Traditional management as taught in business schools is mainly about managing trade-offs. Do you go for disciplined execution or aggressive innovation? Do you accentuate customer focus or empower staff. You can’t do both. You have to be tough-minded and choose.
So when traditional management faces key strategic decisions, it typically applies its business school training and takes one path at the expense of another. It focuses on innovation and new business at the expense of core businesses or vice versa. It stresses discipline and sacrifices flexibility. It focuses on customers and ignores partners. Studies show it doesn’t work: the Fortune 500 are in sharp decline, as many writers and executives are concluding.
Successful management for the 21st Century is radically different, as described in an interesting book called Doing Both by Inder Sidhu (FT Press, 2010). It’s mainly about Cisco (CSCO), which, over the past seven years, in a highly unstable global economy, doubled revenue, tripled profits, and quadrupled earnings per share. How? By “doing both”.
The book confirms that there is a better way, even for large companies. It means approaching every decision as an opportunity to seize, not a sacrifice to endure. It means avoiding false choices, reduced expectations, and weak compromises. It means finding ways to make each option benefit and mutually reinforce the other.
Of course, the hierarchical bureaucracy of a traditioinal Fortune 500 company lacks the agility to accomplish this. If you're in a hierarchical bureaucracy, don’t even bother trying. To accomplish both-and, you need to practice a reinvented management, with new goals, new roles, new coordination, new values and new ways to communicate.
Sometimes traditional managers suggest that only startups have the agility to succeed in a both-and strategy. The fact that a corporate giant lik Cisco has been successful at it, means that the Fortune 500 needs to think again: radical management is in your future.