When you ask children what they want to be when they are older, how many of them say that they want to be a manager? I’ve certainly never met one who had such aspirations. In part this is because management is a pretty amorphous concept to a ten-year-old. But it’s also because we adults aren’t exactly singing the praises of the management profession either. Evidence for a creeping disenchantment with management is everywhere:

• Management as a profession is not well respected. In a 2008 Gallup poll on honesty and ethics among workers in 21 different professions, a mere 12 percent of respondents felt business executives had high/very high integrity—an all-time low. With a 37 percent low/very low rating, the executives came in behind lawyers, union leaders, real estate agents, building contractors, and bankers.¹
• Employees are unhappy with their managers. The most compelling evidence for this comes from economist Richard Layard’s studies of happiness.² With whom are people most happy interacting? Friends and family are at the top; the boss comes last. In fact, people would prefer to be alone, Layard showed, than spend time interacting with their boss. This is a damning indictment of the management profession.
• There are no positive role models. We all know why Dilbert is the best-selling business book series of all time, and why “The Office” sitcom was a big hit on both sides of the Atlantic—it’s because they ring true. The Pointy-Haired Boss in Dilbert is a self-centered halfwit; Michael Scott (or David Brent, if you watched the UK version) is entirely lacking in self-awareness, and is frequently outfoxed by his subordinates. If these are the figures that come into people’s minds when the word “manager” is used, then we have a serious problem on our hands.

What should we do about this? Some observers would like us to get rid of the word manager altogether, favouring terms like leader, executive and entrepreneur. But I believe a more useful approach is to reinvent management – to go back to first principles, and recapture the spirit of what management is all about. We need to help executives figure out the best way to manage, and we need to help employees to get the managers they deserve.

The corruption of management

Where did management go wrong? We cannot put it down to a few rogue executives or bad decisions, and we cannot single out specific companies or industries. The problem is systemic, and it goes way back in time. Big-company executives may be the ones in the hot seats, but many other parties are complicit in the problems of management, including policymakers, regulators, academics, and consultants.

Let’s start with a definition: Management is the act of getting people together to accomplish desired goals and objectives³. There is a lot of stuff missing from this definition — no mention of planning, organization, staffing, controlling, or any of the dozen other activities that are usually associated with management. There is also no mention of companies or corporations, and absolutely nothing about hierarchy or bureaucracy. And that is precisely the point—management is a social endeavor, which simply involves getting people to come together to achieve goals that they could not achieve on their own. A soccer coach is a manager, as is an orchestra conductor and a Cub Scout leader.

I believe that management—as a social activity and as a philosophy — has gradually become corrupted over the last 100 years. When I say corrupted, I don’t mean in the sense of doing immoral or dishonest things (though clearly there have been quite a few cases of corrupt managers in recent years). Rather, I mean that the word has become infected or tainted. Its colloquial usage has metamorphosed into something narrower, and more pejorative, than Wikipedia or Webster’s Dictionary might suggest. In talking to people about the term, and in reading the literature, I have noticed that managers are typically seen as low-level bureaucrats who are “internally focused, absorbed in operational details, controlling and coordinating the work of their subordinates, and dealing with office politics.”⁴

Whether accurate or not, this is a sentiment everyone can recognize. But it is a very restrictive view of the nature of management. And such sentiments also feed back into the workplace, further shaping the practice of management in a negative way. This is why I argue that the word has been corrupted.

Why has this corruption taken place? There are two major reasons:

Large industrial firms became dominant—and their style of management became dominant as well. A careful reading of business history indicates that large companies, of the type most of us work in today, first came into existence about 150 years ago. Back in 1850, nine out of ten white male citizens in the U.S. worked for themselves as farmers, merchants, or craftsmen. The biggest company in the UK at the time had only 300 employees.⁵ But the industrial revolution sparked a wholesale change in the nature of work and organization, with mills, railroads, steel manufacturers, and electricity companies all emerging in the latter part of the nineteenth century.

Of course this industrial Management Model was a spectacular success, and became one of the key drivers of economic progress in the twentieth century.⁶ But it had an insidious effect on the concept of management, because the term came to be associated exclusively with the hierarchical, bureaucratic form of work practiced in large industrial firms. For many people, even today, the word management conjures up images of hierarchy, control, and formal procedures, for reasons that have nothing to do with the underlying meaning of the term. “Management” and “large industrial firm” became intertwined in the 1920s, and they are still tightly linked today.

