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cw453545_cw391140_The Management Myth

cw453545_cw391140_The Management Myth - JUN-lZ-ZEIDB 13...

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Unformatted text preview: JUN-lZ-ZEIDB 13:]? FROM- 550-354-1303 T-lEE RUM/DDT F-lll ————--— ~~—-— THE ATLANTIC MoNTHtY - - --————————-- ~——v— -—-- THE MANAGEMENT MYTH Mart ofmonagemmr ricer/J73; tit ozone writer our carves}?de Mefiunder ifs «consulting fifyou wan! to succeed in bunkers; don ’rger rm MflA. Sludyp/zflonyJ/zy instead 31’ MATTHEW STEWART Nina‘frrurulu gr filart- Rasrli'rdrh' uring the seven years that I worked as a management D consultant, I spent a lor of time trying to look older than i was. I became pretty good at litrrowing my brow and putting on somber expressions. Those who saw through my disguise assumed lniade up for my youth with a fabulous education in management. They were wrong about that. I don‘t have an MBA. I have a docmral degree in pbilosophy—uineteenth-century German philosophy. to be precise. Before I took a job telling managers of large corporations things that they arguably shortld have known already. my work experience was limited to part-time gigs tutoring surly undergraduates in the ways of Hegel and Nietzsche and to a handful of summer jobs, mostly in the less appetizing ends of the fast-food industry. The strange thing abour my utter lack of education in management was that it didn‘t seem to matter. As a principal and founding partner of a consulting firm that eventually grew to 500 employees, I interViewed. hired. and worked alongside hundreds of business-school graduates, and the impression I formed of the MBA. experience was that it involved taking two years our of your life and going deeply into debt, all for the sake of learning how to keep a straight face while using phrases like "out-of—rhe-boit thinking.“ "win- win situation,“ and "core competencies? When it came to picking teammates, I generally held out higher hopes for those individuals who had used their university years to learn shunt something other than business administration. After I left the consulting business, in a reversal of the usual order of things, I decided to check out the manage— ment literature. Partly, I wanted to “process” my own expe- rience and find out what I had missed in shipping business school. Partly, I had a lot of time on my hands. As I plowed through tomes on competititre strategy, business process re-engineering, and the like, not once did I catch myself thinking, Damn! 1]" 0224; I lied known rftir manta"! Insitead, I found myself thinking things I never thought I‘d think, :tnageinent theory came to life in 1899 with a I I simple question: "How many tons of pig iron bars can a worker load onto a rail car in the course of a working day?‘ The man behind this quesrion was Freder- ick Winslow Taylor, the author of T 11-9 A'ch?!“ JSn'em'gfic Malfdgmfflf and. by most accounts, the founding father of the whole management business. Taylor was forty-three years old and on contract with the Bethlehem Steel Company when the pig iron question hit him. Staring out over an industrial yard that coverEd several square miles of the Pennsylvania landscape, he watched as laborers loaded ninety-rwwpound bars onto rail cars. There were 80,000 tons‘ worth of iron bars. which were to be carted off as fast as possible to meet new demand sparked by the Spanish-American War. Taylor narrowed his eyes: there was waste there. he was certain. After hastily reviewing the books at company headquarters, he estimated that the men were currently loading iron at the rate of twelve and a half tons per man per day. Taylor stormed down to the yard with his assismnts (“college men,“ he called them) and rounded up a group of topwnotch lifters ("first-class men“), who in this case 11an pet-ted to be ten "large, powerful Hungarians.“ He offerEd to double the workers” wages in exchange for their partici- pation in an experiment. The Hungarians, eager to impress their apparent benefactor, put on a spirited show. Buffing up and down the rail car ramps, they loaded sixreen and a half tons in something under fourteen minutes. Taylor did the math: over a ten-hour day, it worked out to seventy-live tons per day per mart. Naturally, he had to allow time for bathroom breaks, lunch, and rest periods, so he adjusIEd the figure approximately 40 percent downward, Hence-forth, each laborer in the yard was assigned to load forty—seven and a half pig tons per day, with bonus pay for reaching the target and penalties for failing. When the Hungarians realized that they were being like, f’d’rm‘lier be madahgflez'degger.’ It was a dis- Ma"ng gym”, 1-: W. asked to quadruple their previous daily work- turbing experience. It thickened the mystery nut-bur. mus-r "randy. 9f load. they howled and refused to work. So around the question that had nagged me from The Cour—tier and the ' "' ' - ' “ - Heretic: Leibniz. SPir Taylor found a high Pncecl man, a lean Penn the start of my business career: Why does man- no” and the Fm, “and sylvania Dutchman whose intelligence he oom— agement education exist? 