Management Systems

Pity the poor manager. As if companies don't face enough difficult choices in their businesses, they confront an unprecedented embarrassment of promised riches in management itself. Do you place your trust (and money) in business process reengineering (BPR)? Or Total Quality Management (TQM)? Alternatively, how about becoming a virtual corporation? If that doesn't appeal, you could try the learning organisation, if you're not too busy with time-based competition, continuous improvement (kaizen), core competencies or organisational architecture (OA)

Each of these approaches, moreover, comes complete with its own guru or gurus. In TQM alone, those not content with the doughty old names of Deming and Juran can try Crosby, Taguchi, Ishikawa or Imai. Managers who can reel off the concepts listed above probably also know the attendant gurus: Michael Hammer for BPR, William Davidow for virtuality, Peter Senge for learning, George Stalk for time, David Nadler for OA and C.K.Prahalad for core competencies. 'Reel off' is the right phrase: the assembled ideas look so many and so many-sided as to make the mind reel.

The reeling isn't just in the mind. As top managements latch on to these concepts, so they seek to install them in their organisations. That can all too easily lead to a condition that Mike Freedman of consultants Kepner-Tregoe has named 'initiative fatigue'. Those inside companies know the phenomenon as the 'flavour-of-the-month': the latest 'programme', wished on them by top management, that will be given some fancy name, involve them in fancy training, and then, after contributing negligible benefits to the business, fade gently away into memory, to be succeeded by the next whim.

The pursuit of panaceas has long been a favourite management hobby. The classic case is Management by Objectives. MBO built on a powerful insight of Peter Drucker's (that managers perform better if they know what's expected of them and have agreed to do it). It promulgated a cascade of aims, all with numbers attached, which in theory guaranteed perfect performance and corporate success. In practice, MBO generally produced neither, and its day passed - though more than the memory lingers on.

In very advanced TQM something called 'policy deployment' is at first sight very similar. PD is defined by PA Consulting Group as 'a fully integrated top-down, bottom-up management system through which the two or three critical breakthrough targets and means are identified and implemented with the full participation and alignment of all managers' - or (as at Rank Xerox) all staff. Like MBO, it cascades down the organisation so that every larger objective is fed by the achievement of lesser objectives.

There is a difference, and it's crucial in making sense out of what looks like a managerial Tower of Babel (or Babble). The title Liberation Management coined by Tom Peters, another highly popular guru, strikes the relevant note. Wherever they start from, whatever brand they place on their product, all the gurus end up at the same destination. They all subscribe to the idea that corporate achievement rests on maximising the contribution of individuals, not by imposing controls, but by removing restraints.

The philosophy was beautifully encapsulated by a speaker at the CBI's launch of its competitiveness initiative earlier this year. Asked how other managements could emulate his firm's productivity and quality achievements, the speaker replied simply: 'By getting out of the way'. What managers need continuously is faster performance of streamlined operations to higher quality standards, leading to greater customer satisfaction, achieved by people who use their own initiatives to realise those shared aspirations.

Policy deployment therefore allows people to share in determining objectives and, at least equally important, to set out what improvements they plan. MBO set targets, but wasn't overly concerned with how the numbers were met. PD is deeply concerned with process, with the how of performance as much as the what. Also, its theorists don't make the MBO mistake of believing that a perfect system will produce perfect results. They know that there are no panaceas - that things will go wrong and require correction.

'Flavour-of-the-month', though, leads off with the gung-ho certainty that this 'programme', unlike its predecessors, will achieve the wonders required by the board. Even the word 'programme' is suspect, because it suggests a one-off initiative that will one day be complete. Any management approach worth its keep will require many years of sustained effort. If 'programme' is one bad sign, though, another is a cast-iron guarantee of failure - top management refusal to join the party.

The issue here isn't just the hardy perennial of 'commitment': every peddler of panaceas, along with every seller of genuine corporate essentials, has insisted on top-level commitment as a sine qua non. The trouble is that, with a finite number of senior managers, and only one chief executive, a finite level of commitment is confronted by an infinite variety of choice. The choice must be made - but the chosen approach must be one which embraces the choosers.

The reaction of employees whose leaders won't apply TQM training and methods to their own work, for example, won't differ from that of a sports team whose captain won't join the training sessions. Refusers may believe that they're so superbly equipped and performing so well that efforts to improve their activity and skills are superfluous, if not downright demeaning. The argument misses the point (a) because it's invariably untrue (b) because it harms the collective performance of the team and the system.

'System' is another key word. Any of the approaches mentioned here, and others besides, are capable of producing sharp, even lasting improvements in aspects of performance - in the processes with which policy deployment is concerned. But those improvements need to be integrated with all the other processes that constitute the business system. That isn't the same as the company or the unit. It goes outside their boundaries to take in the customers at one end and the suppliers at the other.

Inside the boundaries, systems thinking takes in all departments and functions that relate to whatever's in hand. Most of the new approaches depend in common on multi-disciplinary, cross-functional team-working. And here the optional element disappears. This isn't another flavour-of-the-month programme adding to initiative fatigue. Such self-managed teams are accounting for more and more activity within organisations, whether top management likes it or not - or even knows that it's happening.

By the same token, and again willy-nilly, information technology is driving companies in the directions favoured by the gurus. The IT revolution and team-working are connected - literally connected, because the networked PC is linking managers and others in ways that rule out the old ways of working. As Fortune writer Thomas A.Stewart puts it, 'Networks irrevocably alter the nature of managerial authority and work' as their use encourages working together across the old boundaries.

Stewart notes that 'A person might spend most of his day with an interdepartmental team led by someone from another part of the company in another part of the world, doing a project his nominal boss knows little about. Then what, pray, is a chain of command?'. One 1993 study of 75 networks found exactly what you'd expect. Once the networks are used, a company's structure starts to change - even if an 'organisational architecture' guru has never come near the place.

You can see how that results from a Business Week definition of OA: 'a metaphor that forces managers to think about organisation in terms of how work, people and formal and informal structures fit together. Leads to autonomous work teams and strategic alliances'. And autonomous work teams and strategic alliances lead to, and are fed by, the IT network. To exploit that to the full, managements really do need all-inclusive, system-wide concepts that deliver quickening speed, rising efficiency, increasing effectiveness and happier people - customers, employees and suppliers.

Which concept is adopted is less important than obeying the rules. First, aim high and system-wide, providing a strategic vision which will give process changes the required direction and leverage. Second, insist that all senior managers believe and participate in the chosen approach. Third, seek and win large, revolutionary outcomes fast: but within, fourth, the context of a long-term commitment to evolutionary change. Some companies have been deeply involved in TQM for a decade or more: you need time to consolidate your advances.

Michael Hammer's firm, CSC Index, did a survey of re-engineering which showed many companies breaking all four rules - and thus wasting the time, trouble and cost of their reforms. Reporting on the survey in the Financial Times, Christopher Lorenz wrote that 'reengineering works best in organisations where employees really trust their managers, make many of their own decisions, believe they are paid for performance, operate well in teams, share information freely, and take risks'.

The cynical response is easy: if you've got all that, who needs gurus or their preachings? To that there's only one answer. To obtain these invaluable assets, which will be more and more decisive in the competitive wars, organisations are going to need all the help they can get.