Such a narrow model of management gets us into trouble for a couple of reasons. First, it blinds us to the range of alternative Management Models that exist. Sports teams, social communities, aid organizations, even families, operate with very different principles than large industrial companies, and these alternative principles are potentially very useful today.

Second, it leads us to assume, incorrectly, that large industrial companies are inherently superior to other forms of organization. Of course there are certain industrial processes that are best suited to economies of scale and scope, but we would be misunderstanding history if we assumed that mass production was the only feasible model of industrial organization. In a fascinating article called “Historical Alternatives to Mass Production,”⁷ academics Charles Sabel and Jonathan Zeitlin made the case that other viable forms of organizing existed during the industrial revolution, including confederations of independent firms working collaboratively within a municipality, and loosely-linked alliances of medium and small firms linked through family ties and cross-shareholdings. These models were quite workable in the late 1800s and many are still in existence today. Sabel and Zeitlin weren’t trying to suggest that mass production took us down the wrong path. Rather, they were arguing for pluralism—for the need to recognize that Management Models other than the hierarchical, bureaucratic organization have their own important merits. Again, this is a lesson from history that has enormous resonance today.

The aggrandizement of leadership came at the expense of management. The second body blow to “management” was the apparently inexorable rise of “leadership” as a field of study. While the classic texts on business management are now more than a century old, books on business leadership are a more recent phenomenon, emerging in the post-war years and really taking off in the 1970s. Today, more business books are published on leadership than on any other sub-discipline. A few writers stuck with management—Peter Drucker and Henry Mintzberg being the most notable cases—but in most books management has been entirely subordinated to leadership.

It’s very clear what happened. To make room for leadership—which back in the 1970s was a poorly understood phenomenon—business writers felt compelled to diminish the role of management. Managers, in this new worldview, were passive, inert, and narrow-minded, while leaders were visionary agents of change. And the consequences of this leadership “revolution” were predictable: people flocked to this new, sexy way of working, while management took a step backward.

Let’s look more closely at the leadership versus management debate. Table 1-1 summarizes the arguments of two of the most influential leadership thinkers, John Kotter and Warren Bennis. Kotter sees managers as being the ones who plan, budget, organize, and control, while leaders set direction, manage change, and motivate people. Bennis views managers as those who promote efficiency, follow the rules, and accept the status quo, while leaders focus on challenging the rules and promoting effectiveness. Needless to say, I believe this dichotomy is inaccurate and, frankly, insulting. Why, for example, does “motivating people” lie beyond the job description of a manager? And “doing things right” versus “doing the right things” is a nice play-on-words but a rather unhelpful distinction. Surely we should all be doing both.

Table 1-1: Leadership versus Management⁸

Now, Kotter and Bennis are smart, thoughtful people who are more right than they are wrong. And they have a logically flawless response to my critique: namely, that “leadership” and “management” are roles that the same individual can play at different times. I can put on my leader hat in the morning when speaking to my team about next year’s plans, and then in the afternoon I can put on my manager hat and work through the quarterly budget. This makes sense. But I still think the aggrandizement of leadership at the expense of management is unhelpful, because management—as a profession and as a concept—is vitally important to the business world. We should be looking for ways to build it up, rather than tear it down.

Here is my view on the management versus leadership debate. Leadership is a process of social influence: it is concerned with the traits, styles, and behaviors of individuals that cause others to follow them. Management is the act of getting people together to accomplish desired goals. To make the distinction even starker, one might almost argue that leadership is what you say and how you say it, whereas management is what you do and how you do it. I don’t want to fall into the trap of making one of these seem important at the expense of the other. I am simply arguing that management and leadership are complementary to one another.

Or to put it really simply, we all need to be leaders and managers. We need to be able to influence others through our ideas, words, and actions. We also need to be able to get work done through others on a day-to-day basis.

In sum, the concept of management has been gradually corrupted over the years, partly because of the success of large industrial companies and their particular model of management, partly because of the popularity of leadership, which has grown at management’s expense. To make progress, we need first to reverse out of the cul-de-sac that management has been driven into. We need to rediscover the original meaning of the word, and we need to remind ourselves that leadership and management are simply two horses pulling the same cart.

