Management Is Generating Diminishing Returns

I spoke at the National Association of Corporate Directors’ Board Leadership Conference this week. I was given 20 minutes on their “Innovation Stage” to talk about the relationship between social media and management. My (very short) slide deck is embedded below (or click here if you can’t see it).

I don’t usually surprise people when I suggest that social media and management are fundamentally incompatible. The audience has seen that in action. But then I suggest that in order for us to move forward, it’s management that needs to change, not social media, and I get quite a few “I’m not convinced” expressions.

Here’s the deal: our current, mechanical approach to management has simply outlived its usefulness to us. We have exhausted its capacity. Don’t get me wrong, it’s been a great run. We’ve achieved tremendous gains over the last 100 years, but the potential there is flattening out. Yes, we can continue to improve efficiency and effectiveness by trying to control and manage in traditional ways, but the returns are diminishing. Meanwhile, social media networks (that are organized on more human principles) manage to leap over the 500 million user mark like it’s nothing. We have only scratched the surface of the potential of the human approach.

And not only are the returns diminishing, there are significant problems that we’re experiencing under the machine approach to management that never go away. Like the employee engagement problem. At first I was shocked that there was not more attention paid to the recent Gallup numbers that revealed 70% of the workforce is disengaged. But then I remembered: Oh yeah, it’s been like that for ten years! We’re not moving the needle on this. Why? Because machines suck at engagement. Engagement requires give and take, flexibility, and agility. And machines suck at agility too. So when you read those Harvard Business Review articles about the need to focus on “transient” strategic advantages, just know that it’s going to be a lot harder unless you shift the way you lead and manage the organization.

In the slide deck I list 5 of the 12 principles in our Humanize Trellis. I listed those five simply because those are the ones that are already starting to get attention in the business press (if anyone wants to take the time to review the last six months of HBR and tell me what percentage of the feature articles touch on these areas, I’d love to see the results!). Decentralization, Transparency, Authenticity, Collaboration, Experimentation. I’m already hearing that transparency and authenticity are “buzzwords!”

Don’t let them become buzzwords. Take them seriously and find ways to build them into your culture. The companies that we showcase in Humanize have been getting better results while embracing these ideas for years. I think we’re now in the transition period between the old way and the new way, and my money is on the companies that choose to be on the front end of this curve, not the reactive ones.