A critique of management tools and the people who use them
Key performance indicators. Balanced score card. Customer relationship management. Dynamic resource management. Many of us know of these management tools, and some of us use them every week, even every day.
But how effective are we at using them? Not very, according to business consultants and authors Jeremy Hope and Steve Player. They estimate that these tools deliver what they promise and yield real benefit to companies in only about 30% of cases. The rest of the time, they say, we are merely spinning our wheels — or going into reverse.
This idea has been a recurring theme in Hope’s writing over the last decade. In “Beyond Budgeting,” he argued that budgets and budgetary controls stifle innovation and creativity, and reinforce bureaucracy at the expense of flexibility.
Later, in “Reinventing the CFO,” he called for reform of corporate finance departments with a view to linking them more closely to the rest of the business.
In their new book, “Beyond Performance Management,” published by Harvard Business Review Press, Hope and Player cast the net wider. They look at 40 of the most cherished management tools, as well as other familiar concepts such as Six Sigma, strategic planning and enterprise resource planning.
Each concept and its origins and purpose are described and analyzed concisely, with notes on how they can best be used. Each section also comes with a long list of references to enable further exploration of the subject.
But this is not an ordinary primer on management tools. With Hope as coauthor, there is a deeper level of analysis. His critique centers not on the tools but on the people who use them. Ultimately, his book amounts to a strong critique of managers.
When tools do not work — or appear not to — the usual tendency is to blame the tools themselves. In fact, say the authors, the problem is one of unrealistic expectations. Managers expect many tools to solve all their problems. Or they pay lip service to the concept but do not push the program all the way through, or they only apply it to part of the company.
Sometimes the problem lies not in our ignorance but in deliberate managerial intransigence. For instance, open book management, which relies on transparency throughout the organization and widespread sharing of knowledge by leaders with subordinates, is one of those concepts that looks good in theory. In practice, however, very few companies do this.
Why? Because, say the authors, most leaders cannot shake off their command-and-control mentality. Despite protestations of greater empowerment and democracy, “do what you are told and don’t ask questions” remains the dominant ethos in many workplaces.
Abandoning that mentality in favor of sharing information with others, say the authors, requires courage. Apparently, that is in short supply.
So this book is for executives after all. It will challenge their prejudices about some management tools at least and force them to consider whether the weaknesses they perceive lie not in the tools but within themselves.
“Beyond Performance Management” is Hope’s last book because he died shortly before it went to press. He will be missed for his plain-speaking and incisive, unsparing critique of modern management at a time when those qualities are very badly needed.
Morgen Witzel is a frequent contributor to the Financial Times of London, in which this review first appeared.
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