Archive for category Management Science
If management thinker Frederick Winslow Taylor (died 1915) were alive today he would certainly resent the straw man we have stood in his place. Taylor tried to inject science into the discipline of management. Innocent of much of the dehumanization of workers pinned on him, Taylor still failed in several big ways, even by the standards of his own time. For example, he failed at science.
What Taylor called science was mostly mere measurement – no explanatory or predictive theories. And he certainly didn’t welcome criticism or court refutation. Not only did he turn workers into machines, he turned managers into machines that did little more than take measurements. And as Paul Zak notes in Trust Factor Taylor failed to recognize that organizations are people embedded in a culture.
Taylor is long dead, but Taylorism is alive and well. Before I left Goodyear Aerospace in the late 80’s, I recall the head of Human Resources at a State of the Company address reporting trends in terms of “personnel units.” Did these units include androids and work animals I wondered.
Heavy-handed management can turn any of Douglas McGregor’s Theory Y (internally motivated) workers into Theory X (lazy, needs to be prodded, extrinsic rewards) using tried and true industrial-era management methodologies. That is, one can turn TPS, the Toyota Production System, originally aimed at developing people, into just another demoralizing bureaucratic procedure wearing lipstick.
In Silicon Valley, software creation is modeled as a manufacturing process. Scrum team members often have no authority for schedule, backlog, communications or anything else; and teams “do agile” with none of the self-direction, direct communications, or other principles laid out in the agile manifesto. Yet sprint velocity is computed to three decimal places by steady Taylorist hands. Across the country, micromanagement and Taylorism are two sides of the same coin, committed to eliminating employees’ control over their own futures and any sense of ownership in their work product. As Daniel Pink says in Drive, we are meant to be autonomous individuals, not individual automatons. This is particularly true for developers, who are inherently self-directed and intrinsically motivated. Scrum is allegedly based on Theory Y, but like Matrix Management a generation earlier, too many cases of Scrum are Theory X at core with a veneer of Theory Y.
Management is utterly broken, especially at the lowest levels. It is shaped to fill two forgotten needs – the deskilling of labor, and communication within fragmented networks.
Henry Ford is quoted as saying, “Why is it every time I ask for a pair of hands, they come with a brain attached?” Likely a misattribution derived from Wedgwood (below), the quote reflects generations of self-destructive management sentiment. The intentional de-skilling of the workforce accompanied industrialization in 18th century England. Division of labor yielded efficient operations on a large scale; and it reduced the risk of unwanted knowledge transfer.
When pottery maker Josiah Wedgwood built his factory, he not only provided for segmentation of work by tool and process type. He also built separate entries to each factory segment, with walls to restrict communications between workers having different skills and knowledge. Wedgwood didn’t think his workers were brain-dead hands; but he would have preferred that they were.
He worried that he might be empowering potential competitors. He was concerned that workers possessed drive and an innovative spirit, not that they lacked these qualities. Wedgwood pioneered intensive division of labor, isolating mixing, firing, painting and glazing. He ditched the apprentice-journeyman-master system for fear of spawning a rival, as actually became the case with employee John Voyez. Wedgwood wanted hands – skilled hands – without brains. “We have stepped beyond the other manufactur[er]s and we must be content to train up hands to suit our purpose” (Wedgwood to Bentley, Sep 7, 1769).
When textile magnate Francis Lowell built factories including dormitories, chaperones, and access to culture and education, he was trying to compensate for the drudgery of long hours of repetitive work and low wages. When Lowell cut wages the young female workers went on strike, published magazines critical of Lowell (“… just as though we were so many living machines” – Ellen Collins, Lowell Offering, 1845) and petitioned Massachusetts for legislation to limit work hours. Lowell wanted hands but got brains, drive, and ingenuity.
To respond to market dynamics and fluctuations in demand for product and in supply of raw materials, a business must have efficient and reliable communication channels. Commercial telephone networks only began to emerge in the late 1800s. Long distance calling was a luxury well into the 20th century. When the Swift Meat Packing Company pioneered the vertically integrated production system around 1915, G.F. Swift faced the then-unique challenge of needing to coordinate sales, supply chain, marketing, and operations people from coast to coast. He set up central administration and a hierarchical, military-style organizational structure for the same reason Julius Caesar’s army used that structure – to quickly move timely knowledge and instructions up, down, and laterally.
