May 26, 2002

Management own goals revealed

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In the 1960s, Peter Drucker, the management guru, made the point that in every organisation, it is bad management rather than bad employees that causes problems.

A manager is paid to manage. This means getting the best out of the resources, not basking in the glory yourself. Getting the best out of people is an extremely difficult task and those who are promoted to managerial level seldom appear to have the talents to gel an entire team together. Why is this? Why are so many bosses absolutely bereft of managerial talent? Why, when you ask so many people about their bosses, is the response negative?

In a recent survey in Britain, 80 per cent of respondents cited bad management and a lack of commitment to the firm as the primary reason for job dissatisfaction. If good management is key to employee commitment and many firms are getting it wrong, then picking bad managers is an economy wide problem that should be scrutinised.

Typically, your boss got the job because he or she wanted more money, more status, a bigger company car or simply a reward for past performance. This type of career structure is very evident in the financial markets. Smart traders, salesmen and analysts spend the first ten years of their careers working all the hours God gave them, in the solitary pursuit of excellence in a narrow field. To get to the top in many areas, a person must work on his own, be totally committed and sometimes think of his closest colleagues as competitors not complements.

In return, if he gets ahead, the rewards will be significant. The higher the rewards, the more bright people are attracted into the profession and sooner, rather than later, a celebrity culture emerges. Therefore, the eminently sensible culture of the team player becomes subservient, financially and status-wise, to the culture of the overachieving loner.

We can see this process in journalism, investment banking and advertising. It is also evident in the partner-ship structure that continues to dominate professions such as the law and accountancy. Ultimately, most modern professional companies foster a corporate disease known as ‘clientitis’.

This illness stems from the fact that many professionals bill hours to clients. The more hours they bill, the more they get paid, leading to a very destructive dynamic. Ambitious lawyers, accountants and consultants will rarely put their colleagues before their clients. Thus, if they are asked by management to do something for the good of the firm which is not directly client related, the ambitious consultant will typically refuse, citing client pressure.

We can put this odd behaviour down to the selfish gene that affects the personalities of many outwardly successful organisations. The selfish corporate gene leads to most outfits being a collection of sole traders who guard clients ferociously while shutting out colleagues from the cash-generating part of their businesses.

Firms react to this self-destructive internal dynamic in a number of ways. The most favoured option is the corporate away day with the guru. The industry that has spawned hundreds of Peter Drucker wannabes is, ironically, based on the selfish gene in corporate politics that the gurus are trying to eradicate.

Back in my investment banking days, in an effort to control these subliminal destructive forces for the good of the firm, managers would organise corporate bonding sessions. This meant about 50 of us went to a big swanky house in the English countryside to be told about the value of teamwork. A guru with a flipchart and big blue baby writing, spent half a day telling us about communication and personality, before sending us off into groups to play inane games of hide and seek.

At the end of the day, the corporate mantra was reiterated, something like “committed to excellence” or “driven by solutions” or some other such nonsense. The following morning at 7am we would be all back at our desks in London trying to shaft each other.

Not only is the celebrity culture very negative for the cohesion of a firm, but it almost guarantees bad future management that is condemned to propagate the selfish gene. In most companies, the most financially successful salesman, trader, lawyer or consultant is promoted.

The senior management gives little or no thought to whether this person has what it takes to manage — possibly because they too have come through the same process.

In many cases, the person has never worked with others before. To succeed, the person may have shut himself off from everyone else for years, focusing on the money, the next deal or the ratings. Suddenly, this individual is put in command of 20 people without any management skills whatsoever.

Unsurprisingly, those workers under the new boss feel misunderstood, not because the boss is not aware of them, but because he does not know how to listen. He has never been made aware of other people’s career aspirations other than through the jaundiced prism where everyone is in competition with him. Where he should have empathy, he has ego. Where he should give space, he narrows the angles.

Because he regards questioning as dissent, the newly promoted celebrity manager breeds an environment where only two types of workers succeed: the sycophant who will never question and the loner who gets on with his own job. This structure sends out very explicit signals to the rest of the team, all of which reinforce the selfish gene.

Therefore, the most successful team member is likely to be the worker who bills most cash from clients, who goes on solo runs or the sycophant who tells the boss exactly what he wants to hear.

The boss, in turn, is still trying to scramble up the greasy poll. Therefore, he has his own agenda which may involve ‘kissing upwards and kicking downwards’ because, in the absence of the one thing that originally defined him in the firm (such as his trading track record or client list or whatever), this is all he knows.

Thus there is a self-reinforcing process in companies, partnerships and even football clubs which see the wrong men promoted. A recently published book, The 90-minute Manager — Business Lessons from the Dugout, makes the analogy between sport and modern business managers by looking at the performance and characteristics of football managers.

It suggests that the best football managers may not have been the best players. For instance, Alex Ferguson, Brian Clough, Arsene Wenger and Bob Paisley were never world class players, but they are fantastic managers.

Meanwhile, brilliant players such as Bryan Robson, Kevin Keegan, Ossie Ardiles and Liam Brady were less suited to management. Although stretching the point somewhat, the authors suggest that in looking for a good manager, firms should ignore today’s players and seek out the employee with a variety of skills such as patience, awareness of others, intellect, precision, rigour and more than anything else selflessness.

When we reflect in time on the Roy Keane disaster, I wonder whether the intelligence and selflessness of the manager, rather than the natural hot-headedness of the player will be seen as the weakest link.