CONCLUSION

Drawing on the Power of Heritage

Although my goal in this book has been to define a comprehensive approach to transforming institutions, I expect that readers will see their goal differently. You have your own unique problems, your own ideas about what is needed, and your own set of principles. I also realize that you are flooded with lots of advice that differs enormously, so why should my concepts be special?

MAKING SENSE OF MANAGEMENT TODAY

I hope you have found it useful to see that a New Management is emerging and that its underlying concepts of internal markets and corporate community offer unusual insights. What sets this book apart, however, is that it focuses very sharply on what really counts. Management could be far more effective if we drew on the power of our American heritage: democracy and enterprise.

It seems to me that we have become trapped in a great irony. At the very time when American ideals are creating revolutions around the world, our own institutions are still suffering from authoritarian control. The unpleasant truth is that we have relegated our principles to lofty occasions, such as presidential elections, while ignoring their relevance to our workplaces, schools, hospitals, churches, and other ordinary aspects of daily life. This problem is compounded by today’s jumble of incompatible frameworks that scatter attention in many other directions: Peters and Waterman’s “Eight Attributes of Excellence,” “Deming’s Fourteen Steps to TQM,” “The Eight Principles for Reengineering,” “Five Disciplines of Organizational Learning,” on and on in an endless stream of mind-numbing lists.

I wonder if we realize how confusing the practice of management has become today? As one who instructs in this field, I often feel embarrassed that it lacks a solid body of knowledge and accepted principles. Yes, I know that’s because management is more art than science, and some confusion is unavoidable because management will continue to change.

But the concept of hierarchy effectively organized management through throughout the Industrial Era, so why can’t we define a conceptual foundation for the Knowledge Era? Rather than struggling to sort out the useful ideas from today’s maze of management fads, almost everything we need can be found in the two great principles of democracy and enterprise America has given the West:

• Is your corporation under pressure to improve quality? Restructure into small internal enterprises that are held accountable for serving their clients.

• How are you going to empower employees while maintaining a sense of control? By helping them organize into self-supporting teams that are managed democratically.

• Are alliances and networking making hash of your organization chart? Set up a common economic infrastructure, and let internal markets do the rest.

• You say the demands of different constituencies are pulling you apart? Bring them together to create a democratic system of governance that sorts out all their rights and responsibilities.

• Your competition is relentless? A dynamic market system of small internal enterprises guided by skilled stakeholders would be a powerful competitive advantage.

I realize that not all problems would fit into this framework, lots of situations will always require firm control, and freedom is a messy, difficult thing to manage. But the evidence summarized in this book shows that democracy and enterprise offer a universal, enduring, readily understood foundation that integrates today’s bewildering blur of management innovations into a coherent whole.

MANAGING THE DAILY NEED FOR COMMUNITY AND FREEDOM

If this heritage is so great, then why do we have such a hard time accepting such a basic idea? I am not entirely sure, but I do know that people feel ambivalent about community and freedom.

I experienced a personal example of this problem recently. My extended family has held a one-week reunion for many years, which my brothers and their families attend faithfully. Not one of us, even the teenagers who are so eager to dissociate from their parents, would think of missing this annual feast of community. It is a veritable orgy of reminiscing, telling stories, hugging and kissing, working on family problems, exchanging photos, admiring each other’s kids, swapping advice, and making future plans.

Yet there is always a subtle but solid resistance to integrating our lives beyond a certain point. Who wants to take the responsibility for organizing next year’s reunion when they are struggling to keep their own lives under control? I would love to help my brother’s son with his college studies, but I’m worried about my own kids. And does anybody really want to go through all the arguments that are part of a closer relationship?

A family is not a large organization, but I think the same two opposing forces are at work in all social systems. Most of us want to be a close part of a group, but we also insist on retaining our individual freedoms. For instance, employees should be part of the corporate team—but they may not agree with each other. Citizens want strong government support—but they also want to avoid rules and taxes. The basic problem is that we rarely acknowledge these conflicting needs for community and freedom, so they are not addressed very well, leaving everyone confused and irritated. I know our family reunions go far better if we make explicit plans for common gatherings and block out time for individual activities.

These two basic needs are strong and growing stronger, and the only real solution is to plan how to serve them better. Bringing democracy and enterprise inside organizations will not magically dissolve the fears, doubts, and other complex issues we experience over this dilemma. But I do think the New Management will provide a framework for dealing with these matters more effectively.

THE UNIVERSAL POWER OF THE NEW MANAGEMENT

I would like to conclude this book with a personal experience that helped me appreciate the essential nature of the New Management more fully. It’s easy to discuss what we should do in the abstract, but somehow things always look differently when put into practice—“management from the inside out.” That’s what happened when I helped make a major change to my neighborhood.

I live in a lovely old community of English Tudor townhouses. It is conveniently located in Georgetown, close to downtown Washington, D.C., yet it retains the spacious feel of a suburb. One of the great legacies left by the builders is three parklike “circles” that dot the community. The one in front of my home is a 150-foot circle surrounded by other homes, creating a large, gracious open space that resembles a public square.

