Book review: Reinventing Management, by Julian Birkinshaw

A strong bureaucratic system or a free-wheeling ethos? Kai Peters likes Birkinshaw's practical approach.

by Kai Peters
Last Updated: 25 Oct 2010

There are, fundamentally, two types of management book. In the one camp are cookery-style books with 10 easy steps to eternal happiness or five easy lessons on leadership. They sell like hot cakes - in my view, because they take away the need to think, as thinking is quite hard work. In the other camp are books that take a more thoughtful, long view: Peter Drucker and Charles Handy come to mind. These books reflect on the changes taking place within society and within organisations, and show how the two are interlinked.

Julian Birkinshaw's new book, Reinventing Management, belongs in the Drucker category. Its central thesis is that each organisation has a management system composed of a variety of elements that have been developed over time. This management model, 'the set of choices we make about how work gets done in an organisation', has four basic dichotomies that blend together. It can be bureaucratic or loose; hierarchical or collective; clearly aligned or oblique; and, lastly, motivational through the pursuit of money or through the pursuit of inherent reward.

Birkinshaw points out that managers have a choice. He doesn't say that bureaucratic, hierarchical organisations are awful and we must all strive towards a knowledge-intensive, collaborative, self-fulfilling nirvana. Instead, his thesis might be characterised as the 'Goldilocks and the three bears' school of management: the challenge is where to sleep.

Recently, he says, too great an emphasis has been placed on strategy and leadership - the vision of the destination - and not enough on managerial graft.

He begins with a short tour of the origins of management systems. Pre-industrial systems were small-scale and loose. The advent of industrial production, however, required large, systemic bureaucracies, with central planning and scientific management. In the early era of the car industry, this made good sense. Today, in environments such as McDonald's, it still makes good sense. We all want our Big Mac and fries to taste and look the same wherever we are.

In other types of organisation, or in other parts of the same organisations, a different set of features is required. If the goal is to generate new intellectual capital, whether in a university or in the McDonald's R&D lab, a looser model is preferable, since knowledge workers are often as interested in the idea as in the business side of their pursuit.

While the historical perspective provides one explanation of the origin of management systems, the life-cycle of the firm provides another. Three computer programmers in a garage do not bother with complex systems, but 300,000 programmers distributed across the world need at least one or two rules to play by. Each approach has good and bad points.

Bureaucracy is slow and cumbersome but generally cost-effective and reliable. Absolute decentralisation is creative and exciting, but it leads to duplication, generates a myriad of micro-systems, and is ultimately frustrating and expensive. For Birkinshaw, the challenge is to see whether there is one that provides a competitive advantage.

The book explores this territory through a variety of case studies. Google tries to maintain a decentralised start-up model to foster creativity. Procter & Gamble experiments with external R&D networks to support its internal staff. BP pursues a variety of strategies to free up creativity and innovation.

A telling example concerns Oticon, a major Danish hearing-aid manufacturer. Faced with intense competition from Philips and Siemens, it launched a brave 'loosening' campaign. Standard operating procedure documents were shredded and self-managing teams introduced. Through the late '80s and early '90s, performance increased dramatically. But so did organisational chaos. In the late '90s, new rules were implemented.

Rather than seeing this as a failure, Birkinshaw likens management to a pendulum that swings between control and creativity: this is what management is - there is no state of equilibrium. One must change or, ultimately, fail.

The book, aimed squarely at working managers, is well-structured. Early chapters help managers to investigate and understand their own management models. Subsequent chapters help them to evaluate whether the model is fit for purpose or might benefit from adjustment. The final part encourages careful experimentation with alternatives.

Overall, Reinventing Management is a thoughtful, practical and readable tour that encourages the reader to reflect on the prosaic role of sleeves-rolled-up management so that Goldilocks can find the bed she wants to sleep in.

- Kai Peters is chief executive of Ashridge Business School.


Reinventing Management: Smarter choices for getting work done
Julian Birkinshaw

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