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.