The Principles of Modern Management
Note: This article is updated at The Principles of Modern Management.
Are your management practices long in the tooth?
I think I was lucky that early on, I worked in environments that shook things up and rattled the cage in pursuit of more customer impact, employee engagement, and better organizational performance.
In one of the environments, a manufacturing plant, the management team flipped the typical pyramid of the management hierarchy upside down to reflect that the management team is there to empower and support the production line.
And when I was on the Microsoft patterns & practices team, we had an interesting mix of venture capitalist type management coupled with some early grandmasters of the Agile movement. More than just Agile teams, we had an Agile management culture that encouraged a customer-connected approach to product development, complete with self-organizing, multi-disciplinary teams, empowered people, a focus on execution excellence, and a fierce focus on being a rapid learning machine.
We thrived on change.
We also had a relentless focus on innovation. Not just in our product, but in our process. If we didn’t innovate in our process, then we got pushed out of market by becoming too slow, too expensive, or by lacking the quality experience that customers have come to expect.
But not everybody knows what a great environment for helping people thrive and do great things for the world, looks like.
While a lot of people in software or in manufacturing have gotten a taste of Agile and Lean practices, there are many more businesses that don’t know what a modern learning machine of people and processes that operate at a higher-level looks like.
Many, many businesses and people are still operating and looking at the world through the lens of old world management principles.
In the book The Future of Management, Gary Hamel walks through the principles upon which modern management is based.
The Principles of Modern Management
Hamel gives us a nice way to frame looking at the modern management principles, by looking at their application, and their intended goal.
| Principle | Application | Goal |
| Standardization | Minimize variances from standards around inputs, outputs, and work methods. | Cultivate economies of scale, manufacturing efficiency, reliability, and quality. |
| Specialization (of tasks and functions) | Group like activities together in modular organizational units. | Reduce complexity and accelerate learning. |
| Goal alignment | Establish clear objectives through a cascade of subsidiary goals and supporting metrics. | Ensure that individual efforts are congruent with top-down goals. |
| Hierarchy | Create a pyramid of authority based on a limited span of control. | Maintain control over a broad scope of operations. |
| Planning and control | Forecast demand, budget resources, and schedule tasks, then track and correct deviations from plan. | Establish regularity and predictability in operations; conformance to plans. |
| Extrinsic rewards | Provide financial rewards to individuals and teams for achieving specified outcomes. | Motivate effort and ensure compliance with policies and standards. |
What are the Principles Upon Which Your Management Beliefs are Based?
Most people aren’t aware of the principles behind the management beliefs that they practice or preach. But before coming up with new ones, it helps to know what current management thinking is rooted in.
“Have you ever asked yourself, what are the deepest principles upon which your management beliefs are based? Probably not. Few executives, in my experience, have given much thought to the foundational principles that underlie their views on how to organize and manage. In that sense, they are as unaware of their management DNA as they are of their biological DNA. So before we set off in search of new management principles, we need to take a moment to understand the principles that comprise our current management genome, and how those tenets may limit organizational performance.”
A Small Nucleus of Core Principles
It really comes down to a handful of core principles. These principles serve as the backbone for much of today’s management philosophy.
“These practices and processes of modern management have been built around a small nucleus of core principles: standardization, specialization, hierarchy, alignment, planning, and control, and the use of extrinsic rewards to shape human behavior.”
How To Maximize Operational Efficiency and Reliability in Large-Scale Organizations
It’s not by chance that the early management thinkers came to the same conclusions. They were working on the same problems in a similar context. Of course, the challenge now is that the context has changed, and the early management principles are often like fish out of water.
“These principles were elucidated early in the 20th century by a small band of pioneering management thinkers -- individuals like Henri Fayol, Lyndall Urwick, Luther Gullick, and Max Weber. While each of these theorists had a slightly different take on the philosophical foundations of modern management, they all agreed on the principles just enumerated. This concordance is hardly surprising, since they were all focusing on the same problem: how to maximize operational efficiency and reliability in large-scale organizations. Nearly 100 years on, this is still the only problem that modern management is fully competent to address.”
If your management philosophy and guiding principles are nothing more than a set of hand me downs from previous generations, it might be time for a re-think.
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