'The wave of the future is coming and there's no fighting it.'

Anne Morrow Lindebergh.

We've been through the Industrial Revolution and the Information Revolution. Next up: the Imagination Revolution.

The business
of doing business
will never be the
same again.

AVE you poked your nose outside the boardroom door recently to check the climate?
I find it chilly. Very chilly. Harold Macmillan's 'winds of change'  -  remember them?  -  are gusting at gale force. They've already swept in unprecedented political changes. Now they threaten to blow chaos into your ordered business life.

Your company structure  -  and the way you conduct your business  -  lie directly in the path of destruction. The tornado has turned even old-established, multinational corporations upside down. And inside out.

'You're gonna be all shook up,' as the late and lamented King of Rock 'n Roll, Elvis Presley, might have put it. 

If we trace the history of business, specifically manufacturing, we find that it has evolved through four ages:

  1. The home cottage industry age.
  2. The steam age.
  3. The electricity age.
  4. The information age.

    And now, clamouring in the wings:
     
  5. The imagination age.

What we're about to experience  -  the changes that will wreak havoc with our businesses and our lives  -  started with the Industrial Revolution.

So let's step back to get some historical perspective.

As wise men have said through the ages: 'When you want to understand what is happening today or try to decide what will happen tomorrow look back.'

History has a habit of repeating itself. And it's about to do so again. So let's start at the beginning with ...

ThE Home cottage industry age

Until the Industrial Revolution rocked the agricultural economy of England during the 1700s, only about 10% of the population lived in towns or cities. And only a handful of these urban dwellers engaged in any form of manufacturing. Those who did usually congregated in guilds  -  the fore-runners of today's trade unions  -  to practise their specialised crafts.

Almost everyone else lived in rural areas where, with luck, they harvested just enough food to subsist. Peasant farmers roughly fashioned farming tools and implements from whatever materials they could scrounge. While the men toiled in the fields, women spun cloth for clothing on hand-operated wheels.

Bosses
and
managers
didn't exist.

 

In effect, the peasants were self-employed. They paid lords of the manors a tithe for the use of their land. This usually took the form of a percentage of their crops. The farmers then bartered anything left over for other goods or livestock at local markets. 

That's the way it was until ...

The steam age

Accompanied by a lot of huffing and puffing plus volumes of scalding steam, it roared in to revolutionise the way our ancestors lived and worked.

Not that steam power was a new concept. Boffins had known about it for hundreds of years. In fact, historians record that an Egyptian scientist in Alexandria produced a working model of a steam engine as far back as AD 60. But he and those around him regarded it only as an amusing toy.

Several hundred years later, in 1698, an Englishman, Thomas Savery, patented the first practical steam engine. He designed it to pump drain water out of coal mine pits.

It worked.

Sometimes.

Thomas Newcomen, another Englishman, improved its reliability in 1712 by modifying the design. Then James Watt, the man usually but erroneously credited with its discovery, adapted and refined the steam engine to drive heavy machinery.

The Industrial Revolution had arrived.

Birth of modern management

Its arrival laid the foundation for modern methods of business management. Steam power shunted cottage-based manufacturing out of peasant homes into factories. These were controlled by a new breed of people  -  entrepreneurial capitalists. These shrewd, early wheeler-dealers organised the finances necessary to buy the machines and rent the space that housed them. And they paid peasants a pittance to drive the new steam-belching monsters.

Factories  -  also called sweat shops  -  were the best and most profitable way to bring peasants and machines together, or so the early industrialists claimed.

In an in-depth study, Industrial Revolution: Interpretations and Perspectives, published by the State University of New York, historian Eric Lampard records that 'the first machine age' gave rise to a still firmly entrenched management concept:

The division of labour.

The concept gives management the right to allot a specific job to each worker. For example, if you assign an employee to tighten every third screw as your product moves along the production line, that's what he does.

Nothing more; nothing less.

The one-person one-job syndrome, a major principle of mass-production on which industry has thrived for so long, reduced individuals to nameless cogs. Industrial plants, which each employed thousands of workers, were  - and still are  -  cold and impersonal. The machines forced people to work faster, and with less rest.

At the same time, jobs became more specialised. And more monotonous.

Yet, despite the introduction of machines and long hours, growth in factory productivity in both the United States and Britain was nothing to write home about. It ambled along at a sedate 0,3% to 0,5% a year. Then a trail of sparks heralded ...

