UK: THAT WAS THE IDEA THAT WAS.

UK: THAT WAS THE IDEA THAT WAS. - Forget the past, re-invent the future, say the re-engineering gurus

by Stuart Crainer.
Last Updated: 31 Aug 2010

Forget the past, re-invent the future, say the re-engineering gurus

The relentless quest for new ideas over the past 30 years suggests that's what managers have been doing all along.

Forget the swinging '60s. While the world discovered free love and hallucinogenics, managers discovered strategy. While everyone else settled for Jimi Hendrix, the corporate universe celebrated Igor Ansoff. And, as nostalgic executives look back over 30 years, they do not survey a wardrobe of garish flared trousers, but a dusty copy of Ansoff's Corporate Strategy - probably unread.

It is just as well that managers, dedicated followers of alternative fashion that they are, appear to have such short memories. For the past 30 years have seen management thinking in a state of perpetual flux. Managers have laboured over their flip charts, explaining the merits of decision trees, the Delphi technique, the managerial grid and the Boston Box. They have described Porter's Five Forces Framework and revelled in the Seven Ss. And then they have moved on, forgetting all that has gone before.

Back in 1966 the received wisdom was that size was might. Power and control were what managerial life was all about. This was the corporate equivalent of the indulgently long guitar solo. The corporate icons of the time were ITT, IBM, Ford and the like: big, safe, slow-moving organisations where you could climb the career ladder, where jobs were usually for life and the company song echoed around the corporate corridors. This was the era of 'corporate man', described by William Whyte, the age when Parkinson's Law ('Work expands to fill the time available for its completion') ruled.

'You felt confident you would make progress up the career ladder. You did so by knowing the right people, keeping your nose clean, having a desire to get on and being lucky,' recalls Malcolm Peel, co-author of The Ten Commandments of Management, but then with an engineering company.

'The possibility of being made redundant or being unemployed never entered your mind.'

Companies such as IBM did not make people redundant. Instead the poor performers, the mediocre, were despatched to corporate backwaters to serve out their time. And, in such sprawling organisations, there were backwaters aplenty. Indeed, the backwaters were dutifully plotted in elaborate corporate hierarchies. You knew where you were and where your loyalty lay.

Amid such corporate warmth and bonhomie, strategy was a means of making sense of the future which, we all assumed, would be remarkably similar to the present. Entire departments sprung up, charged with the task of inventing strategy, and so they analysed, planned and invented. The trouble was the result - what Ansoff himself later labelled 'paralysis by analysis'.

Statistics and reports appeared in abundance, but nothing happened as a result of all of these facts and figures.

Strategy, the magical S word, has dogged the world of management thinking ever since, as managers have sought to understand what it is and how to make it work. It has proved a long and often tedious slog. Fortunately, there have been plenty of distractions along the way. In the late 1960s, the fashion was for Edward de Bono's lateral thinking, an idea which has created a lengthy and lucrative career for its inventor, but whose impact on the quality of management is questionable.

Then there was Schumacher's Small is Beautiful, a child of the '70s, which presented an idyllic vision of what could be. Though the book sold in its thousands, its ideas were never seriously in danger of being implemented at the time. Jimmy Carter was a Schumacher fan. Small may have been beautiful but being big made more money.

While people flocked to buy their copies of Schumacher, the oil crisis and the rise of Japan as an industrial power were generally ignored as blips in the corporate scheme of things. What could the West possibly have to learn from the Japanese? Not much, said western executives. US carmakers continued manufacturing big cars in much the same way as Henry Ford had done over 50 years before: after all, that's what they did and this was how they did it. Indeed, throughout 30 years of fads and theories, executives have proved remarkably resilient, willing to move onto the next big idea after the failure of yesterday's fad. Along the way, uncomfortable truths have been ignored. What made Japan successful in the 1970s also made it successful in the 1980s, but in the 1970s it was unfashionable to view Japan with anything other than disdain.

In 1973 Henry Mintzberg published The Nature of Managerial Work in which he pointed out what we all knew - that managers were hostages to fortune, flitting from task to task, crisis to crisis, meeting to meeting. They might talk strategy but they didn't actually sit down and think about why they were doing something. Not that Mintzberg's carefully researched home truths had a great deal of effect. Managers continued with more of the same.

The 1970s did see the gradual dawning of a new age of management thinking, however. A narrow functional approach to management carried on, but there was some realisation that there had to be a better way. Mintzberg and Charles Handy looked at the innermost working of organisations and concluded that companies were not insensitive monoliths, but complex, changeable and sensitive beings which existed in many shapes and forms and had to be managed accordingly. Corporations had culture.

