Although there are many writing awards, few specifically celebrate management writing. This year, the Management Consultancies Association, in association with MT, determined to put this to rights. We asked for entries in the categories of Best Management Book, Best Management Article and Best Management Article by a New Writer, and awaited the response. More than 130 entries arrived for the 2004 Awards, and we hope to get even more next year. Our judging panel, made up of business writers and practitioners, have picked three category winners from the shortlisted entries. A trophy will be awarded for each section, together with a £1,000 cash prize.We hope management writers among MT readers will be inspired to submit entries for the next competition.
BEST MANAGEMENT ARTICLE WINNER
BUSINESS SCHOOLS FOR SCANDAL by Simon Caulkin
One of Gordon Brown's odder budget ideas was the scheme to allow new graduates of the world's top 50 business schools to come to the UK to work for a year. Most of these establishments being American, this is presumably a very New Labour attempt to jolt British management by mainlining a shot of transatlantic enterprise culture.
The Chancellor should be careful what he wishes for. The business schools that validated the enterprise culture were also the ones that gave us Enron, Tyco and 'Chainsaw Al' Dunlap. More generally, they are at least partly to blame for the paralysing cynicism with which the public has come to regard all companies and their managers.
That's a serious indictment, but it's not mine. The charge sheet is much more formidable because it was hammered on the door Luther-like by one of business academia's own. When he was struck down this month at the tragically early age of 55, London Business School professor Sumantra Ghoshal was working on a project that took issue with just about everything currently being done in management - including and especially the role of business academics.
Ghoshal's challenge can't be shrugged off as revolutionary ideology or a woolly idealism. Originally a physicist and a genuine management heavyweight, he was a meticulous researcher who never stopped observing and questioning why managers and companies acted as they did. Why, he wanted to know, were managers so busy shooting themselves in the foot, behaving in ways that wrecked their own legitimacy and that of their companies?
Why, instead of nurturing their organisations as engines of progress, were they turning them into vehicles of exploitation and coercion, apeing markets, creating monopolies, ripping off customers and forcing employees to work ever harder while their top managers helped themselves to truly breathtaking quantities of pay?
Reluctantly, Ghoshal had come to the conclusion that the culprit was none other than the academy itself: 'We - as business school faculty - need to own up to our own role in creating Enrons,' he wrote in one of his last pieces. 'It is our theories and ideas that have done much to strengthen the management practices we are all so loudly condemning.'
Recent company excesses, Ghoshal argued, had their roots in ideas developed in business schools over the past 30 years. If managers were seeking ever more inventive ways of boosting share prices, paying themselves over the odds for doing so and offloading the costs on to society, they were just doing what business school courses on strategy, transaction cost economics and agency theory had taught them.
Neither was it surprising that policy-makers framed their responses in the same destructive terms. Corporate governance prescriptions are based on agency theory, for instance, with no shred of evidence that they will improve outcomes, while the Chancellor is eagerly laying out the welcome mat for clever people brilliantly trained in the very things that got us into trouble in the first place.
How did the business schools come to create today's management Frankenstein? Ghoshal traced it back to the unspoken academic project to make business studies 'respectable' by removing the subjectivity of analysing company behaviour in terms of human choices and actions, instead looking for explanations in impersonal patterns and laws - a kind of business physics.
The pretension to science has far-reaching consequences. By definition, it excludes moral or ethical dimensions from management, since they are about intentions that cannot be modelled or quantified. By the same token, it can admit only strictly economic motivations, precisely because they can be quantified.
Establishing shareholder value as the one true end of management allows all the complex variables that go into corporate life to be reduced to a neat set of equations. (Mutatis mutandis, it is the same kind of economic determinism that allows Brown to assume that merging the Inland Revenue and Customs or axing 20,000 jobs at the Department of Work and Pensions are simple mathematical formulae: DWP - 20,000 = x % efficiency gain.)
