Age of 100X Workers...& Scientific Management
October 2022 | Abhay Bhargava
The Management Science classics readings, especially Frederick Taylor's theories are as relevant as they were over 100 years back when Taylor developed them. Despite the shift from industrial to knowledge-based economies since then, these theories have formalized and laid the foundation of management science and work standardization and continue to be equally applicable today.
I started as a critic of Taylor’s principles when I first came across them as a business school student. However, over the years, having had experiences across traditional and digital industries in various capacities as a leader and manager of people, I have come to appreciate his principles. I see a lot of value and relevance in most of Taylor’s concepts. They need to be interpreted differently, with the interpretation evolving over time, when examined under different contexts that range across industries, firm size and types, a changing business and technology landscape, worker hierarchy, and the nature of the job.
We are already witnessing how solo founders and small teams have single-handedly created Millions of dollars in value.
The Age of Individual “First Class” Workers
In 2011, Marc Andreessen warned us about “Software eating the world”. One of the impacts of rapid automation and scalability through software is the amplified impact a “first-class” worker can have with it. We are already witnessing how solo founders and small teams have single-handedly created Millions of dollars in value. For example, Tumblr was started and run by David Karp (initially as a sole employee) and was sold to Yahoo for $1.1 Billion in 2013., while WhatsApp was sold for an astronomical $19 Billion with only 55 employees to Facebook in 2014. For WhatsApp, that was almost $350 Million of value creation per employee. The age of the super-worker is here. In 2019 (before ChatGPT and the likes), my hire of a great software developer for a venture did not just have a 20X impact (Silicon Valley productivity adage) compared to other good ones (not just mediocre ones), but possibly a 100X impact. The 100X impact was driven by multiple benefits, including less time (critical for a lean startup) training, motivating and supervising the worker, and by high productivity and quality. Thus, the impact a “first class” worker (as defined by Taylor) can have today becomes even more pronounced when aided by advanced software. As the routine factory-floor jobs from Taylor’s times are automated, the “first-class” specialized worker and their scientific selection become even more critical today.
“Humanizing” - The Psychology of the Hawthorne Effect
The following discusses some of the principles delineated in the classical readings on the genesis of management science in today’s context and within the context of my learnings and experiences across new and fast-moving startup ventures and large firms across managerial hierarchies.
Even though the Hawthorne studies’ results have been questioned (Jones, 1992), the increased worker productivity when under observation can be attributed to the factory workers being motivated by being important enough to be studied. Blalock and Blalock (1982) acknowledged how each change in the study resulted in increased worker productivity. Feedback on tasks as a result of observation and monitoring can also be a positive performance motivator, driven by the human need to be recognized and their presence and contribution acknowledged.
MBO, Task Measurement & Motivation
The “task” defined by Taylor set the foundations for management by objectives(MBO) and feedback. Locke may not acknowledge the direct impact, but the direct connection is visible through deeper introspection. I would argue that Taylor did not just stop at defining the task, but that Taylor’s principles on motivating and managing a worker led to the concept of MBO directly. A task cannot be studied in isolation. There have to be mechanisms put in place to define it for a worker in a specific job and to accurately measure it periodically to ensure that it is being carried out to the best of the worker’s ability. This process leads to iterations on goal-setting – including the development of MBO and the KPIs (Key Performance Indicators) and NPS (Net Promoter Score) performance measuring metrics that are followed today.
...In 2019, my hire of a great software developer for a venture did not just have a 20X impact (Silicon Valley productivity adage) compared to other good ones (not just mediocre ones), but possibly a 100X impact....
Money as a Tangible Motivator
Money can be one of the most tangible motivations for a worker. This has been acknowledged by countless studies in the 1980s (Locke, 1982) that further showcased the impact of financial incentives. Locke also discusses aspects such as goal-setting, decision-making, and job enrichment as motivators that seem to be loosely defined and are open to interpretation. Recent studies on motivation that have emerged in today’s knowledge economy emphasize a need for greater autonomy and providing a purpose and a greater cause to the specialized knowledge workers. However, these are more intangible, abstract, and relative - based on an individual worker’s preferences, sensitivity, and interpretations and that of their manager. Money or financial incentives remain the most tangible and practical motivator that can easily be measured and understood.
4-Day Work Week & Shorter Working Hours
France and other European countries are already transitioning towards a 4-hour work week. The work-from-home culture forced by the recent pandemic showcased the role of a well-balanced lifestyle in increasing worker productivity and creativity. The “rest pauses” and “shorter working hours” proposed by Taylor were driven more by a need to counter the muscle fatigue and physical strain experienced by a factory worker (pig-iron handlers), but the same pauses and shorter working hours are even more important and relevant to counter mental fatigue and burnout for the mental work performed by the knowledge workers today.
The Authoritarian Way
A decisive and confident leader is needed to guide and rally the troops – workers in a firm. There is a fine line between being assertive and authoritarian, and I would view Taylor’s position as being more in the realm of and referring to an assertive style of leadership. Even an assertive and confident leadership style can be construed as authoritarian when carried out in an overtly unabashed way. However, the underlying principles and the need for a central authority for decision-making and providing strategic direction are critical for keeping the workers aligned with the overall organizational goal of maximizing shareholder value. Fayol (Pearson, 1945) extends the same principle when proposing the need for unity of command in organizations. Barnard (1968) argues for more cooperative and less authoritarian leadership. However, I would lean more towards the authoritarian and central command structure proposed by Taylor and Fayol, with some elements of cooperation at the secondary decision-making stage among those lower in the management hierarchy. Being “heard” and “seen” (as discussed in the Hawthorne effect discussion above) would ensure participation, contribution, and continued motivation across hierarchies.
Bottom-Up vs Top-Down Perspective
Taylor and Fayol’s theories on management complemented each other with similar underlying principles, differing in the perspective of their theoretical constructs. Taylor took a more bottom-up theoretical construction approach starting with the “task” and the factory worker carrying out the task, while Fayol focused on a top-down approach, starting with the top management.
These aformentioned seminal works laid the foundation of management science and research that are arguably even relevant today if viewed, adapted, and interpreted through a nuanced contextually appropriate lens.
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References
Barnard C.I. 1968[1938]. The functions of the executive. Cambridge, MA: Harvard University Press. Parts II, XV and XVIII: pp. 65-123, 215-257, 285-289.
Blalock, A.B., and H.M. Blalock, Jr. 1982. Introduction to Social Research. Englewood Cliffs, N.J.: Prentice-Hall.
Locke E.A., 1982. The ideas of Frederick W.Taylor: an evaluation, The Academy of Management Review 7(1): 14-24.
Wrege C.D. and Hodgetts R.M. 2000. Frederick W.Taylor’s 1899 pig on iron observations: examining fact, fiction, and lessons for the new millennium, Academy of Management Journal 43(6): 1283-1291.
Pearson N.M., 1945. Fayolism as the necessary complement of Taylorism. American Political Science Review, 39(1): 68-80.
Jones, S. R.G. 1992. “Was There a Hawthorne Effect?” American Journal of Sociology, 98,
451-468.
MANAGEMENT MUSINGS
The above is one of my musings on Management Science and Theory (“Management Musings”), with reflections on some of the seminal works.
Also check out my book: “CREATIVITY SECRETS: Creativity & Innovation Secrets for Design | Business | Art”, by ABHAY (Wharton grad, Artist, Innovator). www.CreativitySecrets.net