What Traditional Management and Economics Theories Have In Common

In a recent news article titled We Told You So, author Dan Gardner writes about Robert Shiller's books (The Subprime Solution and Irrational Exuberance) and the author's accurate predictions of both the housing crisis and the tech crash. Gardner's article points to Shiller's positioning of two flaws in conventional economics thinking that was a major factor in both economic events (and the Dutch tulip mania of 1637 as it turns out):

• Flaw number one - the premise that people are always rational, and make rational decisions based on facts and what is in their best interests as opposed to "buy a house at grossly inflated price and expect its value to keep rising."
• Flaw number two - "efficient markets theory" - prices are always reasonable and correct based on all publically available information, and markets are never wrong.

Gardner also references the emergence of behavioural economics over the last 12 years or so, and coincidentally I just stumbled across a Tom Davenport article titled Voting for Behavioral Economics (And Against My Own Self-Interest) that references same.

I haven't ready any of the above mentioned books yet, but what I find fascinating in the article is the link between what is referenced as conventional economic theory, and traditional management thinking that leading management writers and thinkers like Gary Hamel and Henry Mintzberg are attempting to break away from - that the world, its systems, and people are predictable.

It would appear to be the contrary.

(PS: Mintzberg talks about the current economic situation as a A Crisis of Management not Economics, and states that "... everything was short-term and everybody is under pressure and everybody is meeting their targets for each short-term period and so they were not managing. It is a management problem from beginning to end, and I do not think this is a banking problem or a finance problem. "

Web 2.0 and the Future of Management

Jim Lee at APQC has recently posted a blog entry titled Et tu, web 2.0? In it he reviews a number of Web 2.0 technologies and rates their usefulness in the context of his own impressions, needs and contexts. At the end of the post, he asks Gen Y'ers to share their experience with Web 2.0 stuff. (Which is why I'm commenting here and not on his blog.. I'm a bit "long in the tooth" to qualify as a Gen Y'er.)

Jim has been exploring the use/usefulness of Web 2.0 technologies for a while, even questioning the value of his APQC blog. I think his questions are in line with what many of us are considering when looking at Web 2.0 in the context of business value and purpose.

I picked up on a couple of interesting themes in his blog;

• the value of Web 2.0 tools if you're on the road almost 100% of the time
• some of the tools don't work for him , which it think is as much related to preferred learning style as anything else
• and most interestingly, he mentions "knowledge marketplace"

The last point really caught my attention, as I'm reading Gary Hamel's absolutely brilliant book (at least in my opinion), The Future of Management.

In the context of key trends and external forces that are affecting individuals and companies alike, requiring dramatically greater adaptability, Gary points to the shortcomings of the current management paradigm built on the core principles of standardization, specialization, hierarchy, alignment, planning and control, and influencing human behaviour using extrinsic rewards. He then suggests that the key is management innovation, which he defines as "anything that substantially alters the way in which the work of management is carried out, or significantly modifies customary organizational forms, and, by so doing, advances organizational goals."

He also suggests that adopting new principles is at the core of management innovation, and offers:

• variety, diversity, experimentation, depoliticizing / depolarization of decision making
• resource allocation flexibility through a market model
• enabling activism through democracy (devolution of accountability, distributed leadership, unalienable dissention rights)
• engagement and mobilization through meaning and common cause
• increasing the odds, and successful contribution, of serendipity

When I think of these, I see a role for Web 2.0 / social media in supporting and enabling management innovation. The effective integration of social media content, features, functions and capabilities (e.g. collaborating, creating, publishing, linking, sharing, commenting, reviewing, rating, aggregating, dis-intermediating, combining and re-combining) has the potential to enable a shift in management paradigm, to support the change from old to new, and provide the part of the support infrastructure for working in new and innovative ways.

BTW: James Gardner has an interesting view of Web 2.0 social media in his blog post titled "The New Divide: The workforce gap."

As well, McKinsey has published a management innovation related article titled Innovative Management: A Conversation with Gary Hamel and Lowell Bryan.

Cognitive Barriers to Collaboration

I attended a management seminar earlier in the week, hosted by master storyteller Frank Rambeau, to verify the alignment of the seminar's core principles with those of collaboration and knowledge work (and fortunately they were), and of course, to reinforce, remind, and learn as well. It's hard to move ahead if you don't have the basics right, or if you unconsciously develop bad habits!

The workshop focused on the need for managers to create a highly collaborative, participative"climate" that encourages staff to contribute to business outcomes, and enables their staff to develop and succeed, as opposed to a mechanistic approach to directing and controlling actions and behaviours in simplistic, rather Pavlovian (or in some instances Machiavellian) ways. Some of the core competencies referenced were collaboration, facilitative leadership, and good communication based on empathetic listening. (Hey.. where did all that cheering come from!)

Much of the discussions was about what managers should do to create the right climate for knowledge work, and what they, or should I say "we", often do that gets in the way. We are all "our own worst enemies" at some time or other are we not, often acting in ways that defy all logic and overwhelming evidence to the contratry?

Have you ever wondered, after a particularly unproductive meeting or conversation, why people have difficulty working together / collaborating? Why people can hear / read the same thing and take away a different meaning? There are many reasons, but in the context of collaborative work, "cognitive biases" play a major role in disconnecting and derailing even the best of communications, information and knowledge sharing intentions.

