We are in a transition from Industrial Economy to Knowledge Economy

Does it means Industrial Economy is no longer exist? Nope, it will continue to be there. The only different is, we have gone passed the day we produce for the sake of producing. To stay alive in the competitive business environment, we must now set our focus on producing value. The company who can produce more value win. This is even obvious in software industry, where duplication is cheap. Basically whoever know how to perform a “copy & paste” function in their computer know how to reproduce something.

This brings to the transformation the title is talking about, we can no longer live in the industrial economy mind-set to be successful in software industry. It’s about producing value. Hence, adopting Scientific Management method from Industrial Economy does not make sense anymore.

The key principle behind Scientific Management is Efficiency! Technical explanation of Efficiency is “The ratio of the useful work performed by a machine or in a process to the total energy expended or heat taken in”. Yes, the focus is to product fast with good quality. 

It is nothing wrong with this approach, however in Software industry, produce more line of code does not yield anything if at the end of the day the software could not produce any value. The situation made worst with other Scientific Management guide:

• Establish clear rules on how work was to be performed. Reduce “rule of thumb”
• Select, train to develop workers
• Cooperate with workers to insure work is consistent with rules identified
• Equal division of work & responsibility between management & workers

Basically, Scientific Management promote specialization. The responsibility of decision making is delegate to the elite person, a.k.a Manager. While the worker just perform the task and complete the plan. The same method has been applied to Software Industry where you can see specialized role or title, i.e. programmer, business analyst, tester, architect and etc. You have the line manager or project manager to perform all the planning and decision making.

Some may ask, what’s wrong with this approach?

Well, Software Industry belongs to Knowledge Industry, where the minimum entry criteria are highly educated worker. Hence, applying Scientific Management does not emphasis learning. In the knowledge economy, the only way to maximize the investment on people is to amplify their learning. To increase their knowledge so they could produce more value.