What Will Management Look Like in the Next 100 Years?

As the era of “unprecedented times” refuses to end, many of us have become accustomed to an almost exclusive focus on the here and now. Recent years have delivered a nonstop crash course in putting out fires as we contend with simultaneous social, environmental, health, and economic crises (not to mention the ordinary frustrations and challenges of everyday life).

In an unpredictable world, a bit of tunnel vision is only natural. But at the same time, it’s still critical to zoom out and consider the bigger picture. With Harvard Business Review celebrating its 100-year anniversary this fall, we wanted to better understand how the practice of management has transformed over the past 100 years — and how it might change in the next 100. And so we asked a diverse group of researchers from around the world the following question: What management practice from the past 100 years will not — or should not — be continued in the next 100? Their edited responses follow.

[ ~ ] Guiding Principles of Management

Managing for Fluid Organizations

Sut I Wong is a department chair and a professor of communication and leadership at BI Norwegian Business School.

The fourth industrial revolution — defined by disruptive growth in blockchain technology, robotics, artificial intelligence, high-performance computing, and other core digital capabilities — is fundamentally transforming how organizations operate. New tools are enabling increasingly decentralized, autonomous, and boundaryless business relationships, including labor models such as crowdsourcing, on-demand gig work, decentralized autonomous organizations (DAOs), and other forms of democratized and participative decision-making. What does this mean for management?

Nearly a decade ago, management scholar Rita Gunther McGrath identified three eras of management. In the execution era, managers took a command-and-control approach. The second era emphasized expertise. McGrath argued that this era would ultimately make way for one of empathy, in which work is centered around value creation conducted through networks and collaboration between machines and humans rather than through rigid structures and relationships.

Although McGrath’s framework predated the concept of the fourth industrial revolution, the development of new technologies has led to exactly the kind of empathetic management practices she envisioned. With the proliferation of digital tools enabling increasingly dynamic organizational structures, full-time employees are joined by gig workers, crowdsourced workers, and community members, necessitating a new approach to management and decision-making. Practices tailored to a static corporate structure may have been effective in the era of expertise, but they are unlikely to apply in the tech-enabled empathy era of the future. Instead, we need to rethink the rigid management practices of the past and develop, test, and iterate on practices better suited to value-driven fluid organizations and a rapidly changing world.

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From the Art of War to the Art of Seduction

Frédéric Fréry is a professor of strategy and innovation management at ESCP Business School.

Price war, target market, chain of command. Why do executives so often sound like generals on the battlefield? A hundred years ago, the distinction between business and the military was far less clear than it is today. As recently as the 1970s, business strategy was often taught by military officers who looked to generals such as Sun Tzu and Carl von Clausewitz for management insights. That made sense, because the businesspeople of the day were almost exclusively veterans, for whom it was only natural to apply wartime experiences to business endeavors.

But the analogy has become less and less relevant. After all, the goal of business is not to annihilate competitors — it’s to attract customers. Business is not about conquering a territory, subjugating its people, and capturing its resources; it is about understanding the needs and desires of customers and delivering a product they choose to buy of their own free will. Modern management is as much about persuasion as it is about command. So rather than endlessly study the art of war, managers in the next hundred years might look to master the art of seduction.

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A Decentralized Approach to Global Expansion

Lele Sang is a global fellow at the Wharton School of the University of Pennsylvania.

In the past, multinational corporations often took a highly centralized approach to managing their overseas divisions, developing a single global strategy and asking each region to adopt it essentially wholesale. That often led to impressive economies of scale, low costs, and other efficiencies — but it’s no longer tenable to ignore the unique characteristics of individual markets.

For example, the Chinese market operates orders of magnitude faster than many more-mature markets do. New competitors can become major threats overnight; new consumption habits, such as digital payments and livestreamed shopping, can take hold seemingly without warning; and new policies and regulations can rapidly impact business. Succeeding in this environment requires fast decision-making and customized solutions. Relying on standardized global strategies won’t work.

Moreover, asking regional managers to adhere to global strategies that may or may not make sense in a local context can be extremely demoralizing to on-the-ground teams. In my research I’ve seen time and again that limiting local employees’ autonomy is a recipe for dissatisfaction, disengagement, and turnover.

