Management theory: reduce everything to numbers?
Leadership and management have been core functions in the success or failure of societies from the time of cave tribes, long before these became subjects for university courses. The study of how human organizations progress or fail, has fascinated wise observers like Peter Drucker, Abraham Maslow, Charles Handy, Henry Mintzberg and others.
Since the 1980s such insightful observation has been increasingly replaced by pseudo-scientific, number-crunching, measure-tabulate-analyse ‘scientific reality’ as a better basis for management education.
The stubbornly unquantifiable spirit and ethos of human beings in complex relationships has been shoved into the ‘too hard’ and ‘too soft’ baskets. Academics want to elevate management to a discipline on par with physics and astronomy. Professors and schools want to inject scientific rigour into what to them are vague and woolly concepts.
They did not regard Peter Drucker with his abundant commonsense, direct management practice and keen insights, to be acceptable in academic terms. Drucker said almost all there was to say about the principles of good management. He learnt it at the coalface. The professors are locked in ivory towers publishing learned papers for other academicians.
The academic teaching of management assumes it can be distilled into quantifiable attributes and principles on the premise of ‘economic man’ - a rational, benefits-seeking economic animal whose behaviour can be measured, predicted, controlled, rewarded and punished to set formulae.
Almost the way Robert Parker shrunk the romance and joy of wine’s complex interplay of aroma, mouthfeel and lingering after-taste into a 100-point rating system. It allowed clueless consumers to buy Parker numbers without trusting their own palate. They - not Parker - will have to drink the stuff, good or bad.
The world awaits a similar rating on sex using perhaps a 20-point scale by another self-appointed guru. Everything can be reduced to numbers? Therein lies the grand folly of our Age.
Have these over-simplifications improved our appreciation of wine, leadership or management? NO. Has it hijacked discretion, judgement and ethics in our management of people and societies? YES.
The number fixation reached its peak in MBA programmes which seek to equip beardless youth with all the formulae necessary to run people, companies and nations from laptops.
We have seen the tragic consequences of that in the bodycount statistics of the Vietnam war where field commanders were rated by the numbers of ‘enemy’ killed. The grunts dropped from helicopters into ‘hostile’ villages and shot as many civilians as they could , to get the kills with minimal risk to themselves. The desperate need to win ‘hearts and minds’ was forfeit and with that, the war itself.
We have seen the quants take over Wall Street and plunge the world into the financial crisis we are still reeling from, by reducing trading and risk assessment into computer programmes minus human judgement.
End of ‘organization man’, rise of individual talent
The era of lifetime jobs is over. The waves of mass layoffs of employees to satisfy short-term cost reduction has destroyed loyalty as a factor in the workplace. Cowardly boards hire high-level assasins to do their dirty work.
The pirate CEOs collect golden payouts after they kill and leave. There is no pretense of concern for human beings caught in the middle of bad decisions by boards and ‘top management’.
Young people entering the workplace today race through two-year tenures at different companies to quickly build up a strategic range of experience in a variety of markets and products. They have little faith in corporations. They use corporations as much as corporations use them.
More and more of them aspire to pool resources of friends and family to run independent businesses. The vast opportunity in cyberspace appeals to them. Many fail but they keep trying to find the niche that works.
It is not uncommon to see these youngsters toil away at a dozen ideas seeking a breakthrough and pick themselves up from as many that collapse. They also offer their skills as freelancers over the web. They are determined not to be cogs in large corporations.
Morale-destroying ritual of ‘performance evaluation’
It originated from Peter Drucker’s straightforward concept of ‘Management by Objectives’ before the consulting witch-doctors seized it as a product to be embellished and hawked to corporations.
It is now one of the enduring techniques to limit payout of bonuses, entrench favouritism and justify revenge on non-conforming subordinates. It is wrapped in a seemingly scientific process called ‘performance appraisal’. Companies are trapped in this fiction all across the globe. It has become a sacred cow which cannot be slaughtered. It has acquired the power of dogma.
Subordinates are put through a ritual of agreeing to a set of goals defined by their managers. These are the individual’s KPI’s - key performance indicators. Numerical values are assigned to record how well they have met their goals. It all sounds quite objective and scientific. In practice it is anything but. And everyone knows it. Savvy subordinates learn how to game the system too.
But the HR department grabs this for dear life as the only power they have over operating managers. They are the high-priests who guard this highly confidential fiction. It is almost the only purpose for the existence of the time-servers there.
Insecure CEOs love it as the stranglehold on independent minded senior managers who may know more about the business and are more competent.
The final joke to top it all is the forcible stuffing of the performance ratings into bell curves to disenfranchise as many staff as possible. It is bad statistics and worse intent packaged as a corporate governance discipline.
The net result in most companies with poor cultures, sub-standard leadership and an overly hierarchical exercise of power, is almost universal depression, dismay and outrage.
It is the most potent self-inflicted company-wide damage. No external competitor can so throughly destroy group morale, loyalty and goodwill at one go. This is repeated every year like a recurring nightmare!!!
It is time to throw this rubbish out and shrink the HR department that feeds on it. It is a relic of a time when managers exercised sovereignity over employees bonded to the organization, fearful of losing their jobs and promotions. The challenge today is to attract and retain talent.
Managers have to earn respect and loyalty. They have to drive their teams to the end results that matter. If they cannot lead, guide and coach, they have no business holding authority over others. If they cannot defend and protect subordinates from unfair victimization, they have no moral authority to be bosses themselves.
Ultimately the organization will reflect the philosophy, values and spirit of its CEO. In a dispirited organization you know immediately where the problem originates. And where the solution lies.
ENDS
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