Crawley David - The people equation: why innovation is people, not products

THE PEOPLE EQUATION

WHY INNOVATION IS PEOPLE,
NOT PRODUCTS

DEBORAH PERRY PISCIONE
WITH DAVID CRAWLEY

The People Equation

Copyright 2017 by Deborah Perry Piscione and David Crawley

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First Edition
Hardcover print edition ISBN 978-1-62656-641-5
PDF e-book ISBN 978-1-62656-642-2
IDPF e-book ISBN 978-1-62656-643-9

2017-1

Cover design: Wes Youssi, M.80 Design. Book production and interior design: VJB/Scribe. Copyeditor: John Pierce. Proofreader: Nancy Bell. Indexer: Theresa Duran.

Photos: : Janina Lamb.

To our respective families, who inspire us to think differently every morning: Dino, Dominick, Drake, Dayne Alexandria, Suzana, and Katarina.

Are you trying to get into the first-class cabin, or are you trying to make the train go faster?

W hat type of organization are you part of? Are you in an organization in which everyone is trying to get into the first-class cabin or one where everyone is trying to make the train go faster? The question may seem trivial, but is emblematic of the shift we are going through within our organizations, and perhaps the world at large. Are we going to live in a world of tension between the haves versus the have nots, those who command and those whom are commanded? Or are we going to live in a world where we move forward together? The query illuminates the dichotomy between those who are motivated by power, greed, and control versus those who want to bring forth new thinking. Those in the latter group believe that we should democratize the opportunity for people to bring forth new thinking, new ideas and audacious innovations. The type of organization that they build holds people paramount. Its processes are set up to support, nurture, and provide psychological safety, enabling the organization to leverage all of the talents, passions and interests of their people. In this book, we advocate for a people-centric organization, where rather than trying to focus on getting a first-class ticket, everyone works together to try to make the train go faster.

Imagine being the manager who has to look into the eyes of an employee that he or she has worked with for years and tell that employee that his or her job has been eliminated, that they are no longer required, and that their working future has been thrown into disarray. Envision this happening in a world where 45 percent of the people you work with have been replaced by automation. That is the percentage of jobs that McKinsey & Company estimates could be displaced by currently available automation technology.

Given this prospect, where millions will have their jobs displaced, why is it that we are so optimistic about the future? Why do we think that the world will offer more fulfilling work, not less? In the future, the uniquely human capability of innovation will consume more of our work lives. And whats more, because the world is changing faster than ever, the need to innovate will be greater, not less than today; the speed with which companies have to innovate will increase not decrease; and the number of people that companies will need in innovative roles will be greater than they are today. In this future society, companies will have to adapt to harness the passions and interests that drive their people.

However, because the modern hierarchical company is organized principally to get many tasks done, rather than to generate new thinking, companies will have to organize differently they will have to have different business processes and a different mindset about how they treat their people. It is certain that companies that are not able to change the way they operate will disappear, just like companies that failed to make the leap during other periods of rapid change.

In 1911, during the later stages of the industrial revolution, Frederick Winslow Taylor, a mechanical engineer who had a passion for organizational efficiency, published The Principles of Scientific Management. Treating employees like a capital asset had a certain attraction, as it provided a clear role for management. In the mass-production era, where the principal method of doing more revolved around deploying more capital and more bodies, Taylorism seemed to fit the world that executives envisioned. Taylorism paid little attention to the thoughts, feelings, and desires of employees, and set the tone of American management practice for the better part of a century and beyond.

At the time, Taylorism was a fantastically successful model, in part because it caused fear anxiety over losing ones job is a powerful motivation to get things done. Yet in 192432, the National Research Council conducted the Hawthorne Experiments, countering Taylorism and asserting that workers are not just machines but people who have feelings and motivations, where wages were just one piece of the pie that encouraged workers to give their best. But despite this new insight, many companies maintained a classic command-and-control structure.

In 1950, W. Edwards Deming, an engineer and management consultant, addressed the Union of Japanese Scientists and Engineers and preached the concept of quality management, where the basic principle is that profit comes from repeat customers. Therefore, employees should concentrate on making the best possible product instead of focusing on management-mandated sales quotas. Demings concept that quality is joy at work implied that productivity would increase when individuals thoughts, feelings, and desires were respected and taken into consideration. It is perhaps an accident of history that Deming spent most of his career improving Japanese industry as part of postWorld War II reconstruction. Simultaneously, in America, Marvin Bower, of the management consulting firm McKinsey & Company, lamented the difficulty of enabling alternatives to traditional hierarchical models.