As Lenin reputedly said, ‘There are decades when nothing happens. And there are weeks when decades happen.’ Management, long becalmed, is in the middle of one of those periods of accelerated evolution now.
Innovation in management (as in regulation) always lags technology innovation, sometimes by decades. If management 1.0 emerged in the Industrial Revolution, management 1.5 in the industrial age and management 1.75 with the governance revolution launched by Milton Friedman in the 1970s and 1980s, could it be that the pandemic of the 2020s will mark the long-awaited shift to management 2.0?
If so, ‘the biggest global shift in a century’, as Gary Hamel hailed it, will be the result of the unprecedented turmoil roiling the world of work in the wake of Covid, and the unexpected unfolding revolt of the knowledge workers.
Most attention today focuses on the widespread industrial unrest and recurrent labour shortages that have UK CEOs bracing themselves for a period of rocky workplace relations. It’s a similar story in the US, where after decades of decline unions are making a comeback. Starbucks is progressively unionising; unions have been formed for Amazon and Alphabet (Google), and the third A, Apple is in union sights.
Yet these pale into insignificance beside a Great Resignation that rumbles on unabated. Last year record numbers of people quit their jobs in the US and the UK, and even now there is little sign of a slowing down. Even those without a job to go to say they are thinking of leaving.The Great Resignation has morphed into the Great Attrition, not just in lower-paid trades like care, retail and hospitality but across the industry spectrum.
Most CEOs assumed that when Covid faded, the workplace would automatically resume its pre-pandemic shape. They can’t wait. In a recent piece for the FT, Gillian Tett reported that at top-level gatherings from Davos to Aspen, never mind inflation or war in Ukraine – all corporate leaders wanted to talk about was how to get employees back to the office, pronto.
They’ll have a long wait. ‘Right now, a lot of wishful thinking is guiding the return from remote working,’ McKinsey warned recently. ‘[CEOs] think it’s both easy and desirable for companies to move on quickly. But their people aren’t begging to disagree. They are voting with their feet’.
Now, it’s not surprising that stress and anxiety increased during the weirdness of the last two years. But to expect them to subside again now is to ignore the fact that, as documented iby Gallup, discontent and dissatisfaction with work were trending upwards years before the pandemic; and to miss the profound psychological effects of the lockdowns. Something snapped. In effect, says LBS’s Lynda Gratton, Covid ‘unfroze’ ingrained work habits that had remained unchallenged for half a century. Yanked out of unquestioned daily routines, working from home, office workers found themselves asking what they really wanted from work and life; and whatever it was, it certainly wasn’t the bureaucracy and bullshit jobs of the status quo ante.
In truth, this too shouldn’t have come as a surprise. What people want from employment remains remarkably consistent: namely, a steady job with a regular pay packet, and a relationship based on respect, dignity and fairness. What they are offered, on the other hand, is something that looks like the opposite: work as a thin, affectless, precarious transaction – a gig.
As a result of this misapprehension, companies continue to get things wildly wrong. Their clodhopping attempts to get people back to the office with offers of cash or a couple of days remote working reflect the belief that they were the reasons employees were quitting in the first place. Wrong. When polled by McKinsey, employees fingered human issues – feeling unvalued by organizations or managers, or not feeling they belonged – as their top reasons for leaving (the last being especially a problem for employees of colour).
Even more damningly, another large-scale survey linked high people churn above all with a toxic corporate culture. Job insecurity, failure to recognize performance and a poor response to Covid also contributed. Yes, it’s management, stupid. Sectors with very high turnover included quintessentially knowledge-based businesses such as consultancy and enterprise software, and firms with high innovation rates, as well as the expected retail and hospitality.
All this might be of academic interest but for one thing: the nature of knowledge work, which, as Peter Drucker foresaw, at a stroke ejects management from the driving seat.
For Drucker, making knowledge work productive was the most important management task of the 21st century. As in many other areas (although not in his linked hope that by now companies would need one-third of managers and half the number of management layers they did 30 years ago), he was right. The main reason why that productivity has failed to materialise is precisely the toxic, top-down, command-and-control (management 1.75) model that is driving the Great Attrition. Politely but firmly, despite the threats, knowledge workers are saying they aren’t taking it any more, and company after company is having to accept that there will be no ‘return to normal’, and some kind of hybrid working – a combination of office and WFH – is now inevitable.
As smart firms have twigged, though, hybrid working is actually about much more than the amount of time spent in which location. As a deconstruction and recomposition of the office, what it is for and what it should be, it is a proxy for how knowledge work and knowledge workers are managed. With no best practice to guide them, and each company having to test what works in its own culture and context, what is now being unleashed is shaping up as ‘the greatest unplanned experiment in the history of work’.
The stakes are enormous. Will managers take the opportunity to rethink work with people at the centre of a system beyond command and control that gives them agency to use their energy and initiative to further the organisation’s purpose? Or will they double-down on the grim default top-down model, as they did most recently in 2008, using technology to surveille and control rather than augment human skills, prolonging the epidemic of alienation and disengagement at work, and yet again kicking the prospect of making knowledge work fully productive into the distant future?
For management, the Great Resignation might more accurately be called the Great Reckoning.