But in any case, trying to make human organisations fit the causal logic of physics is an egregious error. The laws of physics are blind; humans and their organisations have intentions and choices and employ strategies - one step back, two steps forward - that aren't available in the natural sciences. It not only doesn't fit with what happens in practice; it's wrong even in theory.
There's a final savage twist to the infernal circle in which academics and managers find themselves entwined. Social scientists carry an even greater social and moral responsibility than their colleagues in the physical sciences, argued Ghoshal. If in physics you theorise that a brick dropped off a tall building could fall upwards, you'd get some funny looks - but it wouldn't affect the trajectory of the brick.
In the social sciences, on the other hand, if enough people believe it, a 'wrong' theory can become 'right' - exactly what has happened in management. Thus, managers who treat people as opportunistic chancers encourage opportunism that justifies ever tighter controls. Governance that assumes managers can't be trusted to maximise shareholder value without hefty incentives breeds managers who require huge stock options. Strategy based on the idea that maximising profits involves a battle for value with employees, partners and society generates corporate monsters such as Enron, which do, in fact, distort competition and eventually destroy themselves.
When he died, Ghoshal was challenging academic colleagues not only to stop creating Enrons, but to start constructing positive and realistic theories that would be the building blocks for a better corporate world. Many were responding. Contributing to this endeavour is probably not what Brown had in mind for his business-school recruits, but there could be no more urgent task or fitting memorial.
- This article first appeared in the Observer on 28 March 2004
ABOUT THE AWARDS
The first ever MCA Management Writing Awards in association with MT seek to identify the books or articles that have made a significant contribution to management thinking over the past 12 months, as well as the management writers who show an ability to communicate complex and stimulating issues in plain English.
The 2004 Awards Judging Panel were: Lynton Barker chairman of Hedra and president of MCA; Matthew Gwyther editor, Management Today; Carolyn McCall MD, Guardian Newpapers Ltd; Baroness Hogg chairman, 3i; Sir Paul Judge chairman, RSA; Lucinda Kemeny M&A editor, Financial Mail on Sunday; John McLaren author, chairman of the Barchester Group and chairman and co-founder of Masterprize; Fiona Walsh business features editor, Evening Standard.
BEST MANAGEMENT ARTICLE BY A NEW WRITER - WINNER - TRUE LOVE IS A SMOOTHIE RECIPE ON THE BANANA PHONE by Sathnam Sanghera
These are the people I like hugging and like being hugged by: my mum, my dad, my girlfriend, my nephews, my nieces, and, on very special occasions such as funerals and weddings, my siblings. Everybody else has to do with a firm handshake, or, if they're very close, a pat on the back.
But if Jack Mitchell, author of Hug Your Customers: Love the Results, had his way, then this list wouldn't be quite so short: for a start, it would include several hundred thousand FT readers. 'Read the book, then give your customers a hug,' recommends the blurb on the back of the paperback. 'Give them a smile, ask them how their kids are. Just see if it works.'
Mitchell's best-selling book highlights perhaps the most worrying management trend of them all: the emotionalising of business. No longer can we just like what we do, we have to be passionate. We can't just value our customers, we have to love and hug them. One would have thought the now-famous video clip of Microsoft's Steve Ballmer leaping around in front of his staff, sweating heavily and whooping 'I - LOVE - THIS - COMPANY' would have stopped such talk. But more and more companies are insisting on getting touchy-feely.
The other day, I picked up a leaflet from fast-growing, award-winning drinks company Innocent, which contained the claim that they 'were really quite emotional' about making their fruit drinks. 'We love making drinks, we love drinking them and we especially love everyone who buys them. In fact, you're unlikely to find a more passionate set of people than those that work at Fruit Towers.'
The leaflet ended with an open invitation to its beloved customers: 'If you're a bit bored, you can give the banana phone a ring or e-mail us - we're always up for a chat. Maybe you can suggest a new recipe or just tell us about your holiday. If you're ever in the area, pop in. We'd really love to see you.'
