So when managers evaluate a business approach or technique, they should ask these questions: Does the approach have a track record for performance and measurable outcomes in similar companies facing similar challenges? Does it address problems or opportunities that are high priorities for our company? Are the changes it would require within our company’s capabilities and resources? Yes answers to these questions suggest an approach likely to pay off and endure.
Source: Reprinted by permission of Harvard Business Review. From ‘Spotting Management Fads’ by Danny Miller and Jon Hartwick, 1 October 2002. Copyright © 2002 by the Harvard Business School Publishing Corporation; all rights reserved.
He flung himself from the room, flung himself upon his horse, and rode madly off in all directions.
Stephen Leacock
Musings on Management
by Henry Mintzberg
Management is a curious phenomenon. It is generously paid, enormously influential, and significantly devoid of common sense. At least, the hype about management lacks common sense, as does too much of the practice …
These concerns had been building in my mind for years when a particular event caused them to gel. I had been asked to give a speech at the World Economic Forum in Davos, Switzerland, in 1995; so I visited managing director Maria Cattaui in her office near Geneva to discuss possible topics. I first proposed a presentation on government and suggested she allot me the better part of an hour to cover the topic properly. ‘I would really prefer you do something on management,’ she replied. ‘And besides, many chief executives tend to have an attention span of about 15 minutes.’
I went home, thought about this, and decided to respond in kind … I listed ten points on one sheet of paper under the label ‘Musings on Management’ and faxed it to Maria Cattaui. Fortunately, she was open-minded – indeed, enthusiastic. So that was what I presented at Davos: ten points, by then reduced at her request to ten minutes, one musing on management per minute.
The Harvard Business Review being even more open-minded, I can now develop my musings at somewhat greater length, except the last one …
1. Organizations don’t have tops and bottoms. These are just misguided metaphors. What organizations really have are the outer people, connected to the world, and the inner ones, disconnected from it, as well as many so-called middle managers, who are desperately trying to connect the inner and outer people to each other.
The sooner we stop talking about top management (nobody dares to say bottom management), the better off we shall be. After all, organizations are spread out geographically, so that even if the chief executive sits 100 stories up in New York, he or she is not nearly as high as a lowly clerk on the ground floor in Denver.
The only thing a chief executive sits atop is an organization chart. And all that silly document does is demonstrate how mesmerized we are with the abstraction called management. The next time you look at one of these charts, cover the name of the organization and try to figure out what it actually does for a living. This most prominent of all corporate artifacts never gets down to real products and real services, let alone the people who deal with them every day. It’s as if the organization exists for the management.
Try this metaphor. Picture the organization as a circle. In the middle is the central management. And around the outer edges are those people who develop, produce, and deliver the products and services – the people with the knowledge of the daily operations. The latter see with complete clarity because they are closest to the action. But they do so only narrowly, for all they can see are their own little segments. The managers at the center see widely – all around the circle – but they don’t see clearly because they are distant from the operations. The trick, therefore, is to connect the two groups. And for that, most organizations need informed managers in between, people who can see the outer edge and then swing around and talk about it to those at the center. You know – the people we used to call middle managers, the ones who are mostly gone.
2. It is time to delayer the delayerers. As organizations remove layers from their operations, they add them to the so-called top of their hierarchies – new levels that do nothing but exercise financial control and so drive everyone else crazy.
I used to write books for an independent publishing company called Prentice-Hall. It was big – very big – but well organized and absolutely dedicated to its craft. Then it was bought by Simon & Schuster, which was bought by Paramount. Good old Prentice-Hall became a ‘Paramount Communications Company’. It was at about this time that one of my editors quoted her new boss as saying, ‘We’re in the business of filling the O.I. [operating income] bucket.’ Strange, because my editor and I both had thought the company was in the business of publishing books and enlightening readers … Now Prentice-Hall has become a ‘Viacom Company’. After all this, will publishing books remain as important as satisfying bosses? …
Listen to what Fortune wrote a few years ago: ‘What’s truly amazing about P&G’s historic restructuring is that it is a response to the consumer market, not the stock market’ (November 6, 1989). What’s truly amazing about this statement is the use of the phrase ‘truly amazing’.
Nowhere does the harshness of such attitudes appear more starkly than in the delayering of all those middle managers. Delayering can be defined as the process by which people who barely know what’s going on get rid of those who do … Isn’t it time that we began to delayer the delayerers?