The future of management

So. what is the future of management? In the face of all these challenges, can management be reinvented to make it more effective as an agent of economic progress and more responsive to the needs of employees?

One school of thought says management cannot be reinvented. The argument here can be summarized as follows: management is fundamentally about how individuals work together, and the basic laws of social interaction have not changed for centuries—if ever. While the business context will evolve the underlying principles of management—how we set objectives, coordinate effort, monitor performance—are never going to change. For example, Henry Mintzberg argues in his most recent book, Managing, that the nature of managerial work has hardly changed for decades: “Managers deal with different issues as time moves forward, but not with different managing. The job does not change.”⁹ Indeed, it is interesting to note that most of the major innovations in management—the industrialization of R&D, mass production, decentralization, brand management, discounted cash flow—occurred before 1930. Most of the recent innovations—Six Sigma, the balanced scorecard, re-engineering, for example—have been little more than incremental improvements on existing ideas, rather than entirely new ideas in their own right. If we extend this train of thinking, we could conclude that the evolution of management has more or less run its course, that, to use Francis Fukayama’s famous expression, we’ve reached “the end of history” with regard to management progress.

But we haven’t. Of course there is some validity in arguing that the basic laws of human behavior are not going to change. But the practice of management is enormously context-dependent, and as the nature of business organizations evolves, so too will management. Yes, there will always be the need for some sort of hierarchical structure in a large organization, but the nature of that hierarchy can potentially change dramatically.

The other reason I disagree with the argument that “management cannot be reinvented” is that there must be a better way of running large companies. The first part of this article documented some of the problems with management as it functions today, and I believe we cannot just accept that our current model is as good as it gets.

Another school of thought says we are on the cusp of inventing an entirely new model of management. The argument here runs as follows: management as we know it today was developed for the industrial era, in which capital was the scarce resource. Today, it is knowledge. Firms gain advantage not by working efficiently but by harnessing initiative and creativity. And, most vitally, the information technology revolution is making it possible for entirely new ways of working to emerge. MIT Professor Tom Malone has made this case clearly:

Many other writers have made similar claims. For example, Wired editor Jeff Howe argues that the internet-driven phenomenon of crowdsourcing “will change the nature of work and creativity.”¹¹ Again, the argument is persuasive, and one that we can all relate to as we try to come to grips with the potential ramifications of Internet technology.

The trouble is that I have a nagging concern that we have been here before. All the arguments around decentralization and empowerment have been debated for a very long time. Fortune magazine ran a series of articles on “The New Management” in 1955 in which these themes were discussed. And every generation of management writers since then, including such luminaries as Peter Drucker, Gary Hamel, Rosabeth Moss Kanter, and Sumantra Ghoshal, has also argued for its own version of revolutionary change in the years ahead.

Is there a third way here? Can we identify a useful way forward that avoids the extreme positions of these other two schools of thought? I believe there is.

We don’t need to throw up our hands and say management has gone as far as it can, because that would accept the failures of management as something we must just live with. And we don’t need to create a whole new model of management—we have plenty of ideas from the world of theory and insights from the world of practice to guide us.

We need to develop a more comprehensive understanding of what management is really about to make better choices. By going back to a basic definition of management—the act of getting people together to accomplish desired goals—we can frame our discussion of the activities and principles of management much more explicitly. And armed with this new understanding, we can help managers make better choices within the universe of known possibilities, rather than suggest they invent something that has never been thought of before.

Here is an example. Why should we assume that all important decisions get made by the people at the top of the organizational hierarchy? Traditionally this was certainly the case, but is it possible that important decisions might be made in less-hierarchical or non-hierarchical ways? Yes it is. In fact, entire books have been written on the “wisdom of crowds” and “crowdsourcing” techniques for aggregating the views of large numbers of people to make better decisions.¹² So it would be wrong to assume that all decisions made in the future will be made exclusively by those at the top of the hierarchy, and it would be equally wrong to assume that crowdsourcing will entirely replace traditional decision making structures.

