MBAs & Management gurus
Exposing the false gods
“I was just following orders”.
“I’m sorry but it’s procedure”.
How often have you hit the brick wall of “policies and procedures” where inhumane and often idiotic decisions are implemented because people have the comfort of following a procedure set by someone, somewhere far from the action.
“What most manager don't understand,” explains Dianne Volek, CEO of InterComm SA and a specialist in organisational psychology and systems, “is that paper-trails and compliance procedures manage insignificant risks, while increasing the probability of a major disaster. This is because a policy takes away the innate sense of personal responsibility and common sense that every employee was once allowed to practice.”
The Nazis committed genocide and enslaved nations based on the Germanic obsession with following orders. I’m sure that Enron, and Lehman Brothers and Citibank all had massive “policies and procedures” departments to stop employees questioning if what they were doing was morally right or even sensible.
"I always wonder who it was in banking who heard the bright idea “I know, let’s lend money to people who don’t have jobs” and thought “wow, what a great niche market!” Dianne quips.
"I am currently formalising 15 years in systems and management, by doing a BSc degree through Unisa," she explains. "A large part of what I am required in study in second year is management theory. Having been in the active workforce a long time, I find it easy to remember the different theorists because at some point I’ve worked for a company that followed that particular school of thought like it was a religion. The corporate survivors changed their religion every 10 years or so. The rest followed their favourite management guru to their corporate death."
DEATH BY PAPER-WORK IN PUBLIC ENTERPRISE
Today public enterprises are all so deep in management theory that they can barely do their jobs. School teachers, busy reading the ever changing syllabus of "outcomes based education" (which is nothing more than an unproven theory), no longer have time to teach their pupils. The whole objective is that pupils teach themselves and each other!
In hospitals, very sick people are not admitted in case they mess up the targets, or don't have medical aid approval for certain life saving procedures. Police monitor their traffic cameras to chase fines, but ignore the taxi with an AK47 pointing out the window.
THE GODS OF MANAGEMENT
Management theory was born, naturally, in America. Its father was Frederick Winslow Taylor, the time-and motion expert who died in 1915 with, legend has it, a stopwatch in his hand. A mechanical engineer, he believed that workers should be made to do small, specialised, repetitive tasks.
It was super-efficient for workers, but unfortunately dire for the humans who happened to fill 100% of the workforce jobs. It turned out that robots were more suited to this mindset, so the humans were quickly replaced. The loss of jobs meant that the production quotas the robots churned out, lay unbought in warehouses until the war. Luckily humans were still needed for war at that time, and people won new types of jobs by their willingness to die for their employer – the government.
The realism of Taylor was quickly countered by the “touchy-feely” school of management theory, who believed that if you treated the workers like family, they might treat you like family back. Think of your own family, and you know how that turned out!
THE MBA - THE ONE GOD
By the seventies if you wished to run a company, it was mandatory to get a masters degree in business administration - an MBA. An MBA was trained in all the previous management theories, and would be able to run anything from a mine to a cosmetics company. In the USA, it would preferably be bestowed by Harvard Business School, where 1,800 students trying not to think too hard about the economic triumphs achieved by such notable alumni as George W. Bush.
“What you get from Harvard Business School,” says the BBC’s “In Business” presenter Peter Day, “is a habit of thought - conventional responses to conventional situations. Harvard teaches very much on a case-study basis, so it is always telling people how to respond to things that happened in the past. No wonder that when something like the credit crunch comes along, huge numbers of highly skilled people are unable to respond to it.”
ARE ALL MBA'S DANGEROUS?
Not at all. Actually some of my best friends are MBAs. What you need to look for is a depth of industry experience, earned preferably before the MBA degree.
I believe that "gap years" are very important in helping future business leaders learn about what it's like to be at the other end of the food chain. You'll learn more about marketing being a waiter or a shop assistant than you ever will in a corner office. Bookkeepers and credit clerks truly understand about cash flow, and only someone who has worked in a government department knows how they operate.