3. Lean is mean and doesn’t even improve long-term profits. There is nothing wonderful about firing people. True, stock market analysts seem to love companies that fire frontline workers and middle managers (while increasing the salaries of senior executives). Implicitly, employees are blamed for having been hired in the first place and are sentenced to suffer the consequences while the corporations cash in …
I did some work recently for a large U.S. insurance company, with no market analysts to worry about because it is a mutual. I was told a story about a woman there who was working energetically to convert a paper database to an electronic one. Someone said to her, ‘Don’t you know you are working yourself out of a job?’ ‘Sure,’ she retorted. ‘But I know they’ll find something else for me. If I didn’t, I’d sabotage the process.’ … How much sabotage is going on? …
4. The trouble with most strategies are chief executives who believe themselves to be strategists. Great strategists are either creative or generous. We have too few of either type. We call the creative ones visionaries – they see a world that others have been blind to. These are often difficult people, but they break new ground in their own ways. The generous ones, in contrast, bring strategy out in other people. They build organizations that foster thoughtful inquiry and creative action. (You can recognize these people by the huge salaries they don’t pay themselves.) … The creative strategists reach out from the center of that circular organization to touch the edges, while the generous ones strengthen the whole circle by turning strategic thinking into a collective learning process.
Most so-called strategists, however, just sit on top and pretend to strategize. They formulate ever so clever strategies for everyone else to implement. They issue glossy strategic plans that look wonderful and take their organizations nowhere with great fanfare. Strategy becomes a game of chess in which the pieces – great blocks of businesses and companies – get moved around with a ferocity that dazzles the market analysts. All the pieces look like they fit neatly together – at least on the board. It’s all very impressive, except that the pieces themselves, ignored as every eye focuses on the great moves, disintegrate. Imagine if we took all this energy spent on shuffling and used it instead to improve real businesses. I don’t mean ‘financial services’ or ‘communications’, I mean banking or book publishing …
5. Decentralization centralizes, empowerment disempowers, and measurement doesn’t measure up. The buzzwords are the problem, not the solution. The hot techniques dazzle us. Then they fizzle. Total quality manageme
nt takes over and no one even remembers quality of work life – same word, similar idea, no less the craze, not very long ago …
The TQM concept has now magically metamorphosed into empowerment. What empowerment really means is stopping the disempowering of people. But that just brings us back to hierarchy, because hierarchy is precisely what empowerment reinforces. People don’t get power because it is logically and intrinsically built into their jobs; they get it as a gift from the gods who sit atop those charts. Noblesse oblige. If you doubt this, then contrast empowerment with a situation in which the workers really do have control. Imagine a hospital director empowering the doctors … Better still, consider a truly advanced social system: the beehive. Queen bees don’t empower worker bees. The worker bees are adults, so to speak, who know exactly what they have to do. Indeed, the queen bee has no role in the genuinely strategic decisions of the hive, such as the one to move to a new location. The bees decide collectively, responding to the informative dances of the scouts and then swarming off to the place they like best. The queen simply follows. How many of our organizations have attained that level of sophistication? What the queen bee does is exude a chemical substance that holds the system together. She is responsible for what has been called the ‘spirit of the hive’. What a wonderful metaphor for good managers – not the managers on top but those in the center.
If empowering is about disempowerment, then is decentralization about centralizing? We have confounded our use of these words, too, ever since Alfred P. Sloan, Jr., centralized General Motors in the 1920s in the name of what came to be called decentralization. Recall that Sloan had to rein in a set of businesses that were out of control. There was no decentralization in that.
Part and parcel of this so-called decentralization effort has been the imposition of financial measures – control by the numbers. If division managers met their targets, they were ostensibly free to manage their businesses as they pleased. But the real effect of this decentralization to the division head has often been centralization within the division: the concentration of power at the level of the division chief, who is held personally responsible for the impersonal performance.
Division chiefs – and headquarters controllers looking over their shoulders – get very fidgety about surprises and impatient for numerical results. And the best way to ensure quick, expected results is never to do anything interesting; always cut, never create. That is how the rationalization of costs has become to today’s manager what bloodletting was to the medieval physician: the cure for every illness.
As a consequence of all this (de)centralizing and (de)layering, measurement has emerged as the religion of management. But how much sensible business behavior has been distorted as people have been pushed to meet the numbers instead of the customers? …
The analytical mentality has taken over the field of management. We march to the tune of the technocrat. Everything has to be calculated, explicated, and categorized. The trouble is that technocrats never get much beyond the present. They lack the wisdom to appreciate the past and the imagination to see the future … To plan, supposedly to take care of the future, they forecast, which really means they extrapolate current quantifiable trends. (The optimists extrapolate the trends they like, while the pessimists extrapolate ones they don’t.) And then, when an unexpected ‘discontinuity’ occurs (meaning, most likely, that a creative competitor has invented something new), the technocrats run around like so many Chicken Littles, crying, ‘The environment’s turbulent! The environment’s turbulent!’
Measurement is fine for figuring out when to flip a hamburger or how to fill the O.I. bucket at that ‘communications’ company. But when used to estimate the market for a brand new product or to assess the worth of a complicated professional service, measurement often goes awry. Measurement mesmerizes no less than management. We had better start asking ourselves about the real costs of counting. See ‘The soft underbelly of hard data’ at the end of this reading.
