Since the 1890s, there have been, arguably, only a few major management breakthroughs, along with several minor ones. What will be the next big advancement in management that can differentiate leading organizations from the also-rans that lag behind them? I suggest one possibility at the conclusion of this article.

The History of Management Breakthroughs

When talking about innovative methodologies that can provide an organization with a competitive edge, how does one distinguish between major and minor management breakthroughs? The answer is largely subjective, so my list is likely a blend of the two:

Frederick Winslow Taylor's Scientific Management: In the 1890s, Taylor - the luminary of industrial engineers - pioneered methods to organize work systematically. His techniques helped make Henry Ford a wealthy man. Ford applied Taylor's methods at his automobile company, dividing labor into specialized skill sets in a sequential production line and setting stopwatch measured time standards as target goals to monitor employee production rates. During the same period, Alexander Hamilton Church, an English accountant, designed a method of measuring cost accounting variances to measure the favorable and unfavorable cost impact of faster or slower production speeds compared to the expected standard cost.

Alfred P. Sloan's Customer Segmentation: Henry Ford's pursuit of a low unit cost for a single type of automobile (i.e., the Model T) was countered with an idea championed by Alfred P. Sloan, who became president of General Motors in 1923. Sloan advocated expanding product diversity by style, quality and performance. The idea was to provide increasingly more expensive features in car models as a staircase for higher-income consumers to climb - starting with the Chevrolet and ultimately peaking with the Cadillac. This idea revealed the power of branding for retaining customer loyalty.

Harvard Business School's Alfred D. Chandler Jr.'s Organizational Structure: In 1962, Professor Chandler's groundbreaking book, Strategy and Structure, concluded that one factor that could explain why some large companies fail while others succeed involved how those companies learn about their customers and how well they understand the boundaries of their competencies in order to focus their strengths.