Managers are more acutely aware of the need to manage better than ever before. Hence the boom in management consultancy, courses and books. The dificulty is to choose the approach that will best meet a need generated by the world-wide intensity of competition. Which lever do you press? Can you simultaneously press all three - the customer lever (the market), the organisational lever (the corporate portfolio), and the people lever (human resources)?
If the use of human work and intelligence is truly effective, of course, marketing and organisational achievement will also be brilliant. The problem of choice therefore disappears. Yet in most organisations the marketplace and/or corporate affairs come first. Few managements embark on a deliberate effort to reshape the human organisation intellectually; or even to understand that their chances of success in any dimension are limited by the system in which the humans operate.
Systems thinking derived from MIT. Basically, it requires looking at a business unit as an entirety, as a whole consisting of interrelated parts, none of which can be addressed without affecting the others. At its simplest, for example, you can't promise next-day delivery without either raising inventory, or accelerating production, or both. If the promise is kept, the profits may be savaged. If it's broken, the market damage will be severe - and profits may again be savaged.
Yet managements unthinkingly plunge into such dilemmas. MIT's Peter Senge would argue that a true 'learning organisation' avoids them. Systems thinking, which he calls The Fifth Discipline, the title of a highly influential book, is one of the marks of such an organisation. But Senge hasn't stopped at articulating the need for organisations to learn how to learn. He has led an ambitious programme to provide managers with 'strategies and tools for building a learning orgnisation'.
The result is The Fifth Discipline Fieldbook. Does it work? It's certainly copious. At 593 pages, this won't be lightly taken into the field. The same objection can be levelled at the sheer weight of content. The five authors have thrown in a mass of material, including case histories, excerpts from other books and personal accounts, all excellently packaged and brightly written. But the overall effect is to make the creation of a learning company seem somewhat ponderous.
Reduced to essentials, though. the recipe of Senge & Co proposes radically different, light-footed ingredients for success. Since 1920, the book argues, companies have concentrated on efficient manufacturing, effective mass marketing, rapid adoption of technology, financial acumen and (more recently) non-authoritarian Theory Y management. The future, though, belongs to 'distributing power while increasing self-discipline', 'improved conversation', 'voluntary followership' and 'systemic thinking skills'. Profits, market share and products have vanished from the scene.
The systemic thinking skills are the launching-pad for this new paradigm. The seven 'archetypes' of systemic behaviour illustrate the concept. Senge gives them graphic names like 'Fixes that Backfire' and 'Shifting the Burden'. You're suffering from the first if a problem symptom alternates between improvement (the problem goes down) and deterioration (the problem goes up, worse than before). The second refers to your dilemma if the reliance on some short-term fix grows stronger, while efforts to correct the fundamental problem weaken, and the problem symptom (again) alternately improves and deteriorates.
A classic backfiring fix came when the Canadian government, anxious to cut civil service numbers, did so by closing down whole programmes. That seemed unfair to people who wanted to stay, so they were allowed to swap with people on other programmes who wanted to go. The result was a disastrous brain-drain of the brightest and best. 'Shifting the Burden' has similar results - for example, when 'crisis heroism' solves the crisis, but sabotages efforts to avoid crises in the first place. Identifying the archetypes, however, is only the beginning. It takes nothing less than mental revolution to persuade managers to abandon thought processes that, left unchecked, will allow the archetypal dead-ends to continue leading nowhere.
Hence the importance of organisational learning. Organisations, of course, can't learn. But individuals can learn both individually and together. The fieldbook leads from 'personal mastery' to changing the 'mental models' which govern everybody's thoughts, and then on to 'shared vision', which leads to the crucial subject of 'team learning'. That revolves round 'dialogue' - and here the doubts arise. For all its stimulating drills and exercises and diagrams, Senge & Co's prescription differs not at all from the standard guru model of the participative, collaborative, two-way talkative company.
True, the model exists far more in preaching than in practice, and the fieldbook will surely stimulate more managers to explore the practical value of the theory. Far better decisions will be taken, and far better execution will be achieved, if managers can throw away their prejudices and approach issues as collaborative thinkers, learners and doers. Hidebound mental attitudes explain much corporate underperformance, all the way from customer service failures to inadequate management of subsidiaries - the subject of Corporate Level Strategy.
The authors of this deeply researched and thoughtful study, Michael Goold, Andrew Campbell and Marcus Alexander, are well aware of the attitude problem. They believe that the centre's task is to prove itself the best of all possible parents for the business in question. 'In some companies, resistance to change runs so deep that it is likely to withstand any efforts to implant the parenting advantage concept.' But does the concept offer any advantage over the other rationales - core competences, synergy, balance, growth or whatever - that lead managements (or so managers say) to acquire or keep businesses?
Boiled right down, the concept calls for corporate parents to buy or retain only businesses which match their own characteristics and are close to their own 'heartlands'. They should also be insightful and effective in the drive to 'create value' from these businesses. The authors say that these less than startling principles are 'straightforward in concept but far harder to put into practice successfully.' If so, top managements must indeed be slow to learn: that is, if it's easier to have unrelated subsidiaries to which the parent contributes no value whatsover, and which presumably aren't much good at creating value themselves.
That's a failure to which two consultants, Michael Treacy and Fred Wiersma, address themselves in The Discipline of Market Leaders. Like the parenting concept, their notion boils down to a very succinct proposition: that a business unit can choose between three 'value disciplines' in the effort to 'find the unique value that it alone can deliver to a chosen market.' The choice lies between operational excellence, product leadership and customer intimacy - not as exclusive courses of action, but as prime mover.
Rather obviously, delivering a second-rate product with marvellous efficiency to the wrong market is the deadest of ends. Failure of any of the three disciplines will surely invalidate any value drive. Does this blatant fact invalidate the entire book? Not entirely. The authors make the valid point that the marketing focus has a profound effect on management style and structure. Where efficiency rules, deviation is unallowable, so forms are more rigid. Product leadership requires innovation and thus free-form, flexible management. Customer intimacy leads to delegation to the front line.
This is a meagre harvest, however, and has to be reaped from a mish-mash of ill-argued propositions, over-familiar references, half-baked statements of the obvious ('McDonald's expertise in opening new restauarants... contributes substantially to its remarkable success') and equally banal quotes from hero companies like Intel ('the right thing to do is to define your market and know exactly what you must do to be successful in it.' Really?). It reads as if written by a committee - as indeed it was, by some dozen people employed by book-packagers called Wordworks, who on this evidence could make Tolstoy read like Enid Blyton.
The two nominal authors did allegedly contribute something special of their own. According to Business Week, they organised phoney bookstore sales to ensure that the book made the New York Times best-seller list. So it did, for 15 weeks. Which 'value discipline' this technique represents isn't clear. The meretricious aspects of the enterprise are a pity, because the book rounds off a virtuous circle. The market, the organisation and the people do form an indivisible whole. Managers who willingly recognise and respond to that truth must win. Just as you need all three value disciplines to be a successful marketer, so you must press all the levers covered by all three of these books to succeed - and to continue that success into the indefinite future.
read all 70 gurus with one feed read all Read all media
