The Latest Management Technique

An audience listens enchanted to a wise and brilliant speaker. They leave in a daze, no idea what to do next. (Management by fads)
Nails are hammered in a huge wooden plate. Threads are stretched and wound between them. It doesn’t result in a recognizable picture. Grown-ups play children’s games without pleasure. (Unthinking application of management techniques)

These two belong together, though the first one is the province of empty-headed top people and the second one is the province of lightweights one or two levels lower.

Of course, most of these techniques are useful, few are useless. But usually they have a much more limited application than their champions advertise, especially those about leadership and motivation. There are as few recipes for keeping employees happy and productive as there are recipes for marital felicity. Even sensible approaches can be misapplied and become nonsensical. I have seen overhead ratios brought back and the percentage of productive functions increased to the detriment of over-all productivity. The once famous 7-S model of McKinsey was nothing more than a checklist with a gimmick. Again, even simple checklist can be useful if they draw attention to underestimated aspects of organizational health, but applying techniques without real knowledge of the work processes involved leads astray. With knowledge, interest and judgment in place, most new techniques perform. Without knowledge, interest and judgment even proven techniques lead to sham success.

Management literature is replete with reinventing the wheel, but now with a fashionable twist. Even one of the most worthwhile endeavors - applied system dynamics - can lead nowhere when the analysis is too broad or too limited. I saw a system dynamics analysis of the American intervention in Afghanistan that convinced me that the intervention was bound to fail. And what about strategic planning that doesn't show even an inkling of what a stable desirable situation could look like? I have heard brilliant negotiation experts rattling away their precious (at least expensive) teachings without any notion of the factual conditions of the negotiations the audience was involved in.

Enthusiastic proponents of new management techniques are most successful when they interface with critical and seasoned practitioners. That interaction is key to success. But often the prophets are into a conversion game, not a practical improvement game. When a company trading in building materials took over supermarkets for do-it-yourself stuff, they applied rigidly their proven success formula: to go for margin. They eliminated all articles that to them had ridiculous low margins. Within a year they had to sell their acquisition with great loss. They didn't understand that in such shops turn-over speed is a much more important indicator than margin. And they didn't understand that buyers leave when they have to visit several shops to get what they want. One-stop shopping is important for people involved in maintenance and repair and in home improvement.

See new management techniques for what they usually are: a new methodical viewpoint that gives a new and possibly useful view. But without knowledge and judgment of the products, services and activities involved it is just icing without a cake.

And why do I consider this a systemic problem? Because underlying is the decoupling of management from effort and responsibility, from the real world. There is no methodical solution to that problem, only a gross cleansing of all management layers, especially the higher ones. That only happens in Neverland. What happens in reality is bankruptcy in the private sector and what is euphemistically called restructuring in the public sector.

Managing by abstract numbers: the eighth systemic disease of organizations

A Japanese house with many paper walls and  paper ceilings with many layers. It seems designed by a paper-obsessed architect.

Numbers are necessary to keep track of where we are and where we are going. Necessary, but not sufficient. Another simple ingredient is required: the competence to interpret the numbers. Unfortunately, this means direct experience with whatever it is that is measured or counted or registered. It means also to realize which facts are not in these nice numbers.
It is easy to calculate how much money you save when firing workers, but not what the cost may be of lost experience, know-how, of hiring and training and induction of new workers. It is easy to calculate what your turnover has been, but not the value of client satisfaction and dissatisfaction. It is easy to calculate what money you save by automating the response to income phone calls, but not what you lose by losing client
Saving money on execution is often used to increase staff and managerial positions. Boards rather discuss new building projects than upkeep or upgrading of existing facilities. The euro value of stock is based on assumptions, the value of goodwill is a fantasy coming out of accounting conventions. Writing off on property is based in tax and other financial considerations. But the value of any property is zero, unless you have a buyer. And what the buyer will be willing to pay is the umpteenth assumption.
Figures only seem precise. Accountancy is the most esthetic variety of quasi-precision: balances are by definition balanced. Administrators of bankruptcy proceedings are among the most realistic managers.

