Deciding on what really works

It never fails to amaze me how management practitioners continue to embrace fad after fad in the hope that somehow they will discover the secret formula for business success.  At the same time, management frameworks built on a succession of management theories are derided because they do not provide any specific solutions or quick answers. And managers continue to ask: What really works?

Consider some of these formulations that have been management buzzwords like matrix management, total quality management, seven effective habits (or has the number changed to eight?) and reengineering. They may have been brilliant and innovative ideas, but they quickly became passing fads because managers could not apply them as effectively as their inventors had hoped. In the meantime, the authors naturally literally made millions turning those books into bestsellers.

Then there are those who prefer stories instead of theories or again learning the application of management frameworks. After all, there is much less mental calisthenics required in reading stories than real learning.

Management fad writers are forever discovering companies that claim to have discovered that magic formula, the secret of competitive success. In 1982, the book In Search of Excellence identified 43 excellent American companies and tried to distill the sources of their success. Less than five years after its publication, two thirds of the companies studied had ceased to be excellent. But the author, Tom Peters, continued to produce more books advocating different solutions and his books continued to be bought. The one lasting contribution of Tom Peters was his advocacy of the 7S Framework which was not formulated by him.

There is also the obsession that winners must know something that the rest of us don’t know. Because of this passion for how-to books, the writings of high-profile executives like Lee Iacocca of Chrysler, IBM’s Lou Gestetner and GE’s Jack Welch are considered to contain the answers to our problems.

However, these answers do not translate at all to our needs. They derive from local conditions and unique situations. They are not universal. Gestetner’s work or Welch’s visionary leadership make great stories, interesting reading. But a Filipino company is unlikely to resemble the IBM or GE which Gestetner and Welch inherited and reinvented or transformed.

Ever since the end of the Industrial Revolution, which was more than a century ago, managers have spent enormous time trying to guess what really matters in business. This obsession has been motivated by two primal human instincts:  Fear and Greed.

The attrition rate of companies is spectacular, especially after the detrimental effects of the pandemic. In the Philippines, one can only look decades back and wonder whatever happened to well-known companies like Ysmael Steel, Delta Motors, ARCA or Herdis. In the United States, we can also ask about RCA, Pan American Airways, TWA, IT&T and Sears Roebuck.

It must be anxiety that propels even senior managers to pick up any management book that claims to provide lessons that will help a company survive in trying environments. And so we have all kinds of self-help books parading as management theory books. They range from management lessons from characters like Attila to inspirational books that have nothing to do with management and finally to books that proclaim that there are ONLY 18 rules of power or 7 good habits or 10 easy steps to becoming a great manager.

Then there are the easy-to-understand lessons that keep getting recycled by different authors. Thus, innovation became thinking out of the box and now, the blue ocean.  Will the next big thing be flying to the stars or universes unknown?

Because so many so-called gurus claim sole authorship of their ideas, even management teachers make the mistake of thinking that management frameworks can be attributed to one specific author. For example, the frameworks that Michael Porter writes about in his book Competitive Strategy are commonly believed to be his original theories. Nothing is farther from the truth.

A management framework becomes timeless only if it is founded on serious management theories by past management scholars. For instance, Porter’s framework for competitive strategy is derived from Alfred Chandler’s Strategy and Structure published in 1962. This writing was in turn partially influenced by Max Weber who wrote The Theory of Social and Economic Organization in 1924.

Someday, another management guru will come along and develop a more effective framework building on the theories of Weber, Chandler and Porter. The same goes for every modern management framework or theory. But the real test will continue to be its long-term effectiveness.

Management practitioners and teachers must keep distinguishing between management fashions and management frameworks whose foundations are well-researched management theories. Businessmen who keep trying to keep up with the latest fashion will find out that by the time they have implemented the new fad, it will already be outdated.

This is the only way to answer the recurring and perplexing question: What really works?

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Young Writers’ Hangout via Zoom on Feb 26, 2-3 pm., with Jacqui Franquelli, author of newly released title, Anak ng Tinapay.

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