Management Fail

Stream of consciousness with quotes. Deal with it,

Some recent writings on management give the impression that their authors consider management to be an invention of the years since World War II, and an American invention at that. True, before World War II, interest and study of management was confined to small groups – the popular interest in management as a discipline and a field of study is fairly recent. But management, both as a practice and as a field of study, has a respectable history, in many different countries, going back almost two centuries.

When the early economists – from Adam Smith (1723-1790) to Karl Marx (1818-1883) did their work, management did not exist. To them, the economy was impersonal and governed by objective economic forces. As a modern spokesman for the classical tradition, the Anglo-American Kenneth Boulding (1910-1993), phrased it: “Economics deals with the behavior of men.” Or, as with Marx, impersonal laws of history were seen to dominate. Humanity can only adapt. It can, at best, optimize what the economy makes possible; at worst, it impedes the forces of the economy and wastes resources. The last of the great English classical economists, Alfred Marshall (1842-1924), did add management to the factors of production, land, labor, and capital. But this was a half-hearted concession. Management was still not a central factor.

From the beginning there was, however, a different approach that put the manager into the center of the economy and stressed the managerial task of making resources productive. J. B. Say (1767-1832), the brilliant French economist, was an early follower of Adam Smith. But in his own words, the pivot is not the factors of production. It is the entrepreneur – a word Say coined – who directs resources from less productive into more productive investments and who thereby creates wealth. Say was followed by the “utopian socialists” of French tradition, notably François Fourier (1772-1837) and that eccentric genius Comte de Saint-Simon (1760-1825). At that time there were no large organizations and no managers, but both Fourier and Saint-Simon anticipated developments and “discovered” management before it actually came into being. Saint-Simon, in particular, saw the emergence of organization. And he saw the task of making resources productive and of building social structures. He saw managerial tasks.

It is for their stress on management as a separate and distinct force, and one that can act independently of the factors of production as well as the laws of history, that Marx vehemently denounced the French. But it is the French – and above all Saint-Simon – who, in effect, laid down the basic approaches and the basic concepts on which every socialist economy has actually been designed. No matter how much the socialists today invoke the name of Marx, their spiritual ancestor is Saint-Simon.

Peter Drucker, from Management, Chapter 1

We have in our society today a failure to comprehend management as a practice, a profession.

A few years into the [Google’s] life, founders Larry Page and Sergey Brin actually wondered whether Google needed any managers at all. In 2002 they experimented with a completely flat organization, eliminating engineering managers in an effort to break down barriers to rapid idea development and to replicate the collegial environment they’d enjoyed in graduate school. That experiment lasted only a few months: They relented when too many people went directly to Page with questions about expense reports, interpersonal conflicts, and other nitty-gritty issues. And as the company grew, the founders soon realized that managers contributed in many other, important ways—for instance, by communicating strategy, helping employees prioritize projects, facilitating collaboration, supporting career development, and ensuring that processes and systems aligned with company goals.

Google downplays hierarchy and emphasizes the power of the individual in its recruitment efforts, as well, to achieve the right cultural fit. …People who make that first cut are then carefully assessed for initiative, flexibility, collaborative spirit, evidence of being well-rounded, and other factors that make a candidate “Googley.”

So here’s the challenge Google faced: If your highly skilled, handpicked hires don’t value management, how can you run the place effectively? …You use data to test your assumptions about management’s merits and then make your case.

To find the answer, Google launched Project Oxygen, a multiyear research initiative. It has since grown into a comprehensive program that measures key management behaviors and cultivates them through communication and training. By November 2012, employees had widely adopted the program—and the company had shown statistically significant improvements in multiple areas of managerial effectiveness and performance.

…managing remains understudied and under[-]taught—largely because it’s so difficult to describe, precisely and concretely, what managers actually do. …Project Oxygen, in contrast, was designed to offer granular, hands-on guidance. It didn’t just identify desirable management traits in the abstract; it pinpointed specific, measurable behaviors that brought those traits to life.