Although living in such magnificent space is rare in any city, this circle had grown into a useless lot over the years. Large bushes and trees were planted in the center, which became overgrown and choked with weeds, making the entire circle an impenetrable jungle. The only purpose this prized piece of real estate served was as a convenient place for people to walk their dogs—it had become a latrine. The problem persisted because, like most communities, mine consists of a wide variety of people with strong beliefs, and the difficulty of achieving consensus had left the neighborhood immobilized into inaction. The sad state of the circles was merely a symptom of this political paralysis.

Becoming desperate over this growing jungle, two neighbors and I took the lead in relandscaping it, which led to a great adventure in community building. After much discussion, there seemed to be agreement that the circle should be changed. But who was going to do all the hard work? Where would the money come from? How would we ever agree on a new design that all could live with? In short, we faced the typical obstacles that paralyze most organizations.

It occurred to me that we could ignite some energy by organizing a small group of neighborhood men to begin by moving the trees and bushes in the circle. The idea was appealing because there is a symbolic power in “gathering the neighborhood men to work on their common land.” This was a huge, difficult task, but it was also a very visible goal that, if completed, would make an equally huge impact on the way neighbors viewed their community.

Sure enough, it worked. About ten men showed up the first Saturday; they made a large dent in the job and had a great time together. Once everyone saw what could be done, the rest was fairly easy. I organized a half dozen such work teams, which transformed the circle into an open, useful space. As the neighbors watched this progress and came out to discuss it, they became convinced we were serious and began donating money to support the work. And, although we haggled over details, these conflicts were resolved along the way as we allowed the project to evolve of its own accord.

This former eyesore is now carefully laid out with paths leading to shaded spaces for sitting and playing, all enhanced by appropriate landscaping. The effect has been to inject a vital new spirit into the community. People now interact in ways they rarely did before, especially because this gorgeous new public space invites them to be together. The greatest achievement, however, is that an empowering example has been set. Neighbors now think, “If we can do this, why can’t we ______?”

This task was not as challenging as many business projects, but it nicely illustrates the basic elements needed to create organizational success today. The first thing to notice is that this project was not initiated by formal authorities, but sprang up from the grass roots. I cannot imagine how it could have moved successfully through the complex steps our small community association requires for formal action. Even more bizarre is the thought that it could ever be done by—God forbid—the D.C. or federal governments. No, it was accomplished by the voluntary efforts of a small team that had a better idea. I like to think that this highlights my skills as an entrepreneur, although my wife calls me “a madman” for taking on such challenges. But madmen are exactly the stuff that all good entrepreneurs are made of, and the greatest task facing managers across the globe today is to unleash the entrepreneurial powers of ordinary people.

The other major point to observe is that the entrepreneur cannot accomplish the task alone but is utterly reliant on others. Our efforts would have failed without the willing efforts of many men who volunteered to do the hard work, without the financial backing of my neighbors, and without the collaborative sense of community that allowed us to reach tough decisions amicably. Despite all the attention showered on heroic CEOs, the reality is that managers and organizations can do very little by themselves; local pockets of collaborative community are needed to provide the energy, support, and vision that drive all human efforts.

We could show how this simple example illustrates the other concepts of the New Management, but I think the point is clear. Managers around the world are struggling mightily to discover new principles to cope with a changed world, yet the key ideas that are needed lie waiting in our common heritage we take for granted.

Society is adrift in various crises today because business, government, education, medicine, and all other institutions lack a way of dealing effectively with a technological and economic revolution, that is creating a decentralized global order, of 10 billion industrialized people, who all share a fragile Earth. I suggest that the common model needed to manage this huge, far-flung, enormously complex global system is the humble blend of local democracy and enterprise at work in communities like mine around the world. No, it will not solve all the world’s problems by a long shot. It would, however, establish a solid foundation of two well-established, easily grasped principles that offer enormous new prospects because they can harness the power of ordinary people spontaneously from the bottom up.

IT ALL BEGINS WITH YOU

In view of the struggle that goes on within most of us over such issues and the massive momentum of the status quo, I must admit that prospects for creating a New Management do not appear overwhelming. It may be that there is limited potential for this type of management. Nobody really knows.

But the genius of markets and democracy is that it is not necessary for anyone to really “know” how to manage this system. The system manages itself by drawing out the talents and energies of ordinary people. It is open ended, rich in unlimited possibilities. Leaders only have to create such a system and then allow people to do what they can with it. That basic freedom is responsible for the remarkable achievements America has realized during its short 200-year experiment in self-governance. If this principle can be extended into institutions, we may be even more surprised by the creative talent that is unleashed as these ideals penetrate down to the nitty gritty of daily life.

There are many formidable obstacles, of course, but the path to a New Management starts with managers like yourself who are willing to reconsider their basic ideas about the way organizations work. Business leaders in particular have a great opportunity to show the way by developing the New Management for all to see. It is said that John Adams told Thomas Jefferson what he thought was the pivotal factor in the success of the American Revolution: “The Revolution originated in the minds of the people.”

Consider the exciting possibility that we could actually manage our institutions in a manner that is consonant with our most cherished ideals—the belief that members of all organizations should have the freedom to start and manage their own internal enterprises and to control their corporate communities democratically. If we could simply acknowledge that these ideals are as appropriate within organizations as is society at large, the world could take a great step forward.

So managers are the people to take on this challenge, and American managers should lead the way because of our special heritage. After all, even Russia and other post-Communist countries are beginning to embrace democracy and free enterprise now. Can we do anything less than live up to our own ideals?