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.