The prosaic truth is that it depends — the right model depends on a host of contingencies, including the nature of the decision being made, the company’s size and background, the interests and capabilities of the employees, and so on. The right Management Model for your company is the one based on the most appropriate choices you make within known boundaries; between for example the principle of hierarchy on one hand, and the wisdom of crowds on the other¹³.

Making smarter choices

In the field of business strategy it is often argued that there are two different and complementary pathways to success—devising a distinctive strategic position and implementing a particular strategy effectively. Southwest Airlines, Dell Computer, and IKEA have prospered because they developed and protected a distinctive strategic position. Toyota, McDonalds, and Tesco have prospered by executing their plain-vanilla strategy better than anyone else in their industry.¹⁴

The same logic applies in the field of management: you can make distinctive choices about the Management Model you are going to use, and you can have high-quality managers who simply do their jobs well. Ultimately there is no trade-off needed between these two approaches. High-performing companies typically do both well. But I make the distinction to emphasize that I am interested primarily in the former—in how you choose the best Management Model for a given situation. Of course the quality of the individuals you employ, and the extent to which they do their jobs well, are important, but such issues are the subject of another article. The focus here is on the overall architecture of management—the choices we make about how we work. We make these choices through four linked steps (Figure 1).

Figure 1. The Four Key Steps in Making Smarter Choices

Understanding: You need to be explicit about the management principles you are using to run your company. These principles are invisible and often understood only at a subconscious level, but they drive the day-to-day processes and practices through which management work gets done.

Evaluating: You need to assess whether your company’s management principles are suited to the business environment in which you are working. There are risks associated with whatever principles you employ, so you need to understand the pros and cons of each one so that you can choose wisely.

Envisioning and experimenting: You need to be prepared to try out new practices as a way of reinforcing your choices. Your Management Model can only become a source of advantage if you find ways of working that separate you out from the crowd. So it is important to take a creative approach to management, by envisioning new ways of working and experimenting with them.

Alas, there is no recipe book for reinventing management. While these steps suggest a process for evaluating and rethinking your management principles, there is only so much you can learn from the mistakes made by troubled companies or from the latest Dilbert cartoon. The right choices depend entirely on the specific circumstances and opportunities facing your company, and on your willingness to experiment with unproven practices.

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Notes

1. Lydia Saad, “Nurses Shine, Bankers Slump in Ethics Ratings,” Gallup, November 24, 2008.
2. Richard Layard, Happiness (London: Penguin Books, 2005).
3. Taken from Wikipedia.
4. Ronald Purser and Steven Cabana, The Self Managing Organization (New York: The Free Press, 1998), Page 3.
5. Roy Jacques, Manufacturing the Employee (Thousand Oaks, CA: Sage Publications, 1996); Peter Drucker, Management, fourth edition (New York: Collins Business, 2008).
6. Peter Drucker has gone so far as to state that “Management may be the most important innovation of the twentieth century” (Management, fourth edition, op cit).
7. Charles Sabel and Jonathan Zeitlin, “Historical Alternatives to Mass Production: Politics, Markets and Technology in Nineteenth-century Industrialization,” Past & Present, 1985, 108: 133-176.
8. This table is drawn from the writings of John Kotter and Warren Bennis. See in particular: John Kotter, Force for Change: How Leadership Differs from Management (New York: The Free Press, 1990); Warren Bennis, On Becoming a Leader (New York: Addison-Wesley Publishing Co, 1989).
9. Henry Mintzberg, Managing (San Francisco: Berrett Koehler, 2009).
10. Thomas Malone, The Future of Work: How the New Order Will Shape Your Organization, Your Management Style, and Your Life (Boston, MA: Harvard Business School Press, 2004).
11. Jeff Howe, Crowdsourcing (New York: Crown Books, 2008), page 18.
12. Jeff Howe, Crowdsourcing (New York: Crown Books, 2008); James Surowiecki, The Wisdom of Crowds (New York: Doubleday, 2004).
13. For a detailed discussion of the dimensions of a Management Model, see Julian Birkinshaw and Jules Goddard, “What’s your Management Model,” Sloan Management Review, 2008.
14. Michael Porter, “What is Strategy,” Harvard Business Review, 1996; 75(6): 61-70; Patrick Barwise and Sean Meehan, Simply Better (Boston, MA: Harvard Business School Press, 2004).