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A provocative work that challenges the traditional and widely accepted principles of business management — and proves that they are outdated, outmoded, or simply don’t work Do open floor plans really work? Are there companies that put their employees’ welfare first, and their clients second? Are annual performance reviews necessary?
Dr. David Burkus is a highly regarded and increasingly influential business school professor who challenges many of the established principles of business management. Drawing on decades of research, Burkus has found that not only are many of our fundamental management practices wrong and misguided, but they can be downright counterproductive.
These days, the best companies are breaking the old rules. At some companies, e-mail is now restricted to certain hours, so that employees can work without distraction. Netflix no longer has a standard vacation policy of two to three weeks, but instructs employees to take time off when they feel they need it. And at Valve Software, there are no managers; the employees govern themselves.
The revolutionary insights Burkus reveals here will convince companies to leave behind decades-old management practices and implement new ways to enhance productivity and morale.
|Publisher:||Houghton Mifflin Harcourt|
|Product dimensions:||5.20(w) x 7.70(h) x 0.80(d)|
About the Author
DAVID BURKUS is a best-selling author, an award-winning podcaster, and management professor. In 2015, he was named one of the emerging thought leaders most likely to shape the future of business by Thinkers50, the world’s premier ranking of management thinkers. His latest book, Under New Management, reveals the counterintuitive leadership practices that actually enhance engagement and drive performance in companies. He is also the author of The Myths of Creativity: The Truth About How Innovative Companies and People Generate Great Ideas. David is a regular contributor to Harvard Business Review and Forbes. His work has been featured in Fast Company,Inc., the Financial Times, Bloomberg BusinessWeek, and on CBS This Morning. David’s innovative views on leadership have earned him invitations to speak to leaders from a variety of organizations. He’s delivered keynote speeches and workshops for Fortune 500 companies such as Microsoft, Google, and Stryker; at in-demand conferences such as SXSW and TEDx events; and to governmental leaders and military leaders at the U.S. Naval Academy and Naval Postgraduate School. He’s also the host of the award-winning podcast Radio Free Leader. When he’s not speaking or writing, David is in the classroom. He is associate professor of management at Oral Roberts University, where he teaches courses on organizational behavior, creativity and innovation, and strategic leadership. In 2015, David was named one of the Top 40 under 40 Professors Who Inspire. He serves on the advisory board of Fuse Corps, a nonprofit dedicated to making transformative and replicable change in local government. David lives in Tulsa with his wife and their two boys.
Read an Excerpt
Management Needs New Management
In 1898 the Bethlehem Iron Company was in trouble. The company was facing increased competition and losing ground quickly. Besides its misnomer company name (they actually produced steel), its share of the market as a supplier to the railroad industry was rapidly being grabbed by a growing number of Pittsburgh-based firms, including the Carnegie Steel Company.
To try to turn their fortunes around, Bethlehem Iron’s leaders hired a middle-aged intellectual with an interesting past. He had studied at the renowned preparatory school Phillips Exeter Academy, with the intention of continuing his education at Harvard. But after passing the Harvard entrance exam with honors, he decided against attending. Instead, in a somewhat stunning move, he became a machinist and worked his way up the factory floor to become foreman. He studied mechanical engineering by night while he continued to work as both a laborer and a foreman by day. By 1898, having begun to merge his intellectual knowledge with his laborer’s experience, he decided to become a consultant.
His name was Frederick Winslow Taylor.
Taylor brought to Bethlehem Iron a new set of tools for maximizing the efficiency of the steelworks. His method was to systematically study every task in the system of production, then eliminate unnecessary tasks and train laborers in the detailed and specific way to execute each task. After perfecting the system and the tasks, Taylor sought to perfect the laborers themselves by removing hourly wages and assigning a specific pay rate to the segment of work for which they were personally responsible.
This “piece-rate” system was seen as a way to increase the speed of production and decrease loafing among workers. Taylor himself would repeat that there was not a single manual laborer “who does not devote a considerable part of his time to studying just how slowly he can work and still convince his employer that he is going at a good pace.” It was Taylor’s role as a consultant to study what that good pace actually was.
