Written by Jonathan Trevor, THEWORLD@OxfordSaïd Issue 1
‘Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.’ (Tom Goodwin, Crunch Network, 2015)
The information revolution has brought many surprising – even disruptive – and positive benefits. Knowledge is abundant and more readily accessible than at any time in our past. Complex and clever supply chains deliver simultaneous choice, convenience and value for money for consumers. Platform technology has turned established industries upside down, creating exciting opportunities and challenges for innovation.
On the work front, many have predicted this means the end of the nine-to-five grind. Instead, work will be highly discretionary, with folk working on what they want, how they want, and when they want. Vertical progression up the corporate greasy pole will be replaced by portfolio careers, with versatile individuals developing their own do-it-yourself packages of complementary roles in multiple overlapping networks. This is a bright future of strong personal brand, constantly interesting work, instant results (and perhaps gratification), global connectivity and positive (and ceaseless) progress.
Or you could look at it as a potentially scary future of high personal uncertainty. The economist John Maynard Keynes issued a cautionary note in 1930 about the risk of ‘technological unemployment’, in which advancing industrial technology superseded the productive capabilities of humans for routine manual work. Almost one hundred years later, technological unemployment remains an uncomfortable prospect as digital technology potentially supersedes the cognitive capabilities of humans for white-collar and professional work. A study by the Oxford Martin School forecasts that forty-seven per cent of occupational categories, including accountancy, legal work and technical writing, are at risk of being automated within two decades.
Technology is also indirectly transforming work by irrevocably changing the marketplace for goods and services. To better respond to intense competition and global market forces, employers are likely to continue to seek greater flexibility of employment for all sections of the workforce. According to the Office For National Statistics, 2.4% of the UK adult working population was employed on zero hours contracts in 2015, an increase of 19% over 2014. Very few expect a job for life in the 21st century, but will it be the new normal in future to have no job at all?
Our industrial past
How we work today has strong roots in the organising logic of 19th century Western Europe and early 20th century United States. The Industrial Revolution was a period of explosive growth and radical transformation of the economic, social, political and technological circumstances of entire nations. The order of the day for the burgeoning business class was to create surplus value by maximising economies of scale. What were previously craft industries grew very large very rapidly. Industrial centres became established cities by vacuuming up workers from rural areas in a process of breakneck urbanisation to provide labour for the factories. Many British communities remain built around the labour demands of declining or now non-existent industries, whether steel in Sheffield, coal in Durham or soap in Port Sunlight. In the UK and the USA, this revolutionary period was the crucible from which the business magnate, the corporation, the career manager, and the management consultant all emerged. This was the start of the era of big business and ‘professional’ management.
Operating at scale became a key management challenge, as businesses grew large by creating markets for affordable products previously out of reach of the majority of consumers. Mass production fuelled mass consumption, and vice versa. Maximising productivity and lowering costs was made possible by simplifying work to the point where literally anybody could perform it. The abundance of labour for simple and routine work provided businesses with the wage flexibility to employ labour en masse at a predictable cost. Colonialism, and more recently globalisation, exported these principles of industrial work organisation across the world to make them a global phenomenon.
The Machine Bureaucracy
Much like the industrial technologies they relied upon, organisations came to be thought of as machines, to be rationally designed and managed as if an engineering problem. Rationalist organisational design was reflected in the principles of the ideal-type bureaucracy described, most famously – and ambivalently – by German sociologist Maximillian Weber. To be as technically efficient as possible, work in the ideal-type bureaucracy was divided into specialist tasks as much as possible (i.e. a high division of labour); performed as an official duty for which individuals were paid a wage (i.e. employment); with authority conferred upon an ‘office’ or a position, and not a person (i.e. managers); and governed through an escalating hierarchy of authority (i.e. seniority); and in which staff and customers were treated uniformly and impersonally (i.e. no personal exceptions, whether for promotion or product). By organising work according to these principles, management (not owners or workers) were able to control productivity with great precision. This was key to growth and competitiveness: the most effective organisations were those that could best match predictability of supply with predicable demand. The ability to execute strategic plans as efficiently as possible was the front-line in the fight for competitiveness between rival firms.
Accompanying the technological revolution was a revolution in managerial technique. Task simplification lent itself to systematic and impersonal measurement – by performing highly detailed time and motion studies, managers were able to quantify almost every aspect of work performance and establish norms and benchmarks against which all were appraised as standard. Performance against norms was tied explicitly to financial rewards (and penalties), with work becoming, inevitably, routine, transactional and intense. Those who were able to perform the same simple routine task, especially faster than their peers, were rewarded financially. Experimental time, motion and measurement studies of worker output performed in the early twentieth century by the prototypical management consultant, F.W. Taylor, grew to become a science in itself – management science – through which managers could optimise and objectively prescribe performance independent of the thoughts and feelings of those performing the work. There was a clear pay-off in terms of efficiency. Consider Ford, arguably the most innovative company of its time. In 1908, when the Model T was introduced, Ford was capable of producing twenty-seven cars per day. By 1923, factory output exceeded an astonishing two thousand cars per day due to continuous improvement of management technique and the introduction of the rolling production line.
