Traditional management Squashes Potential

Ironically, however, the structure of the modern organization is more conducive to eliminating managerial talents than developing them. Instead of fostering well-roundedness, it inhibits growth.

Consider the modern hierarchical system. It capitalizes on the strengths of individuals. A person who is a strong (A)dministrator will be promoted as an (A) and will climb the corporate ladder as an (A). In the short run, an organization may be getting the maximum out of that manager, but in the long run, his lack of opportunities to develop (P), (E), and (I) will make him inflexible and uncooperative when dealing with people whose styles are different from his, and that will ultimately harm the company.

Another danger is that some potentially great leaders will remain stuck in supportive positions throughout their careers – simply because they are too good at what they do. Examples of such biases in promotion are often seen in the Army, where someone who is an excellent sergeant or staff sergeant may not be recommended for a commission because his commanding officer doesn’t wish to lose a good adjutant.

Yet another breeding ground for mismanagement lies in the very rigid boundaries that corporations typically maintain between workers and management.

At the bottom ranks of most organizations, (P) is expected almost exclusively. Workers are not expected to be (A)dministrators, (E)ntrepreneurs, or (I)ntegrators, nor are they given opportunities or experience in those roles. (In particular, management regards as a potential threat any attempts at (I)ntegration from the lowest levels – which often manifest themselves as unionization efforts or informal, non-sanctioned leadership.)

Just above (P)roduction are first-line managers, who are expected to have plenty of (A). When a (P)roduction worker is promoted to first-line manager, he needs to relax his (P) role to (p) and begin performing (A) tasks and even some (e) and (i).

None of this is easy. In order to reduce his (P), the new first-line foreperson must let others do the work that he formerly did himself. This entails becoming relatively detached from tasks to which he may have been totally dedicated – and to accept the fact that others can and should do the job instead.

Lacking crucial experience in the new roles, however, the new manager will more often than not continue using his exclusive (P) approach. Eventually, he will end up as a (P---), a Lone Ranger.

This would be equally true if a (P)roduction manager were promoted to CEO. In any new job, people tend to repeat the style that has worked for them, and since what made him successful was his (P) orientation, the new CEO will probably continue to (P), running the company single-handedly and making all of the important decisions himself.

And it’s true for those I call “financial engineers” – venture capitalists or investment bankers whose success has derived from their individual deal-making, a (P) task. Given the role of managing director, for example, a financial engineer would need to add some (a), (E), and (I) skills and to relax his (P) style to (p); he’d also have to learn how to work well with (A)-, (E)-, and (I)-style managers. If he could not quickly make this transition, the company he manages would soon be in deep trouble.

Paradoxically, until an employee rises to the vice presidential level, (E) and (I) are generally discouraged – but once he does reach that level, he is instantly expected to be creative and to facilitate staff interactions. The question is: Where will he find the skills and the emotional resources to perform these new functions when he has been harnessed, suffocated, and divested of his creative impulses for twenty years or so? Usually, the answer is: He won’t. This may explain why so many companies fill their top management positions from the MBA ranks who have no experience except learning to write business plans which is (E).

Mismanagement Breeds Mismanagement

Organizational roles are eternally in conflict, and the style that prevails is often (not coincidentally) the style of the company’s founder. If the founder’s style is extreme and intolerant of other styles, he will limit the opportunities for other roles to develop and mature. Thus, mismanagement breeds more mismanagement.

Typically, for instance, corporations founded by (P-E-)s grow rapidly (assuming that they are successful). During this phase, they usually lack the cohesion that good (A)dministration provides; in fact, efforts to create controls are sometimes met by antagonism from a (P-E-) founder.

If the organization is to continue to grow, however, the (A)dministrative function has to be developed.

When the problem becomes serious enough, a (pAei) is usually called in to establish some order. But his chances of surviving at the company for very long with a (P-E-) at the top are slim at best. A (P-E-) tends to change accountants and (A)dministrative managers more often than is prudent for organizational stability.

The challenge for the organization at that point is to find a way to grow away from the (P-E-) founder, to reduce his control over the company. If the organization cannot do that, its (pAei) (A)dministrator will be seriously handicapped in his attempt to substitute structure for chaos.

Sometimes the only way to reduce the (P-E-) founder’s power is to get rid of him. But since he is also the source of much of the company’s (E)ntrepreneurship, energy, and creativity, that strategy can be dangerously self-defeating.

There are several possible scenarios for what happens next. If the by-now large corporation keeps growing at the same explosive pace, over time its founder will lose control – simply because the job, or jobs, he’s been doing by himself will become too overwhelming. Various roles and responsibilities will start to shift, resulting in confusion and a power vacuum. This leaves the organization vulnerable to a takeover by an outside firm. After a takeover, the founder generally resigns, is forced out, or is shunted aside to some innocuous position.

The organization does become free of a destabilizing influence – but at what price?

During this phase of its lifecycle, the organization is exposed to other risks as well – some of which may make a takeover look good.

If, for example, an (-A--) takes control, bureaucracy begins to grow like kudzu. This is fatal to the organization’s (E)ntrepreneurship: Suddenly it is open hunting season on the company’s (E) types, who soon find themselves with exactly two choices: Either they must give up and adapt (don’t make waves; don’t stand out); or they will have to go elsewhere.

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The 20th-century phenomenon of management, as a profession and a “science,” has led to a burgeoning of business schools and training courses for both novices and veteran managers. And without question, there is a need for such training. Unfortunately, however, these schools continue to focus on the wrong goals and the wrong strategies.

