Reinventing Management

 By Julian Birkinshaw

What is the future of management? Can management be reinvented to make it more effective as an agent of economic progress and more responsive to the needs of employees?

When you ask children what they want to be when they are older, how many of them say they want to be a manager? I’ve certainly never met one who had such aspirations. In part this is because management is a pretty amorphous concept to a ten-year-old. But it’s also because we adults aren’t exactly singing the praises of the management profession either. For example, in a 2008 Gallup poll on honesty and ethics among workers in 21 different professions, a mere 12 percent of respondents felt business executives had high/very high integrity – an all-time low. With a 37 percent low/very low rating, the executives came in behind lawyers, union leaders, real estate agents, building contractors, and bankers. Moreover, there are no positive role models out there either – the reason why Dilbert is the best-selling business book series of all time, and why Ricky Gervais’ sitcom “The Office” was a big hit, is because they ring true. The Pointy-Haired Boss in Dilbert is a self-centered halfwit; David Brent is entirely lacking in self-awareness. If these are the figures that come into people’s minds when the word “manager” is used, then we have a serious problem on our hands.

What should we do about this? Some observers would like us to get rid of the word manager altogether, favouring terms like leader, coach and entrepreneur. But I believe a more useful approach is to reinvent management – to go back to first principles, and recapture the spirit of what management is all about. We need to help executives figure out the best way to manage, and we need to help employees to get the managers they deserve.

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Management versus leadership


Let’s start with a definition: Management is the act of getting people together to accomplish desired goals and objectives. There is a lot of stuff missing from this definition: no mention of planning, organization, staffing, controlling, or budgeting; no mention of companies or corporations; and absolutely nothing about hierarchy or bureaucracy. And that is precisely the point – management is a social endeavour, which simply involves getting people to come together to achieve goals that they could not achieve on their own. A soccer coach is a manager, as is an orchestra conductor and a Cub Scout leader.

But over the last century, the term management has metamorphosed into something narrower, and more pejorative, than Webster’s Dictionary might suggest. Managers are often seen as low-level bureaucrats who are internally focused, absorbed in operational details, and controlling and coordinating the work of their subordinates.

Why has this change in meaning taken place? One reason is that our way of thinking and talking about management is based on the century-old form of management practiced in large industrial firms. This approach to management was all about improving efficiency, standardisation and quality control, and it was built on such principles as hierarchy, bureaucracy and extrinsic rewards. The trouble is, these objectives are not what drives success in most sectors today – we are much more likely to be concerned about innovation, agility and engagement. And yet we are still for the most part using these industrial-era concepts to shape the way we get work done.

The other reason was that leadership, as a field of study, took off in the 1960s and has continued to rise since then. To make room for leadership, gurus felt compelled to diminish the role of management. For example, John Kotter saw managers as being the ones who plan, budget, organize, and control, while leaders set direction, manage change, and motivate people; and Warren Bennis viewed managers as those who promote efficiency, follow the rules, and accept the status quo, while leaders focus on challenging the rules and promoting effectiveness. By dichoto-mising the work of executives in this way, Kotter, Bennis and others squeezed out the essence of what managers do and basically left them with the boring work that “leaders” don’t want.

Here is my view on the management versus leadership debate. Leadership is a process of social influence: it is concerned with the traits, styles, and behaviours of individuals that causes others to follow them. Management is the act of getting people together to accomplish desired goals. Or to put it really simply, we all need to be leaders and managers. We need to be able to influence others through our ideas, words, and actions. We also need to be able to get work done through others on a day-to-day basis.

The Future of Management?


So what is the future of management? In the face of all these challenges, can management be reinvented to make it more effective as an agent of economic progress and more responsive to the needs of employees?

One school of thought says management cannot be reinvented. For example, Henry Mintzberg argues in his most recent book, Managing, that the nature of managerial work has not changed noticeably in the 40 years he has been studying it. Management is fundamentally about how individuals work together, and the basic laws of social interaction are not susceptible to dramatic change. Indeed, is interesting to note that most of the major innovations in management – the industrialization of R&D, mass production, decentralization, brand management, discounted cash flow – occurred before 1930. If we extend this logic, we could conclude that the evolution of management has more or less run its course, that, to use Francis Fukayama’s famous expression, we’ve reached “the end of history” with regard to management progress.