[Research described]

In light of this research, the Project Oxygen team concluded that managers indeed mattered. But to act on that finding, Google first had to figure out what its best managers did. …It took several months to code and process all this information.

After much review, Oxygen identified eight behaviors shared by high-scoring managers. …Even though the behaviors weren’t terribly surprising, Patel’s colead, Michelle Donovan, says, “we hoped that the list would resonate because it was based on Google data. The attributes were about us, by us, and for us.”

-David A Garvin, Harvard Business Review, December 2013.

Google discovered these manager qualities.

  1. Is a good coach
  2. Empowers the team and does not micromanage (See the sidebar “How Google Defines One Key Behavior”)
  3. Expresses interest in and concern for team members’ success and personal well-being
  4. Is productive and results-oriented
  5. Is a good communicator—listens and shares information
  6. Helps with career development
  7. Has a clear vision and strategy for the team
  8. Has key technical skills that help him or her advise the team

Meanwhile, back at Drucker’s Management, chapter 22,

Henry Ford, starting with nothing in 1905, had fifteen years later built the world’s largest and most profitable manufacturing enterprise. The Ford Motor Company, in the early 1920s, dominated and almost monopolized the American automobile markets of the world. In addition, it had amassed, out of profits, cash reserves of a billion dollars or so.

Yet only a few years later, by 1927, this seemingly impregnable business empire was in shambles. Having lost it’s leadership position and barely a poor third in the market, it lost money almost every year for twenty years or so, and remained unable to compete vigorously right through World War II. IN 1944, the founder’s grandson, Henry Ford II, then only twenty-sic years old and without training or experience, took over, then two years later ousted his grandfather’s cronies in a palace coup, brought in a totally new management team, and saved the company.

It is not commonly realized that this dramatic story is far more than a story of personal success and failure. It is, above all, what one might call a controlled experiment in mismanagement.

The first Ford failed because of his firm belief that a business did not need managers and management. All it needed, he believed, was the owner-entrepreneur with his “helpers.” The only difference between Ford and most of his contemporaries in business was that, as in everything he did, Henry Ford stuck uncompromisingly to his convictions. He applied them very strictly, firing or sidelining any one of his “helpers,” no matter how able, who dared to act as a “manager,” make a decision, or take action without orders from Ford. the way he applied his theory can only be described as a test, one that ended up by fully disproving Ford’s theory.

In fact, what makes the Ford Story unique and important is that Ford could test the hypothesis. this was possible in part because he lived so long and in part because he had a billion dollars to back his convictions. Ford’s failure was not the result of personality or temperament. It was first and foremost the result of his refusal to accept managers and management as necessary, as a necessity based on task and function rather than “delegation” from the “boss.”

So, what does Drucker know about managers from these and other lessons, way back in 1973? [keyed to Google]

[1] But the objective of the manager who heads the units include what he himself has to do to help subordinates attain their objectives… Seeing his relationship toward them as a duty toward them and as a responsibility for making them perform and achieve that than as “supervision” is a central requirement for organizing the manager’s unit effectively.

[2] With knowledge work, however, what to do becomes the first and decisive question. For knowledge workers are not programmed by the machine or by the weather. They largely are in control of their own tasks and must be in control of their own tasks.

[3&6] At that time, none of the nine management people in one key division were found to be competent to take on new jobs created in the course of the reorganization… Yet, for these nine men, jobs as technicians and experts were found within the organization. It would have been easy to fire them…

[4] A management that wants to create and maintain the spirit of achievement therefore stresses opportunity. But it will also demand that opportunities be converted into results.

Managing is a specific work. As such, it requires specific skills. Among them are the abilities of…

  • [5] communicating within and without the organization

[7] The foundation of effective leadership is first, thinking through the organization’s mission, defining it and establishing it, clearly and visibly.

[8] …picking managers to head a professional organization is often a high-risk venture. Professionals such as engineers do not readily accept as their boss someone whose credentials in the field they do not respect. Yet a successful engineer does not necessarily make a successful manager of engineers.

So, Google initiated a multi-year research initiative to discover what Drucker knew in the 1970’s. An experiment they can afford. At least for the time being.


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