The future of management: Back to basics

(Management Innovation eXchange) -- When you ask children what they want to be when they are older, how many of them say 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.

For example, in a 2008 Gallup poll on honesty and ethics among workers in 21 different professions, a mere 12% of respondents felt business executives had high/very high integrity -- an all-time low. With a 37% low/very low rating, the executives came in behind lawyers, union leaders, real estate agents, building contractors, and bankers.

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What should we do about this? Some observers would like us to get rid of the word manager altogether, favoring terms like leader, coach 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.

Management versus leadership

Let's start with a definition: Management is the act of getting people together to accomplish desired goals and objectives. There is a lot of stuff missing from this definition: no mention of planning, organization, staffing, controlling, or budgeting; 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.

But over the last century, the term management has metamorphosed into something narrower, and more pejorative, than Webster's dictionary might suggest. Managers are often seen as low-level bureaucrats who are internally focused, absorbed in operational details and controlling and coordinating the work of their subordinates.

Why has this change in perception taken place? One reason is that our way of thinking and talking about management is based on the century-old form of management practiced in large industrial firms. This approach to management was all about improving efficiency, standardization and quality control, and it was built on principles of hierarchy, bureaucracy and extrinsic rewards.

The trouble is, these objectives are not what drives success in most sectors today -- we are much more likely to be concerned about innovation, agility and engagement. And yet we are still, for the most part, using these industrial-era concepts to shape the way we get work done.

To make room for leadership, gurus felt compelled to diminish the role of management. John Kotter saw managers as being the ones who plan, budget, organize, and control, while leaders set direction, manage change, and motivate people.

Warren Bennis viewed managers as those who promote efficiency, follow the rules, and accept the status quo, while leaders focus on challenging the rules and promoting effectiveness. By splitting the work of executives in this way, Kotter, Bennis and others squeezed out the essence of what managers do and left them with the boring work that "leaders" don't want.

Leadership is a process of social influence: it is concerned with the traits, styles, and behaviors of individuals that causes others to follow them. Management is the act of getting people together to accomplish desired goals.

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.

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?

Some say it can't. Henry Mintzberg argues in his most recent book, Managing, that the nature of managerial work has not changed noticeably in the 40 years he has been studying it. Management is fundamentally about how individuals work together, and the basic laws of social interaction are not susceptible to dramatic change.

Indeed, it's 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. If we extend this logic, 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 management practices are largely dependent on context, and as the nature of business organizations evolves, so too will management.

Another school of thought says we are on the cusp of inventing an entirely new model of management, largely because of the information technology revolution.

The only trouble with this argument is that we have been here before. All the arguments around decentralization and empowerment have been debated for a very long time. Every generation of management writers, including such luminaries as Peter Drucker, Gary Hamel, Rosabeth Moss Kanter, and Sumantra Ghoshal, has argued for its own version of revolutionary change in the years ahead. And they cannot all be right.

Is there a third way here? 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 simply live with. And we don't need to create a whole new model of management -- we have plenty of ideas from theory and 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 need to be made by the people at the top of the organizational hierarchy?

Traditionally, this was 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. So it would be wrong to assume that all decisions made in the future will be made exclusively by those at the top, and it would be equally wrong to assume that crowdsourcing will 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.

Your management model is simply the choices you make about how you work -- the way you set objectives, motivate your employees, coordinate activities, and make decisions.

Most companies have an implicit approach to defining their management model, by simply working with what they have inherited, or what they have seen in other companies. My view is that you should take a more critical look at those choices. This involves four steps:

1. 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.

2. 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.

3. Envisioning: You need to seek out new ways of working, by looking at examples from different industries and from new contexts.

4. Experimenting: You need to be prepared to try out these new practices in a low-risk way to see how they work.

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 that your company faces, and on your willingness to experiment with unproven practices.

Julian Birkinshaw is Professor of Strategic and International Management at London Business School. He is co-Founder and Research Director of the Management Lab (MLab).