UK: BE WARY OF NEW WAVES.

UK: BE WARY OF NEW WAVES. - Behind the new facilitate-and-empower facade of many companies, the realities of the old philosophy of command-and-control lie concealed.

by Mahmoud Ezzamel, Simon Lilley and Hugh Wilmott.
Last Updated: 31 Aug 2010

Behind the new facilitate-and-empower facade of many companies, the realities of the old philosophy of command-and-control lie concealed.

During the 1980s a new wave of management thinking developed which questioned much of the received wisdom - handed down by countless earlier generations - about how to organise and manage companies. In particular, the new ideas challenged the value of bureaucratic structures and organisational controls - which were criticised on account of their cost, lack of responsiveness and the deadening effect they had on initiative and productivity. Barriers between departments came under fire, as well as layers of hierarchy, for inhibiting effective communication and creating unnecessary managerial overheads. Most crucially, the old ways were said to restrict the speed and quality of a company's response to changing conditions.

What businesses need today, according to proponents of the new wave, are leaner, more creative and adaptive forms of organisation. These have to be based on the commitment of all employees to shared values. So away with reliance on rules and procedures. The organic network, rather than the rigid hierarchy, is to be the central organising principle. Cumbersome and expensive hierarchies will disappear as employees absorb, and became committed to, the core values of the organisation. It is these values, rather than inflexible and quickly outdated regulations, that will guide employees as they form and reform the collaborative inter-(and intra-) departmental teams and networks that will realise the aims of the mission statement (see box, page 100).

With this new type of organisation comes a new kind of management. Managers are no longer required to write rules for a recalcitrant workforce. There need no longer be a narrow 'span of control' to enforce compliance. Since employees now discipline themselves, the levels of the hierarchy can be substantially reduced - if not abandoned entirely. In the new organisation, the responsibility of such managers as remain is to act as 'facilitators'. They are there to ensure that staff are fully equipped, materially and educationally, to carry out their tasks. They play a part in shaping the project teams that are set up to exploit emergent opportunities. They develop synergies and breed commitment. Their individual performance is measured - and remunerated - according to their ability to mobilise the contribution of staff over whom they may have no formal authority.

What matters, in these circumstances, is not so much a manager's position in the hierarchy as his or her membership of particular networks, plus the possession of the interpersonal and political skills needed for building and using alliances within - and across - organisations.

By the same token, compliance with established practice and codes of conduct is no longer a low-risk strategy for achieving recognition and promotion. In order to win advancement, the manager needs to demonstrate a willingness to empower, and an ability to energise and support.

In this bewildering world, the old certainties associated with seniority and title no longer exist. In the drive to sweep away rigidities and improve responsiveness, everything has become flexible, everything is now negotiable. People are increasingly valued for their ability to upset conventions and to spark innovations. Managers and employees are no longer urged to strive for 'excellence'. Instead, they are exhorted to 'thrive on chaos'. Recent years have seen the emergence of a vast literature advocating change along lines such as these. Yet there has been a remarkable dearth of research into changes in practice. What - if any - are the limitations of the new wave philosophy? What are the pitfalls associated with its introduction?

The answers to these questions are obviously in some degree judgmental. The truth may also be blurred by the constant desire of managers to represent their efforts as 'successful' and to conceal failures. This is regrettable because the failures could be at least as instructive to other companies as the success stories. But, in any case, it is clearly not sufficient to take the benefits of the new wave on trust: however great the barriers to objectivity, questions need to be asked.

During the past year the authors have conducted a study of major UK businesses in the hope of shedding light on this rather shadowy area. Conducted during 1992, the first stage was a survey, covering most of the Times 1000 companies, to discover how management practices have changed since the early 1980s. This was followed by a series of in-depth interviews with senior managers from a sample of the same companies. Although the interview evidence is necessarily anecdotal, the survey findings suggest that the responses of the interviewees were broadly representative.

As might be expected, reactions were mixed. A lot of respondents saw the new wave as a practical means of sweeping away the crippling rigidities of traditional systems. 'You'll find that a lot of companies are all having the same problem,' said a director of a manufacturing company, pointing out that 'They've got a very functional systems environment - which is not conducive to efficient running.' Others were more wary. They were either sceptical about the new wave as a set of guiding principles, or doubtful about its efficacy if implemented within their own organisations.

As a generalisation, it was the senior managers - often those who were under intense pressure to survive in a hostile marketplace - who came out most positively in favour of the new wave. Another typical comment came from the financial controller of a company in the extractive sector, who said: 'I think making people accountable and spreading decision-making around in a controlled manner is good for the company.' But he also admitted to reservations, on account of the difficulty that certain other managers experienced in adjusting to the new methodology. 'Some people have struggled with it because they thought they were moving for independence.'

It's commonly supposed that the most serious and concerted opposition to the new wave is posed by middle management. After all, middle managers have most to lose - in terms of jobs, status and career opportunities - when the old control-and-command structure is replaced by facilitate-and-empower. Moreover, those who occupy the middle layers of management are in a powerful position to be obstructive, since it is they who are expected to implement the new organisation.

