Gordian Knots

Why Read It?

Drucker predicted the rise of the knowledge worker long before the term came into common usage. His definition is much broader than the IT-led version that is currently used. The book gives a valuable insight into the changing nature of management roles and responsibilities in the knowledge economy.

Getting Started

According to Drucker, the manager as knowledge worker was a new breed of thoughtful, intelligent executive. The manager was reincarnated as a responsible individual, paid for applying knowledge, exercising judgement, and taking responsible leadership.

The knowledge worker sees him or herself as another professional. While dependent on the organisation for access to income and opportunity, the organisation equally depends on him or her.

In this book we read that knowledge, rather than labour, is the new measure of economic society–and the knowledge worker is the true capitalist in the knowledge society. Knowledge is not only power, but also ownership of the means of production.

Contribution

1. The manager as knowledge worker

Drucker coined the term “knowledge worker”. This was a new breed of executive–a highly trained, intelligent managerial professional who realised his or her own worth and contribution to the organisation. Drucker bade farewell to the concept of the manager as mere supervisor or paper shuffler. The manager was reincarnated as a responsible individual.

Though the knowledge worker is not a labourer, and certainly not proletarian, he or she is not a subordinate (in the sense that he or she can be told what to do). The knowledge worker is paid, on the contrary, for applying his or her knowledge, exercising judgment, and taking responsible leadership.

2. The nature of the knowledge worker

According to Drucker, the knowledge worker sees him or herself just as another professional, no different from the lawyer, the teacher, the preacher, the doctor, or the government servant of yesterday. He or she has the same education, but more income–and probably greater opportunities as well.

The knowledge worker may well realise that he or she depends on the organisation for access to income and opportunity, and that without the organisation, there would be no job. But there is also the realisation that the organisation depends equally on him or her.

Drucker effectively wrote the obituary for the obedient, grey-suited, loyal, corporate man and woman. The only trouble was, it took this corporate creature another 20 years to die.

3. The impact of knowledge workers

The social ramifications of this new breed of corporate executive were significant. If knowledge, rather than labour, was the new measure of economic society then the fabric of capitalist society had to change. The knowledge worker is both the true capitalist in the knowledge society and dependent on his or her job.

Collectively the knowledge workers–the employed, educated middle class of today’s society–own the means of production through pension funds, investment trusts, and so on.

Knowledge was not only power, but it was also ownership.

Context

The book effectively mapped out the demise of the age of mass, labour-based production and the advent of the knowledge-based, information age. Drucker’s realisation that the role of the manager had fundamentally changed was not a sudden one. The foundations of the idea of the knowledge worker can be seen in his description of management by objectives in “The Practice of Management” (1954). Knowledge management, intellectual capital and the like are now the height of corporate fashion. The modern idea of the knowledge worker is a creature of the technological age, the mobile executive, the hot-desker. Drucker provided a characteristically broader perspective. He placed the rise of the knowledge worker in the evolution of management into a respectable and influential discipline.

Drucker has since developed his thinking on the role of knowledge, most notably in his 1992 book, “Managing for the Future”, in which he observed, “From now on the key is knowledge. The world is becoming not labour intensive, not materials intensive, not energy intensive, but knowledge intensive”.

“The Age of Discontinuity” was startlingly correct in its predictions. Much of it would fit easily into business books of today.

Management guru Gary Hamel said, “Peter Drucker’s reputation is as a management theorist. He has also been a management prophet. Writing in 1969, he clearly anticipated the emergence of the knowledge economy. I’d like to set a challenge for would-be management gurus: try to find something to say that Peter Drucker has not said first, and has not said well. This high hurdle should substantially reduce the number of business books clogging the bookshelves of booksellers, and offer managers the hope of gaining some truly fresh insights”.

The Best Sources of Help

Drucker, Peter. “The Age of Discontinuity”. Oxford: Butterworth-Heinemann, 1969.

Why Read It?