Taylor would also study the tools of production. In one instance, he famously asserted that the most effective load a worker should carry in a shovel was 21.5 pounds, but that workers often used the same shovel regardless of the material being loaded (and hence the weight often varied in the load they were actually carrying). Taylor found or designed new shovels for each material that would scoop exactly 21.5 pounds. Taylor viewed the discovery of such specific levels of efficiency as out of the intellectual reach of the common laborer; the ideal worker, in his mind, was simply an unskilled cog in the larger machine, trained to do just one task and rewarded when he performed that task optimally. Taylor asserted that “it is only through enforced standardization of methods, enforced adoption of the best implements and working conditions, and enforced cooperation that this faster work can be assured. And the duty of enforcing the adoption of standards and enforcing this cooperation rests with the management alone.” In short, Taylor didn’t need the minds of laborers; he only needed their bodies.
Not surprisingly, his ideas weren’t easily accepted by the laborers themselves. Taylor’s rigid methods had indeed increased production, but those changes also caused strife among laborers and managers who were used to the way they had been working. By 1901 Taylor was forced to leave Bethlehem Iron after disputes with other managers. But he didn’t walk away from his principles of “scientific management.” Instead, he began spreading his ideas as far as he could, and he would eventually see them readily adopted.
Taylor’s concept of scientific management came at exactly the right time. Just before the turn of the nineteenth century, there had rarely been a need for smart managers to supervise large groups of unskilled laborers. In 1790, 90 percent of the working population in the United States lived on farms, producing food for themselves but also items like clothing, furniture, soap, and candles. What little commercial manufacturing existed was done by skilled artisans who worked in small shops that often doubled as their homes.
The industrial revolution changed all of that. As new machines were invented and ways to power those machines were discovered, the speed of production for various tasks quickened. Between 1890, just before Taylor began working with Bethlehem Iron, and 1958, manufacturing output per labor-hour in the United States grew almost fivefold (and it has kept growing rapidly ever since). Products that used to be created by lone artisans were now mass-produced in large factories. Those factories needed employees. Those employees needed managers. Those managers needed tools.
Frederick Winslow Taylor provided the tools to manage the people in those factories. His ideas dramatically increased the speed and efficiency of production and helped companies grow. There are even those who say that the amazing economic growth of the twentieth century stems largely from Taylor’s management ideas and the ideas they inspired. As the majority of the population moved from farm work to factory work, the style of management that fueled that growth became the unquestioned standard — the universal toolbox. Over time, others would build on Taylor’s work and add more tools that built off his ideas (or sometimes were positioned as replacements for Taylor’s ideas), thus becoming part of the toolbox used to manage large-scale industrial firms. Even the most drastic departures from Taylor’s ideas were still tools to be used by the managers and leaders of large-scale, largely industrial firms.
Taylor’s public lectures were eventually published as books. The most popular, Principles of Scientific Management, was published in 1911, and sales quickly took off around the country and the world, even as far as Japan. (When Taylor’s grandson visited Japan, he reported that managers of many companies insisted on taking their picture with him.) Taylor inspired a group of efficiency-minded managers who started a monthly magazine called System, which featured articles on maximizing the efficiency of all aspects of work. System would grow in popularity and eventually take the new title of Businessweek.
Universities started business schools to train managers and future managers on how to use the tools of scientific management to maximize production and minimize costs. Taylor even joined one, becoming a professor at the Tuck School of Business at prestigious Dartmouth College. Companies began to “benchmark” their practices by comparing their use of these tools to how the industry leaders were using them. Amazingly, many of these basic management tools are still taught at business schools and benchmarked by managers. After all, these tools got us to where we are today.
But the truth is, where we are today looks a whole lot different than where we were when Frederick Winslow Taylor first stepped onto the factory floor at Bethlehem Iron in the 1800s.
Throughout the latter part of the twentieth century, the nature of work changed dramatically for a lot of people. Instead of manual labor (performing routine tasks in the service of mass-producing a product), organizations increasingly needed their workforce to engage in mental labor — making decisions about redesigning products or about marketing them, or designing information technology systems, or finding new sources of capital. The volume of mental labor — or “knowledge work,” as it would become known — has continued to grow. But for a very long time now, management has held on to the tools of the past — like a factory worker using the same shovel regardless of the material being shoveled.
