I'm not saying it's inhumane. I'm not making a value judgment and saying it's inhuman. It's non-human or a-human. It assumes that you have automatons working for you. And you don't. And that's a central challenge in this modern world, where Peter Drucker predicted this. He said, "Oh," he said in 1956, "there's this new breed of worker, they're called knowledge workers. The muscle they have to use at work is not their arms or their legs or their backs. It's the muscle between their ears. And these knowledge workers can't distance themselves from their work. Unlike someone who is a physical worker, they can say, "I moved a bunch of rocks." If you have a software engineer, their software is them. It comes out of her head. It's what they're invested in. And Peter Drucker admonished the world. He said, "We need to think about these people differently, as people who, if we need them to use their brains in this way, we need to treat them as if they were volunteering to work for us. As if they were a volunteer." And despite this warning so many years ago, coming from the greatest management thinker of all time, the world persists in treating people in this non-human way. And that's what we get, workers who are unengaged and somehow managed by surrogates who make them the worst they can be instead of the best they can be.
Sohrab:
And I think that goes back to the model that you were referring to. It's not just the machine model that we apply to business, we also look at each individual organization as a machine, much like when Ford was building cars. The raw materials come in, then people do certain things, and then the cars come out. Today, the product that comes out of many organizations, even if they're producing hardware, the product life cycles are so much faster than a Model T that's been built more or less unchanged for 20 years. And I love that quote from Henry Ford, not because I think it's the right thing to say, but because it shows so well how people thought back then. He said, at least it's written that he said it, "It's a pity that when you need a pair of hands, they're connected to a brain."
Roger:
Absolutely.
Sohrab:
Every time I say that to executives I work with, they say, "Yeah, but right now we don't need the pair of hands. We need the brain." I then say, "Yes, exactly. That's what you need." So you have to use a very different mindset when you're managing or leading a knowledge worker, or whatever term you want to use. And, again, even between a knowledge worker, I think there's a new kind of worker, because a tax accountant is a knowledge worker, but they're doing repetitive stuff, somebody who's building software, or creating great user experience design, or whatever, like the creative economy is even more complex than the normal knowledge worker doing their job.
Roger:
Yeah, I agree. I agree. And if you're interested in reading more about this, if you haven't already, read my 2009 book, Design of Business, because I argue that all of this knowledge flows through a funnel, from a mystery to a heuristic, to an algorithm. And now, since the advent of digital computers, it's becoming an algorithm, you code it where we get it, sort of AI and machine learning, et cetera. So what you're saying is there are things in the category of heuristics where you need a knowledge worker who can deal with the complexity. There are no rules yet. You need their creativity. It moves in due course, some of it into the category of algorithms. And that's what you're saying, these repetitive white collar tasks. And these repetitive white collar tasks are all being reduced to software. And that's my point about how knowledge flows throughout the economy.
Everything flows from a mystery. We have no idea how that works. It used to be a mystery, "Hmm, why does it fall down when I let this go?" There were all kinds of theories, animal spirits, all objects, love for Mother Earth, all these things. Then some smart guy got hit in the head by an apple and said, "Ah, there's a universal..." Sir Isaac Newton: "There is a universal force called gravity that pushes everything down." That's a heuristic. It's no longer a mystery. It's a heuristic. And then we study that enough and find that everywhere except America, things are accelerating 9.8 feet per second squared. In America, of course, it's 32 feet per second squared because America is exceptional. And then we have an algorithm. And then because we have that algorithm, Honeywell can create software that makes aircraft follow the sky in a user-friendly way. And you now have a kind of automated flight system.
Every bit of knowledge in the world is following that path. Some of it is still a mystery and hopefully will never become software. What is love? But everything tends in that direction. Now, what people worry about more than I would is watching things go from heuristics to algorithms, to code, and saying all our jobs are going to go away. I don't see it that way. The world has an infinite number of puzzles to solve. And we will always need people to solve the puzzles, because only when they have the algorithms can we have a computer do something useful with them. But people are concerned about that.