Limitations to efficiency
For the all the economic benefits, there were fierce critics of the social and political ramifications of these new ways of working. Many, including Marx famously, railed against the apparent separation between individuals and the fruits of their labour – an inevitable result of the capitalist mode of production referred to as ‘alienation’. The relative disempowerment of labour within the employment relationship precipitated industrial conflict on a scale to match the times. Labour movements across the industrial(ising) world were formed in exactly these circumstances in the late nineteenth and early twentieth centuries. Workers organised collectively in an attempt to match the considerable wage bargaining power of their employers. As individuals, workers were simply cogs in the cold, hard, and ruthlessly efficient logic of the machine bureaucracy geared solely towards the fulfilment of managerial goals. For customers there were limitations too. Whilst more affordable than ever before, mass-produced products were standardised and typically as simple as the methods used to produce them. As Henry Ford famously remarked: ‘Any customer can have a car painted any colour that he wants so long as it is black’. Production was supply- and not demand-led, with the customer occupying a position at the end of a very long and hierarchically managed supply chain.
But that’s all changed. Today’s environment requires organisations to respond rapidly to the multifarious and changing preferences of fickle customers – not something the bureaucracy was ever designed to accommodate. So what’s the alternative?
The post-bureaucratic future
‘Post-bureaucracy’ is the not-so-catchy catchall term used by academics to describe a dominant logic or organising work fit for the dawning Information Age. More popular terms, no less buzz-wordy, include the adhocracy, the organic (as opposed to mechanistic) organisation, the network organisation and, most simply, the human cloud. All of these conceptions share a number of common traits radically different to Industrial Age logic of the machine bureaucracy. Prized organisational capability is defined as the ability to do new things very rapidly, and not simply the same thing better and better. Efficiency gives way to innovativeness as the new definition of organisational effectiveness.
The networked organisation
A growing (and glowing) consensus from optimists cast a vision in which hierarchies are replaced by flat networks of highly connected and versatile actors (or ‘nodes’), each in possession of complementary capability and knowledge. When integrated, the whole of the network is far more valuable than the mere sum of its parts, with significant value residing in the connections. In place of the traditional boundary between internal and external actors, the boundary of the ‘post-bureaucratic’ network organisation is fuzzy. The distinction between internal and external becomes less meaningful in the ‘open system’ of the organisation, as knowledge pours in from multiple sources and fuels innovations. Knowledge is shared widely across the entire network and flows in all directions to wherever it is required.
The bureaucracy was characterised by formal planning made in advance of implementation, and enforced by impersonal rules, policies and procedures devised by management. Strategy in the post-bureaucracy is emergent in nature, perhaps reflecting the ultimate conception of what Henry Mintzberg described as mere ‘patterns in a stream of decisions’. Moreover, decisions will reflect the collective will of the informed network as opposed to the judgement of a few individuals at the top of a hierarchy. The democratisation of decision-making requires that information is shared freely throughout the network to permit members to reflect meaningfully on the well-being of the whole of the network and not simply their own individual element or partial interests.
Social and digital connectivity
To mobilise its collective wisdom to address novel problems, new discoveries and opportunities for positive change, the network relies upon a web of weak and strong relationships. Strong relationships involve a degree of interdependence between network actors, such as mutual accountability for the completion of a shared task. Weak relationships might simply extend to spontaneous knowledge sharing. Nevertheless, all relationships are valuable forms of ‘social capital’ through which the network is enriched and made resilient. Informal relationships allow the organisation to configure and reconfigure rapidly to best fit its changing circumstances e.g. changing customer preferences or environmental disruption. Whereas maximising economies of scale characterised the organising logic of the machine bureaucracy, maximising economies of association will determine strategic value in this conception of the future organisation. Achieving sustainable distinctiveness in the marketplace by constantly reinventing work will be the top priority for custodians of the network overall.
Freelance and T-Shaped Talent
Human capital in the post-bureaucracy will be split into two categories between which individuals will switch according to circumstances – network custodians and performers. Network custodians will primarily invest their time in establishing and maintaining the health and vitality of the network. They will work to secure the requisite variety of expertise and knowledge to enable the network to respond to complexity, challenge and opportunity within its environment. They will also serve to reinforce and enrich existing connections between network members whilst also establishing new connections for both expressed and opportunistic purposes. To succeed in the knowledge-rich network environment, network custodians will need to become ‘T-shaped’ – capable of developing a depth of specialist expertise in a relevant field, but retaining general knowledge of other fields so that valuable connections and new combinations of knowledge might be forged. Performers, on the other hand, will focus on the completion of a specific task aligned to the common aims of the network. Tasks may be narrow or broad in scope, and short- or long-term in horizon and flexibly sourced.
