Management is dead. Long live management

It is easy to see why gurus like Peter Drucker, Tom Peters, Philip Kotler and Michael Porter are still considered the definitive icons of modern management. Managers' job profiles are still remarkably similar to what they were in the 1960s "" setting and sticking to budgets, supervising teams, setting tasks for subordinates and then reviewing their performances. Nor have organisations altered all that much "" hierarchies, benchmarking, quality ... even the buzzwords have gone flat.

That's got to change, says Gary Hamel. Present management practices have reached the end of their particular road, writes the Harvard and IESE professor of strategy in The Future of Management. The problems and challenges that lie ahead require something beyond the management by monotony that is practised at present. His recommendation? Innovation that reinvents the principles, processes and practices of management to bring them more in line with the challenges of the 21st century.

Hamel places management innovation at the top of a pyramid, above operational, product and even strategic innovations, in terms of value creation and competitive defensibility. The logic: management innovations "" new ways of running an organisation or leading its people "" confer a "difficult to duplicate" advantage on a company. Not too many rivals will be willing to let go of their cherished management beliefs, although they will readily imitate your processes, your product and even your business model. (Think about it: why couldn't American car makers counter Toyota's success? They couldn't bring themselves to imitate its worker-driven approach.)

Is there a checklist for becoming a management innovator? Sort of. Understand your problem and assemble a revolutionary solution, piece by piece. It will help to run your new system parallel to the old one for a while, recommends Hamel. And remember, it takes time.

Hamel backs his provocative theory with case studies of both established companies as well as start-ups. But he only mentions in passing the older giants that won their stripes with management innovation. GE's management of scientific discovery, DuPont's work in developing capital-budgeting techniques, Procter & Gamble's brand management approach and, of course, the Toyota Production System are examples that may perhaps have been of greater value "" but Hamel's fascination with the young turks leads him to devote entire chapters to these and dismiss the rest in mere paragraphs.

Not surprisingly, the freshers appear to be doing a better job of innovation than the old-timers "" it is easier to chart a fresh course than turn a ship midway, after all. Google is a flat organisation that bypassed the command and control culture to create its own "just try it" approach and it empowers employees to an unprecedented degree. Organic foods retailer Whole Foods follows a "no secrets" policy "" employees not only have access to all compensation data, but even usually-confidential information such as store sales and product costs are available to any staffer who's interested. Besides, each team operates as a profit centre that is measured on labour productivity; and individual stores decide what they will stock.

Would these innovations work equally well for other organisations? That's a high-stake gamble "" to follow Hamel's advice means to tinker with the culture of an organisation. The price of failure may be too high for most companies to even attempt the change. Besides, what Hamel has shown are merely ways in which companies have reinvented themselves so they are better positioned to deal with changing market realities "" what works for Google may not necessarily click with another IT company.

If you ask me, management as it is now practised doesn't seem to be making too much of a hash of it, either "" companies' lovefest with the stock exchanges continues, billion-dollar turnovers are commonplace and there doesn't seem to be nearly as much waste and unnecessary layering as there was a couple of decades ago. That's not so bad, is it? Not surprisingly, Hamel doesn't agree. "...the most critical question for every 21st-century company is this: Are we changing as fast as the world around us? ...the answer for most companies is 'no'... It seems that deep change is nearly always crisis-led, episodic, and programmatic... And therein lies the challenge: to make deep change more or an autonomic process "" to build organisations that are capable of continuous self-renewal in the absence of a crisis."

In other words, change before you need to; solve tomorrow's problems today. I guess that idea does have merit.

---

The Future of Management

Gary Hamel
Harvard Business School Press
Price: $26.95; Pages: 272