Management fads: The next 'next big thing'

Suckers for fashionable management fixes and fancies, businesspeople don the latest 'thinking' like a new outfit. They might feel better, but does it suit them? Stefan Stern reports.

by Stefan Stern
Last Updated: 09 Oct 2013

What's the big idea? Is there a big idea - or just a series of smaller and smaller ideas being continuously recycled? Management is both science and art, and the trick of it lies in separating the good ideas from the bad, knowing when to be scientific and when to be artful. At a time of such rapid change in business, you might hope for a few interesting new ideas to think about. We'll come to them in a minute. What is perhaps even more remarkable is that the fad machine seems almost immune to the pressures of the business cycle that the rest of us have to endure. One place where recession rarely seems to strike is on the production line for flaky and half-baked management primers.

But, not surprisingly, there's a healthy market for business gurus and their over-excited books, promising instant and dramatic results in easy steps. When you are loitering at one of 'London's' charming airports at an abysmally early hour, about to embark on a futile trip to a corruption-infested emerging market, a shiny red book-cover that promises business success, personal riches and the admiration of your peers is bound to get your attention. What if everone else is trying out this latest idea and you are being left behind? You don't want to miss out on the next big thing.

In the frenzy of hype and bull that this pursuit of (pseudo-)intellectual chimeras involves, managers turn into an older and less attractive version of their teenage daughters out on a Saturday afternoon shopping spree: trying out this skirt or those jeans for size, getting hotter and crosser in overcrowded changing-rooms. The fashion industry analogy is not so outlandish: like hemlines, great ideas in business rise and fall. Sometimes they rise too high and leave us dangerously exposed. And favoured management styles and approaches come into and go out of fashion almost as fast as colours, fabrics and cuts of cloth do.

Inevitably, academics have sought to understand how management ideas spread and conquer the business world - for a time at least. Perhaps the most meaty analysis of this process was provided by Professor Eric Abrahamson of New York's Columbia Business School in an Academy of Management Review article in 1996.

His rigorous assessment runs as follows (deep breath): 'Management fashion-setters disseminate transitory collective beliefs that certain management techniques are at the forefront of management progress. These fashion-setters - consulting firms, management gurus, business mass-media publications (he means us!], and business schools - do not simply force fashions onto gullible managers - that's the good news).

'To sustain their images as fashion-setters, they must lead in a race (a) to sense the emergent collective preferences of managers for new management techniques, (b) to develop rhetorics that describe these techniques as the forefront of management progress, and (c) to disseminate these rhetorics back to managers and organisational stakeholders before other fashion-setters (ie, you have to get out in front fast and keep talking before the other guys can catch up - think Tom Peters).

'Fashion-setters who fall behind in this race (eg, business schools or certain scholarly professional societies) are condemned to be perceived as lagging rather than leading management progress, as peripheral to the business community, and as undeserving of societal support.' (Is that a whiff of academic sour grapes I detect there? Surely not.)

But, sneering aside, Abrahamson describes, in his meticulous way, exactly how fads and trends are spread and popularised. And he provides us with the tools and vocabulary to help us spot when the business bullshit wool is about to be pulled over our sleep-deprived eyes.

We need to look out, the professor says, for 'triggers' - moments or events that might promote a new outpouring of fads. The rise of China would be a classic example. Nowadays, what business book or conference presentation doesn't point to China to justify or explain its message? The internet was a big trigger, and 'Web 2.0' is the latest.

Conferences, lectures and, increasingly, podcasts and vodcasts (video podcasts) all contribute to the process of diffusion, the way in which ideas and fads are communicated. This is an iterative and self-reinforcing process, thus: 'I heard this guy say that last year at Davos, so I said it at Milan, then I heard someone else say it in London and, whaddya know, someone else said it again in Davos this year too.' So it must be true.

This kind of dissemination of 'knowledge' has been labelled 'superstitious learning'. There is no real core or substance to it, only belief. The label helps explain why management fashions can come and go: in the end they collapse of their own accord. Initial enthusiasm tails away, and followers lose interest. Alleged quick fixes fail to deliver and the faithful lose their faith. When speeches and books are full of solutions that never ultimately materialise, the wheels fall off the bandwagon pretty fast.

A bit harsh? Not everything we know about management is nonsense. Come with me now on a whirlwind tour of the key landmarks in management thinking of the past 100 years or so.

In the beginning was the American Frederick Winslow Taylor. His Principles of Scientific Management (1911) represented an attempt to identify the 'one best way' of doing things at work. An engineer, he was convinced that efficiency could always be improved and that workers needed to be drilled to repeat procedures in that most efficient way. 'Taylorism' was massively influential in the great era of American industrialisation - the production lines of Ford and General Motors were, initially at least, monuments to his thinking.

In Taylor, you find the beginnings of the time-and-motion approach to studying work, and also, incidentally, the origins of the management consultancy industry - although it would be wrong to blame him for all the evils of the world. Bird flu, for example, cannot be pinned on him.

