Lessons that still ring true after all these years

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In my career, I’ve had the benefit of observing a wide range of management successes and failures. I’ve studied them up close as an academic and dean of two business schools. I confronted them as the President’s National Economic Advisor in the Clinton White House, and as a member of three corporate boards. Yet some of the business world’s best lessons from management successes and failures – the ones we read about in newspapers and digest as academics – are often soon forgotten in the race to the next big idea.

One bold management pioneer, who was decades ahead of her time as a lecturer to academics and businessmen in the 1920s and 1930s, put forth lessons that ring particularly true today. Mary Parker Follett’s (1869-1933) thoughts on democracy, society and management have inspired business leaders in fits and starts during the 20th century – and they deserve to be revisited as we move forward in this century.

Most of Follett’s lessons on teamwork, social responsibility, conflict resolution, innovation, leadership and integrity are now considered best practices. In fact, in London Business School’s own 2004 study of global business capabilities, more than 120 business leaders highlighted similar key traits and skills they look for when they hire new employees.

Follett’s early work spanned the Progressive Era (roughly 1890s to 1920s), a period in US history marked by reforms in labour and fiscal policies from local, civic organisations to the upper echelons of national government. Follett was in the thick of the movement as a social worker in Boston, which allowed her to mix with some of the era’s most progressive business leaders. She saw at first hand the societal benefits awarded when organisations were well managed and workers were treated less as subordinates and more as equals to management.

Teamwork became a keystone of Follett’s management lectures. I particularly agree with Follett on this point, as I firmly believe you should not be afraid to surround yourself with the smartest people. We drill this lesson into the minds of business students as we talk about effective teamwork. It’s a topic that Follett touched on in 1926 when she said, “ . . . authority should go with knowledge and experience, that is where obedience is due, no matter where it is up or down the line”.

Globalisation, interdependence and the increasing links between a growing skilled and decentralised labour force are all topics she foresaw in the 1920s. “What the world needs today is a co-operative mind,” she wrote in The New State.

“The business world is never again to be directed by individual intelligences, but by intelligences interacting and ceaselessly influencing one another.” This interweaving of ideas is an efficiency that companies must aspire to.

Managing in an authoritarian way rarely brings out the best in an organisation. Leading in more co-operative terms, however, allows leaders to mobilise their colleagues toward a collective goal successfully. Follett’s idyllic leaders are team members who can set priorities, focus on these, and “organise the experience of the group” to meet objectives. They also have to keep a firm grip on their vision of the future. As Follett said in 1933, “decisions have to anticipate development”.

Another point that rings particularly true in 2005 is Follett’s belief in the important role that businesses play in society. She gave serious attention to what we now call corporate social responsibility, a topic of great interest in today’s boardrooms and business schools.

One of her keenest desires was that companies act as forces for good. Follett believed that the managers should have a good grounding in and respect for their local communities: “ . . . whatever is good for the community is good for the business in the long run”. And they should never abuse their position: “The leader should have the spirit of adventure, but the spirit . . . need not mean the temperament of the gambler,” she said in 1933.

Follett had a real affinity for conflict – especially its “revealing nature”. In her 1924 book Creative Experience she wrote that controversy exposes the real issues at stake in an organisation, and offers a chance to reconcile them.

Her ideal outcome to any conflict was synthesis, what we now call “win-win situations”.

Follett’s ideal solution to conflict was an integration of ideas rather than mere compromise. In her 1918 book, The New State, she wrote, “ . . . whenever any difference is ‘settled’ by concession, that difference pops up again in some other form. Nothing will ever truly settle difference but synthesis.” We now teach business students that finding creative ways to meet each party’s short- and long-term needs and interests is ideal in conflict resolution.

But another outcome she prized was fixing the problem at hand in an innovative way. Companies that identify conflict early, and improve their operations as they solve the problem, stand to gain significant competitive advantages.

Before I joined the Clinton Administration as an economic adviser in 1993, I focused much of my research on industrial competitiveness. What makes one industry or company more competitive than another? Consider General Electric: the company was faced with a somewhat disorganised programme of scientific research at the start of the 20th century, so the company applied management discipline and controls to research. Today, the company is consistently ranked annually among the top 10 patent recipients in the US.

Follett’s early thoughts on creative solutions to industrial conflicts – especially those between capital and labour – are precursors to the topic of management innovation. London Business School is building its own Management Innovation Lab, which seeks to create a collaborative research environment in which companies and scholars can work together to invent the management practices that will define success in the 21st century.

The most essential work of a leader is to create more leaders. This is something my colleagues and I believe in at London Business School, and something Follett advocated, too.

She challenged the idea that “leaders are born, not made”, by saying that leaders can be taught, and should be keen on sharpening their skills as rigorously as a surgeon. In 1933, she put it plainly: managers “must realise that they, as professional[s], are assuming grave responsibilities, that they are taking part in one of the large functions of society, a part which, I believe, only trained and disciplined [business people] can . . . hope to take with success.”

I couldn’t agree more.

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Dipak Jain of Kellogg Northwestern University: The long and the short of it

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