THE ELECTRICAL AGE

Scientists and engineers, financed by industrialists, found that they could harness the power of steam to drive turbines, which generated electricity. And because electrical energy was cheaper, cleaner and more efficient than steam power, factory owners disconnected their machines from steam engines and plugged them into dynamos.

The electrification of industry in the 1880s sparked an explosion in the productivity growth rate. It galloped ahead at an average 5% a year until the Great Depression of 1929 brought it to an abrupt stop.

Stanford University economist Paul David says that while the introduction and exploitation of electricity accounted for up to 75% of pre-Depression growth, 'it took the re-engineering and reconceptualisation of manufacturing to make it happen'.

Although mass-production techniques, inspired by the availability of electric power, led to significant drops in the per unit costs of manufactured products, the costs of setting up factories soared.

Machines cost a fortune. They needed expensive new skills to keep them running. Plants grew bigger and became even more impersonal. Industrialists looked to economies of scale to offset the costs of capital investment and turn worthwhile profits.

Tighter controls

To keep per unit costs of products down, manufacturers needed to control inputs, outputs and inventory levels. So they imposed tighter controls. Organisational structures, planned by managers obsessed with efficiency, became more rigid. The little one-function, one-person boxes on work flow charts became more restrictive.

Production-led marketing strategies were integral to this form of carefully planned manufacturing. Huge factories, working around the clock churned out uniform products in rapidly increasing quantities. They had to be sold to realise a worthwhile return on investment. So manufacturers employed slick advertising and high-pressure salesmen to foist everything that came off production lines onto gullible consumers.

As Henry Ford, founder of the Ford Motor Company, reputedly quipped: 'You can have any colour car you like  -  providing it's black.'

And this is how American humourist Stephen Leacock summed up early advertising: 'The science of arresting human intelligence long enough to get money from it.'

In South Africa, little changed in either manufacturing or advertising, although it came under threat during ...

THE INFORMATION AGE

The Second World War played havoc with the entrenched scenario. To boost national morale and imbue citizens with a loyal fighting spirit, governments launched massive communications programmes to disseminate huge quantities of information  -  most of it of doubtful veracity.

And so hostilities gave impetus to the development of means of transmitting information. By-products adapted for peaceful applications included television and computers.

And it didn't stop there.

More electronics information wizardry has been thrust on us in the intervening years. Think of faxes and cellular phones.

These developments, boffins assured us, would lead to the paperless office.

It never materialised.

Instead, computers and fax machines spewed out even more paper-borne information, much of it useless. We began to drown under a deluge of data. There was simply too much to digest.

While we now have everything we want to know  -  and often much more than we need to know  -  at our fingertips, we are so overwhelmed by the sheer mass of facts and statistics that we don't know what to do with them.

Which leads us to ...

THE IMAGINATION AGE

Instant access to up-to-the-minute data is all very well. But unless you can exploit it to your advantage, it becomes nothing more than useless clutter. To exploit information for gain  -  your gain  -  takes imagination.

So how does this effect the way you run your company?

From now on, the intellectual property owned by your business will become its most valuable asset: more valuable that its physical assets  -  buildings, offices, motor vehicles, furniture and fittings, plant and machinery.

The Industrial Revolution is over. Dead. Kaput. Finito.

'Imagination is
more important
than knowledge.'

Albert Einstein.

Why  you manufacture what you manufacture becomes more important than churning out an endless stream of 'me too' products for some amorphous, ill-defined mass -market.

SO COUPLE IMAGINATION WITH ACHIEVING GALAXY
CLASS CUSTOMER DELIGHT TO FIND A WINNING FORMULA

Which means what  in terms of your company?

It means:

  • radically changing the way you do business;
  • destroying your company structure and rebuilding it from top to bottom, and
  • adopting new criteria for staff selection.

It also means ...

JOINING THE IMAGINATION REVOLUTION
 

Previous   Next

  Authors Note
    Introduction: Prepare Yourself for the New Business Order
     
1. The Evolution of Change
     
2. Give your Company a 'New Look' Profile
     
3. Run Your Own Show
     
4. Lead, Don't Manage
     
5. Cross Train Yourself
     
6. Become a Self-Contained Profit Centre
     
7. Think Network
     
8. Benchmark Yourself
     
9._ Have Heart
     
  Return to FunZone!