Thinking Managers

Robert Heller of points out that the major models and theories that flow from the ranks of so-called management gurus do not change the market but are rather a reaction to market changes.

Initiators and Followers

Managers are always keen on management theories. Or so you might think from the output of academics, other management writers, seminar organisers, consultants and the rest of the managerial support industry. Few of the supporting theorists, though, ever question how much impact their theory-peddling has on the vast majority of practising managers – even on the minority who determine the fate of the major organisations.

For example, how many managers have been directly influenced in their actions – day-to-day, month-to-month, or even year-to-year – by: the Six Forces theory on strategy formation; the 'core competencies' concept; the idea of disruptive technologies; or the description of 'emotional intelligence'? These are the famous ideas, respectively, of Michael Porter; C.K. Prahalad and Gary Hamel; Clayton Christensen; and Daniel Goleman. But how much have the ideas done for anybody else?

First, it has to be said that all four theories are based on observations of purported fact. The insights that result are not necessarily earth-shattering. Porter specified familiar forces that appeared to be dominating strategic action. Prahalad and Hamel concluded that what you do especially well is the determining basis of organisational success. Christensen observed that concentrating effectively on what you've done well in the past debars market leaders from competing successfully in new ways. And Goleman noted that how people feel has more influence on their actions than how they think.

Of course, there's an important role in bringing people's attention to the obvious. All the same, did anyone think differently on any of these points? Also, who has knowingly applied any of the ideas in practice? And yet all of them were described in the Harvard Business Review as 'truly big, paradigm-shattering ideas' that 'don't just advance the conversation; they permanently alter it'.

Even if that's the case with these supposedly big concepts, altering conversation and altering action are very different activities. Also remember that the 'paradigm-shatterers' begin with descriptions: if these are inaccurate, then what? It's well-known that the companies which management writers (including the present one) select as wonderful examples often turn out to have feet of heavy clay. However, generalised observations can also unravel as real life unfolds.

It is questionable whether any theorist writing about 'what is', and getting that wrong, can be a useful guide to 'what should be'.

Business is not 'driven by smart ideas', as stated by HBR, but by deeds – clever, foolish and neutral. The big books and interesting articles don't actually direct events; rather, they flow from them. In the practical sphere of business, managers cope with hard facts that result from changes outside their control – like these:

• It's no longer 'business as usual'. Management has to develop the company's direction and purpose anew on a continuous basis.

• Concentration on a well-defined market is required to fulfil that purpose – and rules out diversified and uncoordinated interests.

• Technologies and markets are now so volatile that innovative attack is the best, and maybe the only form of defence: and that means innovative corporate organisation.

• People are asserting their individuality more throughout society: it's essential to use that individuality to innovate and to animate the new corporate forms.

• There is less rigidity to those forms because of the need for broader inter-relationships, crossing boundaries inside and outside the firm.

Don't overlook the realities. Do suit your actions to the real needs. That means starting with a thorough examination of your business model (which exists whether you know it or not) and asking whether it still meets your objectives.

Find out what works well and stick with it. Change it before it doesn't work any more for something that will work even better, no matter how much change hurts.

About the author
Robert Heller is one of the world’s best selling authors on business management.

  Robert Heller