Towards the end of the 1970s, the doubters and gloom merchants gradually began to hold sway. Article after article lamented the decline of western industrial might. The beginning of the 1980s marked something of a theoretical watershed, the practical implications of which are still being explored.

In 1980 an obscure and elderly American, W Edwards Deming, who had tried to spread the quality gospel to the Japanese and the Americans since shortly after the second world war, was finally discovered in the West (the Japanese having got the hang of him rather earlier). Curmudgeonly and passionate, Deming argued that the long accepted western 'system' of management and corporate behaviour did not have to be a permanent fixture. We had to learn to manage the system rather than allowing it to control our behaviour.

Deming and another quality veteran, J M Juran, sparked interest in the 'Japanese' approach. Newfound grudging admiration was instantly transformed into a ravenous hunger for anything even hinting at unlocking the Japanese secret of management. Managers learned about JIT, TQM and benchmarking; they started peppering their conversation with words like kaizen (continuous improvement to those with little linguistic flair). Japanese management was no longer airily dismissed, instead it was regarded as a rich source of good ideas. And the big idea was quality.

For all the books and theories, the acronyms and advocates, quality is largely self-explanatory. The best companies have been adherents of it for decades. But the ability of a minority to make quality their business was still seen as an exception in the West rather than a necessity. The western system had been geared to quantity for so long that changing its entire structure and philosophy was a big challenge.

Faced with Deming's barbed commentary on western failings and the increasingly self-evident need for change, managers and their organisations sought solace in quality programmes. Teams of consultants scoured organisations, bold commitments to quality were issued from boardrooms, quality circles were introduced and suggestions were solicited from the people who actually did the work.

For ever-expectant managers, the initial results were disappointing. GM did not become Toyota overnight and a general despondency set in. Then came excellence. In 1982 two McKinsey consultants, Tom Peters and Robert Waterman, published In Search of Excellence. Upbeat and positive, it painted a rosy picture of what could be done. Instead of imitating the Japanese, some US corporations were doing it for themselves. Excellence was reassuring: home-made apple pie after a diet of humble pie.

More followed. The 1980s were a decade of re-discovery. Bright ideas abounded, though virtually all had their roots in the depths of history.

Leadership re-emerged as a subject worthy of study, fuelled by a steady stream of leaders pontificating in print. The new fascination with leadership brought the vocabulary of 'visions' and 'mission statements' into the mainstream. Leadership was no longer simply about controlling and dictating; it was more subtle and far-reaching, more abstract and, unfortunately for most managers, more elusive.

Gushing enthusiasm also accompanied the re-discovery of marketing which had been sidelined amid the corporate emphasis on mass production. Ted Levitt's article on 'Marketing myopia' was dug up from the early 1960s. Realising that mass production did not automatically lead to mass sales, companies were encouraged to be customer-focused and market-oriented.

The rational counterpoint to overflowing managerial passions was Michael Porter. If Ansoff provided the rational framework for the '60s, Porter has done so for the '80s and '90s. Brilliantly logical, Porter's ideas are from another world in which the human element is all but ignored.

His terminology of competitive advantage has entered the argot of management, yet, increasingly, managers are coming to realise that management is often irrational and the human side of management - the soft bit - is critical.

The recession of the late 1980s and early 1990s prompted the dismantling of much of what had been painfully erected. 'Forget planning, let's brainstorm,' went the new clarion call. Organisations aimed to be lean, flat and fast: no longer did bigger equal better. Employees metamorphosed into 'knowledge workers' as knowledge and information emerged as strategic weapons, with IT as their conduit. Achieving these objectives with traditional hierarchical structures was impossible.

You could still be big, but you had to be focused. You needed to identify your core competencies. An entirely new vocabulary of delayering and downscaling was invented, injecting a new mood of uncertainty into the previously certain corridors of corporate power. Hierarchies bit the dust, and the talk was of empowerment. It still is.

Empowerment is accompanied by a passion for teamworking. Cross-functional, flexible, even virtual teams are the antithesis of the modus operandi of 30 years ago. Instead of management by dictatorship, there is management by consensus; listening and mutual understanding have replaced bellowing and mutual ignorance. That's the theory although inevitably only a small number of companies can truthfully claim to be transforming concepts such as empowerment into best practice.

The relentless quest for new ideas continues and has accelerated over the past three decades. In the business schools and consultancies of the world, experts abound. Characteristically, as managers have discovered that they want to be focused, flexible and fast, they have sought out more new, more radical fashions. The most notable of these is re-engineering.