80 in the Modern World. pared to that of an ox. Lured by the promise of 13:13 FROM- JUN-lZ-ZUUE a 60 percent inCrcase in Wages. From $1.15 to a whopping $1.85 a day, Taylor’s high-priced man loaded forty-five and three-quarters tons over the course of a grueling day—close enough in Taylor’s mind: to count as the first victory for the methods of modern management. Taylor went on to tackle the noble science of shoveling and a host of other topics of concern to his industrial clients. He declared that his new and unusual approach to solving business problems amounted to a "complete mental revolu- tion.“ EVentually. at the urging of his disciples, he called his method “scientific management.” Thus was born the idea that management is a science—a body of knowledge col- lected and nurtured by experts according to noun-3L objec- tive. and universal standards. At the same moment was born the notion that man- agement is a distinct function beat handled by a distinct group of people-people characterized by a particular kind of education, way of speaking, and fashion sensibility. Tay— lor. who favored a manly kind of prose, expressed it best in passages like this: ... the science of handling pig iron is so great and amounts to so much that it is impossible for the man who is best suited to this type of work to understand the principles of this science, or even to worlt in accordance with these prin- ciples, without the aid of a man better educated than he is. 550-354-1303 T-lEE RUDE/BUT From a metaphysical perspective, one could say that Taylor was a “dualist”: there is brain, there is brawn and the me, he belieVEcL very rarely meet. Taylor went around the country repeating his pig iron story and other tales irom his days in the yard and these narratives formed something like a set of scriptures for a new and highly motivated cult of management experts. This vanguard ultimately vaulted into the citadel of the Establish- ment with the creation of business schools. In the spring of 1908, Taylor met With several Harvard professors, and later that year Harvard opened the first graduate school in the counu-y to offer a master's degree in business. It based its firstayear curriculum on Taylor’s scientific management. From 1909 to 1914-. Taylor visited Cambridge may win- ter to deliver a series of lecturesminspirational discourses marred only by the habit he‘d picked up on the shop floor of swearing at inappropriate moments. Yet even as Taylor’s idea of management began to catch on, a number of flaws in his approach were evident The first thing many observers noted about scientific manage- ment was that there was almost no science to it. The most significant variable in Taylor‘s pig iron calculaan was the 40 percent “adjustment” he made in extrapolating from a Fourteen-minute sample to a full workday. Why time a bunch of Hungarians down to the second if you‘re going to daub the results with such a great blob of fudge? When he 31 .—.__. _... nu..nnmmy—u—v—lfl_—-—+-M-finfi ...i., , . . F-Yll .-.r-"_‘.'wt'\.‘ nears/THEE?" :ww’TH-AK:- fl.WF—__.n.-n‘_WWr—.—A—. van—.wwpfia—e—tjr-v. v. , Y s . as H-anWF‘IWJ-I achm quJA-sxaw-_- Hag—a ‘.‘J r was grilled before Congress on the matter. Taylor casually mentioned that in other experiments these ‘adjusrments“ ranged from 20 percent to 225 percent. He defended these unsightly “wags” (wild—ass guesses. in M.B.A.-Spcalt) as the produCt of his “judgment” and "experience”—but.. of course. the whole point of Scientific management Was to eliminate the reliance on such inscrutable variables. One of the distinguishing features of anything that aspires to the name of science is the reproducibility of experimental results. Yet Taylor netrer published the data on which his pig iron or other conclusions were batted. When Carl Barth, one of his devotees, took over the work at Bethlehem Steel. he found Taylor’s. data to be unusable. Anether. even more fundamental feature of scienCc—hcrc I invoke the ghost of Karl Popper—is that it must produCe falsifiable propositions. insofar as "lhylor limited his cottCern to prosaic activities such as lifting bars onto rail cars, he did produce propositions that were falsifiable—and, indeed, were often falsified. But whenever he raised his sights to management in general, he seemed capable only of soaring platitudes. At the end of the day his “method” amounted to a set of exhortations: Think harder! Work smarter! Buy a stopwatch! The trouble with such claims isn‘t that they are all wrong. It’s that they are too true. When a congressman asked him if his methods were Open to misuse. Taylor replied... No. lfrnan- agcment has the right state of mind. his methods will always lead to the correct result. Unfortunately, Taylor was right about that. Tayloristn. like much of management theory to 82 THE ATLAN'RC MONTHLY T-lEE BED-3544303 RUDE/DDT come, is at its core a collecdon of quasi-religions dicta on the virtue ofbeing, good