Top management strategies of the past 20 years and what still works.
If this were 1977, Seth Godin might be sitting down with one of
his 40 employees to coalign their goals according to the concepts of management
by objective. He might be rounding up Yoyodyne Entertainment Inc.'s workers into
quality circles. He might be using lateral thinking to spur the creativity that
drives the Irvington, New York, online game show production company.
Today, however, Yoyodyne's founder and president tells his
people to "ready, fire, aim," as management guru Tom Peters advised in 1994 in
The Pursuit of Wow! (Vintage Books). He urges them to develop one-to-one
relationships with customers, as Don Peppers and Martha Rogers suggested in The
One to One Future (Doubleday) in 1993. And he asks them to be guerrillas, in the
approach popularized by Jay Conrad Levinson in 1984's Guerrilla Marketing
(Houghton Mifflin).
"We run our business based on those three books," says Godin.
"Every single person who works here has read some or all of them. It's
fundamentally changed the way we run our business."
Godin isn't alone in basing his management style on popular new
ideas presented in bestselling business books. The past two decades have seen
the almost complete discrediting of the long-standard MBO, or management by
objective, as well as the rise and fall of countless shorter-lived fads, each
accompanied by a flurry of books, articles, videos and seminars. There are
buzzwords for every letter of the alphabet and every function of management,
from activity-based costing to intrapreneurship, from just-in-time inventory to
zero-defects manufacturing.
All this ferment can be confusing as well as helpful, say
experts. "A lot of managers waste their time chasing the latest idea," says
Richard Hamermesh, founder of management consulting firm The Center for
Executive Development in Cambridge, Massachusetts, and author of Fad-Free
Management (Knowledge Exchange). Hamermesh blames managerial insecurity--"If
other people are doing it and it's on magazine covers, then I'd better do
it"--for what he sees as harmful trend-chasing.
Consultants are also due a share of the blame for the
bewildering explosion of odd acronyms, newly invented terms and supposedly
unique advice. "Every consulting firm will come up with a focus to differentiate
itself from competitors," explains Charles B. Wendel, president of Financial
Institutions Consulting in New York City and co-author of Business Buzzwords
(Amacom).
But wherever they come from and whatever their failings,
there's no doubt that some of these management ideas have proved to have lasting
merit. Somewhere between adventure-based learning and Theory Z management lies a
style and practice to fit almost any entrepreneur's personal inclinations. But
before you dive in, here is a road map to four of the trends that have most
influenced business in the recent past and are likely to carry it into the
future.
1. TQM: King of the Hill
Total quality management, together with its associated
concepts, such as continuous improvement, zero defects and statistical process
control, make up what is easily the most talked-about business idea of recent
years. TQM, as it's almost always referred to, is especially remarkable for its
long tenure atop the heap.
Some of TQM's basics came out of Bell Telephone's labs as early
as the 1920s. The ideas were refined in
Japan not long after World War II, then gained wide attention from U.S.
businesses about the time Entrepreneur was founded 20 years ago.
TQM can affect almost every area of a firm's operations, but it
rests on one principal idea: It calls for continually improving quality by using
statistical measures to track both problems and the results of efforts to fix
those problems. It helps many businesses greatly cut costs by, among other
things, reducing waste and scrap while boosting customer satisfaction.
The TQM approach is a marked contrast to the traditional method
of using post-production inspection to catch errors. Propelled by the impressive
quality of Japanese goods produced using TQM methods and led by the vision of
gurus such as Joseph M. Juran, W. Edwards Deming and Philip Crosby, millions of
businesses have dropped the old ways and adopted TQM in one form or another.
Indeed, many credit TQM with virtually saving American business
from high-quality, low-cost foreign competitors. But partly as a result, today
TQM is the closest thing to a religion in the ordinarily secular American
business scene. And overzealous TQM advocates who insist on strict adherence to
its principles are the reason, say many, that TQM may be on the decline as a
high-profile business strategy.
That doesn't mean quality management will go away or people
will stop doing the things it teaches. It's just that years from now, say
experts, it will no longer be talked about.
