Management as a discipline has developed more since 1970 than in its entire previous history, to judge by the outpouring of new, or supposedly new, theories and programmes. One leading American guru, Richard Pascale, has a wonderful graph entitled 'Ebbs, Flows and Residual Impact of Business Fads 1955-1990.' It resembles a mountain range, with a small peak in 1970 (with management by Objectives), a valley lasting until 1975, and then a Himalayan eruption of two dozen nostrums, culminating in today's (or possibly yesterday's) reengineering.
Nobody expects another valley. Already new concepts are climbing up the charts, like 'virtuality' or 'globalism.' But how much has management truly changed since the early 1970s? That was when I published The Naked Manager, which became one of those management books whose memory lingers on. I was asked to revise it in 1985, when 'vision' appears on Pascale's mountain, and again a decade later; The Naked Manager for the Nineties was published this February - and profound change has occurred between the two revisions.
The original book debunked the cult of scientific management: the idea that some general body of laws and rules existed, as in engineering, that could be applied universally by anybody who had received the necessary education - certified, of course, by an MBA from a leading business school. Over the years, the debunking became conventional wisdom: the management Emperor had no clothes (hence the nakedness). But that didn't stop the outpouring of pseudo-science, from zero base budgeting to MBWA (management by walking about, in case you didn't know).
All these ideas had some merit, often in large amounts. They were all marred in practice by overselling and by under-use. That is, the top managements who were oversold on the concept (by consultants and academics, often one and the same) climbed eargerly up the fashionable height: when, having expected too much, they lost their footing, they and the company simply moved on to a different slope. The theory and practice never became embedded in 'the way we do things round here' - or the corporate culture.
Naturally, that opened up a whole new area for the consultants and academics: 'culture change.' You can change culture, but only by changing practice. Why else would a culture need reformation? The object must be to improve the practical performance of the business in radical measure. And it's obvious, as The Naked Manager rammed home, that effectiveness is the only useful measure of cultural excellence. The difference between 1985 and 1995 is that this truism has been recognised and put into practice by a wide range of managements.
Oddly enough, the principle is best illustrated by one of the most abused concepts: Total Quality Management. Quality didn't figure in the 1985 revision: nor was it among the attributes of Excellence in the famous Peters-Waterman bestseller. A few companies like Xerox were stepping out along the TQM road, after swallowing the indigestible truths about Japan's huge advantages in productivity, quality and costs. By 1995, TQM had swollen to a worldwide movement, involving thousands of companies - and has perhaps passed its peak, judging by the usual outbreak of critical onslaughts and stories of failure.
But the TQM philosophy is unassailable. It holds that you should constantly and continuously seeking to improve measurably all the elements of the business. That demands a top-down/bottom-up process that enlists the full powers of everybody in the business system (including top management and suppliers). The company thus develops a culture that optimises the satisfaction of the three vital interests: the investors, the employees and the customers. The philosophy works backwards from the latter. To delight the customers, you require highly satisfied employees, and the combination produces results that overjoy the investors.
Forget TQM. Every guru now advocates one version or another of this bundle of beliefs. And almost every management at least pays lip-service to the theory, and most try to implement at least part of its tenets. But partial adoption is deeply inadequate. For example, if middle managers don't fully understand the strategic plan, so research has shown, the company will lose out on productivity, quality - and profits. The concept of the business as a system, each of whose parts affects the whole, is changing the way that top management thinks and goes about its work - in the best companies, that is.
The Naked Manager for the Nineties thus required some major changes to reflect this shift from scientific to humanistic management. The previous versions had advocated this shift, but today practice is following preaching. Scientific method provides the tools (like those of statistical quality control) which help people to improve their work: but its their work, and the more they feel and act as owners, the better the results will be. So not only did the new book require substantial changes in many chapters. I had to add five new introductory essays.
The first of these ends with a regrettable but inevitable caveat: 'All managers say they want to work with people at all levels who are self-motivated, team-working achievers in an innovative environment that isn't averse to risk, embraces change and is action-oriented. That's what managers say. Most even know what must be done to achieve this outcome. But they don't actually do it.' That's why those 'failed' TQM programmes didn't succeed - because the will fell short of the need.
One reason is highlighted in the second essay, entitled 'One Thing Doesn't Change.' That thing is the dominance of the financial imperative: 'However much today's top managers preach non-financial virtues...they still practise in the same way as yesterday's money-grubbers. earnings per share and price per share are the goals and the goads. When the chips are down, it's only the chips that count - even if some are counterfeit.' As the customer-employee-investor chain determines, superior financial performance follows superior business performance. Put the finance first, and it may well come up last.
Companies complain (incessantly) of short-termism in the City of London or on Wall Street. But the institutional investors don't set quarterly profit goals for managers or berate them 9and even fire the worst offenders) for not 'making their numbers.' The top management is the guilty short-termist party. The third introductory essay, though, pointed out that boardroom dominance 'is being undermined by a universal and insidiuous force: the IT network.
'Paradoxically, the information technology which seems to offer senior management greater control is actually going to place increased power and freedom in the hands of their juniors.' The 'virtuality' mentioned earlier refers in part to the operation (now often essential) of systems that operate, not only across internal boundaries, but across corporate borders: 'Once the networks are linked, chief executives are locked into partnership with key people who don't work for them': but who relate primarily 'to their associates, inside and outside the firm.'
That's likely to be true, moreover, across international boundaries. As the fourth introudction observed, developing 'genuine global dynamism' - which global markets obviously demand - isn't going to be easy. But 'developing individual maanagers who can think and operate across frontiers' isn't a need for the future: like the spread of the IT networks, it's happened and its further advance in inevitable; 'the new generation of managers has been born global. Their employing organisations have a simple choice: keep in step, or stumble into obscurity.'
That stark choice has become obvious to all but the most purblind managements, which explains why Pascale's mountain of panaceas has risen so high. As the final introduction says, there are np panaceas: but any chosen technique won't work unless these rules are followed: 'First, aim high and system-wide, providing a strategic vision which will give process changes the required direction and leverage. Second, insist that all senior managers believe and participate in the chosen approach. Third, seek and win large, revolutionary changes fast; but within, fourth, the context of a long-term commitment to evolutionary change.'
That's how the best management has changed, and is changing, in ways that are not only fundamental, but are highly promising, both for organisations and the individuals who work in them. In fact, that's the essence of the new emphasis: that individual achievement is the key to collective success. But other fundamentals still apply - the same basics that underlied the original book's onslaught on pseduo-scientific management. The laws of economics and those of human psychology operate unceasingly: and all three versions of The Naked Manager end the same way:
'Ponder how it is that the Quakers and similar deeply religious gentry made so much wordly lucre. It was because they treated their people honestly and decently, worked hard and honestly themselves spent honestly and saved pennies, honestly put more back into the company than they took out, made honestly good products, gave honest value for money and, being honest, told no lies. the naked manager can never find better clothes.'
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