So our management hierarchies address a long-extinct communication need and our command/control management methods reflect an industrial age wish for mindless carrot-stick employees – a model the industrialists themselves knew to be inaccurate. But we’ve made this wish come true; treat people badly long enough and they’ll conform to your Theory X expectations. Business schools tout best-practice management theories that have never been subjected to testing or disconfirmation. In their views, it is theory, and therefore it’s science.
Much of modern management theory pretends that today’s knowledge workers are “so many living machines,” human resources, human capital, assets, and personnel units.
Unlike in the industrial era, modern business has no reason to de-skill its labor, blue collar or white. Yet in many ways McKinsey and other management consultancies like them seem dedicated to propping up and fine tuning Theory X, as evidence to the priority of structure in the 7S, Weisbord, and Galbraith organizational models for example.
This is an agency problem with a trillion dollar price tag. When asked which they would prefer, a company of self-motivated, self-organizing, creative problem solvers or flock of compliant drones, most CEOs would choose the former. Yet the systems we cultivate yield the latter. We’re managing 21st century organizations with 19th century tools.
For almost all companies, a high-performing workforce is the most important source of competitive advantage. Most studies of employee performance, particularly white-collar knowledge workers, find performance to hinge on engagement and trust (level of trust in managers and the firm by employees). Engagement and trust are closely tied to intrinsic motivation, autonomy, and sense of purpose. That is, performance is maximized when they’re able to tap into their skills, knowledge, experience, creativity, discipline, passion, agility and internal motivation. Studies by Deloitte, Towers Watson, Gallup, Aon Hewitt, John P Kotter, and Beer and Eisenstat over the past 25 years reach the same conclusions.
All this means Taylorism and embedding Theory X in organizational structure and management methodologies simply shackle the main source of high performance in most firms. As Pink says, command and control lead to compliance; autonomy leads to engagement. Peter Drucker fought for this point in the 1950s; America didn’t want to hear it. Frederick Taylor’s been dead for 100 years. Let’s let him rest in peace.
What actually stood between the carrot and the stick was, of course, a jackass. – Alfie Kohn, Punished by Rewards
Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity. – General George Patton
Control leads to compliance; autonomy leads to engagement. – Daniel H. Pink, Drive
The knowledge obtained from accurate time study, for example, is a powerful implement, and can be used, in one case to promote harmony between workmen and the management, by gradually educating, training, and leading the workmen into new and better methods of doing the work, or in the other case, it may be used more or less as a club to drive the workmen into doing a larger day’s work for approximately the same pay that they received in the past. – Frederick Taylor, The Principles of Scientific Management, 1913
That’s my real motivation – not to be hassled. That and the fear of losing my job, but y’know, Bob, that will only make someone work just hard enough not to get fired. – Peter Gibbons, Office Space, 1999
Bill Storage is a scholar in the history of science and technology who in his corporate days survived encounters with strategic management initiatives including Quality Circles, Natural Work Groups, McKinsey consultation, CPIP, QFD, Leadership Councils, Kaizen, Process Based Management, and TQMS.
You might not think of McKinsey as being in the behavioral science business; but McKinsey thinks of themselves that way. They claim success in solving public sector problems, improving customer relationships, and kick-starting stalled negotiations through their mastery of neuro- and behavioral science. McKinsey’s Jennifer May et. al. say their methodology is “built on an extensive review of neuroscience and behavioral literature from the past decade and is designed to distill the scientific insights most relevant for governments, not-for-profits, and business leaders.”
McKinsey is also active in the Change Management/Leadership Management realm, which usually involves organizational, occupational and industrial psychology based on behavioral science. Like most science, all this work presumably involves a good deal of iterating over hypothesis and evidence collection, with hypotheses continually revised in light of interpretations of evidence made possible by sound use of statistics.
Given that, and McKinsey’s phenomenal success at securing consulting gigs with the world’s biggest firms, you’d think McKinsey would set out spotless epistemic values. A bit has been written about McKinsey’s ability to walk proud despite questionable ethics. In his 2013 book The Firm Duff McDonald relates McKinsey’s role in creating Enron and sanctioning its accounting practices, and its 2008 endorsement of banks funding their balance sheets with debt, and its promotion of securitizing sub-prime mortgages.
