May 27th, 2020 - Alex Usher
A few years ago, I was doing some work at a community college in Western Canada and interviewing employers about how they viewed the college and its graduates. One theme that kept coming up was the idea that while they thought graduates had great technical skills, they urgently needed more “critical thinking skills”. I finally heard this one too many times and I pushed a group of them to explain what they meant by this. By and large, what they seemed to mean was something close to what is meant in the military by “commander’s intent”: they thought new employees should have a better sense of what to do when the boss wasn’t around (or, more loosely, they wanted fewer 23 year-olds hanging around their doors asking for instructions).

Reasonable, I guess. But, I asked them: was this a new thing? Were they saying that the college had got worse at this over the past few years? Or had the nature of work changed?   
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There was quite a long silence. It was as if this question had not really occurred to them. Until someone finally said: “The work didn’t change, but the workplace did. We (that is, employers) got rid of a lot of the line managers and middle managers that used to teach them this stuff.” (What this person did not say is that they proceeded to blame the education system for not filling the gap).

For the past 25 years or so – ever since Michael Hammer wrote  Re-engineering the Corporation  – we have tended to think of managers as so much deadweight within an organization and tried wherever possible to “de-layer” them out of existence, and thereby create leaner, meaner processes. But what was missed in this understanding of the role of line and middle managers was that production was only one of their functions. Another, equally important one, was on-boarding new employees and ensuring they got whatever exposure they needed to the organization’s stores of tacit knowledge – that is, the practical action-oriented knowledge based on practice. At least some of the tacit knowledge required to function in any organizational setting requires a knowledge  of  that organization – it cannot be taught outside the organization, because that tacit knowledge is fundamentally social, and its transmission requires co-operation, trust, and sharing. And line managers, precisely because they know how stuff actually gets done, are the ones who can explain to people how this gets done.

(One is reminded of the excellent Henry Mintzberg phrase: “ Delayering can be defined as the process by which  people  who barely  know  what's  going on  get rid of  those  who do” ).

Now, smarter companies –  including, famously, Google  - realized that killing off managers was a bad idea and that  good  managers were key to performance.  But even where that didn’t happen, tacit knowledge did not completely die as a result of delayering. It survived precisely because of its social nature. But now, we see this knowledge under assault from a different direction: that is, the pandemic-driven fad of getting rid of offices and replacing it with universal work-from-home, lead by companies like  Shopify  and  Facebook . The cost-cutting benefits of this are obvious: lower real-estate costs, and in Facebook’s case a decline in pay rates as well as pro-rating salaries of employees in non-Silicon Valley locations. (Though as this  story from Switzerland shows , governments and judiciaries may penalize corporate attempts to download rental costs onto individuals). And I suppose working from home in teams hasn’t gone too badly for some companies so far. But it’s still a short-sighted move: teams are effective because they are working on a stock of social networks and tacit knowledge gained from years of working together. As individuals peel away and new employees are introduced into the matrix, the efficacy of teams will decline because they don’t have the same ways of building up trust and co-operation. 

Twenty years ago, John Seely Brown and Paul Duguid wrote their truly excellent  T he Social Life of Information , which any executive wanting to shift to work at home ought to read before making a decision. They noted that when an office undergoes a major change (such as making everyone work from home) bosses lose little in terms of status and security, while “ others lower in the pecking order, where authority and control are far more tenuous, may find they lose a good deal more. Middle management, one of the most insecure points in any organization, may find managing increasingly difficult.”  Their conclusion was that “ in order for people to be able to work alone, technology may have to reinforce [workers’] access to social networks. The home worker, from this perspective, resembles not the frontier pioneer, striking out alone and renouncing society, but more a deep-sea diver. The deeper a diver works alone beneath the ocean, the more sturdy the connections to the surface have to be.

Now, I come at this whole issue from the perspective of post-secondary education and the students it graduates. If the experience of the last decade, coming into offices with ever-reduced amounts of support for tacit learning, was a sub-optimal and disheartening experience, then the coming age of work from home is going to be a nightmare. Mentoring, networking and social learning are going to be very different and almost certainly less rewarding and valuable experiences, in exactly the same way remote teaching lags its face-to-face equivalent. It’s going to be terrible for them. But in the longer term, it will be just as terrible for the companies involved because their productivity and effectiveness and above all their capacity for innovation rests entirely on the quality of its employees and their teamwork. 

To cut a long story short: we killed middle management in the recessions of the 90s and 00s. We seem to be intent on killing offices in the pandemic. We are killing off all the sources of tacit knowledge transfer that actually makes businesses function. In the same way that offshoring manufacturing proved to be self-defeating because of the way it separated management and design functions from the process of actually making things, working from home will erode the only true source of competitive advantage that knowledge-intensive companies possess: and that is the trust, co-operation and sharing that is the hallmark of great teams. 

We need management to be better, not thinner. And we need common workspaces to encourage teams and innovation. These are two pretty simple and obvious rules for a better economy. Let's try not screw this up.