A Brief History of Management
(FORTUNE Small Business) – After almost a century of crazes, what we still don't know about management could fill more books than Stephen Covey. Art Kleiner, author of Who Really Matters: The Core Group Theory of Power, Privilege, and Success, paraphrases Elliot Jaques, the controversial academic: "The science of management is today where the natural sciences were before the discovery of the circulation of blood."
Here, you'll find a timeline of management thinking. It may seem as scattered as a chronicle of fad diets, but in fact it describes a steady march toward decentralization. Perhaps in the next century some theorist will discover the inarguably most efficient way to run a company. Until then, management will remain more art than science.
1909: Peter Drucker is born, writes first book. No, just kidding. But the prolific 93-year-old author (36 books and counting!) is still the most influential and wide-ranging management thinker of the 20th century. His work has provided a blueprint for the modern corporation, from human resources to research and development to finance to manufacturing.
1911: RISE OF THE MACHINES An American engineer named Frederick Winslow Taylor publishes The Principles of Scientific Management, single-handedly creating "Taylorism," the first modern management craze. Inspired by the rise of the Industrial Age, Taylor encourages managers to think of their employees as specialized, replaceable components. By studying work methods and directing people more precisely, bosses could "secure the maximum prosperity for the employer, coupled with the maximum prosperity for each employee." BENEFITS A certain ruthless efficiency. DRAWBACKS Cogs have feelings too; Taylorism could turn your workplace into a socialist hotbed. CULTURAL RESPONSE Charlie Chaplin's proletarian stooge in Modern Times.
1923: MANAGING BY COMMITTEE Alfred P. Sloan becomes president of General Motors and creates a decentralized bureaucracy that will help make GM the leading car and truck manufacturer in the world. Instead of controlling his entire organization, Sloan--gasp!--delegates. Division leaders become responsible for meeting revenue and profit expectations, and are subject to price controls and budgets meted out by a central executive committee. BENEFITS A limber, more accountable organization that encourages ingenuity. DRAWBACKS Obvious to anyone who's ever had to sit through an executive committee meeting. CULTURAL RESPONSE Sloan's 1964 bestseller, My Years With General Motors, which created the genre of the mass-marketed CEO autobiography.
1927-32: THE KINDER, GENTLER WORKPLACE The National Research Council co-funds the "Hawthorne Experiments," a series of studies to determine what motivates workers. They find that Taylor was wrong: Workers aren't just machines who are motivated only by wages. They are people whose emotional needs must be addressed. The role of the authoritarian leader is downplayed; instead, group decision-making becomes the norm. The Human Relations Movement is born. BENEFITS Happier workers and a more humane worldview. DRAWBACKS Take this stuff too far and your office will be filled with beanbag chairs and silly bonding exercises like "Lazer-Tag Wednesdays." CULTURAL RESPONSE The assumption that every division chief should be intimately familiar with psychologist Abraham Maslow's Hierarchy of Needs.
1938: David Packard and Bill Hewlett form Hewlett-Packard. Their supervisory style, "Management by Wandering Around," encourages bosses to leave their offices and chat with their employees. (They're discouraged from starting conversations with "So, I was enjoying some foie gras on my yacht the other day....")
1945: Tom Peters--the enthusiastic management guru and author of In Search of Excellence, Re-imagine! and The Work Matters!--is born. His first word: "!"
1950: QUALITY IS JOB ONE W. Edwards Deming, a consultant and former statistician for the U.S. Census Bureau, gives his first lecture to the Union of Japanese Scientists and Engineers, preaching the concept of "quality management." The basic idea: Profit comes from repeat customers, so every person in a company should be focused on making the highest-quality product possible, not meeting management-mandated sales quotas; any resemblance to the old top-down management structure should be abolished. Japanese businesses quickly adopt his tenets, but it takes the U.S. until the 1980s--after NBC airs a documentary called "If Japan Can Do It, Why Can't We?"--to catch on. BENEFITS "Let's make the best damn widgets in the world!" is more Inspiring than "Let's increase revenues in our widget division by 17.8%!" DRAWBACKS An all-or-nothing approach that can require completely upending your company. CULTURAL RESPONSE Oh, about a million PowerPoint presentations that open with a slide reading the customer is king!
1978: CEOS THAT SAVE THE WORLD In his book Leadership, James MacGregor Burns, a presidential biographer and scholar, develops the doctrine of "transformational leadership," which holds that a leader's job is to determine how his company and his employees can benefit society. BENEFITS You're not just a money-grubbing capitalist, you're changing the world. DRAWBACKS Grandiosity. "Our online dry-cleaning service is a fundamental step forward for American democracy!" CULTURAL RESPONSE The Beatles' "Revolution" is used to sell basketball shoes.
1984: Chrysler's Lee Iacocca publishes Iacocca: An Autobiography, introducing the age of the celebrity CEO. Suddenly it's not enough for businesspeople to be rich and powerful; they've got to be famous too.
1990: AT YOUR SERVICE Robert Greenleaf, a former AT&T manager, dies. But during the next decade the philosophy of "servant leadership," which he created in the 1970s --stating that the main role of a leader isn't to single-handedly pursue some higher goal, but to act as a servant who keeps his employees happy--catches on. BENEFITS Let's see. Your employees do more work, and you get credit for being a modest, empathetic boss? Sweet! DRAWBACKS Say goodbye to that executive washroom. CULTURAL RESPONSE The cult of Southwest Airlines CEO Herb Kelleher; Ross Perot's anti-elitist presidential campaign.
2001: Daniel Pink publishes Free Agent Nation: The Future of Working for Yourself, arguing that workers no longer need companies to employ them. A year or two later that proves to be a good thing when many of his readers are pink-slipped.