Company as a Management Leader

Management ideas are susceptible to the same cycles of hysteria and disillusionment that shape the sales of designer clothes, rock bands and technology; think of the boom and bust of such ideas as Business Process reengineering, Economic value addition and Quality Circles.

There is an industry of fashion setters out there (journalists, management consultants, business academics) who make their living from hyping up companies and bringing their new management techniques to light. And there is no shortage of company executives quick to pick up on new ideas to move their business forward. Business process Reengineering took off when Michael Hammer published his 1990 article. Reengineering Work: Don’t automate obliterate Companies began applying his ideas which encouraged dozens of consultancies to launch to launch reengineer practices.

But where do these new ideas come from? The “fashion setters” did not invent them, any more than the talent spotters working Domino Recording Company wrote the Arctic Monkeys first song. The new ideas always start through the entrepreneurial efforts of a few key individuals.

So there is a tricky question: given the vibrant market for management ideas, and the reassurance that comes from doing what everyone is doing why would anyone choose to develop their own management innovation? The risk of being wrong is significant, the pressure to justify ones non-conformist choice is enormous and the payoff is distant and uncertain. In fact, it is a wonder we ever see any management innovation. But of course we do. So, if one think company should be doing more management innovation, the following may give some direction:

When a problem or opportunity that is unprecedented is faced and demands a novel solution. Tata Consultancy Services, an Indian IT services provider, puts highly interdependent activities in different countries to make the most of differences in employment costs, so it has had to come up with new ways of achieving “coordination without co-location”. A company should have the self confidence to allow people to take a chance on new ways of working. The company must take experimentation and prototyping seriously. The mavericks and contrarians in the company may find themselves marginalized if the company encourages freedom for innovation.

If the approach is positive for the above by a company then one can probably work for one of the small minority of companies who are true “management leaders” – the ones that push best practice, experiments with new ways of working, and set the pace for the others. So here’s the bottom line: there is nothing wrong with management fads, because they always contain some elements of real value. But it needs to be evaluated to decide whether they really address the current challenges. And if they do not, one shouldn’t be afraid of coming up with his own novel solution.