To understand the benefits of decentralization, I interviewed executives at Sequoia Capital, which has made such a shift. When Sequoia first expanded overseas into the Israeli market, it employed a traditional, centralized strategy that ultimately led to failure. But it learned from its mistake and took a radically different tack when entering the Chinese market several years later. Sequoia entrusted its China team with developing its own strategies and making its own investment decisions, with little interference from headquarters. The company was united by shared values, culture, and financial interests, and of course it had some systems in place to monitor and coordinate international operations. But gaining traction in China would have been impossible without its fundamentally decentralized approach.

[ ~ ] Tactical Management Policies

A More Proactive Approach to Retention

Rachel Spivey is the head of Google’s Stay and Thrive team.

According to exit interview data compiled by my team in 2021, 67% of employees leaving Google reported that their managers made no attempt to retain them before they gave notice.

Despite the well-known costs associated with turnover, it’s all too common for companies to let employees walk away without making any effort to persuade them to stay — but this archaic mindset has no place in the next hundred years. Indeed, Google recently began to explicitly acknowledge the myriad benefits of proactively retaining employees, from increased engagement and improved employee performance to a more diverse workforce, and we have transformed our approach to management accordingly.

Our new philosophy has multiple components. First, managers must adopt a mindset that prioritizes retaining the talent they worked so hard to recruit. That means paying attention not only to performance but also to factors that could fuel attrition. Second, retention-focused managers must work to develop and improve business processes designed to keep employees engaged. And third, they should make a concerted effort to understand the distinct factors that motivate each employee. That involves, among other things, determining what kinds of recognition matter most to individual employees, what career aspirations drive them, and which benefits are most important to them.

Responsibility for retaining employees doesn’t rest solely on managers’ shoulders, though. Senior leaders and HR teams must not only provide managers with the necessary tools but also empower them to use those resources to support their teams in whatever ways will be most impactful. An organization might offer internal career-growth support, retention bonuses, or customized leave options, for example, but those perks will boost retention only if managers are equipped to leverage them. In the end, it’s all about fostering a direct, transparent, and empathetic approach to management, where engagement and retention are prioritized just as much as performance is.

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Flexible Work Is Here to Stay

Ashley Whillans is an assistant professor in the negotiation, organizations, and markets unit at Harvard Business School.

The industrial revolution made it standard practice for workers to commute to a factory, work for eight or more hours, and commute home. This pattern has since become firmly ingrained in working culture — before being completely disrupted by the Covid-19 pandemic. As a time and happiness researcher, I firmly believe that over the next hundred years, the old, rigid assumptions around how, when, and where we work must be replaced with a much more flexible approach.

There are countless arguments for flexibility. Studies have shown that flexible work arrangements can decrease stress, save time, and reduce carbon emissions. Moreover, my ongoing research has found that one of the top three predictors of employee engagement is the amount of control people have over their time. Many employees today care more about flexibility, meaning, and personal empowerment than they do about even such important factors as fair pay, good managers, and psychological safety.

Of course, flexible work arrangements work only if managed carefully and intentionally. Hybrid arrangements can exacerbate existing problems such as long hours, always-on work cultures, and gender inequality (because women are more likely than men to take on unpaid labor in the home). Many organizations have also found the shift to remote work to be a perfect example of Parkinson’s law, with work expanding to fill the time previously spent commuting. According to one global study, the time spent in meetings has increased by an average of more than 250% since February 2020, creating higher levels of stress, unhappiness, and burnout among office-optional workers.

To address these challenges, leaders must cultivate a “time smart” approach, helping their teams to become more deliberate about when and where they work and developing best practices to guide flexible work policies. Most important, they must be intentional and proactive about building flexible work systems. The days of mandatory in-office, 9-to-5, five-days-a-week are long gone. It’s up to the leaders of the future to invent a better way of working — wherever and whenever that may be.

[ ~ ] The Role of Management in Society

A More Cooperative Capitalism

Akie Iriyama is a professor of strategy and organization at Waseda University Business School.

Much of management has long centered on trade-offs among stakeholders. In what’s been dubbed shareholder capitalism, firms raise funds from equity investors, whose interests often diverge substantially from those of other stakeholders, leading to misaligned incentives for customers, shareholders, and employees. For instance, customer needs might drive companies to invest in R&D, but shareholders might push them to increase dividends, thus pulling managers in differing directions. That makes it hard to maintain a consistent strategy and support community interests.