Table of Contents
Introduction: Management Needs New Management 1
1 Outlaw Email 13
2 Put Customers Second 26
3 Lose the Standard Vacation Policy 44
4 Pay People to Quit 58
5 Make Salaries Transparent 71
6 Ban Noncompetes 86
7 Ditch Performance Appraisals 102
8 Hire as a Team 117
9 Write the Org Chart in Pencil 132
10 Close Open Offices 148
11 Take Sabbaticals 162
12 Fire the Managers 176
13 Celebrate Departures 192
Afterword: Reinventing the Management Engine 206
Next Steps 211
About the Author 245
Most Helpful Customer Reviews
I've been on both sides of the management coin. I've been in management, and I've been managed. I have an idea of what works for me and what doesn't. In this book, David Burkus shows that many of the management practices that were developed in the early 20th century to manage line workers don't work today. Even some that have evolved over time need to change. He identifies 13 items that need to change. They are: 1. Outlaw Email 2. Put Customers Second 3. Lose the Standard Vacation Policy 4. Pay People to Quit 5. Make Salaries Transparent 6. Ban Noncompetes 7. Ditch Performance Appraisals 8. Hire as a Team 9. Write the Org Chart in Pencil 10. Close Open Offices 11. Take Sabbaticals 12. Fire the Managers 13. Celebrate Departures. Some of these sound counterintuitive at first glance, but he makes the case, with examples of companies that have tried them, that they can actually work. Some of this is not new. For example, the idea of scrapping the standard vacation policy was explored in Why Work Sucks and How to Fix It: The Results-Only Revolution by Cali Ressler and Jody Thompson. They argued, as does David Burkus, that as long as the work is done accurately and on time, it shouldn't matter if you're at your desk for a certain time each day. There is some freshness to this book, though, from the use of real world examples. Some of them are modified from what he thinks. For example, the chapter on outlaw e-mail could be retitled outlaw internal e-mail. If a client is emailing you something important, you'd better be ready to take it. Space alone prohibits me from going into detail about every chapter. One thing I wish the book had done more of is to show instances where the item in the chapter title was tried, and it didn't work. There is some of this, but there could be more. In the chapter on salaries, he discusses a company called SumAll, which has fixed, but transparent, salaries. You're assigned to a salary level, and there is apparently no negotiation. When I saw that, I thought of Ellen Pao, former CEO at Reddit. Ms Pao came to Reddit after losing a discrimination suit against her former employer, an investment firm. The jury returned the verdict in favor of the firm. Ms Pao then instituted a no negotiation policy for salaries at Reddit. This was your salary, take it or leave it. It was supposed to take the pressure off people who didn't feel comfortable negotiating, which some studies have shown many women are. Ms Pao may still have been reeling from her loss in court. At any rate, the policy was universally panned, not just at Reddit, but on other social media and the regular media. It probably led to her exit from Reddit. I believe the policy has since been rescinded. I'm not sure if salaries at Reddit were disclosed within the company or not. This would have been a good example for the book. The author does emphasize flexibility. There is no one size fits all solution. For example, I'm a CPA who does taxes. The policy on vacations would have to be modified. January 1-April 15, no extended vacations other than medical or death in the family. The rest of the year, the schedule is much more flexible. That's what I like about this book. It doesn't attempt to impose a solution. it suggests a solution, and leaves it to the individual companies to implement it, realizing that it may not work for everyone. All in all, a good book.
At the end of the Constitutional Convention, Ben Franklin told his fellow delegates “For having lived long, I have experienced many instances of being obliged, by better information or fuller consideration, to change opinions on important subjects which I once thought right but have found to be otherwise.” I can relate. "Under New Management" by David Burkus changed my opinion on accepted organizational practices that I thought were right but recent research and practices have actually proven otherwise. Burkus takes on a plethora of issues, including the “customer first” mentality, hiring practices, non-compete agreements, frequency of checking email, standard vacation policy, office design, frequency and formality of performance appraisals, and even the need for management. This is an excellent resource for all managers. It will challenge your thinking and change your behavior. Note: I received a review copy of this book in advance of publication.