Work in the next 10 years and emergence

Emergence

I am tidying up and I glanced through a notebook from 2 years ago. I was utterly fascinated by ‘emergence’, the phenomenon where a flock of birds, for example, emerges from simple behaviour of birds.   With three very simple rules – join the flock, keep up and keep a respectable “stopping distance” – birds individually, and probably without thought, create a flock that looks as if someone did think it up.

Emergence, business & management

We are fascinated with “emergence” in a business context because a naturally-forming flock undermines the idea of the all knowing and ominiscent leader.  The planning, leading, organizing & controlling management theory of Fayol goes ‘for a loop’.

At first, I was puzzled that university departments hadn’t taken up this idea more vigorouosly, and more practically.

Including emergence in the theory of management

Two years on, I’ve found my thinking has drifted.  Yes, it is certainly true that the role of managers is probably exaggerated (with their pay).  But the project of changing management is unnecessary.  Overmanaged firms will self-destruct, possibly at great cost to themselves and others, simply because managers have to be paid for and management that is not necessary simply makes a firm unweildy, inefficient and unprofitable.

The real issue is where our better understanding of organization is emerging in business.  The best example that is written up is the motorcycle industry of China. The best example where an industry is trying to use similar processes is the aerospace industry in UK and the production of the Boeing 787.

Moving along to understanding emergence in business

The challenge now is to understand the variations of self-organizing networks.

I think, perhaps, the basic principle is that emergence, by definition, is not willed.

  • We can prevent it happening.
  • We can illustrate the principle.

But in real life, the probably the best we can do is create conditions for it to happen.  What are those conditions?

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Global supply chains

McKinsey have just circulated an article on supply chain management.  I read it hoping to find information on local modularization, i.e., breaking up the supply chain in the way done by Boeing.

Rules-of-thumb for organizational structure

The article was about linear, but global supply chains.  In HRM, we have very few rules-of-thumb to guide us about what is possible.  Here are three that I gleaned from the article.

The demand for labor within a firm varies huge

1.  Demand for mobile phones is often inaccurate by 400%.  Evidently, if we have no idea whether we need to make 1 of something or 5 of something, we will have heaps of productive capacity idle much of the time.  We are also going to have people hanging about, or we have to hire people at short notice with consequent loss of skill, team cohesiveness, and performance.

Companies who ‘play well’ with their supplier reduces their order times and save money on ‘capital employed’

2.  A company who shared market information increased their suppliers’ confidence in the company’s predictions [industry unstated] and decreased inventory by 45% and order-shipment cycle time by 70%.    Do we deduce that this reduction in capital-employed and stock-outs and the improved the cash-flow of the business with a positive knock-on effect into other areas like HRM?

Companies who share sales data with suppliers benefit from fewer stock-outs

3.  A retailer who provided a supplier with direct access to their data and ceded the management of their supply chain improved the availability of availability in store by 70%, and overall supply chain inventory by 20%.  Improvements of this size are likely to decrease lost sales and the price of the product itself  and increase competitiveness.

Lateral communications across organizational boundaries

It is stunning that improvements of this magnitude come about from improving the lateral communication structures across the organizations boundaries.

I wondered earlier today whether there any examples of HRM across a whole supply chain.   It would be an interesting project.

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