A bureaucratic economy could become a thing of the past, said Rotarian, bond underwriter, pastor and college professor Jeff Godwin, as he spoke to the Buckhannon Rotary Club last week about leading organizations in the "Information Age."
Godwin said that the economy has seen two phases in the past, and a third phase he called the "information age" is now emerging. He said today's bureaucratic economy has been in a transitional stage since 1960, gradually changing and adapting with the age of information.
Godwin earned a Ph.D. in Business Management from Virginia Tech in 1998, his Master's of Business Administration from West Virginia University in 1991, a Master's of Divinity degree from Wesley Theological Seminary in 1988, his Bachelor's of Business Administration degree from the College of William and Mary in 1981, and he is a 1977 graduate of Buckhannon-Upshur High School.
The Inter-Mountain photo by Melissa Toothman
Dr. Jeff Godwin spoke to the Buckhannon Rotary Club last week about the transition from the industrial age into the information age.
Today's leading organizations seem to have adapted to the change, and their adaptations have led to their successes, Godwin said. The concept behind the theory he proposed came to him from "Third Wave," a book by Alvin Toffler, in which he describes three economic paradigms.
The first paradigm would have been the agricultural age and would have started in early history, probably about 10,000 B.C., Godwin said, adding that the agricultural age lasted into the 1800s for the United States. Land was the key resource during the agricultural age.
Family hierarchies, such as kings and monarchies, ruled the class structure for this first paradigm when wars were fought over land in the interest of growing food. Godwin said that Toffler described a transitional period into the industrial age from the 1820s to the 1850s. Godwin said that the bureaucratic model arose out of that transitional period.
"I know today, if you use the term bureaucratic model, people think it has somewhat of a negative connotation," Godwin said. "It has a negative connotation because it means structure and rules and forms and processes that may or may not be efficient.
"At the time, it was a giant leap forward for humanity. You were no longer given a position because you were the monarch's nephew or son. You were given the position in a bureaucracy because you were the best qualified. Now, everybody's treated the same, by the same rules."
Godwin also said the structure of this second paradigm was hierarchical from the "top, down." Decisions were made by those at the top. The key resources for the Industrial Revolution were the physical plant, the equipment and natural resources.
Another transition began around the 1960s. Godwin said the transition into the information age hasn't ended, although Toffler had predicted it would end by 2000.
"We've had the privilege of living in that period of transition, and we know the turbulence, turmoil and uncertainty that comes along with that," Godwin said. "The organizational form of bureaucracy no longer fits very well. We know from biology when things don't fit their environment, they don't do to well."
Key resources also changed, Godwin said, adding that the intelligence contained by workers is becoming the new key resource. Godwin said that the power was held by the manager in the industrial age.
Management in the bureaucratic model consisted of formal rules, specialized tasks, functioning departments, centralized decision-making, narrow spans of control, clear chains of command and employees selected based on their qualifications.
"Normally, managers were managing people that didn't know as much as the manager did," Godwin said. "Well, today it's flipped. In organizations today, managers and leaders can't know all the knowledge that their employees know. In that flip, this no longer works very well."
The organizational forms of today are not as settled as they will eventually be in the future, Godwin said.
"We've seen organizations that do well are the ones that have been able to bring their employees into the structure in a way that they can contribute," said Godwin, adding that the employees participate in the decision making and provide ideas and opinions.
Godwin said it gives the employees empowerment. Decisions are decentralized, and people work in teams. Godwin said that "third-wave" organizations have less "layers in the middle."
"This goes against that bureaucratic, top down, 'I'm in charge,'" Godwin said, adding that the manager's role is primarily to attract and retain knowledgeable workers.
He said that if employees don't feel like they can contribute, they tend to search elsewhere for opportunities.
"If you put them in that culture, they feel like they can participate. They find meaning. They're motivated by that. They're energized by that," Godwin said. "The last thing you want to be is in an environment where you have someone micromanaging."
Godwin said that without change, the best in the industrial age could be out of business within 20 years.
"Even the mightiest organizations are not immune to the changing environments," Godwin said, adding one corporate example.
He said Kodak, a previously thriving photography industry, is now in bankruptcy. He said the company's downfall was a mixture of digital technology and its own resistance to change.
Godwin said Kodak invented the digital camera in 1975. Godwin said that when the inventing engineer proposed his creation to his supervisor, the response was "that's cute, but don't tell anyone about it."
"That's an example of an organization that was living in the second wave, didn't make the transition to the third wave, and they paid a heavy price for it," Godwin said.