Reading this made me feel like I did when I was 10 and my alcoholic uncle would try to kiss me goodbye: I wanted to run away and scream. Why would I want to tell Innocent about my holiday? Why would they want to listen to my recipe ideas? Of course, they wouldn't 'really love' to see me at Fruit Towers: presumably they've got work to do.
Thinking this was the perfect opportunity to show how phoney claims of corporate love are, I decided to take up Innocent's invitation, beginning by putting in a call to the 'banana phone' with a recipe idea. Inevitably, there would be an answering machine; inevitably, nobody would get back to me; and, inevitably, I would have made my point.
In the event, the phone rang twice before it was answered by a serious-sounding Englishman. I told him my recipe idea: a normal crushed fruit smoothie with banana, honey, milk and apricots but with an added twist: prunes. It would appeal to people with digestion trouble. And they could call it Smooth Moves. 'Smooth Moves? I like it,' he crooned back. 'I'm just writing that down.' A pen scribbled in the background. 'Look, I don't work in product development myself, I'm on the sales side. And I'm not sure about prunes - I have a feeling that when blended, they won't look very nice. But I will look into it.'
As I put the receiver down, in spite of myself, I found myself thinking: what a lovely man.
He really seemed to like talking to me. But there was no way the company could survive the next test: an unannounced visit from an over-inquisitive customer to their offices in west London. I arrived early on a Tuesday morning and approached the first member of staff I saw, expecting to be turned back or asked to return at a more convenient time.
'Oh, come on in,' he replied, inviting me into the office without hesitation. 'What's your name? Cool. Would you like a smoothie? Mangoes and passion fruits? Yeah? Cool. Cool. I'm one of the three founders who started the company five years ago. Row will show you around.'
Within 30 seconds Row had appeared, smiling broadly and talking rapidly in a Cumbrian accent. 'Hi! Pleased to meet you,' she said, looking genuinely pleased to meet me. 'Can I show you around?'
There followed a 30-minute tour where she showed me every bit of the building, answered every inane question ('No, we don't hug each other') and explained that they got around 10 calls a day on the banana phone. 'We get everything from people saying they like our drinks to people complaining, to people just wanting a chat.'
So it's like the Samaritans line, but not as serious? 'Yes, I mean, I have dealt with a few serious issues in my time, but it's great having that direct communication with customers - it just shows how much we love them.'
To my surprise, I left the Innocent offices feeling warm and fuzzy. As a customer, I felt valued. If I'm really honest, I felt more than that: I felt loved. Indeed, although I started this column by complaining that businesses were getting too touchy-feely, I have now changed my mind.
If 'loving' your customers and being 'passionate' means being as generous and open as Innocent, then we all need more love.
I have changed my mind about Hug Your Customers too. Jack Mitchell, who runs a successful clothing business in Connecticut, doesn't actually suggest that we grab customers in our arms (though he does do this, occasionally).
He uses hug as a metaphor for 'exceeding customers' expectations', which may come in the form of carrying their shopping to their car, sending thankyou notes and even, on occasions, exchanging recipe ideas.
In which case, as cringe-making as it is to say, I need more hugs.
- This article first appeared in the Financial Times on 14 June 2004
ONE TO WATCH: Sam Dukes, for the article 'Manage the Maasai Way', Edge, Nov 2003
BEST MANAGEMENT BOOK - WINNER - JOURNEY TO LEAN by John Drew, Blair McCallum and Stefan Roggenhofer (Palgrave Macmillan)
Lean has entered management consciousness in a big way in recent years. No longer regarded as an arcane set of Japanese methods and tools, it appeals because it holds out a promise no other approach can make: not only does it cut costs and improve quality, but it also stabilises operations and matches supply with demand. It even promises to end firefighting for good and establish the necessary conditions for continuous improvement.
