How Pervasive is the Amazon School of Management?
A recent article published in the aptly named “Schumpeter” section of the Economist lamented the rise of “Digital Taylorism,” the modern incarnation of a mechanistic management theory from the 1930s. A primer:
“[Frederick] Taylor’s appeal lay in his promise that management could be made into a science, and workers into cogs in an industrial machine. The best way to boost productivity, he argued, was to embrace three rules: break complex jobs down into simple ones; measure everything that workers do; and link pay to performance, giving bonuses to high-achievers and sacking sluggards.”
Sound familiar? This call for “scientific management” remains popular, but it’s a framework that has contributed to stifling, technocratic government bureaucracies around the world. And as the Economist points out, its impact has been amplified in our increasingly disruptive digital world. A recent Amazon exposé—which stoked a torrent of punditry and a record-setting number of comments in the New York Times, many written by employees citing similar practices in their own firms—is a small piece of the overwhelming body of evidence.
“Digital Taylorism” is neither inevitable nor good for business. Retooling a century-old paradigm is not the way forward. It asphyxiates agility and individualism, both of which are lifeblood of successful modern organizations. We need instead a new path to prosperity. Businesses must be intentionally and systematically designed and managed to capitalize on human uniqueness, not temporal outcomes. We call it Designing for People and, when done well, the results are remarkable: an unshackling of human and economic potential, demonstrated through improved attention allocation, more innovative products and services, and fulfilled and engaged employees.
Why the Taylorism Paradigm Has Prevailed
We at Talentism have covered this ground in previous posts, but it’s important to restate the economic context in which Taylorism was born and continues to thrive. By the end of the 19th century, industrialists were capitalizing on economies of scale—the capacity to produce more widgets of the same quality at lower cost per additional unit. Economies of scale require consistent supplies of cost-efficient raw materials. In this paradigm, people are just another raw material, another cost-sensitive input in the value chain. They must deliver more work at the same or higher value in order to increase profit. That requires standardizing jobs so that people deliver predictable outcomes regardless of their differences in knowledge, skill, or aptitude. That was Taylor’s key insight—people could and should be mechanized to maximize productivity and profit. As the Amazon exposé (and many other cases and anecdotal evidence) confirms, Taylorism remains the conventional thinking on management and organizational design.
It’s important to take a step back and consider what this means. Most of us have devoted ourselves to a system that takes the unique complexities of human beings and reduces them to a set of predictable and interchangeable outcomes. Mass production and economies of scale have taken humankind to new heights: more people thrive on non-subsistence jobs, and non-subsistence goods are more accessible than ever before. But it has done so by dehumanizing people on a grand scale.
Economies of scale have put microwaves in our kitchen and smartphones in our pockets. But the jobs that produce them—not just in factories but cubicles and corner offices—continue to dehumanize us. We made a deal with the devil. Taylorism has contributed to systemic disengagement, economic waste, and constrained human potential.
A New Path to Prosperity
The world has fundamentally changed in the last two decades in ways that are difficult to overstate. The days of squeezing advantage from economies of scale—the economic zeitgeist in which Taylorism thrived—are drawing to a close. Vast increases in computing power have meant that standardized, interchangeable, scalable jobs are being given to computers and robots. Mass production technologies and the capital to implement them are cheap and ubiquitous. Global supply chains—mastered by Amazon—have been optimally scaled in almost every area. Companies that design jobs with this mass production mentality will no longer find competitive advantage.
In our new world, jobs that create advantage require creativity, agility, and judgment. These are qualities born of individualization, not standardization. When information, technology, and algorithmic work are commodities, the companies that win will be those that optimize for people in ways that take advantage of their unique attributes to serve customers in ways that other companies can’t.
The best way to find competitive advantage is to configure an employee’s responsibilities around their passions and talents. People who are emotionally invested in their jobs don’t think work sucks. People whose jobs are built around their strengths and individuality consistently produce excellence in surprising ways, and find new and inventive ways to delight customers. Companies that create these kinds of jobs for a thousand people have created a thousand points of differentiation from the competition. That’s Designing for People.