In fact, most business schools of management do not teach management at all. They will teach you accounting, and finance, and the economic theory of the firm, and behavioral science. But knowing how to measure profits, optimize financial resources, or understand group dynamics and personal needs does not guarantee that you will know how to manage. Management – the art of defining what you should want and making it happen – is not just the sum of the above management skills. It is something else entirely, and it is not taught.

For one example, traditional management theory fails to differentiate among the various styles and circumstances that should be considered when managers plan, organize, and motivate. Any organization, if it is to remain healthy, must have a style and strategy that is heavily contingent on its current phase in the organizational lifecycle. Both style and strategy will and should change regularly, because what is functional and desirable at one stage in the lifecycle can be deadly at another. However, this is nowhere acknowledged in traditional theory, which tends to use the same formula for any organization, regardless of its degree of maturity.

But the schools’ most outrageous failure has been to buy into and purvey the conventional – though wildly unrealistic – paradigm of the individual perfect manager. By encouraging students to believe they can manage large groups of people without the support of a complementary team, these schools do their students a tremendous disservice, setting them up for a future of perceived humiliating failure.

The schools encourage these unrealistic expectations in ways both direct and indirect. For instance, management textbooks, to illustrate good management practices, often put together a collage of the best traits of the best managers – and then present this collage as if it were a single, individual manager. This mythical creature will then proceed to manage (flawlessly, of course) all tasks – planning, organizing, training, developing, motivating, leading, organizing, disciplining – under all conditions in all organizations in the same way.

In effect, then, the textbooks present as a model for their students a manager with no weaknesses – a model who, in reality, could never be emulated, trained, or found – because he does not and cannot exist.

Have you ever known anyone who was entirely without weaknesses? No, of course not. And here’s a related question: How many people do you know who attended the best MBA schools and programs in the country, who could recite the textbooks by heart; and yet weren’t able to manage skillfully? Quite a few, right?

Why? Because nobody is perfect; people, by definition, have flaws as well as virtues, areas of weakness that balance their skills. There is no manager on earth who can perform with exceptional ability every single task within his purview.

Nevertheless, management textbooks are thick with formulas, maxims, directives, and rules for what every good manager “should” do: He “should” plan, “should” organize, “should” communicate, “should” discipline, “should” lead; there’s hardly a single page that doesn’t contain at least one “should.” What you won’t find is any hint that the degree of perfection required to qualify as a “good manager” – at least as these textbooks define it – might be impossible to achieve.

This is a simple, basic perceptual flaw – but with vast consequences: It virtually wipes out the value and effectiveness of contemporary managerial training. In this way, it closely resembles the development of economic theory, which developed an abstract entity called “the firm” to represent the group process of decision-making. Economists then put this construct to work as a research tool: By analyzing the conditions in which “the firm” tends to raise prices and those in which it tends to lower them, they could predict organizational behavior.

It is instructive to note the effect of this technique on the study of economics: While the hypothetical “firm” can be valuable in determining why certain decisions are made, it has been a poor device, at best, for studying the more crucial question of how the decisionmakers interacted.

For the same reason, the education and training that management schools currently provide for students is doomed to be misguided at best, useless at worst. The moment the choice was made to present an abstraction, a better-than-human being, as the model for students to strive for, an unrealistic, ultimately unhealthy archetype was established. Inevitably, that archetype began to twist both theory and practice away from constructive and necessary pursuits, toward false values and unrealistic goals.

Origins of the species

Origins of the Species The paradigm of individuals as perfect managers has never worked; it is the fundamental error from which all the other management schools’ flaws derive.

How did it come about? Why are millions being spent by corporations to train into being a creature who could not possibly fit the definition and still be human?

There are several causes. One simple one is that management theory has primarily been developed in the United States, where the tradition is individualistic and (E)ntrepreneurial. Thus it was a logical manifestation of American culture to personalize the process of management into one individual, called the “manager” or the “leader.”

Reading chronologically through the major works in the development of management theory, you can actually see the (PAEI) code emerging, bit by bit – while continuing to focus on one individual and his behavior and effectiveness rather than on a management team. For example, Frederick W. Taylor, a pioneer in the field, was concerned primarily with (P)roductivity and specialization, the (P) role.3 Both Henri Fayol and L.F. Urwick, on the other hand, were concerned with organizational structure, authority, span of control, delegation of authority, and staff-line relationships – the (A) role).4

Mathematician, engineer, and social philosopher Norbert Wiener focused on the dynamics of change – (E), and introduced the theory of cybernetics, which he defined as the science of communication and control in the animal and the machine.5

Elton Mayo, a sociologist at Harvard, did groundbreaking studies on behavioral science in the workplace and developed the human relations movement,6 which has become the heart of contemporary management theory.

Psychologists, too, focus on behavior – in their case, on why people have the styles they have: What needs motivate them.7 However, while understanding the why of behavior is interesting, it does not tell you what to do about it.

Whatever their ideas happened to be, all of these theorists had one thing in common: They concentrated exclusively on the individual manager – claiming, in essence, that one or two fingers equals a hand.

More recently, general management theoreticians including Peter Drucker,8 William Harold Newman,9 and Harold Koontz,10 have changed their definitions somewhat, putting result orientation (P), structure (A), change (E), and the human element (I) together into a whole that they called the “process” or “functions” of management. However, they stopped short of challenging the old paradigm, which held that all of these roles are meant to be performed by a single manager.

Most or all of the research and documenting of management theory has been flawed for this reason. It’s true that some management theorists have attempted to correct this error, by basing their own studies on the observation of real managers functioning in real situations. But because the premise behind the classic definition of management has never been challenged, the results of these descriptive studies are liable to be misapplied. Henry Mintzberg’s ten roles of management11 may be more specific than Fayol’s four roles12, but the individual who tries to master all ten roles is still attempting the impossible.