“We shape our tools and thereafter our tools shape us.”
— John M. Culkin
When the Spanish flu pandemic (which, of course, is misnamed) hit our world a century ago, the modern management theory du jour had just moved from Taylorism to Fordism. Remote work was a thing back then, but the tools to accomplish work over distance were limited to postal mail, telegraph, and telephone. The telegraph had enabled command-and-control over distance, especially for transportation via railroad or ship, and for the military.
For example, signalmen conversed via telegraph between their signal boxes, and the train engineers learned from the signals whether they should stop or go. This was remote work, but the structure of the railway system and the limitations of the communication technology still enforced a strictly hierarchical management style (amber, in Frédéric Laloux’s parlance). Roughly at the same time, the scientific and industrial revolutions shifted management from command-and-control to predict-and-control (what Laloux dubs orange).
To stick with our railroad example: signalmen and train engineers have to execute a plan, the train schedule. As long as everything goes according to plan, this is easy and predictable. The railroad system may be complicated, but it’s not complex. It’s feasible to come up with a decent plan, aka train schedule. But what if things go haywire? The plan is getting obsolete, and signalmen have to decide for themselves how to proceed. Things go haywire when external complexity breaks into a fine-tuned system like the railways.
Management over distance
Companies learned how to manage over distance while they learned to manage by objectives. If you don’t need to tell everyone what to do every day, management can increase the physical distance between company sites. Global companies only become possible with global communication technology and management by objectives. The refinement of both paves the way to virtual companies and a high degree of remote work. Only when every employee has access to advanced communication technology and management evolves, does the shift to remote work at scale become feasible.
We’ve seen that big companies occasionally slash entire levels from their management hierarchies. The middle manager can quickly become an endangered species when flat hierarchies are all the rage. Middle management is an artifact of overwhelming complexity. If employees don’t know what to do, companies need middle managers to tell them. If employees can advance their careers only by being promoted up the corporate ladder, companies create middle managers only to retain their best people. Welcome to the Peter Principle.
When suddenly everyone is remote, as it happened this year, do we need more or fewer middle managers? It depends. Management by wandering around becomes pointless when the office is empty, so you don’t need middle managers just doing that. As a rule of thumb, we can assume a correlation between complexity and management structure:
- When remote work increases complexity (and confusion in the workforce), companies may need more middle managers to resolve these issues.
- They may need fewer when, on the contrary, remote work decreases complexity (because people know very well what to do, and the chaos of the office suddenly falls away).
Vertical and horizontal ambitions
Self-direction is the key term here. If the plethora of information in the digital age overwhelms you, self-direction is hard. But if you thrive in an environment where everything you need to know is just a few clicks away, self-direction is for you. Self-directed employees don’t need as much management attention, and may also have less vertical ambition when it comes to their careers. I.e., they may be less interested in promotions to higher management levels if this interferes with their degree of self-direction.
These people need a place to live up to their horizontal ambitions, as Jason Fried puts it:
“Employees who love what they do are encouraged to dig deeper, expand their knowledge, and become better at it. We always try to hire people who yearn to be master craftspeople, that is, designers who want to be great designers, not managers of designers; developers who want to master the art of programming, not management. Instead of rewarding high performers with managerial responsibilities—which often drives people further away from the job they are actually good at—we reward with responsibilities closer to the work.”
Another seminal shift follows the distinction between output and outcomes. The industrial world measured output as a proxy for value, since it was both easier to measure and made more sense in a world driven by physical goods. In the digital world, marginal costs are virtually zero. This devalues output and upvalues outcomes. Measuring the number of keystrokes (or maybe Zoom calls) per day obviously doesn’t say anything about outcomes or added value.
Worry about the outcome
In the agency world, we’re used to measuring chargeable hours as a proxy for value, since agency clients typically pay for this. Start-ups measure sign-ups and unique users, since it’s all about the user and their experience. If you have the users, revenue will follow. All these proxies are easy to measure, and a remote setting doesn’t change much. But in the long run, the only thing clients and users will pay for is the outcome, not the output. Management needs to worry about the outcome for users and clients.
This, in turn, leads to a focus on the outcome of the daily work your workforce puts in. In a remote setting, the outcome becomes even more important, as the proxy of physical presence falls away. A lazy middle manager can no longer count his chickens sitting in the battery farm of the modern office to get a glimpse of what they are doing. Management over distance in a remote-heavy setup will give a huge boost to what Laloux calls teal organizations. In his book “Reinventing Organizations”, he asks:
“Imaging what organizations would be like if we stopped designing them like soulless, clunky machines. What could organizations achieve, and what would work feel like, if we treated them like living beings, if we let them be fueled by the evolutionary power of life itself?”
When Laloux wrote this book, he couldn’t know that a pandemic would move the world closer towards this vision. Today, it is a framework that can help us to redesign our world.