However, the interview data suggests that middle managers may on occasion be used as scapegoats by more senior managers, who themselves reached the top precisely because of their ability to operate in a command-and-control world. A director of one manufacturing company expressed the view that: 'Middle managers are quite capable of taking on more responsibility. It's the board who don't want to give it away ... Right now it's the biggest challenge to (the implementation of) all this good stuff we're talking about. It has to start in the boardroom.' The speaker was not alone. Despite protestations to the contrary, there appears to be a widespread reluctance - particularly at the top - to dilute or weaken hierarchical control. On occasion this takes the form of outright rejection of the new management theory as impractical or 'airy-fairy'. More often the response has been to accommodate the theory by deploying it highly selectively, and/or adopting its rhetoric to push through changes that represent, at best, a very slight shift in the direction of facilitation-and-empowerment. In this way, managers can appear to be 'progressive' while actually keeping the processes of command-and-control intact.

When pressed, they rationalise this behaviour in terms of the need for individual accountability. Some might consider their attitude cynical and self-serving. In their own eyes, the managers are merely being sensible and applying the new wisdom with caution. The importance of accountability came out strongly and repeatedly during the interviews. 'We're trying to get away from rigid structures,' insisted the finance director of a manufacturing company. 'But you can't give everybody sort of carte blanche to do their own thing. You've got to accept (the need for) accountability.' Resistance to the new philosophy often extended throughout the hierarchy. Below the top level the prospect of empowerment can hold attractions for the individual employee. Yet while many people undoubtedly 'enjoy having more control over their own destiny and their own day-to-day roles and responsibilities' (in the words of one executive), they are even keener to maintain control over the destiny, roles and responsibilities of others.

Naturally, the best hope of preserving the influence that used to be enjoyed in the past is seen to consist in retaining the authority that was acquired under the traditional organisation structure. Desire to conserve control undoubtedly lies behind a lot of opposition to the new wave, and it is by no means confined to middle management. As another of the interviewees remarked: 'People who don't want to work that way (ie, in the style of the new organisation) take some time to convince'. At the root of the problem is 'management's willingness (or, more correctly, unwillingness) to let go'.

Some companies have shown themselves adept at hijacking the language of new wave management theory (networking, empowerment, etc), which they then apply to quite conventional programmes of change. One business in the financial services sector, for example, found itself disadvantaged by its major competitors' superior use of financial and management information. The discovery caused the managing director to launch a productivity and effectiveness programme which was also designed to encourage management-by-information. This involved the installation of 'fundamentally a very simple work measurement system' - which was said to 'empower' managers by requiring them to quantify the contribution of staff towards planned improvements in performance.

But even assuming a genuine commitment to the new wave philosophy on the part of top management, and initial enthusiasm in the ranks, a real problem arises when it comes to implementation. The question is: Where to begin? 'The new organisation' is designed to work as a total package, but the transformation of an existing structure from command-and-control to facilitate-and-empower cannot be made overnight. In principle, it is necessary to change all aspects of the business simultaneously, so that everyone points in the same direction. In practice, you have to start somewhere. Yet the full rewards are unlikely to be reaped until substantial changes have been introduced elsewhere.

When companies seek to apply the new philosophy, a Catch 22 situation often arises. They find that, if structural change is to be effective, a number of other issues have to be dealt with first. However it is difficult to deal with these without changing the structure. This is how the employee relations director of one manufacturing company describes his own organisation's predicament: 'Our main response has been structural (but) you can't actually tackle that on its own because if you change the structure without tackling a number of other key issues, you will fall over. We did something about culture, and once you do something about culture you've got to look at your personnel systems. You're going to need new pay systems, new performance appraisal systems, and you have to change all those as well ...'

Some changes can be extremely difficult to make without destroying, in advance, the commitment that the new culture is supposed to engender. Here's the systems and quality director of another manufacturer: 'If you really want to move to a remuneration system that says "Look, I only succeed if the company succeeds", go to a salesman and tell him that you'll pay him if the company succeeds, not (merely) if he gets the orders.'

In short, managers - and other stakeholders - are right to be cautious about the claims that are made for the new organisation. They are wise to be wary of the difficulties in implementation. For the command-and-control system often lives on, concealed beneath the trappings of the facilitate-and-empower philosophy. Before adopting the new creed, managements should be aware that the consequences of striving to follow its prescriptions could easily be incoherence, demoralisation and confusion.

THE DIRECTION OF THE NEW WAVE

The past - characterised by reliance on:

- Universal laws (eg, span of control)

- Hierarchical control/chain of command

- Discipline imposed by management

- Fragmented, mechanistic, directive approach to problem-solving

- Single-function specialisms

- Individualism

- Job description setting out tasks and responsibilities

THE FUTURE - CHARACTERISED BY EMPHASIS ON:

- Appreciation of contingency and ambiguity

- Commitment/effective use of human resources

- Self-discipline accepted by employees, facilitated by management

- Holistic, recursive, participative approach to problem-solving

- Multi-functional teams

- Mutual dependence

- Continuously reviewed and renegotiated assignments.

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