But we can, with hindsight, criticise Taylor for underestimating the creative contribution that employees were capable of providing. In the 1890s, levels of educational achievement were much lower than they are now. But even today you find managers with a Taylorist view of their workforces: 'Do as I tell you, and do no more and no less than that.'

Even Henry Ford worked out that he needed to make the most of his employees' talents. 'The great thing about people is that with every pair of hands you get a free brain,' he is said to have observed. Ford needed greater productivity from his workers to build a successful business. (He also needed to employ people at higher rates of pay so that they could actually afford to go out and buy the very cars they were working on.)

Taylorism begat a powerful successor - planning. The newly industrialised world - whether in the capitalist west or the communist east - was constructed on the altar of planning. Honest, intelligent people would find the right way to do things. And if World War I had been a calamity of planning incompetence, World War II seemed to reassure us that planning would always lead to victory, whether military or commercial.

New theories emerged in the post-war world. Ironically, it was the vanquished rather than the victors who learned the new lessons the quickest. The concept of quality - zero defects, brought about by the commitment of a well-trained and empowered staff - was an idea developed by the American analyst W Edwards Deming. Although he had helped American industry to improve its performance during the war years, it was in Japan in the 1950s that his work had the biggest impact. The seeds of Toyota's current success were sown then, at a time when 'Made in Japan' was considered a joke rather than a recommendation.

It was only later, in the 1970s and '80s, when the West woke up to what was being achieved in Japan, that companies started adopting Total Quality Management in an attempt to catch up. But TQM, like a lot of TLAs (three letter acronyms), often failed to live up to its own hype. Its related successors - the 1992 'balanced scorecard' of Kaplan and Norton, and the 'systems thinking' of Russell Ackoff, have prouder records, however. Another TLA that, initially at least, seemed to help managers focus on the task in hand was Peter Drucker's 'management by objectives' (MBO), a phrase he first used in his book The Practice of Management in 1954. Spotted the problem? That's right - some objectives may not be compatible with others, while employees may be tempted to 'game the system' to hit their objectives.

Recession (another classic trigger for management fads) in the '80s and early '90s brought us Business Process Re-engineering (BPR) in 1993, the radical 'break the china' philosophy of Michel Hammer and James Champy. Downsizings and restructurings of immense size were justified by this theory, which led (as far as CEOs were concerned) to unhappy headlines about so-called 'corporate killers'.

The internet-inspired, emotionally intelligent 'new economy' of the late 1990s was the great reaction against BPR's brutalism. All pool tables and skateboards, the new economy was great fun while it lasted - which was not very long. Someone forgot to tell the geeks about the iron laws of business - those boring old things such as profits and cash.

The millennial reaction to the defunct new economy was the craze (still running, this one) for 'execution' as the supreme management skill. No, not the taking out and murdering of irritating colleagues - not literally, anyway - but the firm, unflinching and utterly competent carrying out of business decisions. There are few laughs in the execution-driven approach. Few laughs, but no little success.

And today? I sense another shifting of the balance of power between the cold steel of execution and the warm fluff of Web 2.0. Suddenly, it seems acceptable again to acknowledge the human factor in business. Niceness is back in vogue, at least for some of the time. People are talking about strategy not just in visionary terms but also in emotional ones. In the era of globalisation, corporate social responsibility (another dreaded TLA) is maturing and growing into something more serious and substantial. And behind all this, the big Green question of sustainability looms large.

Still not convinced, perhaps after bitter personal experience, that the human factor is being take seriously again? Well it should, and for the proof we need to turn the clock back to the 1920s and '30s.

Between 1924 and 1932, a series of workplace experiments took place as part of a research project at the Hawthorne plant of the Western Electric Company in Cicero, Illinois, outside Chicago. It was found (although these results are disputed to this day) that by adjusting the factory's lighting, heat, working hours and break times, improvements in performance could be achieved. This was the famous 'Hawthorne Effect'.

What was remarkable in these experiments was that it did not seem to matter what sort of changes were made - whether lights were made a bit brighter or a bit dimmer, or whether the heating was turned slightly up or slightly down. The mere fact of bothering to change something, and being seen to do so, produced the desired outcome.

Two main interpretations of this effect are possible. One is that employees are easily duped, and it doesn't matter what you do to them. The other, more constructive interpretation is: by showing an interest in people's working conditions you can encourage better performance.

Tom Peters has argued that, in practice, good management is little more than a series of closely observed Hawthorne effects. By showing a genuine interest in people's work you let them know that what they are doing matters to you. Or, as John Garnett, former director of the Industrial Society used to say: 'If you care about what they care about, they'll care about what you care about.'

In that sense, workplace conditions - chairs, workspaces, lighting, break-out areas, refreshments, and the way people are spoken to and involved - are not merely 'hygiene factors' (in the words of the psychologist Frederick Herzberg), they are also key to people's productivity.

Here is MT's unfashionable contribution to the great fashion of management ideas: show a real interest in what people are doing for you. It matters. As Willy Loman's wife says in Arthur Miller's Death of a Salesman: 'Attention must be paid.'

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