But we haven’t. Of course there is some validity in arguing that the basic laws of human behaviour are not going to change. But the practice of management is enormously context-dependent, and as the nature of business organizations evolves, so too will management.

Another school of thought says we are on the cusp of inventing an entirely new model of management, largely because of changes made possible by the information technology revolution. For example, Tom Malone has argued that “We are in the early stages of another revolution… that promises to lead to a further transformation in our thinking about control. For the first time in history, technologies allow us to gain the economic benefits of large organizations, without giving up the human benefits of small ones. “This revolution has begun.”

The only trouble with this argument is that we have been here before. All the arguments around decentralization and empowerment have been debated for a very long time. Every generation of management writers, including such luminaries as Peter Drucker, Gary Hamel, Rosabeth Moss Kanter, and Sumantra Ghoshal, has argued for its own version of revolutionary change in the years ahead. And they cannot all be right.

Is there a third way here? Can we identify a useful way forward that avoids the extreme positions of these other two schools of thought? I believe there is. We don’t need to throw up our hands and say management has gone as far as it can, because that would accept the failures of management as something we must just live with. And we don’t need to create a whole new model of management – we have plenty of ideas from the world of theory and insights from the world of practice to guide us.

We simply need to develop a more comprehensive understanding of what management is really about to make better choices. By going back to a basic definition of management – the act of getting people together to accomplish desired goals – we can frame our discussion of the activities and principles of management much more explicitly. And armed with this new understanding, we can help managers make better choices within the universe of known possibilities, rather than suggest they invent something that has never been thought of before.

Here is an example. Why should we assume that all important decisions get made by the people at the top of the organizational hierarchy? Traditionally this was certainly the case, but is it possible that important decisions might be made in less-hierarchical or non-hierar-chical ways? Yes it is. In fact, entire books have been written on the “wisdom of crowds” and “crowdsourcing” techniques for aggregating the views of large numbers of people to make better decisions. So it would be wrong to assume that all decisions made in the future will be made exclusively by those at the top of the hierarchy, and it would be equally wrong to assume that crowdsourcing will entirely replace traditional decision making structures.

The prosaic truth is that it depends – the right model depends on a host of contingencies, including the nature of the decision being made, the company’s size and background, the interests and capabilities of the employees, and so on. The right Management Model for your company is the one based on the most appropriate choices you make within known boundaries; between for example the principle of hierarchy on one hand, and the wisdom of crowds on the other.

Your Management Model is simply the choices you make about how you work – the way you set objectives, motivate your employees, coordinate activities, and make decisions. Most companies have an implicit approach to defining their management model, by simply working with what they have inherited, or what they have seen in other companies. My view is that you should take a more critical look at those implicit choices. Conceptually, this involves four steps:

• Understanding: You need to be explicit about the management principles you are using to run your company. These principles are invisible, and often understood only at a subconscious level, but they drive the day-to-day processes and practices through which management work gets done.
• Evaluating: You need to assess whether your company’s management principles are suited to the business environment in which you are working. There are risks associated with whatever principles you employ, so you need to understand the pros and cons of each one so that you can choose wisely.
• Envisioning: You need to seek out new ways of working, by looking at examples from different industries and from entirely new contexts.
• Experimenting: You need to be prepared to try out these new practices in a low-risk way to see how they work.

Alas, there is no recipe book for re-inventing management. While these steps suggest a process for evaluating and rethinking your management principles, there is only so much you can learn from the mistakes made by troubled companies or from the latest Dilbert cartoon. The right choices depend entirely on the specific circumstances and opportunities facing your company, and on your willingness to experiment with unproven practices.

This article is drawn from the author’s book, Reinventing Management: Smarter Choices for Getting Work Done, Jossey-Bass, 2010.

About the author


Julian Birkinshawis Professor of Strategic and International Management and the Chair of the Strategy and Entrepreneurship group at the London Business School. He has written eleven books, the most recent being “Reinventing Management”. He is regularly quoted in international media outlets, including CNN, BBC, The Economist, the Wall Street Journal, and The Times. He speaks regularly at business conferences in the UK, Europe, North America and Australia. He is a consultant to many large companies, including Novo Nordisk, the Guardian Media Group, UBS, and Rio Tinto. Prof Birkinshaw is co-founder with bestselling author Gary Hamel of the Management Innovation Lab (MLab), a unique partnership between academia and business that is seeking to accele-rate the evolution of management.

 

 

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