Epistemic and Scientific Values
I’m not talking about those kinds of values. I mean epistemic and scientific values. These are focused on how we acquire knowledge and what counts as data, fact, and information. They are concerned with accuracy, clarity, falsifiability, reliability, testability, and justification – all the things that separate science from pseudoscience.
McKinsey boldly employs the Myers Briggs Type Indicator both internally and externally. They do this despite decades of studies by prominent universities showing MBTI to be essentially worthless from the perspective of survey methodology and statistical analysis. The studies point out that there is no evidence for the binomial distributions inherent in MBTI theory. They note that the standard error of measurement for MBTI’s dimensions are unacceptably large, and that its test/re-test reliability is poor. I.e., even in re-test intervals of five weeks, over half the subjects are reclassified. Analysis of MBTI data shows that its JP and SN scales strongly correlate with each other, which is undesirable. Meanwhile MBTI’s EI scale correlates with non-MBTI behavioral near-opposites. These findings impugn the basic structure of the Myers Briggs model. (The Big Five model does somewhat better in this realm.)
Five decades of studies show Myers-Briggs to be junk due to low evidential support. Did McKinsey mis-file those reports?
McKinsey’s Brussels director, Olivier Sibony, once expressed optimism about a nascent McKinsey collective decision framework, saying that while preliminary results we good, it still fell short of “a standard psychometric tool such as Myers–Briggs.” Who finds Myers-Briggs to be such a standard tool? Not psychologists or statisticians. Shouldn’t attachment to a psychological test rejected by psychologists, statisticians, and experiment designers offset – if not negate – retrospective judgments by consultancies like McKinsey (Bain is in there too) that MBTI worked for them?
Epistemic values guide us to ask questions like:
- What has been the model’s track record at predicting the outcome of future events?
- How would you know if were working for you?
- What would count as evidence that it was not working?
On the first question, McKinsey may agree with Jeffrey Hayes (whose says he’s an ENTP), CEO of CPP, owner of the Myers-Briggs® product, who dismisses criticism of MBTI by the many psychologists (thousands, writes Joseph Stromberg) who’ve deemed it useless. Hayes says, “It’s the world’s most popular personality assessment largely because people find it useful and empowering […] It is not, and was never intended to be predictive…”
Does Hayes’ explanation of MBTI’s popularity (people find it useful) defend its efficacy and value in business? It’s still less popular than horoscopes, which people find useful, so should McKinsey switch to the higher standards of astrology to characterize its employees and clients?
Granting Hayes, for sake of argument, that popular usage might count toward evidence of MBTI’s value (and likewise for astrology), what of his statement that MBTI never was intended to be predictive? Consider the plausibility of a model that is explanatory – perhaps merely descriptive – but not predictive. What role can such a model have in science?
Explanatory but not Predictive?
This question was pursued heavily by epistemologist Karl Popper (who also held a PhD in Psychology) in the mid 20th century. Most of us are at least vaguely familiar with his role in establishing scientific values. He is most famous for popularizing the notion of falsifiability. For Popper, a claim can’t be scientific if nothing can ever count as evidence against it. Popper is particularly relevant to the McKinsey/MBTI issue because he took great interest in the methods of psychology.
In his youth Popper followed Freud and Adler’s psychological theories, and Einstein’s physics. Popper began to see a great contrast between Einstein’s science and that of the psychologists. Einstein made bold predictions for which experiments (e.g. Eddington’s) could be designed to show the prediction wrong if the theory were wrong. In contrast, Freud and Adler were in the business of explaining things already observed. Contemporaries of Popper, Carl Hempel in particular, also noted that explanation and prediction should be two sides of the same coin. I.e., anything that can explain a phenomenon should be able to be used to predict it. This isn’t completely uncontroversial in science; but all agree prediction and explanation are closely related.
Popper observed that Freudians tended to finds confirming evidence everywhere. Popper wrote:
Neither Freud nor Adler excludes any particular person’s acting in any particular way, whatever the outward circumstances. Whether a man sacrificed his life to rescue a drowning child (a case of sublimation) or whether he murdered the child by drowning him (a case of repression) could not possibly be predicted or excluded by Freud’s theory; the theory was compatible with everything that could happen. (emphasis in original – Replies to My Critics, 1974).
