Faulty management

Management consultants and theorists have been hard at work for the past three decades – defining, refining and applying management theories to improve productivity and efficiency in enterprises. Most of these ideas can be traced back to the industrial revolution when factories sprung up to produce things at scale (2). Some have been softening these obsolete ideas lately (1) but none of these addresses the fundamental issues facing today’s companies.

People are horrible at producing standardized objects, physical or otherwise, repeatedly. Fortunately or unfortunately, they are endowed with an organ that consumes 20% of available energy to think. Machines are exceptionally good at making other machines and whether contemporary companies want it or not – it is unlikely that humans will be standing around putting nuts and bolts in automobiles, wrapping soap with their bare hands or pushing paper for too much longer. In such a context, the term management itself is archaic (2).

People do not need management – they need the right incentives. If an organization requires management, it is a clear indication that something is wrong in the structure, systems, strategies and incentives of the firm (2). Working hard to build trust and reduce burn-out in employees – although may be good as a band-aid for a broken organization – is not a solution. One has to first ask why management exists and how the company is structured. Equally important is the question of what skills the managers have. If the answer to this is that they exist to “manage,” people, then shareholders should know they have a failing enterprise in their hands.

Management consultants and theorists may have done significant damage to the economy by perpetuating archaic ideas in modern companies, that will fail without the right incentives to innovate and create.

(1) Trust in management key to avoiding correctional staff burnout Wayne State research finds. Published: Friday, August 17, 2012 - 15:05 in Psychology & Sociology

(2) Flexibility : Flexible Companies for the Uncertain World, Gill Eapen, http://tinyurl.com/doflex