Decision-making, according to Simon, is synonymous with management. But what is decision-making, how are decisions made? Simon realised that most people’s assumptions were hopelessly unrealistic. He set out to inject some realism into the subject, but not in a merely reductive way; he also elaborated a very modern concept of the organisation as an interrelated and intercommunicating body. He also said that the ability to make decisions effectively made the difference between effectiveness and ineffectiveness in organisations. On that basis alone, his book must be worth reading.

Getting Started

Herbert Simon, the son of German immigrants to Milwaukee and a graduate of the University of Chicago, won the Nobel prize for economics in 1978 for his work on administrative behaviour, the subject of his doctoral thesis and this book. He is said to have been inspired to write it by observations made while working part-time for the Milwaukee local authority while a student. He is also said to have told the Nobel committee, when collecting his award, that his real interest was in artificial intelligence–the field into which his interest in how decisions and choices are made ultimately led him.

In “Administrative Behavior: A Study of Decision-making Processes in Administrative Organization” (to give the book its full title), he developed a theory of human choice or decision-making that aimed to be sufficiently broad and realistic to accommodate both the rational views of economists and the human concerns of psychologists and practical decision-makers.

Contribution

1. The problems of organisational theory

According to “Administrative Behavior”, the way in which administration is usually described suffers from superficiality, over-simplification, and a lack of realism. Theorists have refused to undertake the tiresome task of studying the actual allocation of decision-making functions. Instead, they have been satisfied with talking loosely about authority, centralisation, span of control, function, and the like, without seeking operational definitions of these terms.

Classic economic theory also suggests that decisions are made by obtaining all the available information, assessing it, and coming to an objective and rational conclusion as to how the best result can be achieved. In reality, nobody has the time and the mental resources to do this. Instead of aiming for “the best”, administrative man is content with what is “good enough”, a solution that is “satisficing” (that satisfies and suffices).

2. Organisation is important

Organisation is important, first, because in our society, people spend most of their waking adult lives in organisations, and this environment provides much of the force that moulds and develops personal qualities and habits.

Second, because it provides those in responsible positions with the means for exercising authority and influence over others.

3. The complexity of organisational interaction

It is not sufficient to regard organisational behaviour as a matter of understanding people or measuring the performance of people more effectively. Each act in an organisation exists in a complex interaction with the organisational system as a whole.

4. Understanding decision-making

A complex decision is like a great river, drawing from its many tributaries the innumerable component premises of which it is constituted.

Many individuals and organisation units contribute to every large decision, and the problem of centralisation and decentralisation is a problem of arranging the complex system into an effective scheme.

5. The importance of relationships

An organisation is not an organisational chart, but a complex pattern of communications and other relationships in a group of human beings.

This pattern provides the members of the group with much of the information, assumptions, goals, and attitudes that enter into the decisions made by each and every one of them. It also provides them with a set of stable and comprehensible expectations as to what the other members of the group are doing and how they will react to what any individual says and does.

Context

Simon later observed that he must have had a prophetic gift when he included the words “behavior”, “decision-making”, and “organization” in the book’s full title as they quickly became the fashionable phrases of social science.

Organisational theory had remained deeply bedded in vagueness before the publication of “Administrative Behavior”. Its clearest proponent up to that time had been Chester Barnard who contributed the foreword to Simon’s book.

In response, Simon developed a theory of human choice or decision-making that aimed to accommodate:

* the rational aspects of choice that have been the principal concern of the economist

* the properties and limitations of the human decision-making mechanisms that have attracted the attention of psychologists and practical decision-makers

He thus formed a bridge between the humanists and engineers in management thinking.

His views were ahead of their time. For the next 40 years, organisation, in the West at least, continued to be seen as an act of ordering, simplifying, and categorising rather than as a powerful dynamic and ever-changing force.

Only in the early 1990s, partly through the success of Senge’s “The Fifth Discipline”, did systems thinking make the leap from academic obscurity to the executive agenda.

The Best Sources of Help

Simon, Herbert. “Administrative Behavior: A Study of Decision-making Processes in Administrative Organization”. New York: Macmillan, 1947.