In the coming 100 years, the shareholder equity system is likely to become a lot less relevant. Much has been written about the shift to stakeholder capitalism in general, but specifically, I believe we will see the proliferation of a co-op–based model of doing business. Instead of relying on external investors, co-ops are funded by customers in the community, meaning that the interests of customers and investors are aligned. The system is already common in many Scandinavian countries and has become widespread in Japan, where I serve as a director of CO-OP Sapporo (the largest co-op in Hokkaido, with more than $2 billion in revenue). Because the company is funded by the community, its management team is incentivized to focus on making a profit in ways that support Hokkaido’s customers and society. For example, while CO-OP Sapporo’s main business is supermarkets, it started a discounted (but profitable) school-lunch program to support elementary school students in areas with limited budgets. It also developed a mobile grocery store business: Trucks bring a selection of products to small villages with no grocery stores, both creating a new revenue source and providing a lifeline to communities that are underserved by traditional options. In addition, if CO-OP Sapporo earns more than it needs to support operations, it spends the extra funds on social programs such as childcare support and sustainability initiatives.

As technology advances, I expect that various kinds of tech-enabled co-ops will emerge, such as cloud-funded enterprises and DAOs. But regardless of the mechanism, we are seeing a clear trend toward stakeholder alignment — meaning we may be able to abandon management practices that were designed to compromise between various stakeholders’ conflicting interests. Perhaps organizations will no longer need independent, external board members to monitor management activities on behalf of equity shareholders. We might even shift away from shareholder-specific management practices such as paying dividends and offering share buybacks to investors.

We’re just beginning to see the impact of these new organizational structures — but their potential to truly align the interests and incentives of all stakeholders suggests that they could be a win-win-win.

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Beyond Union Busting

Veena Dubal is a professor of law at the University of California Hastings College of the Law.

Historically, business leaders in the United States have categorically opposed sharing power and profits with workers. Companies have used whatever means necessary — from legal injunctions to state militias to armed mercenaries — to crush union activity.

In the wake of the Great Depression, U.S. legislators advanced protections for labor organizing, but that did little to stymie union-busting efforts, as businesses engaged undercover operatives and mounted Red Scare whisper campaigns to undermine workers who were fighting for better wages, shorter hours, and safer working conditions. Today union busting is a behemoth industry, with companies like Amazon and Starbucks spending millions of dollars on consultants, lawyers, and trade associations whose sole expertise lies in subverting employees’ efforts to organize.

This has to change. The United States claims the dubious honor of having both the lowest level of union membership and the highest level of income inequality of all western OECD countries, despite national surveys indicating that U.S. workers across party lines are extremely interested in unionization. C-suite executives must recognize their central role in creating workers’ stagnating wages and limited social mobility and accept labor unions as partners — not obstacles or foes — in the practice of commerce.

Workers in a wide range of industries are already demanding changes related not only to wages and working conditions but also to higher-level business decisions. Employees of Amazon and Google, for example, are seeking worker seats on their company’s board of directors. Unfortunately, union-busting efforts are ongoing — at a Tennessee Volkswagen plant, a South Carolina Boeing plant, and an Alabama Amazon warehouse, to name a few examples — and they demonstrate the deeply ingrained assumption that unions can only ever pose an existential threat to business.

Legal scholars (myself included) have argued for legislative fixes, aware of how contemporary labor laws and policies empower businesses to engage in antiworker campaigns. But businesses can act in the absence of legislation. Many leaders in other parts of the world have long understood the importance of worker representation in healthy capitalist societies. It’s high time for U.S. executives to do the same, viewing employees as partners and co-creators — not fungible overhead.

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Moving Past Scientific Management

Shaista E. Khilji is a professor of human and organizational learning and international affairs at George Washington University and the founder of the Humanizing Initiative, a research institute and consultancy.

Twentieth-century business was defined by scientific management, a theory that prioritized economic efficiency above all else. It led to unprecedented gains in productivity and innovation, and more than a century after the term was coined, the mindset still dominates in settings as varied as Silicon Valley and the U.S. military.

But times are changing. Corporate scandals and a heightened awareness of societal problems such as climate change, structural racism, and socioeconomic inequality — along with a growing expectation that companies should address those problems and contribute positively to society — demonstrate the limitations of scientific management. Toxic practices entrenched in its principles of command-and-control and profit maximization perpetuate inequalities and dehumanize workers. Trends such as the “Great Resignation” and “quiet quitting” demonstrate that employees are no longer willing to put up with them. As employees take control, rethink their relationship with work, and negotiate for better benefits, flexibility, and treatment, leaders must acknowledge the shortcomings of scientific management. They must envision and adopt bold new practices that balance organizations’ need for efficiency with employees’ need for dignity and well-being.

Copyright 2024 Harvard Business School Publishing Corporation. Distributed by The New York Times Syndicate.

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