Many of these developments are countercultural in the contemporary workplace. Consider Master of Business Administration (MBA) degrees. The first MBA was created at the Wharton School of Management at the University of Pennsylvania in the late 19th century for the expressed purpose of training a cadre of professional administrators to service the needs of the bureaucracy. T-Shaped talent will require a holistic education in the interrelatedness of many different subjects. Successful network relationship brokers will be polymaths (i.e. know a little about a lot of things) necessarily to make novel and high potential connections between individuals and groups with potentially similar interests but dissimilar backgrounds. Thinking horizontally about career progression runs contrary to the functional (and specialist by definition) demands of established vertically oriented careers.
Mutual aims and collective thinking
The bureaucracy presumed workers to have different interests to those of their employers – simplistically, employers wanted workers to work as hard as possible for the least amount of pay, and workers the opposite. Aligning staff to the goals of their employing organisation was (and continues to be) achieved by enforcing strict rules, precise targets and financial incentives to perform. Those same external controls would be entirely counterproductive in the post-bureaucratic workplace. They would limit the ability of the organisation to change rapidly and promote discretionary effort or self-direction. Motivation will be primarily intrinsic, appealing to the emotive aspect of the work relationship and the fulfilment of shared purpose. In the absence of discernible superiors, performance management will become mutual monitoring amongst peers. Reputation will never have mattered more for individuals and for entire networks.
The complexity and dynamism of the rapidly changing marketplace will require wisdom beyond that capable of any few individuals sitting atop an organisational hierarchy, no matter how ‘heroic’ or wise. Post-bureaucratic organisations in future will represent collectives in which individuals’ interests are secondary to collective community interests and ideas are crowd-sourced. The explicit purpose of the organisation will represent a higher purpose for all. Individuals and groups will willingly be a means to the organisation’s ends because its purpose defines their own. Gary Hamel said of creating superior engagement for vital talent, “create a cause and not a business”. Work in future will feel more like a passionate cause, rather than an impersonal and purely functional employment transaction between capital and labour.
The need for ambidexterity
Is this, or some version of it, the inevitable future of work for us all? We can see many aspects of the envisaged future workplace already. Collaboration, employee empowerment, emotional intelligence, culture management and so on are commonplace business practices today, and all post-bureaucratic in nature.
However, it would be wrong to abandon our industrial age thinking completely. Efficiency will continue to matter as much as ever in future. Bureaucratic ways of working will always be the most appropriate way of producing the indispensable commoditised products we consume on a daily basis. The challenge for organisations and leaders in the 21st century is to become ambidextrous – capable of being simultaneously efficient at exploiting existing opportunities, and exploring what capabilities are required for competitiveness in future.
To manage the complex trade-offs necessary to become and remain ambidextrous, organisations may well come to resemble networks more than hierarchies – especially when viewed at the enterprise level. Within these networks there will be elements that are organised bureaucratically. The principles of a division of labour, supervision, impersonal rules and formalisation of work practices will always have a place in the world of work, whether performed by man or machine. The networked corporate ‘ecosystem’ will provide the umbrella for multiple different species of sub-organisation, with work organised either bureaucratically, post-bureaucratically, or any point in between, according to requirements. The work challenge in future is therefore to be both efficient and innovative.
Questions to ponder
There are winners and losers in all change. What might the future of work envisaged in this article mean for economies, organisations and individuals?
Will everybody benefit equally from the shift from bureaucratic to post-bureaucratic ways of working? Earnings inequality is a hot political potato; is it set to become even more so in future? Will some – whether the few or the many – thrive in the future work place or fall by the wayside? What are the social implications of changes to the business of employment? What new assumptions will we need to adopt to reflect the new reality of life, liberty and the pursuit of happiness through work? Will unemployment cease to be a meaningful measure of the economic health of economies? How else will we measure individuals’ chances at living a prosperous life? Can we or should we even try to sustain those who cannot or will not change with the times?
How should we educate our children to thrive in a post-bureaucratic world? Mastering technology is perhaps the easy part. How can we give them the best chance of developing the political self-awareness and sociability to meaningfully connect with others across the unstructured landscape of the human cloud?
For all of the opportunities the future of work must surely present, how will organisations manage the increased complexity of network working when stripped of tired but tested structures? How will firms continue to generate loyalty and commitment amongst people they rely upon to perform vital work but don’t employ? Who’s to blame when things go wrong? Where does accountability reside? What does good look like and who decides? Who’s in charge when no one can decide?
How will individuals plan for the future if the future is inherently uncertain? Is the counterweight to increased job flexibility, decreased job security? Are we all to become entrepreneurs of our own personal corporations of one? Will we be left bereft by the absence of established career paths and easy choices that we currently take for granted? As individuals, do we really want to be left to our own devices completely? Is it even a choice?
‘The Future of Work’ will be the next topic addressed by Global Opportunities Threats Oxford (GOTO). GOTO is a platform to bring together Saïd Oxford’s 13,000-strong network of management scholars, alumni, friends and Oxford faculty to reflect, as one community, on world-scale issues. The most recent topic was ‘Water Management and Markets’; the three winning MBA projects can be read here.