Management in theory and practice is found wanting.

​

Business. Jun 11th 2020 edition

​

Jun 11th 2020

​​

​

Perhaps the most remarkable discovery was how much is written about management. Back at The Economist’s offices, books are piled high by Bartleby’s desk; so many that it would be impossible to read them all. Either the laws of supply and demand are broken, or there is a huge appetite to learn how to manage.

​

Admittedly, many of these books are hard to read. The authors use “architect” as a verb and “learnings” as a noun. They randomly Capitalise every Other word. And they are overly fond of peas (pointless esoteric acronyms).

​

The sheer variety of advice suggests that the task of managing people in the modern era is rather difficult. Early management theory was largely concerned with maximising the output of manufacturing workers, and tended to treat people as recalcitrant cogs in a machine. The output of such workers was easy to measure; it was all a matter of producing more widgets per hour.

​

The modern economy is dominated by the service sector where measuring productivity is difficult. Volume and speed may not be the best measures. A call-centre worker may handle 20 conversations per hour but if most customers go away dissatisfied, the time has not been well used. Creative workers may get their ideas by reading a book, or reflecting during a long walk.

So gurus now suggest managers should be coaches—like Phil Jackson of the Chicago Bulls basketball team or Jürgen Klopp of Liverpool Football Club.

 

The tone should be more guidance counsellor than regimental sergeant-major. Many high-skilled workers have been treated this way for some time. The approach is now being tried further down the corporate hierarchy.

​

The trouble is that humans come with many different personality types and not all respond to the same coaching strategies. Some need the reassurance of a daily chat with their boss; others will regard that as tiresome interference. Some may respond well to constructive criticism; for others it may destroy their morale. No single approach can possibly be right (good news for writers of management books, who can keep churning them out).

​

Another big problem is the typical corporate structure. A system created in the 20th century for mass-manufacturing companies is lingering into the 21st, just because nobody can reimagine it. It was a command-and-control system in which middle managers communicated guidance from top executives to the workforce. Modern technology has eliminated the need for this function.

​

As usual, the technology sector has been the leader with “agile” teams made up of colleagues from across the organisation collaborating on short-term projects. Perhaps managers should be more agile, in charge of some projects and merely team members for others? And if remote working becomes more common, how will that affect management structures? How do you build a relationship between supervisor and employee if the two never meet?

​

At the top, a focus solely on shareholder value, associated with the 1990s boom, is no longer appropriate. The modern senior executive must be a statesman (or woman), dealing not just with shareholders but wider society. They must be attuned to the views of their employees and customers, in case the company finds itself in the middle of a social or political conflict. And they have to navigate these minefields while simultaneously generating sufficient profit growth to fend off attacks from activist shareholders.

​

The monetary rewards of managers are linked to financial targets, rather than these broader criteria. The task for the next few years is to find ways to measure the executive’s success in dealing with staff and other stakeholders, when clear yardsticks are hard to find.

​

Indeed, lack of clarity is the besetting sin of managers (and management theory). Bartleby has had much opportunity to mock the jargon used in corporate statements. If managers cannot express themselves clearly, that suggests to staff that they are not thinking clearly either. So here is a plea to executives. Next time you write a memo, show it to a relative and ask if they understand it. If they don’t, throw it in a bin and start again.

​

This article appeared in the Business section of the print edition under the headline "Tale of the century"