Many managers strive to a company in which nothing has to be done anymore: the hollow corporation. Everything is contracted out, if possible even the contracting out. What remains is supervision. Supervising things you don’t know and don’t want to know. Production is the first thing that should be eliminated. It produces noise and smell, it takes up space, it needs maintenance and repair, warehouses, transport. Its main drawback is that you need personnel to work there and people are always creating problems. If you can’t avoid having them, you prefer temps, so you can get rid of them the moment they start to have comments, criticisms and, worst of all, suggestions. But the most horrible thing of production is that things may go wrong. Imagine being responsible for that!
Sales is much more difficult to get rid of. But even that can be contracted out. You can limit yourself to creating the condition for sales: marketing. The main drawback of sales compared to marketing is that failure is much more visible and direct.

The only things you can’t get rid of, are finance and legal. Even in the most abstract of worlds, wriggling with money and contracts remains important. Anyway, it is a clean world of board rooms and hotels with only civilized and clean and well-dressed people.
And if you still want something tangible? Build a new headquarters. Of course, it will be much too grand for what you really need. So you rent it out to prestigious firms and events. And you sell shares in it. In the end, everybody invests in everybody else. Till reality kicks in. Preferably as far away as possible.

All this is in government administration as rampant as in business administration.

LIMITS TO MANAGEABILITY - DEADLOCKS, SPIRALS AND FOLLIES

T

error, the first challenge, is society’s deadliest cancer: people destroying people. The second challenge is the gnawing doubt of whether we can improve society at all, whether we can steer it, whether we are at the helm, if there even is a helm. This chapter deals with things running out of hand, getting out of control. This challenge is about political and governmental inability. It is about what happens when we do what we can to steer the boat, but the boat does not respond or responds wildly and unpredictably. This sphinx makes us feel helpless and impotent.

It is easy to feel that we can do nothing to change the world. In ancient times people believed that the gods were in control, and as everyone knows, gods are weird, fickle, easily angered, difficult to placate and impossible to understand. Or people viewed priests, soldiers or the prince as being in command. Princes, like gods, often behave capriciously, and priests and soldiers always bicker among themselves and with princes. Later, princes and tyrants become kings and then bicker with barons and courtiers. Read Antony Jay for an analysis of the present-day successors of these officials. In cities, oligarchies of the rich and powerful called the shots, and members of these oligarchies always bickered at home and abroad.

Today we talk about social forces, the establishment, class struggle, racial tensions or the low intellectual and moral standards of politicians, to explain why the world is not moving more quickly in the right direction. What can a human do? What can a community do? What can a government do? What can humanity do?

We are responsible for the world we make. This position is clear and simple. If we reject that, we are stuck with fatalism, with an attitude of not bothering, not caring, and we believe that the buck, if there is any, stops elsewhere.

Even when we accept the view that those who are at the helm are actually us, it soon becomes painfully clear that this ship that we call society often does not respond to our most forceful prompting. Even if the world is controllable, obviously it is only partially so. Ostensibly there are limits to what we can do, as one version of the Serenity Prayer makes clear: ‘Oh God, give me power to improve what I can, to accept what I cannot, and the wisdom to know the difference.’

Here we will talk about that difference, realizing that at times we may choose to do or not do something that later leaves us no choice. Some developments are like traps in that we may choose to enter, but we cannot leave of our own free will. Often, we are like the sorcerer’s apprentice who knew the spell to make a broom fetch water but did not know the spell to stop it, and nearly flooded everything.

The previous chapter dealt with people being treated in beastly, inhumane ways. This chapter deals with people who are dragged along by processes that they have started but can no longer control. The sorcerer’s apprentice effect crops up wherever we start something that becomes more difficult to stop than to continue. Having more of something becomes easier than having less of the same thing; moving forward becomes easier than moving backward. Often such forward movement is worsened by a self-feeding, accelerating loop.

