UK: Falling over the edge.

UK: Falling over the edge. - Richard Pascale had some strong views on good management, which he believed to be about moving with the times - something he himself has had problems with.

by Trevor Merriden.
Last Updated: 31 Aug 2010

Richard Pascale had some strong views on good management, which he believed to be about moving with the times - something he himself has had problems with.

If you have laurels, try not to rest on them. So easy to say, so hard to do. We all do it and so do so many of the companies we work for. Anyone who works for a sleeping corporate giant will feel some sympathy for Richard Pascale's message: 'Nothing fails like success.' Companies flourish, he says, then lose their edge because they are locked into a deadly paradox: their greatest strengths are also their weaknesses. So carried away are they by what they do best, they fail to realise that the world around them is changing.

Pascale's famous message comes from Managing on the Edge, published in 1990. But the roots of this classic work come from his time as a hotshot management consultant in the late 1970s. Back then, young Richard Tanner Pascale was one of the brilliant McKinsey team, along with three other fledgling musketeers of management thinking (Tom Peters, Robert H Waterman and Anthony Athos).

As a team they came up with the famous 'seven S' method for assessing business performance, in which they exhorted managers to evaluate the strategy, structure, systems, staff, style, skills and shared values of their company.

When Pascale went solo with Managing on the Edge, he convincingly argued that '99% of managerial attention today is devoted to (squeezing) more out of the existing paradigm,' an act which ignores the debilitating effects that an unchallenged raison d'etre may be having. Hence, he rightly suggests, the task of good management is to 'provoke inquiry and sustain vitality'.

Pascale points at the example of the late Konosuke Matsushita, founder of Matsushita Electric, one of Japan's largest firms, who gave a chilling account of Japanese success (as it then was): 'We are going to win and the industrial West is going to lose out; there's not much you can do about it because the reasons for your failure are within yourselves. Your firms are built on the mechanical Taylor model. Even worse, so are your heads ... we are beyond your mindset.'

But how to achieve a perspective which is firm enough to pursue strategic goals but flexible enough to know when the goal posts have moved? Pascale identifies four factors that drive renewal in the organisation. Firstly, the 'fit' of an organisation - its internal consistencies and coherence.

When fit is not there, the firm is going to struggle. A simple example is the desire to improve customer service, when the customer service department is undermanned. The second factor is 'split', that is, methods of sustaining autonomy and diversity, obvious examples being decentralised profit centres and stand-alone subsidiaries.

The third factor is known as 'contend' - the value of the constructive conflict in an organisation. There are some tensions in organisations that should never be fully resolved (such as that between cost control and quality). We are almost always better served when conflict is surfaced and channelled, not suppressed. Fourthly, even an organisation that can marry 'fit', 'split' and 'contend' must also have the ability to think beyond the traditional corporate mindset.

Pascale's book is an excellent read with, unlike many management tomes, a liberal sprinkling of company examples. But his identification with the success of the Japanese, though understandable at the time, now looks rather odd as we approach the end of the 1990s. And some of his analogies are just plain unconvincing and rather lazy. He likens running a modern, fast-moving, adaptable company to riding a bike for the first time. 'How, you wondered, can I possibly balance on two narrow tyres ... but when you got on the bicycle, you rode it ... your mind shifted from a "stationary" to a "moving" concept of balance.' That's all very well, but at least you can get off a bicycle whenever you feel like it. Modern corporate leaders have no such luxury.

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