Management in the 21st century

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Wednesday, January 02, 2008 at 2328 hrs went from building power plants to engaging in complicated financial shenanigans that quickly led it to ruin.

After materials, labour and capital, what is left? The final factor of production, one that will be the focus of management in the next century, is knowledge. I use this term to include data and information, and embodied (such as skills) as well as disembodied (blueprints) knowledge. Silicon Valley illustrates the importance of knowledge as the next frontier of management. The region has been the centre of crucial innovations in information technology that have made it possible to create global value networks, putting very different demands on managers than the hierarchical corporations that marked the last century. Managing in Silicon Valley is about technology, talent and teams. Factory production is still important, of course, but it has been routinised, outsourced and offshored, leaving at home the tougher issues of managing creativity and collaboration across cultures, languages and time zones. What are some specific areas of importance for managing in a knowledge-based economy? Intellectual property management is one example. Another is information analytics, including techniques of data mining and filtering. Perhaps the most challenging area of all is that of managing collaboration among highly skilled, widely dispersed individuals—the “creative class” that ultimately drives wealth creation. In the old-style corporation, “personnel” evolved into “human resources.” The new name may stick, but it will be more like “human capital” management. In many cases, the concepts and tools of finance will continue to be important, but the best managers will also need to understand the drivers of technology and talent.