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 / Autumn 2010 / Issue 60(originally published by Booz & Company)


Theory U and Theory T

The Triumph of Y

We are all Theory Y people now — at least when it comes to delivering or receiving motivational talks — and yet, truth be told, we all have our doubts that the world has caught up with our wisdom about it. It will have already occurred to many people, for example, that quite a few of those companies are great places to work because they are successful, rather than the other way around. (I mean, any old company can offer free haircuts and on-site medical care if it has a market capitalization of US$200 billion and a fast-growing market.) There is also plenty of anecdotal evidence to suggest that firms change their assumptions about human nature after their fortunes change, rather than before. The dot-coms, for example, were all exuberantly convinced about the merits of self-realization in the workplace as long as the market-valuation bubbly was pouring. In the gloomy aftermath, many of the surviving firms transformed themselves with impressive speed into gulag archipelagoes, imposing harsh, X-style discipline on employees who were doing all those jobs that the dot-coms did not outsource.

Perhaps the most disconcerting fact about the world as McGregor left it, however, is that it isn’t at all obvious that self-realization in the workplace has increased in proportion with all the talk about the importance of self-realization in the workplace. On the contrary, one does not have to spend much time in the cubicles these days to appreciate how the jargon of Theory Y has evolved into an Orwellian Newspeak that often serves as cover for the kind of exploitation and manipulation that would make even the most chauvinist X-ist quiver. “You will be self-actualized!” the new humanist organization tells us. “And then you will be ‘counseled out’! We believe in trusting individuals with responsibility, so good luck dealing with your own health, pension, and training needs!”

Unraveling the tangled web woven by the human relations movement in the real world over the past half century would certainly make for an interesting subject of study. But we can get a grip on at least some of the confusion by going back to the source. There is a simple and obvious obscurity in McGregor’s distinction between X and Y — a congenital flaw, perhaps, that sheds light on some of the developments that followed.

In the story as McGregor tells it, and more especially as his successors resell it, the world of X is in a state of conflict. Workers and managers eye one another across the ragged front lines of suspicion and mistrust. The world of Y is in a state of peace. Workers and managers embrace one another as partners on the journey to personal fulfillment. And all that is required to change from one state to the next is making a simple change in one’s assumptions about human nature. But is this really true? Does all conflict dissolve in a higher state of consciousness?

The confusion results from the fact that McGregor himself confounds and overlays his distinction between Theories X and Y with a second, very different distinction. This is a distinction not between theories of human nature, but between theories about the nature of human relations — or, more precisely, about the sources of human conflict. In honor of McGregor, I call them Theory U and Theory T.

Utopian or Tragic?

Theory U, for Utopian, says that conflicts among human beings always originate in misunderstanding. Eliminate the false assumptions that individuals carry around in their heads, the theory says, and a human community will return to the natural state of peace. McGregor — like just about every management guru you’ve ever heard of — is a U-man at heart.

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