Thursday, 23 April 2009

Theory X Theory Y – the management battleground

I’ve been wondering recently just why is it that, whenever one talks about the shift in business and society as a result of the Web, two camps quickly develop in the room.

Whatever the specific topic of the conversation, about half the folks in the room believe the change to be foundational and that new management approaches are needed urgently, and about half don’t. The camps often become more entrenched not less as the discussion progresses. Often there’s more than a little heat in the exchanges.

Is it the usual battle between proponents of status quo and change, or something else?

For me, it's something else.

The Web is a real paradigm shift and I think it has re-opened one of the oldest and longest running political management battlegrounds in organisations - control versus empowerment, or ‘Theory X’ and ‘Theory Y’.

Theory X and Theory Y are well established theories of motivation created by Douglas McGregor at MIT Sloan School of Management in the 1960s. They describe two very different attitudes toward workforce motivation. McGregor felt that businesses followed either one or the other approach.

Theory X managers assume employees are inherently lazy and will avoid work if they can. Because of this, workers need to be closely supervised and comprehensive systems of controls developed. A fixed structure of authority is needed with narrow span of control at each level.

Theory Y managers come from the opposite perspective and assume employees are inherently self-motivating, and that given the right conditions, most people will want to do well at work. Theory Y managers tend to ask what they can do for employees, not the other way round.

According to the Y-ers, the X-er's management style leads to dis-economies, a lack of innovation and ultimately a lack of sustainable success. According to Jeanie Daniel Duck’s famous HBR article – ‘The problem is simple: we are using a mechanistic model, first applied to managing physical work, and superimposing it onto the new mental model of today’s knowledge organization.’

What’s interesting is that the pre-Web corporate IT most organisations have spent 40 years implementing is a real weapon of choice for Theory X managers. Business process re-engineering, enterprise resource planning and process focused industry application solutions have provided a formidable armoury. And to the Y-ers, IT enabled business change has become a large-scale proxy for mechanistic process enforcement which doesn’t respect the operating model, creating data and process standardisation out of kilter with the value systems of the business.

Or to put it simply, there is a problem with process.

The problem for the Y-ers has been that, despite the rise of shadow IT, the cost benefits of IT automation for core business processes have, on paper at least, always seemed compelling. To the X-ers people are expensive, unreliable and require supervision. Corporate IT reduces cost, improves quality and generally kicks ass.

Despite the clear value case of pre-Web collaboration software like email (you can’t put a cost case forward for it, but no-one ever took it away), there has never been another obvious way.

Until now.

Where corporate IT enabled mass-control on the inside, the Web has enabled mass-collaboration everywhere. And to cite Don Tapscott and Wikinomics, ‘mass collaboration changes everything’.

Don goes on… ‘the conclusion from all of this work is striking… billions of connected individuals can now actively participate in innovation, wealth creation, and social development in ways we once only dreamed of… leaders must think differently about how to compete and be profitable, and embrace a new art and science of collaboration…’

And leadership where the default context is mass collaboration starts with understanding motivation and enabling dialogue, not enforcing ‘business processes’.

If the PC offered a new hope before ERP struck back, the Web is the Return of the Theory Y. It’s Episode VI. And I’m with the half of the cinema cheering it on.