Difficult times require big ideas and re-engineering is perhaps the ultimate management idea. If it doesn't work, start again. If more of the same isn't delivering results, re-invent what you do and how you do it. Re-engineering gurus Champy and Hammer advocate a clean sheet of paper - forget the past, re-invent for the future. Yet, through all the fads and fashions, this is what managers have been trying to do all along.

How well managers have succeeded is a matter of debate. Comparing past and present is diverting, but provides more questions than answers. Ryan Giggs will never be George Best. What can be said is that managers remain open to new lights and that over 30 years the sheer profusion of ideas has, at times, been overwhelming.

1960s

Strategy is discovered by the corporate monoliths

Igor Ansoff

Champion of strategy who has spent the past 30 years refining what strategy entails. His books, Corporate Strategy (1965); Strategic Management (1979); and Implanting Strategic Management (1984), remain at the heart of the great strategy debate.

Robert Blake & Jane Mouton

Creators of the managerial grid which measured management styles on two dimensions: managers' concern for production and concern for people.

Edward de Bono

Creator of lateral thinking, the art of turning ideas on their head, using analogy and random word association to break tyranny of traditional patterns of thought.

Alfred Chandler

Chandler's 1962 book, Strategy and Structure, helped ignite the later debate on strategy.

Theodore Levitt

A single Harvard Business Review article, 'Marketing myopia', secured Levitt's reputation though no one acted upon its analysis of the limitations of conventional thinking on marketing for another 20 years.

Douglas McGregor

Inventor of the motivational categories Theories X and Y, and author of The Human Side of Enterprise.

Abraham Maslow

Developed the hierarchy of needs, a limited but influential model of motivation.

Alfred P Sloan

Highly influential practitioner of the decentralised organisation. His work at General Motors (in the 1920s) revolutionised the company, allowing it quickly to outperform Ford, and provided a long-lasting organisational model.

1970s

The West had nothing to learn from the Japanese

Chris Argyris

The Harvard academic has never become populist and has consistently bemoaned the corporate incapacity to allow people to fulfil their potential. Studied learning and knowledge long before they became fashionable.

Warren Bennis

Though Bennis's later work on leadership has gained more attention, his earlier work is more broad-ranging, questioning accepted organisational forms.

James McGregor Burns

Leadership theorist and author of Leadership (1978). Invented the terms 'transactional' (focused on immediate events) and 'transformational leadership' (long-term and visionary).

Peter Drucker

Drucker's career spans all four decades though in the 1970s he produced some of his best work including the monumental Management: Tasks, Responsibilities, Practices (1974).

Henry Mintzberg

Mintzberg's The Nature of Managerial Work (1973) provided refreshing new insights into how managers actually manage, pointing out how much time managers spent on fire-fighting rather than strategic planning. Mintzberg has similarly refreshed strategic thinking.

Reg Revans

The British pioneer of action learning. Ignored in the UK, in the 1970s he played a major part in transforming the Belgian economy.

Only now is action learning beginning to be taken seriously.

EF (Fritz) Schumacher

Schumacher's Small is Beautiful is a popular blueprint for an alternative reality: more in tune with many of the ideas of the 1990s rather than of the 1970s when it was published. The book was subtitled A Study of Economics As If People Mattered. Schumacher was the first to suggest explicitly that large companies should try to simulate smallness.

1980s

The radical and rational

W Edwards Deming

Quality guru famed for his 14 points. In 1980 came to public attention in the West after decades of success in Japan.

Charles Handy

Handy's work in the 1970s, including Understanding Organisations, paved the way towards the radical alternatives proposed in his 1989 bestseller, The Age of Unreason.

Rosabeth Moss Kanter

Kanter's Change Masters and When Giants Learn to Dance provided a rigorous analysis of the changes of the decade as well as a carefully argued prediction of what was to come.

Tom Peters

Scourge of middle managers and prodder of the timid, Peters's manifesto was characterised by flexibility and empowerment.

Michael Porter

Harvard's arch-rationalist, Porter has taken the study of the nature of competitiveness to new extremes and arenas.

1990s

Re-engineering the idea

James Champy & Michael Hammer

Their Re-engineering The Corporation provided the 1990s with its big management idea.

Sumantra Ghoshal & Christopher Bartlett

Academic duo jointly responsible for identifying an emergent organisational form,namely the entrepreneurial organisation.

Gary Hamel & C K Prahalad

Explorers of 'strategic intent' and 'core competencies' and authors of Competing for the Future (1994).

Richard Pascale

Pascale's Managing on the Edge (1990) provided a benchmark of the seismic shifts that would be required of managers and organisations in the future.

Peter Senge

Populariser of the term, 'learning organisation'.

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