This annotated version of The Human Side of Enterprise has been wonderfully brought back into the sunshine and placed in the modern setting by Joel Cutcher-Gershenfeld, Professor of Social Policy and Management at Brandeis University and formerly Senior Research Scientist at MIT's Sloan School of Management. I would also like to add that I am incredibly proud Let me start by stating that my own book Sense and Respond: The Journey to Customer Purpose has been cited in this updated classic as providing modern evidence of the Theory Y organisation in action.
The Human Side of Enterprise is a forgotten landmark in the history of management research and thinking, which is very surprising considering it clearly provides an explanation for the pitiful state we find within many organisations today. Maybe it has been ignored because it shines a clear light on the fallacious assumptions many organisational designers and developers have about human beings. Maybe it has been ignored because people in influential positions feel threatened by the perceived loss of power and control any change of assumption might bring.
Whatever the reason, we are left feeling that the greatest waste in organisations today is the waste in human potential, and this, McGregor points out, is a result of the wrong-headed and unscientific assumptions management has about encouraging the best from people.
McGregor's system and research demonstrates clearly that systems designed to control people certainly work, but we must ask, what type of control and at what cost? The cost to productivity, innovation, enterprise, society and human fulfilment?
"The greatest waste in organisations today is the waste in human potential."
It is no mistake the book is called The Human Side of Enterprise and not The Human Side of THE Enterprise. We are talking here about the enterprise of humans as a natural instinct, not the organisational enterprise which is an unnatural construct.
Traditional management systems are an invention to maintain control over power and resources in an effort to maintain compliance. This creates organisations where everything is forbidden unless permitted and limits the enterprise and potential of human beings.
Traditional organisations trying to maintain control narrow focus and close down possibilities, hence the need for extrinsic rewards and punishments to make people do what they would not otherwise do. However, enabling the human side of enterprise opens possibilities by designing organisations around assumptions that people will respond to purpose, autonomy and intrinsic rewards because the ends and means are rewards in themselves.
Creating an enterprise where everything is permitted unless forbidden encourages human enterprise and creates healthier societies.
If you would like some advice on your organisation's design and how to open up the potential of your staff, please feel free to get in touch.