There was a huge outcry from people in the United States when the first automatic washing machines appeared. And the concern was that before automatic washing machines, the average housewife in America was spending two hours every day doing laundry. And there was a huge concern that they would be at the end of their rope if they could just throw the laundry into an automatic washing machine.
Sohrab:
What to do with those two hours?
Roger:
They thought of lots of more productive things they could do. And that's the story of technological progress, as far as I'm concerned.
Who is responsible for the strategy of the company and a product?
Sohrab:
Yes. But that could also be a model that turns out to be wrong. And we'll have to see how things develop over time.
Roger:
In any case.
Sohrab:
Before we get to some of the last things you mentioned in your book, I wanted to ask a side question. And we kind of started with me asking you, you wrote about a lot of things. But one of the main things that I saw at least in your work and how I connected to your work was always the theme of strategy. How do you connect this book, When More Is Not Better, to your overarching theme of strategy? And what does it mean specifically for CEOs, but also for other executives who need to develop and implement strategy?
Roger:
Sure. So I think the connection I would say is that "When More Is Not Better" should in some ways help an executive or a CEO, someone who's responsible for strategy, to take an approach that says strategy is a model. So Southwest has a model. Jack Bogle of Vanguard had a model for the business that they then built their business around a set of principles of that model. "When More Is Not Better" is a warning that you shouldn't get too enamored with your model because it's going to be flawed and there will be adjustments. So you should be willing to keep tweaking and improving your strategy.
Now does that mean you revise your strategy every five minutes? No. But it does mean that you should constantly tweak it because the forces of adaptation are unstoppable. And the likelihood of your model capturing all the complex relationships between, I don't know, the channel and the buyers and the cost structure, whatever, the likelihood of me getting it completely right is zero. So you should watch the signs and optimize. That said, I still disagree with the thesis that your strategy should be completely emergent, meaning we just figure it out and then change it. I think that's kind of too nihilistic for me. I think you should always say, 'Based on everything I know today, this is my model.' And this is where I'm going to strike based on that model." But I'm not going to put blinders on. I'm going to say that I'm watching it and thinking about it and also acknowledging what John Sherman said, that there are going to be side effects that you didn't anticipate. That is just the nature of a complex world.
Sohrab:
Of a system.
Roger:
To ignore them and say, "Oh, it'll go away," is a stupid idea. The best idea is to say, "In what way is this thing I think an anomaly, not what I expected. What if it actually continues in its current thing? What would I do now to adjust my strategy based on that?"
Sohrab:
And I think it also depends a little bit on what level you define your strategy. So what I really like and what I usually teach when I'm working with people who are working on products is a quote from Jeff Bezos, "Be stubborn about the vision and flexible about the details." You still need that vision, and you're not going to adjust that vision every five minutes just because you heard one thing. So you need to give some kind of guidance, some kind of direction on where you want to go. But within that direction, you have to check and adjust. And maybe sometimes you realize that your model was wrong and then you make a major adjustment, which may or may not be a pivot. But you need some kind of thing to work towards.
Roger:
Yeah. And can I just say, on the Bezos thing, I mean, in some ways, he's adopting what I think is a completely flawed management model, which is the idea that this one decides. But he's adapting in a good way. He says be flexible on the details. Well, why would you be flexible on the details? Well, the answer is because you have to make a strategic decision at that level. So I'm against the model that says there's something called strategy and then there's something called execution. I don't believe in that. What Bezos is talking about is making some strategic decisions at the Amazon level, and that brings the need to make other decisions. I call that strategy decisions. Other people call it execution. But then, because other people call it execution, Jeff Bezos has to make this big point about being flexible.
The only reason you have to be flexible is because you can't define from your high level exactly what decisions they need to make. Then you're actually going to infantilize them and you're going to be wrong. You have to say, "Do something that's consistent with my strategy, but you have to make decisions." So I say senior management's job is not just to make decisions that they can make better than anybody below them, but just make those decisions, and then commit to the next level decisions. Say, "You guys at the next level have to make a decision. And the output must be consistent with my choice. But what exactly you choose, that's up to you. And the reason is you know more about your level than I do. But it has to be consistent with mine."
Sohrab:
Exactly. You give the guidance, and you decentralize the decision making to where the information is.