Radical Change

I’ve been reading some of Steve Denning’s columns on the Forbes website recently, and it struck me that my reaction to his comments on the need for radical change may be worth looking at more closely. In many ways, I am that particular everyman that business writers talk about when they describe the behavior of “management types” – a generic MBA with 20+ years in corporate life who has never made it more than three layers up into any hierarchy. However, starting three years ago, I also became a generic business educator – almost exactly average for my department, and only slightly higher than that for the instructors who teach my subject, which is management strategy and strategic management. It’s true that my field experience as a manager crosses a number of different sectors (retail, wholesale, energy, communications, service, consulting and education); it’s also true that my institution (Michigan State) is considered one of the top business schools in the country (even if it collectively doesn’t appear to think much of me). Be that as it may, I’m still right in the center of the demographic which Mr. Denning is speaking of and to – and I have some issues with his conclusions…

Let me be clear, up front, that I would not care to directly contradict so learned a scholar, or one of such experience. Mr. Denning has published six books on the subject of management reform, served as a Director of the World Bank and as a Visiting Fellow at Oxford, and worked with both the Smithsonian and the University of Maryland, whereas all I’ve managed to do in academia so far is irritate the faculty at MSU to an entirely unprecedented extent. That said, on reading through some of Mr. Denning’s comments, I can’t help thinking of belled cats, ivory towers, and the difference between my academic experience (remarkable only for the complete lack of respect I have received from my instructors) and my professional experience (in which I was actually quite well regarded). Or to be specific:

First, the exhortation to change focus from making money for the stockholders to delighting the customer is completely correct, as far as it goes, but can’t be accomplished in a traditional company for the very simple reason that the stockholders are the actual owners of the company, and they have contributed (or pooled, depending on your point of view) their capital for the purpose of making money. If the firm is owned by the employees, or operated entirely as a co-op, this might still be possible, but even then it will be tricky for as long as people remain people. This is especially true in the case of those products and services which are considered to be commodities (e.g., for which no product/service differentiation is possible). In a pure low-cost strategy the only way to “delight” a customer is going to be with a lower cost/price structure, which will require lower margins and less benefit to the firm’s owners.

Second, the idea of self-enabling teams can work in professional settings, but becomes less and less practical as we continue down the scale into semi-skilled or unskilled labor; it is also less practical in the case of inexperienced workers or complex task scenarios. I will not weary the reader with the citations that support this contention (it comes up in both Organizational Behavior and Strategy seminars), but the straight answer is that part of the manager’s role has always been direction of the employees, and even workers who can function without direct supervision still need some amount of direction.

Third, the idea that work can be coordinated in ways other than bureaucracy is not new – it’s one of the seminal arguments of Organization Theory, and has been discussed in detail for at least the past sixty or seventy years. No one is going to claim that work can only be controlled through a massive and unresponsive structure, but not all enterprises lend themselves to either short cycles or direct customer feedback.

Which brings me to the real point of this objection: for several years now, I’ve made a point of teaching my students that management is a process, and the key factor is the manager him or her self – in other words, them. The manager’s duty includes making sure that the customer’s needs are met and, wherever possible, exceeded; it includes making sure that his or her people have the resources they need, including room to work without being hounded or micro-managed; and it includes working with the employees in real time, providing continuous direction as well as feedback and control. None of these things demand a traditional – which is to say, hierarchical – structure of management, but saying that these things can not be accomplished through traditional management (or worse yet, that traditional management theory is finished and must be completely ripped out and replaced) is nonsense. In the end, science can make the manager’s job easier; make the objectives easier to understand and the goals easier to achieve; but it can’t replace the practicing manager, and all of the things he or she has learned about the profession of management.

For those of you who didn’t want to wade through that, the TL;DR version is: the key to management is to manage, and for that you need actual managers. Everything else is just a fancy way of drawing up the org charts. I promise that my next post will have less preaching and more snarky humor – but this needed to be said...