Management techniques seem to come and go: Management By Objectives now has antique status, Activity Based Management (ABM) could be approaching a mid-life crisis, and Business Process Re-Engineering (BPR) is the current dynamic upstart, albeit partly disowned by its creator. Why is so much management theory transient? Worse than that, it often becomes systematised, documented in vast implementation manuals and takes on a status of its own, obscuring the management issues it is supposed to be addressing.
Good management, of course, is difficult to define and even more difficult to practise. It is, like the rainbow, magnificent to behold but impossible to pin down. Perhaps that is the answer to my concerns over management theory – management is as much an art as a science and any attempt to systematise, define standards or impose techniques is only effective if there is a basic foundation of skilled management to start with. So what is a manager?
The definition I like best is: “A manager is responsible for more work than he or she can do on their own.” Like most skills, many people can and do have a go at being a manager, but too many muddle along rather than achieving real success. So let us look in a bit more detail at what we should find a manager doing:
– planning and budgeting;
– organising and prioritising;
– monitoring and controlling performance;
– delegating responsibility;
– defining roles;
– consulting team members on key decisions;
– receiving reports from subordinates and reporting to superiors;
– striving for consensus, but making sure decisions are taken and implemented;
– building on team strengths, minimising and compensating for weaknesses
– and perhaps most challenging of all: listening to and communicating ideas; and effecting and coping with change.
The need for organisation
A common thread in these management tasks is working with people, and the only way to do that effectively is to get them organised. This does not mean a hierarchical chain of command which must be strictly observed, and regimentation such that every action is prescribed, timed and monitored.
But it does mean team structures with team leaders and team objectives; it means lots of different lines of communication, lines which are welcomed, not resented, by the workforce. Inevitably, no organisation structure can be perfect: it will be a compromise between competing pressures.
For example, communication consumes resources – on the other hand lack of communication may result in wasted resources; or a structure which seems best in theory may be quite wrong for the given set of people, and it is a brave, even callous organisation which changes all the people!
Small businesses, with only a few people, often survive because everyone knows everyone else and the various personalities are encouraged to work together by mutual self interest or by a forceful leader. They see enough of each other to develop organic relationships – they simply know how to handle each other. But this does need familiarity and takes time to evolve.
Any business entity with more than about 20 people needs some formal structure, so that it is clear, in a more objective way, who does what and who controls whom. Some rules of operation have to be laid down to avoid the time consuming and, for large organisations, impossible process of ensuring everyone understands and has empathy with everyone else.
Ideally, when a formal organisation structure is set up, or even evolves, it allows the small group dynamic – those organic relationships – to prosper within the larger whole. This is seldom easy and in practice there will be some erosion of the small group’s freedom of action: a distribution department may devise a wonderful set of operating procedures, but if they do not suit a receiving customer’s schedule or they place awkward demands on the supplying factory, they had better think again. This may seem obvious, yet a favourite topic in the world of logistics is “integration of the supply chain” or making sure that marketing, sales, purchasing, production and distribution are all working together for the good of the whole company, rather than sub-optimising their own department. This has resulted in some remarkable reductions in intermediate stock holding and improved customer service. So the most successful companies are those where an open, outward-looking approach is combined with an internal structure that allows well-motivated teams to prosper.
Furthermore, a balance has to be achieved between “small is beautiful”, subsidiarity, decentralisation and so on, and recognition that there are economies to be had by standardising a few things, centralising some functions, providing efficient lines of communication and presenting a consistent image to customers and suppliers. Very few organisations achieve this balance consistently. It is a balance between the most efficient use of resources from a logical, systems viewpoint and the provision of local, working environments in which everyone is motivated for the greater good of the whole business.
Coping with change
Because the best structures are a combination of formal and informal interactions, they must be allowed to constantly change and evolve as constituent groups and individuals within the groups mature and develop.
It is a truism that the only unchanging organism is a dead one. If there is too little change there is a danger that people will stagnate, complacency may make a company miss critical movements in the marketplace, and the full potential of a maturing workforce is not realised. Sir John Harvey-Jones has said: “Management is about maintaining the highest rate of change that the organisation and the people within it can stand”: like his neckties, interesting but exaggerated.
Too much change, of course, may be equally damaging. During the process of change, the existing, stable state has to be dismantled or “unfrozen” before the constituent parts can be re-arranged or “frozen” into another stable state. The state of flux between beginning and end states is very unstable and fluid. An individual’s familiar working environment may be disrupted, and few people like disruption; new roles and objectives may arise, a welcome challenge to some, a perceived threat to others.
However desirable the end state may be, if the workforce becomes disorientated and disaffected in getting there, the organisation is likely to take a long time to recover. The problems are greatest when change happens too quickly or too often: staff become over-stressed, with increased absenteeism and illness, systems and procedures do not have time to settle down and the organisation may lose cohesiveness. Its ability to survive external pressures may also be jeopardised: it is often not the changes themselves which cause the stresses and strains, but rather the way they are managed.
Management needs particular skills in working with people during the planning and the process of change – skills which are different to those needed for running things in more tranquil times.
As an example, the state education service has had more than its fair share of these problems recently. Devolving resources to individual schools makes sense; but then encouraging schools to jump ship (opt out), losing all economies of scale and the local authority back-up resources/expertise to boot, smacks of dogma overcoming common sense. At the same time massive changes in the curriculum, followed by changes to changes, have numbed the teaching profession and made a generation of teachers cynical about change, instead of champions of it, as they could have been with a different approach. It would appear that the need for change won the day in Whitehall, but the all-important implementation of the new approaches was attempted by little more than dictat and a mountain of paper.
So when BPR has had its day, ABM is history and some other new, arcane technique sets fair to seduce us, perhaps we should focus on three basic points:
– management is about people;
– people need to be organised;
– change is the life blood of organisations.
Managers will still need all their skill and experience to manage against this backdrop, but perhaps they need not be deflected by yet another new technique.
Big Four firm Deloitte has announced its investment in blockchain start-up SETL as well as a partnership with VTC Group
Clients and business advisers can now connect to small businesses through a Facebook Messenger chatbot service, provided by Xero
It has been another glittering night in the accountancy calendar. A range of practices big and small, plus outstanding individuals, have been rewarded for their efforts in the British Accountancy Awards 2016
Making Tax Digital responses to the consultations expected in January 2017