12 Innovations that shaped modern Management..

Frederick  W.  Taylor, Father of Scientific Management

Who were the pioneers of Modern Management theory or let me say, the Father of scientific Management ? Frederick Winslow Taylor. What did he come up with ? As I explain in my class very simply, he told that it is not only a manager;s son who could become a manager, anybody who practices the scientific principles of management as put up by FW Taylor, could also become a manager. 

What makes Toyota the world leader in automobiles, that gives you great value for money  ? It is nothing but their belief in their people and the practice of employee-driven practice of problem solving that is practiced in all Toyota plants across the world.

Toyota's Kaizen, employee driven problem solving

How can one manage large projects, that run in different locations and takes months or years to complete ? It is the innovation whereby large projects were broken down into small projects or activities and micro manage these activities to finally manage the large final project. 

When General Motors under Alfred Sloan was growing in the 1920s, it faced complex problems as operations were scaled up, but the shop floor remained as messy as ever. Management was a nightmare then. Meeting targets and producing quality products were a nightmare. It was then Sloan's idea of coming with different divisions depending on the output, for example, the car model which simplified the matters and reduced the complexity on the shop-floor.

Alfred P. Sloan, General Motors, initiated divisionalisation

Science was till the beginning of the twentieth century esoteric and helped provide knowledge, but the term technology was yet to pick up. One of the greatest innovations of the twentieth centuries is the industrialization of Science, popularly; called Industrial research and development (R&D). Success of General Electric is a great example of industrial R&D ..

The proactive approach whereby similar industries got together to share their best practices, common problems etc was a management innovation. Earlier industries in similar area looked at the other competitor with suspicion and fear. Now industry wide fora are available for sharing knowledge and problems, though deep knowledge of the area still remains protected by IPR.

GE logo .. Champions of Industrial R&D

Rather than having centralised organisations, industries over the years found that it was easy to manage their operations, if they decentralised their operations, thus was born the concept of radical decentralisation (self-organisation). It made communication and decision making easier. 

While I was researching on Management Innovation I was going through the paper by Gary Hamel in HBR of Feb 2006, "The Why, What and How of Management Innovation". (click here for a copy)

Thomas Edison, GE founder ..

The paper gives a good explanation of how management innovation has shaped the theory and practice of Modern management ever since Management came to be accepted as a science from the beginning of the 20th century, ie the beginning of 1900s.

Here are the twelve Management Innovations of the past century as proposed by Hamel.

1. Scientific management (time and motion studies)  

2. Cost accounting and variance analysis  

3. The commercial research laboratory (the industrialization of science)  

4. ROI analysis and capital budgeting 

5. Brand management 

Gary Hamel

6. Large-scale project management 

7. Divisionalization  

8. Leadership development 

9. Industry consortia (multi-company collaborative structures) 

10. Radical decentralization (self-organization) 

11. Formalized strategic analysis  

12. Employee-driven problem solving 

One aspect that still baffles me is to find assembly line missing in the list of innovations. In fact, assembly line concept started mass production and gave the major impetus to the autombile industry of the world.

George..