at what you do. ensconced in a pmtECliVE bubble of parables (otherwise known as case studies). Curiously, Taylor and his college men often appeared to float free ftom the kind ofaccountability that they demanded from everybody else. Others might have been asked. for example: Did Bethlehem’s profits increase as a result of their work? Taylor, however. rarely addressed the question head-on. With good reason. Bethlehem fired him in 1901 and threw out his various systems. Yet this evident vacuum of concrete results did not stop Taylor from repeating his parables as he preached the doctrine of efficiency to count- less audiences across the country. It the management literature these days. Taylorism is pre- sentcd, if at all, as a chapter of ancient history“ a weird epi— sode about an odd man with a. stopwatch who appeared on the scene sometime after Columbus discovered the New World. Over the past century Taylor‘s successors have devel- oped a powerful battery of statistical methods and analytical approaches to business problems. And yet the world of man- agement remains deeply I'Ihylorist in its foundations. At its best management theory is part of the democratic promise of America. It aims to replace the despotism of the old bosses with the rule of scientific law. it offers economic power to all who have the talent and energy to attain it. The managerial revoluan must be counted as part of the [neat widening of economic opportunity that has contributed so JUNE 2006 i - -- -. P--P.rr-.J—Ilr .i-n ‘P-fi. - .. . .H.( .. .-.....-...--n-.-.-ig..m-yu- a .A airway—:5 amps-4- -= : N... ., 3 , «A-{nT-a'brP-fuw‘iu . . [email protected]— , __ awn). 4M— JUN-lZ-ZDDE 13:19 FROM- much to our prosperity. But, insofar as it pretends to a kind ot’esoteric certitude to which it is not entitled, management theory betrays the ideals on which it was founded. That Taylorism and its modern variants are often just a way of putting labor in its place need hardly be stated: from the Hungarians" point of view, the pig iron experiment was an infuriatineg obtuse way of demanding more work for less pay. That management theon represents a covert assault on capital, h0wevet‘, is equally true. (The Soviet five-year planning process took its inspiration directly from one of Taylor‘s more ardent followers, the engineer H. L. Gantt.) Much of management theory today is in fact the consecra- tion of class interest—not of the capitalist class, nor of labor, but of a new social group: the management class. i can confirm on the basis of personal experience that management consulting continues to worship at the shrine ofnumerology where'Taylor made his first offering of blobs of fudge. In many of my own projects, I found myself com— pelled to pacify recalcitrant data with entirely confected numbers. But I cede the place ofhonor to a certain colleague, BED-3544303 T-lEE RUM/DDT F-Ill The World of management theorists remains exempt from accountability. In my experience, for what it’s Worth, consultants monitored the progress of former clients about as diligently as they checked up on EX-spfluses (of which there were many). Unless there was some hope of renewing the relationship (or dating a sister company), it was Harm [a com baby. And why should they have cared? Consultants' recommendations hate the same semantic properties as cam- paign promises: it‘s almost freakish if they are remembered in the following year. In one episode, when I got involved in winding up the failed subsidiary of a large European bank, I noticed on the eapense ledger that a rival consulting firm had racked up $5 million in fees from the same subsidiary. “They were supposed to saVe the business.“ said one client manager, rolling his eyes. "Actually," he correCted himself, “they were supposed to keep the illusion going long enough for the boss to find a new job.“ Was my competitor held to account for failing to turn around the business and/ or violating the rock-solid ethical standards of consulting firms“? On the Just as most people are able to lead fulfilling lives without consulting Deepak Chopra, most managers can probably spate themselves an education in management theory. a grufi' and street-smart Belgian whose hobby was to amass hunting trophies. The huntsman achieved some celebrity for having invented a new mathematical technique dubbed "the Two-Handed Regression.” When the data On the cor— relation between two variables revealed only a shapeless cloud—even though we knew damn well there had to be a correlation—he would simply place a pair of meaty hands on the offending hits of the cloud and reveal the Straight line hiding from conventional mathematics. The thing that makes modern management theory so painful to read isn‘t usually the dearth of reliable empirical data. It‘s that maddening papal infallihility. Oh sure, there are a few pearls of insight, and one or We stories about heto-CEOs that can hook you like bad popcorn. But the rest is jusr inane. Those who looked for the true meaning of "business process