In large organizations, resources get allocated top-down, in a politicized, Soviet-style budget wrangle. On the Web, human effort flows towards ideas and projects that are attractive (and fun), and away from those that aren’t. In this sense, the Web is a market economy where millions of individuals get to decide, moment by moment, how to spend the precious currency of their time and attention.
8. Power comes from sharing information, not hoarding it.
The Web is also a gift economy. To gain influence and status, you have to give away your expertise and content. And you must do it quickly; if you don’t, someone else will beat you to the punch—and garner the credit that might have been yours. Online, there are a lot of incentives to share, and few incentives to hoard.
9. Opinions compound and decisions are peer-reviewed.
On the Internet, truly smart ideas rapidly gain a following no matter how disruptive they may be. The Web is a near-perfect medium for aggregating the wisdom of the crowd—whether in formally organized opinion markets or in casual discussion groups. And once aggregated, the voice of the masses can be used as a battering ram to challenge the entrenched interests of institutions in the offline world.
10. Users can veto most policy decisions.
As many Internet moguls have learned to their sorrow, online users are opinionated and vociferous—and will quickly attack any decision or policy change that seems contrary to the community’s interests. The only way to keep users loyal is to give them a substantial say in key decisions. You may have built the community, but the users really own it.
11. Intrinsic rewards matter most.
The web is a testament to the power of intrinsic rewards. Think of all the articles contributed to Wikipedia, all the open source software created, all the advice freely given—add up the hours of volunteer time and it’s obvious that human beings will give generously of themselves when they’re given the chance to contribute to something they actually care about. Money’s great, but so is recognition and the joy of accomplishment.
12. Hackers are heroes.
Large organizations tend to make life uncomfortable for activists and rabble-rousers—however constructive they may be. In contrast, online communities frequently embrace those with strong anti-authoritarian views. On the Web, muckraking malcontents are frequently celebrated as champions of the Internet’s democratic values—particularly if they’ve managed to hack a piece of code that has been interfering with what others regard as their inalienable digital rights.
These features of Web-based life are written into the social DNA of Generation F—and mostly missing from the managerial DNA of the average Fortune 500 company. Yeah, there are a lot of kids looking for jobs right now, but few of them will ever feel at home in cubicleland.
So, readers, here’s a couple of questions: What are the Web-based social values that you think are most contrary to the managerial DNA one finds inside a typical corporate giant? And how should we reinvent management to make it more consistent with these emerging online sensibilities?
