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Most technology-intensive companies today depend on specialized and talented employees, in fields ranging from high-tech product development to life sciences research. Such employees often design much of their own work; no one else is as qualified as they are to do so. The work itself may involve intangible materials and products. Often managers can’t tell what exactly is going on. As one CEO said, frustrated by his inability to manage a technical staff, “Sometimes they’re hanging out drinking coffee, other times they’re rushing around — I don’t know what any of it means.”
Never before in history have there been such profound knowledge gaps between managers and the frontline employees who create business value. In earlier times, supervisors often rose from the ranks of workers and therefore were expert in the activities being supervised. But even when that is true today — when a software developer becomes a development manager, or a genetics researcher becomes a research manager — the specialized field in which value creation occurs keeps moving forward. A software developer more than four or five years removed from actual coding is no longer expert. With the exception of a few remarkable individuals, most managers can’t keep up with all the details of advancing technology while also having full-time management responsibilities.
Being a good supervisor traditionally meant encouraging sound business practices and introducing changes to those practices as business conditions changed. Lately, something has gone radically wrong in the second part of that formulation, at least for businesses in fast-changing industries that rely on specialized employees. Now the changes sometimes come from key employees whose work managers don’t completely understand. This wouldn’t be a significant problem if managers and specialized employees always saw eye to eye. But they don’t. The worldviews of these two groups can differ drastically. Consequently, the process of business innovation can resemble a series of battles between people with very different priorities. Such conflict often entails a substantial risk of squandering corporate resources.
The idea of an ongoing struggle between results-oriented managers and technical visionaries is not new. Economist and sociologist Thorstein Veblen noted it in his 1904 book The Theory of Business Enterprise.
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1. T. Veblen, “The Theory of Business Enterprise” (New York: Charles Scribner’s Sons, 1904).
2. J.K. Galbraith, “Economics in Perspective: A Critical History” (Boston: Houghton Mifflin Co., 1987).
3. P. Drucker, “The Age of Discontinuity” (New York: Harper & Row, 1968).
4. For a survey of this work, see T.M. Amabile, M.A. Collins, R. Conti, E. Phillips, M. Picariello, J. Ruscio and D. Whitney, “Creativity in Context: Update to the Social Psychology of Creativity” (Boulder, Colorado: Westview Press, 1996).
5. For a review of this literature, see R.D. Austin, “Measuring and Managing Performance in Organizations” (New York: Dorset House, 1996).
6. R. Florida, “The Rise of the Creative Class: And How It’s Transforming Work, Leisure, Community and Everyday Life” (New York: Perseus, 2002).
7. M.A. Hiltzik, “Dealers of Lightning: Xerox PARC and the Dawn of the Computer Age” (New York: HarperCollins, 1999), 263-264.
8. J.C.R. Licklider and R.W. Taylor, “The Computer as a Communication Device,” Science and Technology (April 1968): 21-31.
9. “... there’s no way of properly telling people [like the people at Xerox PARC] what to do on a day-by-day basis. What I tried to do is hire people based on the quality of their nervous systems and then turn them loose.” Authors’ interview with R.W. Taylor, April 2001.
10. Hiltzik, “Dealers of Lightning,” 159.
11. C. Hawn, “If He’s So Smart ... Steve Jobs, Apple, and the Limits of Innovation,” Fast Company 78 (January 2004): 68-75.
12. R.D. Austin and R.L. Nolan, “On Identifying and Tracking the Next ‘Killer App,’” working paper 05-027, Harvard Business School, Cambridge, Massachusetts, May 2004; and R.D. Austin and L. Devin, “Artful Making: What Managers Need to Know About How Artists Work” (Upper Saddle River, New Jersey: Financial Times Prentice Hall, 2003).
13. C.M. Christensen, “The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail” (Boston: Harvard Business School Press, 1997).
14. R.D. Austin, “Novell: Open Source Software Strategy,” Harvard Business School case no. 605-009 (Boston: Harvard Business School Publishing, 2005).
15. R.D. Austin, R.L. Nolan and M.J. Cotteleer, “Cisco Systems, Inc.: Implementing ERP,” Harvard Business School case no. 699-022 (Boston: Harvard Business School Publishing, 1998).
16. D. Leonard and W. Swap, “When Sparks Fly: Igniting Creativity in Groups” (Boston: Harvard Business School Press, 1999).
i. In 2005, for example, CNN listed the Internet as the No. 1 nonmedical invention since 1980, according to a panel of technology leaders assembled by the Lemelson-MIT Program. See “Top 25: Innovations,” June 19, 2005, www.cnn.com/2005/TECH/01/03/cnn25.top25.innovations.