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Management Fail

Entry 1236, on 2010-10-20 at 21:12:04 (Rating 4, Comments)

Why is modern management such a failure? Why do most large organisations produce such mediocre outcomes and why do so many smaller companies and organisations with atypical structures produce the real innovations?

These questions assume that organisations with modern management are more mediocre, and I haven't produced any real proof of that but I think there are some reasons to accept the idea. There are many anecdotal cases where bureaucracy as suppressed creativity and many new ideas arise in small organisations or from individuals and are often assimilated into bigger companies through acquisition.

So I just want to accept the idea that traditional hierarchies are inefficient and move on from there. The question is, why are they inefficient. In the past I have blamed management. My personal experience is that the vast majority of managers are mediocre and inadequate in every way. No doubt there are exceptions but I'm talking in generalities here. Up until now I have had no reason to believe this theory beyond my own observations and personal biases. But now I have...

You might have heard of the Nobel Prize. Of course you have. Everyone has heard of the Nobel Prize (or prizes because they are awarded in multiple categories). But have you heard of the Ig Nobel prize? This prize is run each year and highlights real research but that research must have a humorous or bizarre twist.

For example, this year the engineering prize was awarded to a team for perfecting a method to collect whale snot using a remote-control helicopter. The medicine prize was for discovering that symptoms of asthma can be treated with a roller coaster ride. The peace prize was for confirming the widely held belief that swearing relieves pain. The public health prize was awarded for determining by experiment that microbes cling to bearded scientists. The biology prize was awarded for scientifically documenting fellatio in fruit bats.

And (the point of this whole blog entry) the management prize was awarded to Alessandro Pluchino, Andrea Rapisarda, and Cesare Garofalo of the University of Catania, Italy, for
demonstrating mathematically that organizations would become more efficient if they promoted people at random.

Yes, if a an organisation promoted people randomly it would work better than choosing those to promote using the criteria which are used now. This means that exactly the wrong selection mechanism is currently used and this surely explains why we have such poor management.

It's easy to see why this happens. Many managers are promoted through the "Peter Principle". That is they rise to a position where they are no longer competent and stay there. These are the same people who make decisions on who to promote in future. Given that they are already incompetent, how likely is it that they will make sensible promotion decisions? That's right, either through pure incompetence or a conscious or subconscious wish to avoid other managers being more competent than they are, they will promote more incompetent people - possibly people even less competent than themselves. So it's almost certain that the whole mechanism is self-perpetuating.

So there's an explanation of why things in general today are such a mess. Don't ask me what the answer is. All I'll say is that I reject the whole idea of hierarchical management and the idea that to be promoted a person must move into management. But the first step is always to admit that the current system doesn't work. But one study can't really prove that - even if it did win the Ig Nobel prize!

Comment 1 (2839) by GadgetDon on 2010-10-21 at 03:02:05:

There's an old quote, "The mark of a good general is the ability to make decisions. If they happen to be right, so much the better."

So even if true that organizations would be better if they promoted randomly (I'm highly suspicious about mathematical proofs of human behavior), it's less important that these organizations ARE able to organize, to make decisions, get set in motion. Because in motion is where things happen.

While I'll be the last one to say that the lone person following his muse has no place in this world, most things involve lots of people working together. And like it or not, that means management, some people making decisions, setting policy, passing out tasks, checking results. Charity groups will have coordinators (and usually a board at the top). Open source projects, which you'd think would be the perfect example of people just coming together on their own, have people who fall into the roles of manager.

Are these decisions always good ones? No. Capitalistic and evolutionary theory both say that those who make bad decisions will be a self-correcting problem. But even if the marching orders are sending the group to towards the nearest cliff - it's got people moving, it has things happening.

Comment 2 (2840) by OJB on 2010-10-21 at 13:53:16:

Interesting quote, but I don't really agree with it. In a competent and motivated work place the best thing most managers could do is nothing!

The question is really: is a top down management model or is one where individuals make most of the decisions best? The answer is: it depends on the circumstances, and in most cases a system somewhere between the extremes should be used.

I'm not saying there should be no management. What I am saying is that managers should be administrators and coordinators, not the "supreme commanders" they are now. Of course, as I said above, it probably depends on the type of organisation involved.

Clearly there is no self correction in these systems for the reasons I mentioned in the original entry. I have no faith in "capitalist theory" which always looks good in theory but almost never works in practice, and evolutionary theory only works if there is a selective force operating. If that selection is itself provided by incompetent managers then it's not going to achieve much!

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