GUEST POST from Greg Satell
In 1988, a young management student named John Krafcik published an article in MIT’s Sloan Management Review entitled, Triumph of the Lean Production System. Based on his study of 90 manufacturing plants in 20 countries, it argued that manufacturing could be made vastly more productive, while improving quality at the same time.
These methods would grow into the lean manufacturing movement and their effectiveness has been well documented. Krafcik himself went on to have a successful career in the auto industry, taking over Google’s self-driving division, Waymo, in 2016. There is an amazingly strong case for manufacturers to adopt lean methods.
Yet surprisingly few do. In fact, a recent survey found that less than 15% of manufacturers have adopted lean methods. This dilemma is much more common than you’d think. We’ve been conditioned to believe that a good idea, once proven out, will prevail in the marketplace, but that’s not really true. There is often a large gap between what we know and what we do.
A New World Of Work
Clearly the world of work has changed. When I began professional life in the mid-90s, laptops were still new and few people had access to the Internet. Work was something you did in your office. We largely communicated by phone and memos typed up by secretaries. Data analysis was something you did with a pencil, paper and a desk calculator.
Today, on the other hand, work is largely something we do with each other. We are increasingly collaborating in teams and our work has become more social and less cognitive. For example, the journal Nature noted that the average scientific paper today has four times as many authors as one did in 1950 and the work they are doing is far more interdisciplinary.
The truth is that we spend most of our time in meetings, collaborating with colleagues to solve problems, rather than working alone in our offices to execute tasks. Perhaps not surprisingly, there has been no shortage of concepts developed, such as psychological safety, agile development and diversity & inclusion policies, designed to help us succeed and prosper in this new world of work.
Yet much like with lean manufacturing, the reality of most workplaces rarely reflects the pundits’ rhetoric. The reason for this is simple. The status quo has inertia on its side and that is an incredibly powerful force. Change takes effort and is often disruptive. The costs are clear and present while the benefits can seem distant and remote.
The New, New Economy
In 1982, when Steve Jobs was trying to lure John Sculley from Pepsi to Apple, he asked him, “Do you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?” The ploy worked and Sculley became the first CEO of a major conventional company to join a Silicon Valley startup.
Yet since then, besides for a relatively short period between 1996 and 2004, labor productivity has remained depressed, except during recessions when businesses cut workers. At the same time, income inequality has increased and business has become less dynamic, with fewer startups and less churn among market leaders. I don’t think those are the changes Jobs was talking about.
It seems amazing that given all of the technological progress, including mobile and cloud computing, artificial intelligence and Industry 4.0 manufacturing technologies, that so little has been accomplished, but in their recent book, Power and Progress, economists Daron Acemoglu and Simon Johnson argue that market and technological forces, if left to their own devices, tend to favor elites rather than society as a whole.
We can’t simply leave our fates to the impersonal whims of market and technological forces. The historical record shows that innovations that displace workers do not necessarily make us better off. In fact, we have strong reasons to suspect that many of these technologies impoverish our society and corrode our culture.
Technology and markets were created by humans to serve people. That is their purpose and should be, by any reasonable analysis, the measure of their value. We need to take a hard look at the last 30 years and ask how we’re better off, how we’re worse off, what we need to do differently and how we can forge a better path.
The End Of History?
In 1989, just before the fall of the Berlin Wall, Francis Fukuyama published an essay in the journal The National Interest titled The End of History, which led to a bestselling book. Many took his argument to mean that, with the defeat of communism, US-style liberal democracy had emerged as the only viable way of organizing a society.
He was misunderstood. His actual argument was far more nuanced and insightful. After explaining the arguments of philosophers like Hegel and Kojeve, Fukuyama pointed out that even if we had reached an endpoint in the debate about ideologies, there would still be conflict because of people’s need to express their identity.
Humans tend to build stories that support our notions of who we think we are. If you work hard at your job, new ideas about lean manufacturing or agile development can seem like an affront. In much the same way, entrepreneurs like to think that their businesses have social value and the denizens of the tech universe like to think that their code changes the world.
If you believe that the forces of history are on your side, pursuing your path seems like a calling and an obligation. The benefits you receive are just more proof that you are headed in the right direction and whatever costs that are incurred by others may seem like mere table stakes to be paid for the price of progress.
That’s why tech billionaires write silly manifestos and politicians are able to fleece them for outrageous amounts of money. It is not enough to earn a good living and live in comfort. People have a need to be recognized and they will cling to the the identity they have built for themselves. Asking them to change can often seem more than a simple shift in behavior, but an affront to who they are.
Dismantling the Cult of Inevitability
We’d like to think that if something is a good idea, can be proven to work, improve performance and make people’s lives better, that market and technological forces will somehow make it inevitable. Unfortunately, the history of the last half century makes it clear that’s not true. Most people in developed countries are worse off than a generation ago.
Yes it’s true that our TV’s have gotten better and we have infinitely more channels. We carry supercomputers around in our pockets that give us unprecedented access to information and emerging services like ChatGPT give us almost superhuman powers to process it. Yet the cost of basics, such as housing, healthcare and education have impoverished us.
This wasn’t inevitable. Consider that in the US per capita GDP has nearly doubled since 1985 but median household income has risen only 27% and you begin to see the problem. In my work with organizational transformation it is clear that similar forces are at work in the corporate world. For all the talk about disruption and change, the status quo usually prevails.
We need to be more cognizant of the stories we tell ourselves. We have a primal need to be the heroes in our own narratives, to tell ourselves that we are on the right path while others are just fooling themselves, to look for information that confirms our choices and neglect evidence to the contrary. It is not a character flaw, but a reality of human nature.
Ironically, it is through awareness of our failings that can help us overcome them. Decades of research show that shifts in knowledge and attitudes don’t necessarily result in changes in behavior. Once we know that we can be more vigilant and hold ourselves to a higher standard. What we know and what we do are two different things, but with effort we can narrow the gap.
— Article courtesy of the Digital Tonto blog
— Image credit: Unsplash
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