The field your MBA was in before he or she became an expert on business is also an indicator of hidden "principles of work":
The basis of the accounting profession is maximise profit minimise input. This sound incredibly sensible - until you rephrase it as "put in as little as possible, take out as much as possible. This is how you build short term profits and "flipping" a business, but minimising your service levels and doing as little as you can get away with doesn't work in thriving businesses or thriving marriages.
The basis of the marketing profession is "what you say is more important than what you do." Enough said.
The basis of the operations area is "make a better mousetrap and the world will rush to your door". The world is filled with better mousetraps, Sony Betamax video recorders and Firefox. No-one understands about better, they are sold on the packaging and advertising.
The basis for the IT profession is "beta testing rules". Nothing is done right the first time - get the money and and perfect functionality in the next version. Install first, read the manual when it crashes.
BACK TO THE EIGHTIES
Come the eighties, theorists united in their loathing for the comfortable, profitable business culture - job stability, quality health insurance and pension plans looked like commercial death to the Business Re-engineering Consultants who ruled the corporate world at thousands of rands an hour.
In the pursuit of excellence and billable hours, they set off a cult of destruction - reduced in the title of one book of popular management theory ubiquitous in airport bookstores: If it Ain't Broke...Break it! And managers in their millions did exactly that - they broke the economic powerhouse of the world.
THE ART OF WAR ...AGAINST HUMANITY
At its bleakest, this social Darwinian philosophy required managers to rank their employees each year. Some 20 per cent are “A players” who must be handsomely rewarded. The next 70 per cent, the Bs, will be less well paid. The bottom 10 per cent, the Cs, will be fired.
By 2004, a survey of 200 human resource professionals reported that “forced ranking” resulted in lower production, scepticism, damaged morale and reduced collaboration. Logic alone should point out - why should 10 per cent of your workforce become incompetent each year, when they weren’t last year?
Performance reviews, in which staff are yearly taken into a room by their manager and told how they are doing, are increasingly regarded as the least effective way of communicating between boss and worker. By both bosses AND workers.
There is no doubt that efficiency needs to be measured: “KPI [key performance indicators] are powerful tools if used by effective management. But if you have incompetent, ineffective management and policies that only want to give the illusion of progress, they demotivate anyone in the organisation actually trying to DO something. They reward those who chase their short-term targets, no matter what the real consequences. Hence Enron.
LOSING FAITH IN THE FALSE GODS
Management theory transformed itself into a religion wonder where one had faith and didn’t question. These false gods should take at least some responsibility for the current economic downturn. Target-related bonuses generated greed, which generated irresponsibility. Compartmentalisation left bosses with no overall view of what was going on.
In the “olden days”, young people would rise through a company to the top, gaining deep personal knowledge of the business. In the 1970s, however, a new breed of “professional managers” arrived, armed with MBAs. They were trained to manage anything - a charity or a chemical company - but they lacked “domain knowledge”. Managers who knew all about management but nothing else left the incomprehensible science of sub-prime mortgages to the boffins in their labs.
FALL OF THE FALSE PROPHETS
The economy is now exercising its traditional revenge. Consultants, MBA’s and theorists are out of work. Unfortunately I have no doubt that there will be a new set of books on the shelves offering new theories from the experts who can’t do, but are quick to teach. "How to Survive in a recession" will be at your local bookstore soon!
It would be a brave new world without management gobbledegook but - to use a management theorist's phrase - an empowered one, too. Managers would be chosen not for their ability to bandy jargon but for their pragmatism, experience and decisiveness with their staff. They would not be drawn from a pool of professional managers but from among the people who DO the work.
And, once chosen, they would be allowed to do the job or replaced. This brave new economic world would cease to be managed. It would begin to be led.
And is that not where the small business succeeds where the big corporations fail? Because we have grown our businesses from the perspective of people who DO things, we KNOW our clients, we KNOW our products, and we don’t have orders to follow or policies to hide behind.
The future of the world economy might just be relying on the small private enterprises to guide them back to the light. Perhaps I should write a management book about it…
