Management Tools: Cycling through the concepts

Everybody wants to be the author of a popular management tool. But at the end of the day, it’s useful to realize that many have a lot in common – what makes the difference, as with any tool – is the skill of the person using it and the consistency with which you stick with it.  

For some time now, I’ve enjoyed regular conversations and spirited exchanges between a group of thought leaders convened by Steve Denning and named, by him, as the “Fortnight Group.” Among them is Bain & Co’s own Darrell Rigby, who for many years was a co-author on Bain’s regular surveys on how executives use management tools.  It’s fascinating to see tools come and go, which they do, a lot. Four have remained in the ranking since Bain first started collecting information on tool usage in 1993. These are Mission and Vision statements, customer satisfaction, total quality management and benchmarking. Others proved far less durable – I mean, who talks much about quality circles these days?  

 Everybody wants to claim center stage for their tool

Waterman and Peters’ book In Search of Excellence: Lessons from America’s Best Run Companies was published in 1982 and became a runaway best seller.  It brought the whole consumption of management tools to a broad audience and perhaps singlehandedly created the category of the mass market business book. It also maintained that strategy was perhaps less important than organization for long-term performance. Given that Waterman and Peters were both consultants at McKinsey, a firm whose bread and butter depended on firms handing over large sums for strategy advice, this might not have been the most politically astute position to take…Peters didn’t last long at the firm after taking this position.

So what were the magical practices that characterize the best-run companies? The authors found 8 that they argue make all the difference. 

1. A bias for action - a preference for doing something - anything - rather than sending a question through cycles and cycles of analyses and committee reports.

2. Staying close to the customer - learning customers' preferences and catering to them.

3. Autonomy and entrepreneurship - breaking the corporation into small companies and encouraging them to think independently and competitively.

4. Productivity through people - creating in all employees the awareness that their best efforts are essential and that they will share in the rewards of the company's success.

5. Hands-on, value driven - insisting that executives keep in touch with the firm's essential business.

6. Stick to the knitting - remaining with the business; "The company knows best."

7. Simple form, lean staff - few administrative layers, few people at the upper levels.

8. Simultaneous loose–tight properties - fostering a climate where there is dedication to central values of the company combined with tolerance for all employees who accept these values

So here we are, more than 40 years later, and we are still having these ideas presented to us as though they were completely novel! Without naming names, we’re still talking about simplifying complexity, being close to customers, breaking big organizations down into smaller ones, empowering the workforce and so on. As Roger Martin has long said, if the opposite of a strategic choice is stupid on its face, it isn’t really a strategic choice. 

Why do we get so much tool recycling? As Darrell observes…

“A few things that I have noticed about tools over the years:

1. They often make exaggerated claims that prove disappointing.

2. They run in cycles. During boom times, innovation tools flourish. During downturns, usage of cost reduction tools increases.

3. People like to rename tools to make them seem more modern and leading edge. Because many tools have proven disappointing, they get a bad name. Someone comes along to slightly update it, rename it to differentiate it from past failures, and hype it anew. Many supposedly “new” tools have been around forever.

4. Even though many tools have a lot in common, people focus on small differences to trash the competition and make their own tools look better.  

5. As Tears for Fears should have said, “Every tool guru wants to rule the world.” 😊 

We all want to create the definitive framework that puts other tools into supportive roles. That leads to speaking and consulting, invitations to exclusive conferences and much more.  That makes it fun to be a tool guru.  

It’s much less interesting to say “well, Edith Penrose or Mary Parker Follett said this six or seven decades ago.” Curious? If you think elimination of command-and-control leadership and employee engagement and empowerment are new concepts, have a humbling read of Follett’s work.  

Some tools do have a lasting impact

That being said, some tools have become so widely used and embedded in how we manage organizations that we forget that at one point they were brand-new ideas. Melinda Merino, my editor at HBR, noted that we’ve been experiencing a broad evolution, including ideas such as thinking about ecosystems and two-sided markets, the role of purpose, funnels and flywheels, growth mindset, the importance of diversity, the importance of learning, distinguishing between intelligent failures and other kinds and so on. I would even argue that we have the scaffolding of understanding of what’s necessary for ongoing innovation, which would be a lot easier to access if we eliminated some of the dysfunctional incentive systems that lead people to avoid or ignore it.  

Indeed, some management theories – Frederick Winslow Taylor’s come to mind – have been so widely and well adopted that we barely notice their existence any more. See Christopher Mims’ wonderful book “Arriving Today” for a brilliant discussion. You can watch a recording of our Fireside chat on the same topic at this link. We are so accustomed to the algorithms that dictate how even the most minute aspects of our lives work, based on Winslow’s scientific method, that we have to make an effort to even notice them.  

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