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Austrian economics is a school of economic thought that focuses on the individual and their actions as the driving force behind economic behavior. This approach stands in contrast to other schools of economic thought, such as Keynesian economics, which focus on the aggregate behavior of the economy.

One key concept in Austrian economics is the idea of subjective value. This means that the value of a good or service is determined by the individual and their subjective preferences, rather than being determined by objective measures such as cost or market demand. This concept is at the heart of the Austrian approach to economics, and it has implications for management as well.

In terms of management, the Austrian approach emphasizes the importance of individual incentives and the role they play in decision making. For example, a manager who understands the concept of subjective value may be more likely to offer employees incentives that are tailored to their individual preferences, rather than using a one-size-fits-all approach. This can lead to more motivated and engaged employees, who are more likely to be productive and contribute to the overall success of the organization.

Another key concept in Austrian economics is the idea of entrepreneurship. This refers to the process of taking risks and making decisions in order to create value in the economy. Entrepreneurs are seen as the driving force behind innovation and economic growth, and they are crucial to the Austrian understanding of how the economy works.

In terms of management, the emphasis on entrepreneurship means that managers should be encouraged to take risks and make bold decisions in order to drive innovation and growth within their organizations. This approach can lead to a more dynamic and adaptable organization, which is better equipped to respond to changes in the market and to seize opportunities as they arise.

Overall, the Austrian approach to economics and management emphasizes the importance of individual incentives and entrepreneurship, and it offers a unique perspective on how the economy and organizations operate. By understanding and applying these concepts, managers can be better equipped to make decisions that drive innovation, growth, and success within their organizations.

I’d forgotten about these posters originally from 1999 until I just overhead somebody say “The Document is Not the Process”.

There are:

• The Document is Not The Project
• Plan with Models, Manage with Markets (repeat)
• I’m sorry, is my work interfering with your management (again)?
• It’s easier to manage 10 people than it is to be managed by 10 people
• Management is the process of deciding which decisions don’t need to be made by consensus
• The 7 Steps to Successful IT Transformation

Download them here

“Is it time to retire the title of manager?”

https://www.strategy-business.com/blog/Is-it-time-to-retire-the-title-of-manager?gko=e5846

I find it amusing that Digital folks can simultaneously pronounce that digital is a complete change in mindset that impacts the entire organisation, while also being upset when people outside the digital department start doing digital without them.

“They are doing it wrong! They don’t get it!”

Maybe. But maybe not.

You can’t use dramatic socio-technical trends to justify your approach but then claim that nobody else is evolving. Where do you think trends come from? Or where they are directed.

“Oh this is just the inevitability digital backlash. We predicted that.”

Yes, didn’t we all.

Once everybody “gets” digital who will we say doesn’t get it? Maybe the ageing digital folks?

It’s time to change the way we think about escalations in preparation for the organisations of the future.

The word “escalation” has an ominous tone. In corporate cultures skewed by managerialism – that is, most organisations – escalations get a reputation as being a risk to your career.

An escalation is often seen as a failure to collaborate, when in reality it’s a mismatch between the level of the organisation where particular decision rights currently sit versus the availability of information required to make those decisions.

As with performance management, the discipline of general management has focused the management of escalations on the people aspects of the process. People are very important, I grant. But when any process too heavily focuses on the people aspects the unintended consequence is that people are identified as the problem, and only people-focused solutions are found.

Performance Management, while ultimately concerned with the performance of the whole organisation, makes us think of yearly performance management processes focused on individuals.  Progress to change to this slow, hard, work that’s against most corporate cultures.  Changeling our approach to escalations will be the same.

Neither escalations nor performance management have much to do with individual behaviours. Performance management is simply about measuring and optimising performance. This might involve people’s behaviours but is actually a bundle of people, process, information, and technology (where those words are defined so broadly as to mean they encompass every possible thing).

The correct way of thinking about an escalation is to think of it as moving a decision-making process or instance of a decision to the appropriate level of the organisation. If something is escalated it couldn’t be resolved where is it was.

Escalation is simply the opposite of delegation. Our organisations are comfortable with the idea of increasing spans of control, and reducing layers of management. This means there are positive delegation flows occurring in all high performaninng organisations.

It makes sense that continuous optimisation of an organisation undergoing change also includes cases where decision processes or instances of decisions need to be escalated.

Automation trends therefore offer a challenge to the general management discipline. Automation means that delegation and escalation are often to or from “robots” rather than people.  This is having a profound effect on management.

In an organisation governed, managed, and executed by people an escalation is a handy escape value. Those executing the work get to shift a decision to the right level of the organisation.

But because managerialism has been people focused it’s become confused about delegation and escalation. If a person has been delegated to and doesn’t make the right decisions it’s considered a failing. Similarly, if a person escalates when they were not supposed to, or doesn’t escalate when they are supposed to this is also considered a failing.

Organisations that a governed by people, managed by people, but in part executed by machines bring the ambiguity about escalation and delegation to a sharp point. If a machine isn’t performing delegated tasks it’s the fault of the delegator. Similarly, if a machine isn’t escalating at the right time it’s the fault of whoever it’s supposed to be escalating to.

Australian regulator ACCC recently came to the reasonable conclusion that when an automated decision process makes multiple incorrect (and in this case illegal) decisions, or omits steps it was legally obligated to perform, the organisation is break the law multiple times. This is as opposed to breaking the law once via the single programming error that caused the multiple illegal actions.

See Tweet: https://twitter.com/matthewdegeorge/status/931256101818966016

“You cannot avoid liability by saying ‘my robot did it’” #ai https://t.co/2y9Ki4v8c2

— Matthew De George (@matthewdegeorge) November 16, 2017

This is profound. It means our understanding of delegations  and escalations needs to change. It’s also why an organisation that is governed by people, managed by robots, and executed by people might actually be a more likely future form than organisations where only the execution is robotic.

As per the battle between general management and architecture, it’s getting close to the cross over point:

Aegon: Make Management Your Business Partner for Successful EA Implementation