6. Great organizations, once created, don’t need great leaders. Organizations that need to be turned around by such leaders will soon turn back again. Go to the popular business press and read just about any article on any company. The whole organization almost always gets reduced to a single individual, the chief at the ‘top’… . ‘CEO Jack Smith didn’t just stop the bleeding. With a boost from rising auto sales, he made GM healthy again’ (Fortune, October 17, 1994). All by himself!
Switzerland is an organization that really works. Yet hardly anybody even knows who’s in charge, because seven people rotate in and out of the job of head of state on an annual basis. We may need great visionaries to create great organizations. But after the organizations are created, we don’t need heroes, just competent, devoted, and generous leaders who know what’s going on and exude that spirit of the hive. Heroes – or, more to the point, our hero worship – reflect nothing more than our own inadequacies. Such worship stops us from thinking for ourselves as adult human beings …
Part of this cult of leadership involves an emphasis on the ‘turning around’ of old, sick companies. Just look what we invest in that! Think of all those consulting firms specializing in geriatrics, ready to help – hardly a pediatric, let alone an obstetric, practice to be found. Why don’t we recognize when it’s time for an old, sick organization to die? …
What we really need, is a kind of Dr. Kevorkian for the world of business – someone to help with pulling the plug. Then young, vibrant companies would get the chance to replace the old, spent ones. Letting more big companies die – celebrating their contributions at grand funerals – would make our societies a lot healthier.
7. Great organizations have souls; any word with a de or a re in front of it is likely to destroy those souls. Well, there are still some healthy big organizations out there. You can tell them by their individuality. They stay off the bandwagon, away from the empty fads. Did you ever wonder why so many really interesting ones headquarter themselves far from the chic centers of New York and London? …
If you really want to adopt a new technique, don’t use its usual name, especially with a de or re. Call it something completely different. Then you will have to explain it, which means you will have to think about it. You see, techniques are not the problem; just the mindless application of them. Wouldn’t it be wonderful if the editors of HBR printed a skull and crossbones next to the title of every article, like those on medicine bottles: an example might be ‘Warning! For high-technology companies only; not to be taken by mass-production manufacturers or government agencies.’
Consider the mindless application of reengineering. I opened the popular book on the topic and at first thought. This is not a bad idea. But when I saw the claim on page 2 that the technique ‘is to the next revolution of business what specialization of labor was to the last’, namely, the Industrial Revolution, I should have closed the book right there. Hype is the problem in management; the medium destroys the message.
Wasn’t reengineering what the Ford Motor Company did to automobile production at the turn of the century, what McDonald’s did to fast food 30 years ago? Every once in a while, a smart operator comes along and improves a process. Companies like Ford and McDonald’s did not need the book; quite the contrary. They needed imagination applied to an intimate knowledge of a business.
In other words, there is no reengineering in the idea of reengineering. Just reification, just the same old notion that the new system will do the job. But because of the hype that goes with any new management fad, everyone has to run around reengineering everything. We are supposed to get superinnovation on demand. Why don’t we just stop reengineering and delayering and restructuring and decentralizing and instead start thinking?
8. It is time to close down conventional M.B.A. programs. We should be developing real managers, not pretending to create them in the classroom.
I have been doing a survey. I ask people who know a lot about U.S. business to name a few of the really good U.S. chief executiv
es, the leaders who really made, or are making, a major sustained difference. I am not talking about the turnaround doctors but the real builders. (Stop here and make your own list.)
You know what? Almost never has anyone been named who has an M.B.A… .
Years ago, when things were going better in U.S. business, I used to think that the brilliance of the country’s management lay in its action orientation. Managers didn’t think a lot; they just got things done. But now I find that the best managers are very thoughtful people who are also highly action oriented. Unfortunately, too many others have stopped thinking. They want quick, easy answers… .
It is plain silly to take people who have never been managers – many of whom have not even worked full-time for more than a few years – and pretend to be turning them into managers in a classroom. The whole exercise is too detached from context. We need to stop dumping management theories and cases on people who have no basis even to judge the relevance.
Let’s begin by recognizing today’s M.B.A. for what it is: technical training for specialized jobs, such as marketing research and financial analysis. (And these are not management.) Then maybe we can recognize good management for what it is: not some technical profession, certainly not a science or even an applied science (although sometimes the application of science) but a practice, a craft. We have some good things to teach in management schools; let’s teach them to people who know what’s going on …
Now we have a new, insidious track to the executive suite. After the M.B.A., you work as a consultant with some prestigious firm for a time, skipping from one client organization to another. And then you leap straight into the chief executive chair of some company. That system might work on occasion. But it is no way to build a strong corporate sector in society …
Management- It's Not What You Think! Page 8