How Developments Run out of Hand

Since Norbert Wiener, Hal Ashby, Stafford Beer and others, the old art of steering has become the new science of cybernetics. Cybernetics applied to people is called management. Today, since we understand the conditions and dynamics of management, we can pinpoint the conditions of unmanageability. Management or control relies on feedback: results achieved are compared against results expected or desired, and the difference triggers a corrective action. Thus, the pathology of control becomes:

1.    If we do not know what we want, there is no course we can take;

2.    If we cannot take corrective action, whether by lack of capability,

guts or feedback, we will drift along in the dark;

3.    If we overreact, the resulting oscillations will destabilize the sytem;

4.    If we do not register feedback, or even reject feedback, the system

becomes rigid;

5.    If effects do not weaken their causes but instead strengthen them

(feed-forward instead of feedback), things spiral out of hand or

lock themselves in.

The first pathology, that of not knowing what we want, shows itself in persistent differences of opinion. The methodology that is usually employed to deal with this state of affairs is called politics, a mix of advertising and bargaining that usually results in compromises that fall short of what was expected, or even prove to be irrelevant. This shortfall in results leads to still more politics. When the political approach is compared to grand strategies that move toward lofty goals, politics is essentially a muddling through, but surprisingly this process rarely gets stuck. Politics resemble a Brazilian traffic jam: somehow the cars keep crawling.

The second pathology, that of inability to take corrective action, is seldom present in society as a whole, but becomes evident when communications break down, as well as when demoralization and anarchy appear.

The third pathology, that of overreaction, prevails in times of mass hysteria, and in times of anxiety in general. Much overreaction also appears in the dialectics of intellectual fashion. If a particular approach has been overadvertized and has underperformed, critics who propose an inverse approach may suddenly drift into prominence.

The fourth and fifth pathologies are probably the most persistent and pernicious. Barbara Tuchman explores the fourth pathology, that of rigidity, in her March of Folly. She analyzes beautifully the course and effects of this tragic condition, but does not analyze its origins. Societies indulge in stark folly either when they do not register feedback, or they reject that feedback. But how and why does this folly occur?

The fifth pathology may show itself in either a feed-forward cycle that snowballs or spirals out, accelerating or escalating like a chain reaction, toward explosion and collapse; or a feed-forward cycle that works like a dark hole, spiraling inward toward implosion and deadlock. Very often, spirals and deadlocks are two sides of the same coin. Armament spirals accompany disarmament deadlocks; deadlocks between decision-makers accompany spiraling costs.

The challenge of unmanageability is ultimately the challenge of protecting and repairing social, economic and political feedback systems. This challenge also involves the wisdom of timing. The acute sense of things getting out of hand or having gone out of hand is called ‘crisis’. Therefore, this challenge also includes dealing with crises: preventing a crisis if prevention is still possible, or finding a way out of a crisis that already exists.

Many people believe that we may prevent crises by forecasting the future. This belief assumes that political ‘business as usual’ will continue. Some criticized Meadows’ report to the Club of Rome, The Limits to Growth, for not foreseeing the effects of its own publication. Maybe these same people also point out that certain traffic signs that warn of the danger of flying off the road at a dangerous curve actually prevent this danger from happening, and therefore are incorrect. Scenarios and futurology are not intended to predict the future, but to show probable future effects of present circumstances. World modeling offers a new type of feedback; it enhances control and represses crises. The real question is not which future will arrive, but how any future is created and what factors determine which future will arrive.

Anxiety over lack of control is not new. Prophets of doom satisfy deep human urges and therefore do a steady business. They play Victim, Prosecutor and Savior simultaneously. The Cassandra complex is a firm step toward the Messiah complex.

Too much talk of The End of the World has discredited prophecies of doom. Yet there may be smaller doomsdays ahead, days that are bad enough to warrant a look through the windshield and a hand on the steering wheel, even if we cannot take our foot from the accelerator. If we are on a collision course or a self-destruction course, we need to be warned of this.

What type of crises do we want to avoid? First are the ancient fearful four: war, revolution, famine and pestilence. Secondly, we wish to avoid their forerunners: financial crises, economic crises, social crises, political crises. How to do that?

From: The Ten Global Challenges: How People Make the World. An Essay on Politics, Civilization and Humanity. Ordering the book