re~engineering." the most overtly Tay- lorisr of recent management fads. were ultimately rewarded with such gems of vacuity as “BPR is taking a blank sheet of paper to your business!" and “BPR means rte-thinking everything, everything!” Each new fad calls attention to one virtue or another— first it‘s efficiency, then quality, next it’s customer satisfaction, then supplier satisfaction, then self-satisfaction, and finally, at some point, it’s efficiency all over again. If it’s reminiscent of the kind of toothless wisdom offered in self-help literature, that’s because management theory is mostly a suhgenre of self-help. Which isn't to say it’s completely uselesa But juSt as most people are able to lead fulfilling lives without con~ suiting Deepak Chopra, mos: managers can probably spare themselves an education in management theory. 84 THE ATLANTIC Mon‘rHtv contrary, it was ringing up even higher fees over in number wing of the same organization. And so was I. In fact, we kind of hired failing businesses: there was usually plenty of money to be made in propping them up before they finally went under. After Enron, true enough. Arthur Andersen sank. But what happened to such stalwarts as Mcansey, which generated millions in fees from Enron and supplied it with its CEO? The Enron story wasn‘t just about bad deeds or false accounts; it was about confus- ing sound business practices with faddish management ideas, celebrated with gusto by the leading lights of the manage— ment world all the way to the end of the party. firm I helped to found represented a complete revolution from the Taylor-ist practices of eonVentional organizations. Our firm wasn‘t about bureaucratic control and robotic elli- cienCy in the pursuit of profit. It was about love. We were very much of the moment. In the 19909, the gurus were unanimous in their conviction that the world was about to bring forth an entirely new mode of human cooperation, which they identified variously as the “informa- don-based organization," the “intellectual holding company:I the “learning organization," and the “perpetually creative organization." "Pol-P. Rip, shred, tear, mutilate, destroy that hierarchy," said fiber-guru Tom Peters, with characteristic understatement. The “end of bureaucracy“ is nigh, wrote Gifford Pinchot of “intrapreneuring” fame. According to all the experts, the enemy of the “new” organization was lurk- ing in every episode of Leave [Ho Beans-r. If you believed our chief of recruiting, the consulting JUNE 20% JUN-lZ-ZEIDE -'-1-|r-n--. HID-H1! T-guwu-q l—rnr tare-1v N's—.- -_ ..¢ g..,__.cwmw1.._y h.dl..FWFF.-'u -- -. -t- 4 13:20 FROM- Many good things can be said about the “new” organi- ration of the 19905. And who would want to take a stand against creativity, freedom, empowerment, and—yes, let‘s call it by its name—love“? One thing that cannor he said of the “new” organization, however, is that it is new. in 1983, a Harvard Business SchOol professor; Rosabeth Moss Kramer, heat the would-be revolutionaries of the nine»- ties to the punch when she argued that rigid "segrnentaiist" corporate bureaucracies were in the process of giving way to new “integrative” organizations, which were “informal” and “change-oriented?” But Kanter was just summarizing a view that had currency at least as early as 1951, when 'lbm Burns and C. M. Stalker published an influential hook criticizing the old, “mechanisdc” organization and championing the new, “organic” one. In language that eerily anticipated many a dot-com pro- spectus, they described how innovative firms benefited from “lateral” versus “vertical” information flows, the use of“ad hoe” centers of coordination, and the continuous redefinition of jobs. lIlse “flat” organization was first explicitly celebrated by James C. Worthy, in his study of Sears in the 194-05. and W. B. Given coined the term “bottom-up management” in 1949. And then there was Mary Parker Follett, who in the 19205 attacked “'depattmentalized” thinking, praised change-oriented and informal Structures, and—-Rosabeth Moss Kanter fans please take note-«advocated the ‘integrative” organization. If there was a defining moment in this long and strangely forgetlitl tradition of“humanist“ organization theory—a single case that beat explains the meaning of the infinitely repeating whole—-—it was arguably the work of Professor Elton Mayo of the Harvard Business School in the 1920s. Mayo, an Austra— lian, was everything Taylor was not: sophisticated, educated at the finest institutions, a little disrant and dilute, and perhaps too familiar with Freudian psychoanalysis for his own good. A researcher- trained Homer Hibarger had been testing theories about the effect of workplace illumination on worker pmdundvity. His work, not surprisingly, had been sponsored by a maker of electric lightbulhs. While a group of female workers assembled telephone relays and receiver coils. Homer turned the lights up. Productivity went up. Then he turned the lights down P...
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