Monday, October 06, 2008

Fashion and the first five fallacies in modern management - a note

My post Saturday Morning Musings - the first five fallacies in modern management drew a comment from Bob Embry who said in part:

Almost no institutions on the planet have practiced or are practicing Drucker's view of management. If they were it would be "positively" obvious in our day to day lives—as opposed to "negatively obvious."
In a broad sense, I think that Bob is right. I found Peter Drucker's writing enormously influential, still relevant today. The core problem I have is the way in which certain approaches have come to be applied in combination almost as holy writ.

Take planning as an example. At one level, the value of planning is self-evident - it sets out the how to do. However, the problem we now have lies in the blind application of planning techniques without proper understanding of either their role or limitations. I have discussed this at various times, most recently in Mechanistic Management - the sometimes fallacy of planning.

A particular difficulty lies in the role of fad and fashion in management thinking. Management is very prone to fashion. New ideas rise, become popular, then recede. Yet even in recession, they may still remain embedded in the organisational landscape like an ancient artifact
To illustrate what I mean, take the concept of the business plan. Originally conceived in a start-up context, this had morphed by the mid-eighties into something that all businesses should have. The idea became specially popular with Australian governments - state and Federal Governments provided funds to help smaller businesses develop their own business plans.

Most if not all of this money was wasted because thinking was actually mis-directed. Good businesses already knew what they were doing - they had techniques in place. Other businesses lacked the capacity to really benefit.

In all this, there was a mismatch between the assumptions held by those espousing business planning approaches almost as holey writ and the actual mechanics involved in small to medium size business. The most successful small businesses were too busy responding to changing market need, too busy trying new things, too busy improving what they did, to set up plans that they knew would be quickly invalidated by changing business conditions.

It is now more than fifteen years since the business planning ideal peaked. However, the concept remains embedded in the Australian institutional landscape.

Government is a particular problem here in that Government agencies have, to my mind inappropriately, institutionalised internal business planning techniques without proper reference to their original purpose. They have become, to use modern jargon, commonly accepted "best practice". Worse, they sometimes attempt to impose the approach on others in the name of good public policy.

Don't get me wrong. I do support business planning approaches, but only in the right place.

In all this, as a reformer and business improver I am as prone to fashion as anybody else. I have been involved in one way or another with most of the popular management movements over recent decades. So I will and have pleaded mea culpa at times (here, for example) for my own enthusiastic errors.

Now as I argue the need for new approaches I am conscious at times of the danger that I may simply be participating in the latest fashion wave.

We live in age of shortening organisational life cycles, of business destruction. Here I am not talking about the latest financial crisis, but of a longer term trend. I attribute this in part to mechanistic management, arguing that we need improve organisational resilience. I thought that this was a new idea, but it is in fact very popular just at present. So it too is a fashion

I have also argued for evidence based approaches, centered especially on the concept of a discipline of practice. Now here I was seriously concerned to learn that Australian Prime Minister Rudd is an exponent of evidence based approaches.

Why concerned? If we formalise evidence based approaches within current policy and institutional structures, then it risks becomes just another device within what I have called the current fallacy of measurement for enforcing central control.

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