Star Performers and Commodity Developers

An article by the management guru, Peter F. Drucker, published in Harvard Business Review in 1988 had clues to what new organizations may look like after 20 years. He talked about the end of departmental boundaries and emergence of cross functional teams to perform a task. He warned about the disappearance of the whole layers of management whose main function is to serve as relays. In year 2008 we can see that the middle management has not disappeared. In typical IT services companies it goes by various names such as resource managers, people managers or business unit managers. However Peter F. Drucker would be proven right perhaps one or two decades later because IBM is working on a new project that will automate the management of its IT staff as the Business Week reports in an article on a book titled The Numerati by Stephen Baker.

IBM is building mathematical models for their knowledge workers. These models will take the skills and experience of their knowledge workers and then predict what is best way to deploy them. But that is not all. These models will also keep track of a knowledge workers’ social networks in the company, their eating habits and commuting patterns. All a manager would need is to input skills and budget in the computer and the model will suggest a team that will have the best chances of working together smoothly. Let’s assume that the suggested team does not fit the available budget then the system will suggest an alternative team where with a small amount of training similar results could be achieved.

Another interesting possibility that this model will offer is the optimization of the utilization of knowledge workers while making a distinction among star performers and commodity workers. The model would take into account that star performers would get bored easily and it will treat them gently because they can earn more profits for the company in short bursts of interesting work. The model would make sure that the commodity workers work up to 100% of their time since they make little profit for the company. If the Business Week article is to be believed then such indistinguishable workers are going to be found in India or Uruguay.

While such development might seem scary, finally the knowledge workers will have the power to know their worth because the model will be able to crunch all the data about a knowledge worker and display a NASDAQ like number that will be the his/her worth. This is a reason for middle managers to be happy about because they can finally abolish illogical yearly appraisal systems. At last middle managers will be able to attach some logical explanations to the salary hike of a knowledge worker.

Remember that about 20 years ago Peter F. Drucker predicted the death of middle management in the new organization. With sophisticated models in place, the new organization will be able to automate middle management tasks such as appraisals, team formation, skill matching and wage hikes. If you are not likely to get retired in next twenty years in IBM then it will make more sense for you to become a star performer specialist than a commodity worker or a middle manager. Other IT companies might follow the similar trend where the middle management would become redundant.

Comments (2)

  1. Shrikant Vashishtha - Reply

    September 1, 2008 at 6:25 pm

    I agree that the kind of mechanical work middle managers do these days can be automated in someway. At the end of day they do the same thing, for example - looking at skillsets and finding out the best match. However, in today's world, the most conspicuous problem is people management. Many of the times, team fail to deliver not because of lack of domain expertise but because of human behavior issues. From my experience, I have realized that every human and his/her problems are unique. They need to be understood in their entirity and should/can not be termed as generalized expressions. That's why the role pf people-manager is so important but mis-interpreted. In the context of dealing with human issues and the need of middle management, I don't think machines can ever replace human psyche and intelligence in dealing with these tricky issues. IBM can get better in dealing with trivial human issues and can reduce their corresponding middle-management manpower. But for dealing with human behavior issues, there will always be need of good people-managers.

  2. [...] originally published in Harvard Business Review in 1988. It inspired me to write a new blog on Xebia blog [...]

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