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Since the 1980s there’s been a revolution in our understanding of how to manage others. When you think about management you think about the traditional organizational chart. Everything is hierarchical. There’s a boss and the boss tells the sub-bosses what to do and the sub-bosses tell their sub-bosses and those sub-bosses tell the employees. And decisions come from on high and they roll downwards. And that’s what management has meant for decades.
But in the 1980s a company named Toyota, which we’re all familiar with, the car company, opened a new plant in Fremont, California, named NUMMI. Now Toyota had a new management system, what they called the Toyota Production System, which came to be known as “lean management” or “agile management” in the United States. And the idea behind this new kind of factory was kind of radical. What they wanted to do is they wanted to give decision-making authority to whoever was closest to a problem. So if you’re a worker on an assembly line and you see a car rolling past that has some defect, they felt like it should be up to you to stop the assembly line and repair the problem. Whoever is closest to a problem has responsibility and authority to solve that problem. And the reason why they were so into this idea, was that everyone has a unique expertise. The receptionist knows more about greeting people than her boss possibly can. The assembly worker knows more about building doors than some executive sitting in an office. The guy who runs the plant, the foreman, he knows more about scheduling shifts than some executive in Japan who designed the factory in the first place. And how do you tap into that expertise? How do you take advantage of everyone’s unique knowledge? By giving them authority. By giving them power. Saying to them it’s your opportunity but also your obligation to solve the problems you see around you.
Since then this approach to management – lean management and agile methodologies of managing other people – they’ve transformed countless industries. If you go and talk to Disney and Pixar about how they manage animators making films, Ed Catmull, the head of the studios will tell you that he uses the Toyota approach. There are lean hospitals where they tell nurses and orderlies if you see something happening that’s a problem you should solve that problem right away because you’re better qualified to solve that problem in most cases than a doctor is. In schools, we have lean schools. There are lean startups. Within software companies, we see the agile methodology. But at the core, all of these basically say the same thing which is: When you empower people you also enable them to do their best work. That when you tell someone you can solve the problem that you see you actually create an opportunity for them to start solving problems in new ways. That if we want people to be motivated, if we want workers to be innovative then we have to invest in our employees with real authority to take action. And that once you do that people end up paying these huge dividends.