What is the difference between a puzzle and a problem? According to Revans, there is an existing solution to a puzzle and it simply needs to be found. There is no existing solution to a problem. The solution has to be worked out by a process of inquiry that begins at the point where one does not know what to do next and expertise is no help. ‘Action Learning’ explains that process and offers an alternative method of learning to the traditional one, which is based on programmed knowledge instead of encouraging students to ask questions and roam widely around a subject.

Getting Started

As a young man, Reg Revans competed in the 1928 Olympics and worked in the famous Cavendish laboratories at Cambridge, alongside such fathers of nuclear physics as Ernest Rutherford and J.J. Thompson. Action learning is his systematisation of the methods used by the Cambridge team to deal with problems. He developed them further when working for the National Coal Board after the second world war. He also later went on to become Britain’s first professor of industrial administration at the University of Manchester.

“Action Learning” is all about an alternative to traditional education and training. The method it sets out is a form of “learning by doing”, but its proponents are careful to distinguish it from simply “learning on the job” or “learning by experience”. It involves a collaborative effort, humility, a “trading of one’s confusion with that of others”, and deep reflection on one’s experience and on the nature of the problem. Its outcome is personal growth as much as a way out of a current difficulty.

Contribution

1. Action learning

The concept of “action learning” is based on a simple equation: L = P + Q. Learning (L) occurs through a combination of programmed knowledge (P) and the ability to ask insightful questions (Q).

It does not deny all usefulness to existing knowledge, but its focus is on asking questions. Learning must be opened up. Programmed knowledge is one-dimensional and rigid; the ability to ask questions opens up other dimensions and is free-flowing.

The first step towards asking constructive questions is to acknowledge one’s own ignorance. Too many people are concealing their ignorance under a veneer of knowledge. Instead of hiding our ignorance, according to Revans, we should be bartering it.

The essence of action learning is to become better acquainted with the self through observing what one actually tries to do, endeavouring to ascertain the reasons for attempting it, and tracing the consequences that result from it. Revans said he sought “to focus [his] own doubt by keeping away from experts with prefabricated answers”.

2. The importance of small team learning

The structure linking the two elements in the equation is the small team or set. The central idea of this approach is collaboration within the set; its members strive to learn with and from each other as they confess failures and expand on victories.

3. A better way to develop managers

Action learning is also the antithesis of the traditional approach to developing managers. We keep solving the same problems because we do not learn from them. We bring in consultants to provide solutions or send managers on courses where they are taught a lot but learn little. Action learning is about teaching little and learning a lot.

4. Collaboration counts

In industry, managers and workers need to acknowledge the problems they face and then attempt to solve them. When doctors listen to nurses, patients recover more quickly. If mining engineers pay more attention to their workers than to their machinery, the pits are more efficient. It is neither books nor seminars from which managers learn much, but from here-and-now exchanges about the operational job in hand.

According to Revans, “The ultimate power of a successful general staff lies not in the brilliance of its individual members, but in the cross-fertilisation of its collective abilities”.

Context

For a long time Revans’s ideas were comparatively little known and comparatively undervalued–at least in the English-speaking world. His ideas were received much better in mainland Europe (and in Belgium in particular), however, and he himself spent the final period of his working life abroad. Many management ideas that are currently fashionable, however, such as teamworking, re-engineering, and the learning organisation, contain elements of “action learning”.

One of the critical points about action learning is its relation to action. In a way it appears misnamed. The name at first sight suggests learning in practical situations or performing tasks, rather than studying theory. It tends to conceal the centrality of reflection, questioning–especially questioning one’s own actions in a deliberate and precise way– ignorance-bartering, and collaborative effort to the process. The solutions that are eventually arrived at must be tested in action, but that is very much the final stage.

Interest in Revans’s ideas nevertheless continues to grow. The Pentagon is said to be enthusiastic; the ANC has taken up action learning; General Electric uses action teams to tackle particular problems. There is also a Revans Centre at the University of Salford, where the theory and practice of action learning are particularly studied.

The Best Sources of Help

Revans, Reg. “Action Learning”. London: Blond & Briggs, 1974.