vladimirgrebenar 
Three highly expert consultants from Mckensey & Company, the world’s strongest consulting firm in the late 1970s in collaboration with Harvard Business School, investigated a phenomenon related to the fact that academic scientific theory of entrepreneurship and management provides no answer to how to solve complex organizational problems that business system directors had to deal with at the time.
Organizational problems began to pile up around the world due to the increasing degree of process automation. Machines replaced human labor and the issue of employment became a social issue. Robert Waterman, Thomas Peters and Julien Phillips traveled the world and interviewed leading academic names from the most prestigious business schools in the US and Europe and directors from the world’s best-known companies about the new phenomenon.
Their effort was to understand the problem of why management theory cannot provide guidelines for managing organizations in an increasingly dynamic business environment due to production automation trends in the mid-1970s. The academic community has realized the scale of the problems in organizations related to employee dissatisfaction.
Managers sought to address these problems, and scientists in the fields of work psychology, organization, and management could not generate some unique science-based management model in emerging circumstances that would guarantee better results. Scientific theory mainly dealt with the old problems of designing the structure of the company (hierarchy) and strategy (planning), which was no longer sufficient and adequate to the new situation.
Moreover, the paradox was that the same science proved that as many as 90% of companies that continue to follow the old scientific recommendations of the time fail to achieve business goals and have serious management and staffing difficulties. It was a time that was gripped by the 3rd Industrial Revolution and the growing automation of production, the application of powerful machines and increasingly present computers.
Change management in organizations was carried out spontaneously, without strong scientific and professional support. For example, until the beginning of the 3rd Industrial Revolution (1970s) at that time the share of direct human labor on machines in product value averaged over 80%, and with the use of automated machines the share of direct labor in product value declined rapidly.
Today, the share of direct labor in the value of the final product is below 10%, closer to about 5% with a tendency to further decline. In this modern time in which we live and work, we are witnessing the 4th industrial revolution called “digital”, which began in 2011 and affected our daily lives.
Changes today are incomparably faster and with a much greater impact on workers than ever before, and this trend will not stop and the real question is how to respond to all this on an individual and organizational level. The integration of computer technologies and mechanical systems that are changing simple human work is now in an ever-increasing momentum. We can ask the question, “so what will man do in the future?”
The uninformed reader could easily and superficially address this social problem to entrepreneurs and managers who relentlessly lay off workers for the benefit of automation and higher productivity. However, the pace of market change is not generated by managers, but by customers. Organizations are adapting to the increasingly demanding wishes and needs of customers. When we criticize there some managers as responsible for the social problems of workers we should ask ourselves about our own contribution to such a situation.
For example, in a lecture to management students, I asked the following question: “Would you like to receive offers from all insurance companies via a banking application on your smartphone before the expiration of mandatory annual car insurance and a very reliable recommendation from the bank which offer is best for you? Then to select an offer with one click on your phone and close the whole deal? So, immediately and without any effort and time, the simplest, without the necessary communication with the insurance sales network?”
The students all replied that such an application would be an excellent service they support. Then I asked the question: “What do you think about the fact that after such a digital service millions of people will lose their jobs in insurance sales networks around the world?”
There is no answer to this question! Why? The answer to this question is a spiritual answer and one of the modern fundamental moral questions of human creation: “should technological development be stopped in order to reduce unemployment?”, or: “should man continuously accept external changes and therefore personal changes to respond to modern challenges?”
Modern science of change management proves that change must be carried out patiently and in accordance with man’s capacity for change. Man changes slowly, not by force. Either way, every change requires human effort, and today that effort is mental, no longer physical. When we say mental effort, we also mean spiritual effort. Man’s mental capacities to accept change and learn new technologies are directly influenced by man’s motivation to learn something new.
Man’s aspiration to master new knowledge and skills is driven by the values to which man holds as life principles. It has been firmly proven that for a person’s lifelong building and learning, it is necessary for a person to become ethically and socially responsible, and only people who have clear life values can do that. Issues of professional ethics and social responsibility of the individual worker are of greater importance today than ever before.
However, American leadership expert John Maxwell stated: “There is no professional ethics. There is an ethic. Man is either ethical or not. It is not possible to be unethical in private life and ethical in business.” Therefore, modern man as a worker seems to have no choice, or he will be a man of strong values and adaptable to faster changes or he will be a man who blames others for his own problems.
Technological advances and changes, no matter how rapid and intense they may seem, are in fact moderate enough for man to overcome them at the level of the average individual with mental and spiritual effort. Technologies, robots and machines will never replace all human labor, and we should not be afraid of this process no matter how advanced the technology. Why? Any technology intended for human improvement must wait for human progress for that technology.
For example, one of our leading retail chains had cashiers without workers 15 years ago, but the new technology had to be removed and workers returned to work because customers were not yet IT-capable enough to pay for themselves. Over the past years, there has been an increase in cash desks without workers in retail stores. Probably in about 15 years, the cashier’s job will no longer exist, so traders have plenty of time to master new work skills.
Technology must wait for man and a critical number of individuals in society to master technology, but it should be borne in mind that a creative society will not wait for individuals who live by the mentality of the past and who do not accept change.
Let’s go back to the beginning of the ’80s, when the mentioned three researchers published one of the most famous scientific papers from the management of “Structure is Not Organization”. Their findings have changed the attitude of science towards the problem of behavior in business organizations that are in a market of increasing change and adaptation. Researchers have found that some highly successful business organizations in the mid-1970s adapted very quickly and successfully to automation and new circumstances, to the satisfaction of workers.
Such organizations had strongly expressed core values of work shared by employees and as their personal life values. Values were integrated into the elements of the organization: structure, systems, strategy, skills, staff, and style. The six elements of work organization with the seventh, which refers to shared values at the center, form a model that is still cited in management books, and is called “7S” or the model of organizational culture.
The model represents the philosophical foundation for building business organizations. The researchers found that change was best managed by those directors who were role models as leaders and who integrated the true values of creation into the business organization. These values were mainly related to creativity, innovation, responsibility, ethical principles, justice at all levels, protection of human dignity, etc., and in such circumstances, good workers adapt quickly. At the time, it was a real discovery for management. Business plans and structure schemes are not like ordinary hardware forces that adapt employees to new circumstances. Excellent adaptation to change comes from the fundamental ethical values of creation. Every time we point a finger at another today looking for the culprit for our problems we should look at the hand with which we condemn and realize that with all five fingers we are judging someone. One outstretched finger condemns other people (forefinger) and the other the sky (thumb), and we rarely see the other three bent fingers facing us![1]
[1] The article was published with minor changes in: Veritas. Glasnik Sv. Antuna Padovanskog. Croatian Province of St. Jerome of the Franciscan Conventuals. Zagreb. Duh Sveti 31. No. 9. September 2019. p. 20.