Designing for People
As we’ve discussed elsewhere, Designing for People means creating jobs at the intersection of their purpose, talent, and opportunities.
Purpose: what people find meaningful and compulsive
Talent: what they improve at fastest with practice
Opportunity: the exercise of Talent and Purpose in a way the market rewards
This isn’t HR happy talk. As we’ve seen in our clients and other bellwether organizations that Design for People, this intersection is where people are most creative, agile, and resourceful; where excellence and competitive advantage are forged and sustained.
This may be clear, but it’s difficult. Our education and commercial institutions have invested heavily in homogenizing our differences, turning us into usable raw materials for Taylor’s economy. As a result, most of us simply don’t know our passions and talents. And we don’t know how to find opportunities that best capitalize on the unique productivity package that we each bring to the table.
From early childhood, our system of education emphasizes standardized learning that develops knowledge and skills, not learning and development of one’s unique attributes. This emphasis on what we know, rather than who we are, continues seamlessly into the workplace. The principles of Designing for People show a way out of learned helplessness, low productivity, and failed companies. In fact, they can be found in many of the world’s most successful companies.
W.L. Gore, best known for manufacturing the Gore-Tex line of fabrics, dispensed with traditional job roles, organization charts, and chains of command altogether. Instead they have a flat organization where people are free to organically form teams around opportunities that interest them and commit to projects matching their strengths. Leaders emerge naturally based on contributions and followership, and people are assessed through a system of peer ratings. As such, work is done is through continuous chains of productive experiments and feedback loops, leading to better fine-tuning of the design to match the passion and talent of each associate.
Gore has driven innovation after innovation through this way of being. Their products can be found “from the surface of Mars, to the permafrost of the arctic, to inside the human heart” and have saved countless lives. Designing for people has fueled the company through more than 50 years of growth, profitability, and market leadership.
Wegmans, an East Coast supermarket chain, has designed the company around a fundamental belief that employees should be equipped and empowered to explore and develop their passions. Cross-training, lateral learning, and ability to move around across job functions and locations all encourage productive experimentation to help people find their passion and talent. And the company invests in nourishing these when found. As The Atlantic reports:
A fish salesman raved about the exhausting standards of the company’s distributor in Alaska. A butcher said he had visited the ranch where a steak came from in Montana. And Maria Benjamin, a 38-year Wegmans veteran, started running a store bakery after managers loved her homemade Italian cookies. “They let me bake whatever I want,” said Benjamin, one of 1,015 people employed at the company’s 135,000-foot flagship store in Pittsford, New York. “They’re really down-to-earth, wonderful people.”
As it has for Gore, designing for people has propelled Wegmans to the forefront of its industry. It has won awards for best grocery store from Consumer Reports and Food Network, and has twice the revenue per store of Kroger, the nation’s largest supermarket chain.
Companies like Gore and Wegmans (and others) are distinctive from their peers. The designs of their jobs and culture are not the staid, static models of Taylor’s world, but are vibrant, pulsating, evolving symbols of what is possible. It is not a coincidence that these companies consistently show up towards the top of “best places to work” lists, or that they enjoy the highest levels of customer satisfaction and loyalty in their industries.
Designing jobs for people isn’t a repackaging of tired and largely ineffective “talent management” practices. It’s not about engineering incentives or perks to get the most out of people, nor is it a plug-and-play solution. It requires mindful leaders, incisive management, and rapid experimentation. It’s not easy, nor is it intuitive for most leaders and managers. It’s an entirely new way of thinking about building businesses to maximize the ROI of people investments first as opposed to a myopic focus on other capital investments. It’s a move from capitalism to Talentism, the only logical, sustainable strategic leverage left in a world of automation. And it’s the most worthwhile investment leaders can make.
Author: Tom Granado