Quest for management’s little black dress

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Last week, London Fashion Week 2006 saw the city become the temporary centre of the multi-billion dollar global fashion industry. To outsiders, the catwalk shows may seem dazzling and a little be­wildering. What propels the almost constant changes in fashion? Who and what decides what we will be wearing next year?

Perhaps we should try to understand a little more. All human activities are subject to changing fashions, and business and management are no exception.

We may try to persuade ourselves that management is a rational activity, where managers define problems, assess the options and pick the one that best meets their needs. The reality is otherwise. Just as hemlines go up and down, so there is an ever-fluctuating series of ideas – old and new – about how management should be done.

For managers, the trick is to understand which of these ideas will turn into “classics” that can be used over and over, and which are fads that will quickly disappear.

What if management were to have a fashion week? If it did, there is an odds-on chance that the topic of leadership would occupy a prominent place on the catwalk this year. Leadership is very “in” at the moment. Harvard Business Review alone
has published at least 12 articles in the past year relating to it.

But leadership never really goes out of fashion. It is the business equivalent of the little black dress: essential, intensely practical, deceptively simple. It is hardly surprising that leadership climbs back to prominence every few years, especially when the gurus have run out of other ideas.

Other fashions in management tend to be much more transitory. Who now remembers the Bedaux unit, methods-time-measurement, the seven-S framework, therbligs, necessary disorganisation, the 14 steps? Does anyone out there still read their copy of Who Moved My Cheese?

Spotting the difference between genuinely good new ideas and passing fads in management is not easy because they often come from the same source.

Someone has a simple
idea for initiating radical performance improvement
in a particular field. The belief emerges that this idea can be replicated and used in other businesses. Books and articles appear, seminars are organised. A few high-profile chief executives endorse the idea publicly. A bandwagon is formed, and the idea takes on a momentum of its own.

Managers are suddenly under pressure to adopt the idea, not because analysis has shown that it may be good for their company, but through peer pressure. Managers abandon rational behaviour and simply follow the herd, apparently content in the knowledge that if all goes wrong, at least they will not be alone.

Business process re-engineering is a famous example. BPR started off as a method for improving process efficiency. It seemed to work, excited consultants and executives sang its praises. In no time, BPR was everywhere. Michael Hammer, one of BPR’s founders, described it as having the potential to “reverse the industrial revolution”, and argued that it would transform organisations and people and lead to an entirely new world of work. An article in Fortune magazine in 1993 described BPR as “the hottest trend in management”. Yet within a few years BPR was almost dead, repudiated by its founders and disgraced as a concept.

BPR had changed from principles for improving efficiency into a tool for sacking people. While some redundancies were always going to be essential if efficiency were to be served, companies went further, cutting entire teams for reasons that had nothing to do with BPR. And at least some managers who followed the trend were not doing so for reasons that made any sense. They were simply following the herd.

The more recent vogue for “execution” is another example of a concept extended too far beyond its primary purpose. The original idea was a good one: more care needs to be taken in the execution of decisions, as even a good idea that is executed poorly will usually end in failure. But the fashion for execution went too far, giving priority to execution and not enough to planning, reflection and decision-making.

The consultant Richard Pascale, in his 1990 book Managing on the Edge, discusses how managers are attracted to fads and argues that they need to be more sceptical and more critical. But too often, the opposite problem occurs, with managers rejecting genuinely good new ideas on the grounds that they are fads.

When J. Lyons, the caterer and food producer, introduced Leo (Lyons Electronic Office), the first business computer, in 1951, other companies scoffed and said computers in business would never catch on.

As Edward Brech, management historian, describes in his 2002 book The Evolution of Modern Management, it took a decade before computers came into general use in Britain, and then only to calculate payrolls, not to handle management information, the original purpose of the Leo project.

This continues to happen. Knowledge management and corporate governance, two movements that have had a far-reaching affect on management over the past few years, have both been described as fads that would never last. How is it, then, that managers will chase fads under the impression that they are enduring ideas that will last, and yet reject ideas with real value on the grounds that they are fads?

Partly, it is a matter of perceptions, of ourselves and others. No one likes to be seen to be falling behind. Just as people dress fashionably to attract the admiration of others, so managers are under pressure to be seen to be doing the most up-to-date thing. “Why aren’t you out­sourcing?” can be a difficult question to answer, particularly when everyone else in your industry is doing so.

How many managers have the courage to claim that they are right when everyone else says they are wrong?

Lou Gerstner of IBM was one who did have that courage. He took over the troubled computer maker in 1993, at a time when the fashion was to break large conglomerates into a num-ber of smaller companies.

According to Mukul Pandya and Robbie Shell, authors of Lasting Leadership, Mr Gerstner offered his employees a simple challenge: “Don’t you think we should try something different?” His successful recipe was to concentrate the company still further, bringing all its disparate business units together in pursuit of a single goal.

“Fashion changes”, said the designer Coco Chanel said, “but style remains.” Keeping up with your neighbours is not a recipe for success in management.

It is vitally important to keep abreast of trends, to know what is coming in the world of management, and to benchmark against competitors and rivals. But ultimately any strategic decision has to be founded, not on what others are doing, but on what is right for the business. And sometimes that means rejecting the dictates of fashion.

HOW TO MANAGE WITH REAL STYLE

■ Do not be too hasty in accepting new ideas. The fact that an innovation worked for one of your rivals is not a guarantee that it will also work for your business.

■ Beware of simply following the herd. Just because you see others wearing dinner jackets with flared trousers does not mean it is a good idea. At the same time, do not be too quick to reject new ideas. If necessary, put together an ad hoc project team to assess potential. Healthy scepticism is good; but recognise real value where it exists.

■ Like Lou Gerstner at IBM, dare to be different. If the prevailing orthodoxy says management should be done in a particular way, think again. Some of the best ideas are those others have rejected.

■ Every company has its own culture. The best management ideas are those that harness that style and use it in a positive sense, to hit profit targets and reach goals. The managers who can do this have a real style of their own, and do not need to worry about what the world of management fashion thinks.

FURTHER READING

Brech, E.F.L., The Evolution of Modern Management, (Thoemmes Continuum, 2002)

Furnham, A., Management and Myths: Challenging the Fads, Fallacies and Fashions (Palgrave Macmillan, 2004)

Pascale, R.T., Managing on the Edge: How Successful Companies Use Conflict to Stay Ahead (Touchstone, 1991)

Pandya, M. and Shell, R., Lasting Leadership, (Wharton School Publishing, 2006)

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