"It won't be a buzzword anymore," explains Michael Hitt, a
management professor at Texas A & M University in College Station and co-author
of Strategic Management (West Publishing Co.), "because firms will have to
compete on quality or they won't stay in existence."
2. Reengineering
Business process reengineering hit the business world in 1994
with the publication of Reengineering the Corporation (Harper Collins) by
consultants James Champy and Michael Hammer. Though just 3 years old, business
process reengineering, or BPR, has already had such a major impact that most
experts consider it a leading idea of the past two decades.
Reengineering calls for making major changes to a business's
fundamental operations, with cost reduction as the primary goal. Because these
changes often call for reducing the number of workers, it's closely associated
with ideas like downsizing and rightsizing.
Reengineering's main appeal rests in its ability to provide
companies with a quick way to control costs, says Dipak Jain, professor of
entrepreneurial studies at Northwestern University in Evanston, Illinois. While
it violates one of TQM's rules by often concluding that workers should be laid
off, BPR shares many of the same goals. "Quality [management] and reengineering
are not mutually exclusive," Jain says. "They need to be done jointly."
Recently, BPR has been widely criticized as a short-term way to
boost profits by gutting a company's work force. "Corporate anorexia" and
"hollow-shell corporation" are two newly coined terms referring to companies
that have trimmed so many workers, they have lost essential functions.
Yet BPR has also produced some remarkable success stories. The
ability to coexist with TQM may explain much of BPR's rapid rise in influence
and popularity, and suggests it will remain influential for some time.
3. Empowerment
Handing employees the power to make decisions and rewarding
them for making the right ones has proved one of the toughest pills for managers
to swallow in recent years. Perhaps that is what has saved the idea of
empowering employees from the kind of overexposure that characterizes other
trends and kept it, after more than a decade of considerable prominence, still
on a growth trajectory.
Empowerment and related ideas such as participative management
have the dual goals of reducing costs and improving quality. This is done by
placing responsibility for many decisions in the hands of production workers,
customer service personnel, and others who formerly took orders from managers.
The result is less need for overhead-gobbling middle managers and more relevant
decisions.
Not surprisingly, empowerment is popular with employees. Among
other things, it is said to boost job satisfaction, reduce absenteeism, lower
turnover and even improve workplace safety. These advantages alone may drive the
concept for years to come.
"What's important about empowerment is that organizations are
made up of people," explains Eileen Shapiro, president of Cambridge,
Massachusetts, management consulting firm The Hillcrest Group Inc. and author of
Fad Surfing in the Boardroom (Addison-Wesley). "To the extent you can get them
to do their jobs more effectively and enjoy it, that's got to be a competitive
advantage."
4. Teams
Today, people who supervise the work of others are as likely to
be called team leaders or project heads as managers or executives. It's all due
to the phenomenal popularity of self-directed teams, teamwork, cross- functional
teams and other ideas associated with the practice of organizing groups of
workers to achieve a common objective.
Teamwork is central to other major trends, such as quality
management and empowerment, because it aids communication, improves cooperation,
reduces internal competition and duplication of effort, and maximizes the
talents of all employees on a project. But it's only in the last decade or so
that attention has been focused on the team itself as a vital management tool.
Like most major trends, the teams movement has lately been
criticized for positioning itself as a panacea. In fact, teamwork requires a
good deal of back-and-forth communication, which can slow down decision- making
to what is, in some instances, an unacceptable speed. Says Hamermesh, "I'm all
for teams, but not when someone on their own can make the decision a lot faster
and better."
By Mark Henricks
Management Training - Try Participating Management
Management Training Program Quote
"Success demands singleness of purpose."
Vincent Lombardi
Suggested Reading:
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The Tools & Techniques Of Practice Management (The
Tools & Techniques)
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New Techniques for Modelling the Management of
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Project Risk Management : Processes, Techniques
and Insights
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Developing Management Skills (6th Edition)
by David A Whetten, Kim S. Cameron
Management: Skills and Application with PowerWeb
by Leslie W. Rue
A Guide to Getting It: Remarkable Management
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Management : A Skills Approach (2nd Edition)
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Management Skills for Everyday Life : The
Practical Coach (2nd Edition)
by Paula Caproni