What are cognitive biases? I generally define them as ways of thinking that, singly or in combination, are limiting, or inappropriate, for a given circumstance or context. (It may not be technically accurate, but it works for me.. )

As an example, the a common critique of having "having blinders on", can be linked to one of the cognitive biases called "anchoring", which is basically to use a past event, or a single piece of information, to make a decision, ignoring broader valid information.

Being told "we don't do it that way here" in the context of resisting change, can be associated to a "status quo bias".

Take someone who says, in reflecting on a recent event or outcome, "I knew that would happen all along!" If they didn't / couldn't have predicted the outcome in advance, yet tell themselves they did, they're likely exhibiting "hindsight bias."

When I look at a more extensive list of the various biases (for example http://en.wikipedia.org/wiki/List_of_cognitive_biases) I certainly wonder how we humans get anything done!

And that's only the start! Imagine what can happen when an individual unconsciously defaults to their "home" type of reasoning (e.g. deductive, inductive, abductive, fallacious) when a situation calls for a different one, or when conflicting types of reasoning implicitly held by participants collide in a meeting or conversation! (http://en.wikipedia.org/wiki/Reasoning)

For me, different ways of thinking and viewing the world represents a never ending challenge to collaboration, but also a never ending wealth of possibility and potential.

"Organizational Float" in a Knowledge Work Environment

"Organizational float" came to mind somewhat unbidden in a recent meeting. The term itself comes from an article or paper I read a while back, but unfortunately I don't recall the exact source. I think it may have been in the context of some writing by Leif Edvinsson, an article about Skandia, or a piece on intellectual capital.

Though I'm sure the of the original definition and context, in my mind I've no doubt altered it a bit as follows. (I also forgot that I'd referenced it in a KnowledBoard discussion on KM Governance. )

There has been much press about the retiring baby boom generation, the war for top talent and so on. In a very real sense, many organizations challenged in finding, identifying and recruiting qualified candidates, are faced with bureaucratic staffing and security screening processes, and often burden already overworked staff with responsibilities for "onboarding" / training new employees or contractors at the least convenient of times - during a crisis need. And in this overall context, organizations are trying to innovate, improve processes and effectiveness, and become more agile. Not too stressful, is it?

Perhaps one strategy is to introduce some "organizational float". This can take the form of extra staff, with a variety of broadly relavent skills and experiences, that can step in and fill gaps left by temporary absences or unforseen workload spikes. It can take the form increasing staff compliments to distribute work such that every employee has a certain percentage of time, say 20% to step back and reflect, think strategically and innovatively, participate in change or performance improvement initiatives, develop professionally, and perhaps pick up on some of the work left undone by temporarily absent or departing employees.

There is no doubt many challenges to building organizational float. Gaining support and approval from the management hierarchy can be a challenge, unless a strategic, capability building mentality is prevalent. How about, in highly knowledge-intensive, non-transactional organizations or groups, the difficulty of putting a box around "work" so that it can be packaged and shipped to another worker. Or perhaps the hurdle created by the replacement mindset, that assumes that the unique thought processes, approaches to work, capability sets and experience bases that people carry can be transactionally replaced 1 for 1.

So I think the real strategy here is buying time and increasing available attention - organizational float.

Facilitation - At The Root of it All

I've been thinking about the concept of "knowledge-conscious managers" for a while, though I don't recall exactly what triggered the line of thinking.

It could be an article I read on the Mospos blog titled The 18 commandments of Knowledge-conscious managers http://blog.mopsos.com/archives/000188.html.

It could be an Inside Knowledge Magazine piece titled A Knowledge Conscious Curriculum.

Perhaps it was a Knowledgeboard discussion I participated in titled Exact role of Knowledge Manager and some very thoughtful comments by Frank Guerino, CEO & Founder TraverseIT.

Nonetheless, if you subscribe to the notion that knowledge management is just good management, then the perspectives and behaviours suggested in discussions and articles about knowledge conscious managers resembles to me what I've read about facilitative leadership.

For example, in The Art of Facilitative Leadership: Maximizing Others’ Contributions by Jeffrey Cufaude, facilitative leadership is described as:

• making connections and helping others make meaning
• providing direction without totally taking the reins
• managing content and process
• inviting disclosure and feedback to help surface unacknowledged or invisible beliefs, thoughts, and patterns
• focusing on building the capacity of individuals and groups to accomplish more on their own, now and in the future

I see strong similarities and connections with many of the concepts of knowledge-conscious management, and ultimately I think it all boils down to managers doing whatever is required to facilitate effective knowledge work, as defined by roles and responsibilities in organizational context. This strikes me as being a very inclusive approach covering everything from making information easier to create, capture and access, to improving group and team interpersonal effectiveness and collaboration though the explicit, systematic facilitation of group processes.

Therefore, if you subscribe to the notion that a manager's role is to facilitate knowledge work, than facilitation as a fundamental mind set, and a key core competency, has even greater importance in today's knowledge based organizations than even the facilitation community has been promoting well over the last fifteen years. Perhaps organizational management and leadership development programs need to explicitly identify, bundle, include and emphasize facilitation and other knowledge-conscious/facilitative leadership capability development opportunities.