Thinking Managers

Robert Heller of looks at how the rise of the management consultant has contributed to our current problems but that, provided you understand its limitations, the notion of scientific management can still be of value.

The rise of the consultant and the real lessons learned

The sins of the management consultants track back to their earliest days and greatest figures. Writing in the New Yorker, historian Jill Lepore traces the profession back to a 1910 meeting in a New York apartment, at which the pregnant phrase ‘scientific management’ was adopted to describe a new religion. Its high priest was Frederick W. Taylor. He held that by methodically analysing how work was performed and timed, the consultant could measure and then close the gap between observed performance and the optimum figures - above all, cost. Like all his great followers, Taylor was expert at turning his teaching into terrific fees.

Leporte, however, reports that ‘Taylor fudged his data, lied to his clients, and inflated the record of his success’. Even some of America’s smartest brains were misled. The great lawyer Louis Brandeis asserted that nothing else ‘seems to me to be equal to this [scientific management] in importance and hopefulness…Efficiency is the hope of democracy’. Taylor wasn’t at the 1910 meeting, but his philosophy and practice dominated the talks.

The Great Crunch is the apotheosis of the Taylor revolution. Algorithms became talismans on Wall Street. The collapse of one early result, Long-Term Capital Management, was an awful, ignored warning. The fall showed that big brains are not the only answer and that management is about action, not just strategy. Moreover, the outsider is bound to be less effective than the insider - in a good organisation.

Scientific management is still a great and good idea - provided you know its limitations and your own. The nearer you get to the ground or shopfloor, the better and broader the potential for meaningful achievement. What the major consultancies found as they launched and led their commercial revolution was a lesson that applied to themselves as much as their clients - that the higher their claims, the more opportunities they would be able to find and exploit as heirs to Frederick Taylor. Problems are opportunities, true; but opportunities are also problems.

A true scientific manager like Intel’s Andy Grove is liable to challenge higher-flown messages. A few years ago Grove discussed his approach to strategy. This undisciplined discipline is used with great solemnity as the master-map for the future. But what about the present? What kind of future can you build on a shaky today?

Grove warns that:

• Strategic plans are statements of intention;
• they sound like political speeches;
• they are abstract and usually have no concrete meaning except to management;
• they deal with events far in the future and are thus of little relevance today.

None of these four attributes or atmospheres is needed on journey. Like witty consultants they may be fun to have around. But they can cause terrible trouble. As Grove would advise:

• Strategic actions are already taken or being taken and imply longer-term intent;
• they are concrete stages;
• they immediately affect people’s lives;
• they take place in the present and thus command immediate intention.

The key is to be interested passionately in what you are doing now to achieve much better outcomes in the present, the near future and thereafter.

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

  Robert Heller