I am firmly convinced there is an imminent demarcation point coming that presages a remarkable revolution in management thinking. And this revolution will come faster for us, my small business brethren.

Rita McGrath of Columbia Business School, a speaker at the Sixth Annual Global Drucker Forum in Vienna, offers a useful historical perspective and current analysis of management in a recent Harvard Business Review blog. She opens with this statement: "Organization as machine--this imagery from our industrial past continues to cast a long shadow over the way we think about management today. It isn't the only deeply-held and rarely examined notion that affects how organizations are run. Managers still assume that stability is the normal state of affairs and change is the unusual state." 

Well, that stability ain't necessarily so, to paraphrase Sportin' Life in Porgy and Bess.

McGrath posits that there have been three thematic ages of management since the industrial revolution: execution, expertise, and now, empathy. She says, "If organizations existed in the execution era to create scale and in the expertise era to provide advanced services, today many are looking to organizations to create complete and meaningful experience. I would argue that management has entered a new era of empathy."

I think McGrath is right on. The vanguard of the new management paradigm is already very much in place among larger corporate entities under the successful stewardship of such disruptive entrepreneurs as Kip Tindell, Tony Hsieh, Danny Meyer, Jack Stack, Paul Spiegelman, and most significantly, John MacKey (and his growing Conscious Capitalism organization).

In terms of small business, Bo Burlingham has eloquently and presciently recorded this new paradigm as far back as 2006 in his bestseller Small Giants, which is even more relevant now than when published.

My eye was caught by an article in May's Inc. magazine about Bob Chapman, the 68-year-old CEO of the $1.7 billion Barry-Wehmiller. He describes his evolution to a more empathetic management style.

"I had been taught, both in school and in my first jobs in public accounting and the business world to see people not as people but as functions: That person is a receptionist, that person is an engineer, that person is an accountant," and so on. I didn't realize what an impact that has on people....That began to change in 1997, when I had an epiphany. I was visiting a company we had just acquired, and I was hanging out in the kitchen before work started. The team members were all talking about March Madness and how they were doing in the office pool. They were having fun. You could feel the energy. But the closer we got to the start of the workday, the more the joy went out of their bodies. I found myself asking, "Why should people have to leave work to have fun?"

Chapman feels that the basic corporate buzzwords like engagement, productivity, and performance are basically a cover for corporate command-and-control Darwinism. He advocates something called THL ("truly human leadership"), based in the belief that the goal of effective long-term management is to foster a better world. (Chapman is obviously doing something right. His company has averaged 15 percent annual growth since 1988.

I agree with Chapman. As I like to put it: Good Is Greed. If you have to read one book on creating an empathetic corporate management structure, read Setting the Table by Danny Meyer. It's the best book on creating corporate culture I have ever come across. Or, on the more macro/philosophical level, read John Mackey's Conscious Capitalism.

Management education must change rapidly and radically to accommodate this neo-empathetic business model. Without it business schools will increasingly become $80,000/year irrelevancies. And, as John Bunyan versifies in Pilgim's Progress:

"A man there was, though some did count him mad
The more he cast away, the more he had."

Again, as a committed capitalist, I repeat: Good Is Greed. Thank you, John Bunyan.

Published on: Sep 22, 2014
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