Julian
Burkinshaw’s Reinventing Management
The book proposes a kind of contingency theory of management: different situations demand different kinds of management. To be effective, a manager needs to adapt to the demands of the situation. Managerial behavior is mapped on four dimensions: bureaucracy-to-emergence, hierarchy-to-collective wisdom, alignment-to-obliquity, and extrinsic-to-intrinsic motivation. This leads to main four models of management:
A. The traditional top-down bureaucracy or “Planning” model—tight means, tight ends; e.g. McDonald’s
B. “Science” model—tight means, loose ends: e.g. Arup, the international engineering consultancy.
C. “Quest” model—tight ends, loose means: e.g. do whatever it takes to win, investment banks
D. “Discovery: model—loose ends, loose means: e.g. Google, change the world.
I talked with Julian recently about his new book:
1. The book begins by explaining why management failed. How widely do you think is it accepted in business today—and in business schools—that management has failed?
I don’t believe it is widely accepted. The trouble is, our existing orthodox view of management has been a great success for many decades, so its gradual decay is not readily visible to those in the middle of it. But there are many indicators that business executives have lost their legitimacy and that the quality of management, as currently practiced, is simply not as good as it could be.
2. The book rejects both the view that management can’t be reinvented and also the view that we are on the cusp of inventing a wholly new way of managing. Could you comment on the “third way” that your book presents, which involves “reinventing management” but not doing something that is wholly new?
We are not on the cusp of an entirely new way of managing. As you say, I argue for a “third way” that lies somewhere between the arguments of those who imagine an entirely new way of managing and those who argue there is nothing new under the sun. My third way says most of the “new” approaches to management exist, in some form, already, and that the challenge companies need to address is how to choose the RIGHT model for their competitive situation, rather than to blindly follow the herd. To do this, executives need a framework to help them make conscious and careful choices among competing approaches. And that is what the book provides.
3. The book notes that one cause of management’s failure was the aggrandizement of leadership at the expense of management. You cite Henry Mintzberg’s dictum that companies these days are “over-led and under-managed,” and argue that “we all need to be leaders and managers.” Is this about leaders becoming managers, or managers becoming leaders, or both?
It is both. Of course leadership matters, but it should not be built up at the expense of effective management. For me, effective executives are those who can both set a long term vision and also understand and influence the detailed activities that allow them to deliver on that vision. Some people might argue that we should separate these two roles out, but for me the people who can span the macro- and the micro- are the ones who are truly effective.
4. The book notes that the traditional Planning Model of management has difficulty with innovating, with motivating employees and with coping in unstable environments; as a result, many firms have been exploring other options, along the four dimensions described in the book. Yet the book concludes that “there is nothing wrong with the Planning Model, as it can be highly efficient and profitable in a stable and predictable environment.” Are there many business environments today where the Planning Model is still appropriate?
This is a good question. Empirically, there is plenty of evidence that “planning” model companies like McDonalds and ExxonMobil are doing very well, and have done for many years. But many people, including myself, have argued that this model is going to become less viable in the years ahead. My hunch is that the number of sectors in which companies can afford to stay with this traditional model (and still do very well) is shrinking.
5. One of the most original parts of the book is the discussion of the principle of obliquity. It notes that three of the four dimensions are relative familiar concepts: emergence, collective wisdom, intrinsic motivation. But the fourth concept—obliquity—will be unfamiliar to most people. Obliquity concerns the idea that in complex situations, indirect objectives may be more effective than direct objectives. Thus in psychology, we achieve happiness, not by pursuing happiness, but by following our dream; happiness follows as a consequence. In management, the idea that a tight management focus on maximizing shareholder value may induce management actions that actually undermine shareholder value is quite recent. How important is the principle of obliquity for re-inventing management?
Obliquity is the most contentious but perhaps the most important part of the book. Interestingly, John Kay has just published an entire book on the subject, so this could be an idea whose time has come! My honest view is that we don’t know quite what obliquity means yet – it is a powerful catch-all for a lot of the non-linear things that happen in business and in life, but it is a concept that evades easy analysis. I expect my next book will give much more considered thought to the concept of obliquity!
6. The book mainly focuses on the private sector. Do you see management in the public sector as facing essentially the same or different issues?
Yes, I believe that the public sector faces most of the same challenges as the private sector in terms of excessive bureaucracy and hierarchy and so on. But because of the breadth of stakeholders it has to work with the difficulties faced in implementing my proposed ideas are even more severe. I have done quite a few talks about this work to executives in health care, further education and so forth, and there is no question that the ideas resonate with them.
7. The book provides an immensely helpful set of dimensions on which firms can find out where they are now, and then plan to make changes as needed, given their particular context. Chapter 9 discusses the leadership agenda that this will involve. How ready are business leaders to tackle this agenda?
Well, there are some leaders who clearly “get it” and are already doing many of the things I talk about. But most struggle. I have had many conversations with top executives about how they might move forward with their management innovation agenda, but these conversations often founder because no-one “owns” the responsibility for management innovation, and because the returns to management innovation are often fairly uncertain. It takes a great deal of courage to put in place, for example, a management structure or performance evaluation system that has never been used before.
8. In the final chapter, you make a plea to “broaden the debate on reinventing management.” Just as war is too important to be left to the generals, so management is too important to be left to the managers; there is a broader social interest in the reinvention of management being successful. To achieve it, we will need more cross-company sharing, new governance models and new rules around the ownership of intellectual property. Thus many parties share responsibility for moving the agenda forward. How ready are they to take up these challenges?
These sorts of collaborative endeavours are incredibly difficult to put together. Witness the failure of the climate change talks in Copenhagen last year, as one example of how difficult it is for independent actors to reach agreement on things that are ultimately in their interests. But they do occasionally happen. For example, consider Dee Hock’s book on the origination of the Visa network, “Birth of the Chaordic Age”. He describes how he was able to persuade a bunch of self-interested bankers to agree to a common set of standards and rules to create the credit card industry we know today. Obviously there are a lot of factors that have to come together for collaborative endeavours to work. But there is always a person, or small group of people, at the centre of any such movement, that seek to impose their vision on others. This is true leadership!
ABOUT THE AUTHOR: Julian Birkinshaw is Professor of Strategic and International Management at the London Business School, co-founder of the Management Lab, and the Deputy Dean for Programmes. He is a Fellow of the Academy of International Business and the Advanced Institute of Management Research (UK). He has PhD and MBA degrees in Business from the Richard Ivey School of Business, University of Western Ontario, and a BSc (Hons) from the University of Durham. He has worked at the University of Toronto, the Stockholm School of Economics, Price Waterhouse and ICI.
Julian Birkinshaw: Reinventing Management: Smarter Choices for Getting Work Done
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