When lean becomes a way of life rather than a project, it can make an enormous impact, surpassing managers' expectations and conferring enormous competitive advantage. By applying lean principles, Dell turned over its inventory 64 times in 2001, 50 times more than its nearest rival, while incurring operating costs that were less than half those of its closest competitor.
Dell's founder, Michael Dell, says the principles of its success are simple: 'What's the point in having a monitor put on a truck to Austin, Texas, and then taken off the truck and sent on a little tour around the warehouse, only to be put back on another truck? That's just a big waste of time and money.'
Many other companies have made the same transition. Yet if lean is such a powerful approach, why is it that so few companies are able to implement it successfully? We might just as well ask why we struggle to improve our golf handicap, even though it seems so worthwhile. Part of the reason, no doubt, is that the appeal of a better handicap fades as the task proves tougher than we had imagined. Time pressures get in the way, bad weather keeps us off the course, family commitments intervene, or more attractive opportunities come along to distract us. In much the same way, many companies' attempts to 'do lean' peter out before they ever take hold. Good intentions are swamped by day-to-day demands. Priorities change as the organisation responds to external pressures. This is why we look on lean as a journey. It calls for able leadership, a reliable vehicle, a skilled and enthusiastic crew, adequate supplies, a reliable map and frequent checks on progress along the way.
The journey to lean is not for the timid, and there are no stopping places along the way. You can't hope to reap half the benefits of lean by being half-hearted. Making the transition is highly challenging, and many fall by the wayside. You need to be completely committed before you set out.
A lean transformation should not be seen as a technical process that's best left to technical people. In our experience, most companies that try to replicate the success of lean role models fail because they don't see the whole picture. When visitors tour a Toyota plant, for example, they see a set of tools and techniques that optimise operations, but not the infrastructure and behaviours that support them.
It's rather like watching a play at the theatre. We see the actors move around and hear them speak, but we don't know what happened during rehearsals, what the director asked them to do, how they prepared for their parts, how the playwright revised the script, or how tonight's performance may differ from yesterday's or tomorrow's. Like a stage play, too, lean operations aren't static but evolve dynamically over time.
Staying the course of the lean journey calls for strong leadership. All change programmes need the commitment of senior management if they are to succeed; for lean transformations, this is doubly so. Because lean is a radically different way of operating, few people will immediately understand it. Until they see its benefits for themselves, they may well react against it, because it challenges and undermines customary practices, such as accumulating inventory to protect against problems.
Especially in the early stages, experienced operations managers in particular are likely to feel threatened as they see cherished ways of working overturned.
Senior management need to share this vision not only for what is to be achieved, but how. People involved in the change need to be given a degree of security and support, especially if lean is introduced in the context of a radical reduction in costs. Many companies that have successfully introduced lean have provided some form of employment guarantee to the employees who remain after the initial reduction in labour that lean usually makes possible. Without such assurances, employees may suspect that lean principles are just another way of putting them out of a job - hardly an inducement for them to participate actively in the change process.
The journey to lean is also a long haul. If a company is to become fully lean, it must be able to keep up its efforts over time. Although lean does yield immediate results, the full benefits come only when it becomes the basis for a process of continuous improvement. Accommodating such a long-term perspective presents a challenge to modern businesses. Today's short-term focus on quarterly results, coupled with short tenures at senior level, indicates that lean can't be sustained by the willpower of individual senior managers alone. Companies need to institutionalise lean practices and perspectives as part of their capability building. In short, everyone in the organisation needs to think lean.
Our aim in this book is to investigate what lean operations are, and how they work. We'll show how a comprehensive lean transformation, properly implemented, can create value for shareholders and customers. We'll also show what it feels like to be part of a lean transformation, giving an insider's view of what can be a turbulent and uncomfortable, as well as challenging and rewarding, transition.
- Extracts taken from the book's introductory chapter, 'The Challenge of Lean'
Highly commended: Enterprise: The Leadership Role by Roger Parry (Profile Books)
Commended: Trust Matters by Sally Bibb and Jeremy Kourdi (Palgrave Macmillan).