Management 1.0
Management 1.0 is a term that could be used to characterise the emergence of modern structured management techniques that were created and developed from the 1776 until around 1920. This era can be summarised by the need for perseverance, scientific observation, application and energy. This era represents a ‘tipping point’ in terms of both social and technological developments driven by the start of the Industrial Revolution. The need to covert people historically trained in agriculture, into people that could operate machinery was one of the major driving forces.
As we enter this next phase of Management History, outlined below are a list of influential people that had a direct impact on the world at the time, and their words and wisdom still echo down the tunnel of time. The list of notable people is not meant to be exhaustive, and there are others that have not been mentioned that perhaps should have been, but with any finite endeavour boundaries have to be drawn, scope has to be defined and delivered as outputs, and finally schedules need to be met with available resources in the required timeframes. Apologies in advance for those people I have missed that perhaps should be been added, however they may be mentioned in other aspects of this book and all the associated materials. What is evident is that as we enter the Industrial Revolution, the old practices and techniques that had served humanity so well up to that stage, no longer delivered the required outcomes and new techniques had to be developed and learnt during this period. This philosophy will be observed time and again in subsequent chapters, which underlined the statement that “change is the only constant in life” (Heraclitus).
Adam Smith (1723-‐1790) showed how productivity could be improved through work-‐planning of appropriate resource allocation, manufacturing production techniques and pricing structures, in his book called ‘The Wealth of Nations’. The likes of Eli Whitney (1765-‐1825) were famous for inventing the cotton gin (a machine that removed the seeds from cotton) and his support for the interchangeable parts philosophy (as a maker of muskets). The partnership of James Watt (1736-‐1819) and Matthew Boulton (1728-‐1809) saw improvements being made to the steam engine that ‘enlarged the resources of his country’, and Watt is often described as one of the most influential people in history. Manufacturing techniques such as standardisation, quality controls and cost-‐accounting, were developed as a direct result of the work of these men. John Stuart Mills (1806-‐1873) had remarkable insight in his book called ‘Principles of Political Economy‘ where he remarked that unlimited growth was destructive for the environment.
By the turn of the twentieth century we find that engineers trying to quantify their theories through scientific methods. One of the first people to start seeing a new role for engineers in management was Henry R. Towne (1844-‐1924), who outlined his thoughts in his book entitled ‘Science of Management’. Up to this time, the company owners automatically assumed management responsibilities irrespective of their experience or qualifications. The realisation that specific skills were needed was reinforced in Fredrick Winslow Taylor’s (1856-‐1915), the ‘Principle of Scientific Management’. Taylor is often cited as the father of management science, and his work on improving industrial efficiency had huge ramifications across businesses and future management thinking/theories for years to come. Taylor’s principles effectively transferred control of factories from the workers to the management, and had huge implications for workers conditions and owners of factories that did not use his techniques.
The founder of economics, Alfred Marshall (1842-‐1924) published his book called ‘Principles of Economics’ and brought the ideas of supply and demand, costs of production and marginal utility to the world attention. His use of diagrams really brought the text to life, and teachers around the world started to emulate this technique.
Henry Ford (1863-‐1947) did not as may people think invent the automobile, however he developed the assembly line technique and was a recognised pacifist. Ford was able to mass produce goods that were affordable to many middle class Americans, whilst providing workers with very high wages. This had the effect of reducing staff turnover, raising productivity and attracting the best talent that lowered training costs. Ford introduced concepts such as welfare capitalism (looking after his workers), the franchise system and systematic lowering of costs whilst improving technical and business innovations.
It took others such as Henry L. Gantt (1861-‐1919) and Frank and Lillian Gilbreth (1878-‐1972) to develop the Gantt Charts and formalise Time and Motion Studies, before the full effect of the theories of Taylor could be implemented to by industry. The eventual construction of the Hoover Dam and the U.S. Interstate Highway System employed Gantt Charts to amazing effect.
Yoichi Ueno (1883-‐1957) had the distinct that he introduced Taylor’s management theories interwoven with oriental philosophical thoughts to Japan, and founded the SANNO Institute of Management. Yoichi is often cited as the first management consultant, and his son Ichiro Ueno went on to pioneer Japanese quality assurance, that eventually lead to the decline of the British Motorcycle Industry and the creation of a dominant world-‐wide electronic industry for many years.
Management 1.0 is the period when industrialisation gets to a stage where factories of workers are created and need managing using specialised techniques. Before this stage, technology limited the size and outputs of factories, and factories typically had a handful of craftsmen/workers controlled by the factory owner. Management 1.0 was a time when new theories were developed, tested and quantified. The vast majority of basic management techniques were developed during this period often by the in-‐house mechanical engineers, and the focus was on improving industrial efficiency and increasing owner wealth. There are glimmers of future in-‐sights, but they are ideas before their time.
Of particular note during this period is the work of Samuel Smiles (1812-‐1904) who can be considered to have published the first ‘Self Help’ book in 1859, advocating the education and improvement of the working classes. Smiles legacy has lasted right up to modern times, John Marsh (Director of the British Institute to Management) quoted Smiles in 1962; the Chief Scout (Bear Grylly) of the Scout Association (Motto: Be Prepared) and popular explorer is directed related to Smiles, and a significant number of people now employed in the self-‐help industry (from Oprah Winfrey through to Paul McKenna). Although not an author on management theory, his seminal world entitled Self-‐Help concluded that more progress would come to individuals and society in general from new attitudes than from the introduction of new laws. He also prompted thriftiness claiming poverty was largely cause by the irresponsible habits associated with a materialistic culture and a laissez-‐faire style government.
Samuel Smiles
“Young men who entered industry needed a sense of service and duty; they must be "men of character who know how to behave well as in phases of success; they must possess self-‐discipline in thinking and behaviour: There is something still to be said for Samuel Smiles's doctrine of self-‐help”. (John Marsh, 1962)
Some of the lessons from Management 1.0 are:
Early successes can be a long-‐term disadvantage as they often only produce partial solutions or can stop people from observing the whole problem. Failure can be a service, as demonstrated by the perseverance of James Watt. “For defeats do not long cast down the resolute-‐hearted, but only serve to call forth their real powers.” Samuel Smiles
“It is the close observation of little things which is the secret of success in business, in art, in science and in every pursuit in life. Human Knowledge is but an accumulation of small facts, made by successive generations of men, the little bits of knowledge and experience carefully treasured up by them growing at length into a mighty pyramid.” Samuel Smiles
“In the pursuit of even the highest branches of human enquiry, the commoner qualities are found to be the most useful….common sense, attention, application and perseverance.” Samuel Smiles
“I would not have any one here think that, because I have mentioned individuals who have raised themselves by self-‐education from poverty to social eminence, and even wealth, these are the chief marks to be aimed at. That would be a great fallacy. Knowledge is of itself one of the highest enjoyments. The ignorant man passes through the world dead to all pleasures, save those of the senses...Every human being has a great mission to perform, noble faculties to cultivate, a vast destiny to accomplish. He should have the means of education, and of exerting freely all the powers of his godlike nature.” Samuel Smiles
Extract from a forthcoming Management Book entitled “The Five Percenters“, Copyright ©2017, Innov8or Solutions Ltd. All Rights Reserved.