Robert Heller of www.thinkingmanagers.com looks back at his first book, published in the 1960s, and asks whether anything has really changed?
The Naked Manager
My first book, The Naked Manager, published in the late Sixties, was dedicated to all those executives who did the right thing for the wrong reason, and were acclaimed as geniuses and heroes; and to all those who did the wrong thing for the right, the wrong, or no reason at all and still retained their overpaid jobs. How much has this jaundiced view of management changed? Not very much.
People who have never risked their own fortunes have long been making themselves multi-millionaires, even at the shareholders’ expense, with no more trouble than it takes to arrange a bonus deal or stock option scheme.
The trouble is that too many managers have started to treat the corporation as if it really were their own: another faulty trait of the discredited past. The bad old days, though, produced nothing that was more discreditable than the modern golden parachutes (paid on departure), golden handshakes (paid on arrival) and greenmail (merely paid).
The follies and foibles of greed have little to do with the lives and concerns of the younger managers who are going to carry the ball for Western management. The sheer volume of new technology, the shortening time between innovation and imitation, the speed of change in both the market and the workplace – all these demand that responsibility be pushed down the organisation into the hands of those who most need to exercise it. These coming generations of management are the people who have shown most impatience with the dominant traditions of the giant corporations.
The naked manager pays lip service to fashionable ideas – like the need for higher investment in modern plant and innovation. However, what’s actually done is very different: American management has been spending many billions in absolutely sterile operations which have the sole purpose of elevating, not true performance, but untrue earnings per share.
For instance, tens of billions went, completely without economic justification, on buying back corporations’ own stock. That outweighed tenfold the amount, still vastly too large for comfort, lavished on LBOs and roughly equalled the massive sums disbursed for other mergers and acquisitions. Both the M&A expenditure and the stock buybacks were many, many times the money which the venture capitalists (supposedly the stars and leaders of the new American economy) invested in start-ups.
Even worse, spending on research and development, the font of innovation, has lagged in the West. Spending on innovation must be backed up by capital investment. Yet capital spending by manufacturers has stayed low, too: it’s the service industries that have raised their investment. That’s simply not good enough.
In an era of unparalleled competitive cut and thrust, those who don’t thrust run the risk of being cut to pieces. That’s why thrusters and non-thrusters alike need to consider the myths of management and its realities more than ever before.
It's not a question of 'may the best men and women win', because they will. The problem is that the bad men and women might yet again set the pace.
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