For Popper, Adler’s psychoanalytic theory was irrefutable, not because it was true, but because everything counted as evidence for it. On these grounds Popper thought pursuit of disconfirming evidence to be the primary goal of experimentation, not confirming evidence. Most hard science follows Popper on this value. A theory’s explanatory success is very little evidence of its worth. And combining Hempel with Popper yields the epistemic principle that even theories with predictive success have limited worth, unless those predictions are bold and can in principle be later found wrong. Horoscopes make countless correct predictions – like that we’ll encounter an old friend or narrowly escape an accident sometime in the indefinite future.
Popper brings to mind experiences where I challenged McKinsey consultants on reconciling observed behaviors and self-reported employee preferences with predictions – oh wait, explanations – given by Myers-Briggs. The invocation of sudden strengthening of otherwise mild J (Judging) in light of certain situational factors recalls Popper’s accusing Adler of being able to explain both aggression or submission as the consequence of childhood repression. What has priority – the personality theory or the observed behavior? Behavior fitting the model confirms it; and opposite behavior is deemed acting out of character. Sleight of hand saves the theory from evidence.
What’s the Attraction?
Many writers see Management Science as more drawn to theory and less to evidence (or counter-evidence) than is the case with the hard sciences – say, more Aristotelian and less Newtonian, more philosophical rationalism and less scientific empiricism. Allowing this possibility, let’s try to imagine what elements of Myers-Briggs theory McKinsey leaders find so compelling. The four dimensions of MBTI were, for the record, not based on evidence but on the speculation of Carl Jung. Nothing is wrong with theories based on a wild hunch, if they are born out by evidence and they withstand falsification attempts. Since this isn’t the case with Myers-Briggs, as shown by the testing mentioned above, there must be something in it that attracts consultants.
I’ve struggled with this. The most charitable reading I can make of McKinsey’s use of MBTI is that they want a quick predictor (despite Hayes’ cagey caution against it) of a person’s behavior in collaborative exercises or collective-decision scenarios. They must therefore believe all of the following, since removing any of these from their web of belief renders their practice (re Myers-Briggs) arbitrary or ill-motivated:
- that MTBI is a reliable indicator of character and personality type
- that personality is immutable and not plastic
- that behavior in teams is mostly dependent on personality, not on training or education, not on group mores, and not on corporate rules and behavioral guides
Now that’s a dark assessment of humanity. And it conflicts with the last decade’s neuro- and behavioral science that McKinsey claims to have incorporated in its offerings. That science suggests our brains, our minds, and our behaviors are mutable, like our bodies. Few today doubt that personality is in some sense real, but the last few decades’ work suggest that it’s not made of concrete (for insiders, read this as Mischel having regained some ground lost to Kenrick and Funder). It suggests that who we are is somewhat situational. For thousands of years we relied on personality models that explained behaviors as consequences of personalities, which were in turn only discovered through observations of behaviors. For example, we invented types (like the 16 MBTIs) based on behaviors and preferences thought to be perfectly static.
Evidence against static trait theory appears as secondary details in recent neuro- and behavioral science work. Two come to mind from the last week – Carstensen and DeLiema’s work at Stanford on the fading of positivity bias with age, and research at the Planck Institute for Human Cognitive and Brain Sciences showing the interaction of social affect, cognition and empathy.
Much attention has been given to neuroplasticity in recent years. Sifting through the associated neuro-hype, we do find some clues. Meta-studies on efforts to pair personality traits with genetic markers have come up empty. Neuroscience suggests that the ancient distinction between states and traits is far more complex and fluid than Aristotle, Jung and Adler theorized them to be – without the benefit of scientific investigation, evidence, and sound data analysis. Even if the MBTI categories could map onto reality, they can’t do the work asked of them. McKinsey’s enduring reliance on MBTI has an air of folk psychology and is at odds with its claims of embracing science. This cannot be – to use a McKinsey phrase – directionally correct.
If personality overwhelmingly governs behavior as McKinsey’s use of MBTI would suggest, then Change Management is futile. If personality does not own behavior, why base your customer and employee interactions on it? If immutable personalities control behavior, change is impossible. Why would anyone buy Change Management advice from a group that doesn’t believe in change?