OpenManagementPage|1

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OpenManagement:TheconceptofOpenManagementandexplorationofthenewimperativesfororganizationsandtheirleaders

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September21,2009

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HaydnShaughnessy,Partner,haydn@theconversationgroup.comTedShelton,Partner,ted@theconversationgroup.com

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Abstract

Overtimecertaintheoriesofmanagementhavehadaprofoundimpactonthewayenterprisesareperceived,organizedandmanaged.Taylor’sScientificManagementandPorter’sCompetitiveAdvantageareclassicexamples.Butmuchoftheintellectualworkofdevelopingorganizationalstructuresandmanagementtechniqueshasaddressedonlyonespecificsetofchallengesposedbytheindustrialrevolution,efficientlyscalinganorganizationofsemi‐skilledlaborersengagedinrepetitivetasks.Whileefficiencyinthemanagementoflaborremainsimportanttoday,overthepastfewdecadesanewsetofimperativeshavebeenforcingtheirwayontothemanagementagenda.Anincreasingamountoftheproductivecapacityofoureconomiesisnowdedicatedtotasksthatengagetheintelligenceofourworkers‐‐notjusttheirbodies.Furthermore,invirtuallyeveryindustrytheroleofinnovationhasprofoundlychangedthecompetitivelandscape.Webelievethesetwochallengescallforacceleratedchangeinthegovernancemodelfororganizationsofeverysizeandtype.Theideaofopenmanagementencapsulatesbetterthananythingelsewhatthatchangeshouldbe.Inthispaperweexaminetheunderlyingshiftsinoureconomyandexplorepracticalillustrationsofhowspecificorganizationsaregrapplingwiththischange.Inparticularwelookathowtechnologyischangingboththenatureofourworkandsocialdynamicsinourworkplacesandasaresultisalteringthemannerinwhichwemustorganize,manage,andrewardemployees.Wealsoseektounderstandhowtheseshiftsarealsobreakingdownwallsbetween“employees”and“customers”andcreateentirelynewmodelsofactivityacrossallofourbusinessprocesses.Ourconsistentthesisisthatamoreparticipatoryandmoreengagedleadershipstyleisneededforpost‐industrialorganizationsinwhichthenatureofworkhasforevershiftedawayfromrepetitionanddrudgery.Inthisnewmodelwherecreativityandcollaborationareneededfromeveryemployee,companiesmusttransformtheirpolicies,philosophies,andorganizationalmodelstosucceed.Thatisultimatelytheobjectiveofwhatwecallopenmanagement.

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Introduction

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ItwouldberelativelyeasytoassumethatthechallengesyourbusinessisfacinghavenothingincommonwiththosefacingGoogle.Afterall,Googlehasgrownfasterintermsofemployeesandinitsgeographicscaleofoperationsthananyotherorganizationinhistory.AndthebusinessisentirelydrivenbythelogicoftheInternet,withitsendproductwhollydigital,itscustomersconnectingelectronicallyfromeverypartoftheworld,anditsemployeesmostlyhighlyskilledandwelleducated.Andcertainlythecharacteristicsoftheweb(onwhichGoogle’sorganizationalstructureisbased)–itsspeed,transparency,andinclusiveness–doseemtobeatoddswiththetraditionalcharacteristicsoforganizations;deliberative,structuredandoftensecretive.Butperhapsitisthosecharacteristicsthatareholdingorganizationsbackfromachievingthegrowthandprofitabilityofwhichtheycouldbecapable.IfthereissomethingtolearnfromGoogleandotherbusinessesthatareadoptingsimilarmethods,thestartingpointistounderstandthewaysinwhichourbusinessesaresimilartoGoogleandthusarefacingthesameproblems.Thetwoideasthatwewillexamineare(1)theshiftfrommanualtointellectualworkand(2)theinnovationimperative.

Brainsvs.Brawn

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Throughouthistory,individualintelligenceandcollectivelaborhavebeenthedefiningelementsofourorganizationsandsocieties.Economicsystems,politicalstructures,andindividualorganizationshaveallgrappledwiththechallengeofprovidingasingleindividualorasmallgroupofindividualswiththepowertomakedecisionsandtransmittheauthorityofthosedecisionstoavastnumberofotherswhowouldthencarrythemoutthroughtheirphysicalactivities.Ascivilizationshavegrownmorecomplexandmorepopulouswehaverequiredincreasinglymoresophisticatedstructuresandprocessestoallowthismodeloftopdowndecisionmakingtoscaleacrossever‐largerorganizations.Inthesecondhalfofthetwentiethcenturytwotechnologicaltrendsbegantotransformthenatureofwork.Thefirstwastheincreasingpaceofdevelopmentofinformationsystemsthattransformedawidearrayoforganizationalfunctions,introducinganewclassofworkerintoorganizations.Sometimescalled“knowledgeworkers”theseemployeeswereengagedinthecreation,manipulation,anddisseminationofinformationthroughthesenewsystems,necessarilyincreasingtheintangible“intellectual”contentofproductsandservices.