Rajat Gupta
A recent article in the Financial Times described how one company was struggling with the question of whether to structure its international organization around products or markets. I had a feeling of déjà vu and I asked myself, how long will companies doing business in several countries debate this or other perennial questions relating to market segmentation, sales force management, span of control, the role of the corporate center, or channel selection? Despite all the management fads and new techniques for fixing problems, the fundamental questions of strategy and organization have outlasted the answers.
Not only do the problems remain, but they now occur in a context of uncertainty and unpredictability. With world markets changing so fast, one must ask, can advice and theory about management really be helpful to
leaders who must make decisions in real time? It's interesting, then, that the first article in this book is entitled "Managing Our Way to Economic Decline." Published in 1980, it attacks what it characterized as an MBA-dominated approach to management an overly analytical, technologically illiterate, and control-oriented mindset among managers that the authors believed was hurting the performance of American companies.
The article had a big impact on many of us, especially those of us with newly minted MBAs who believed that our problem-solving and analytical skills would lead to success. Even those who didn't read it soon realized through their experiences that two-dimensional thinking is of little use in a multidimensional world. And yet there were many students of management whose research and findings insisted on a simpler
world.
In The Reflective Practitioner, Donald Schon argued that professionals lost their credibility during the seventies when they acted as if the world was certain, simple, and susceptible to a body of knowledge and tools. But "problems are interconnected, environments are turbulent, and the future is indeterminate just in so far as managers can shape it by their actions. What is called for, under these conditions, is not only the analytic techniques which have been traditional in operations research, but the active, synthetic skill of designing a desirable future and inventing ways of bringing it about." Schon was describing the need for what has been a fundamental change in the perspective of management thinking and research. Rather than dissecting the past, delineating cause and effect, and modeling the results, the study of management now looks forward, focusing on aspirations, empowerment, the creation of new products for new markets, and ways of probing an ill-defined future. More and more, the study of management reflects, or needs to reflect,
a description of management proposed by Russell Ackoff: " Managers are not confronted with problems that are independent of each other, but with dynamic situations that consist of complex systems of changing problems that interact with each other. I call such situations messes. Problems are abstractions extracted from messes by analysis; they are to messes as atoms are to tables and charts. . . . Managers do not solve problems: they manage messes."2
How do we get better at managing "messes"? "Do it, try it, fix it,"3 wrote the authors of In Search of Excellence, building on James Brian Quinn's arguments for "logical incrementalism." But the world seems to be changing too fast to appear logical or to tolerate incrementalism. Clearly managers should recognize
the need and develop the ability to experiment with not only implementing but also conceiving strategy through interactive action and analysis. We experiment to discover and invent. In his analysis of the new professional, the ''reflective practitioner," Schon described various experiments undertaken in
order to both understand situations and improve them. ''When the practitioner reflects-in-action his experimenting is at once exploratory, move testing, and hypothesis testing."4
Given Schon's arguments and the environment in which management operates today, it is not surprising that the roles of academics, consultants, and managers have begun to blur. Consultants do more research (McKinsey invests $50 million to $100 million per year) to help clients make real-time decisions; academics do more consulting to test the usefulness of their observations; and managers, much more aware of the theory behind their practice, do more willing experimentation with new approaches. All of us need to "reflect in action." So why read this book? Because, unlike other books, these essays search for understanding rather than proselytize new answers to solve all problems. The articles that won the McKinsey Award between 1980 and 1994 reflect years of turmoil, waves of acquisitions and divestitures, lessons learned the hard way, and the emergence of a truly powerful and humbling global marketplace. For younger managers this collection provides a good opportunity to scan some of the best thinking about management over the past 15 years and to determine what to pursue as part of their own development. For more seasoned managers, it offers a chance to return to relatively solid ground from the heights of management fads that seem to change yearly. And for the chief executive, this book serves as a reminder of the crucial task of developing people by exposing them to new management challenges and experiences.
A recent article in the Financial Times described how one company was struggling with the question of whether to structure its international organization around products or markets. I had a feeling of déjà vu and I asked myself, how long will companies doing business in several countries debate this or other perennial questions relating to market segmentation, sales force management, span of control, the role of the corporate center, or channel selection? Despite all the management fads and new techniques for fixing problems, the fundamental questions of strategy and organization have outlasted the answers.
Not only do the problems remain, but they now occur in a context of uncertainty and unpredictability. With world markets changing so fast, one must ask, can advice and theory about management really be helpful to
leaders who must make decisions in real time? It's interesting, then, that the first article in this book is entitled "Managing Our Way to Economic Decline." Published in 1980, it attacks what it characterized as an MBA-dominated approach to management an overly analytical, technologically illiterate, and control-oriented mindset among managers that the authors believed was hurting the performance of American companies.
The article had a big impact on many of us, especially those of us with newly minted MBAs who believed that our problem-solving and analytical skills would lead to success. Even those who didn't read it soon realized through their experiences that two-dimensional thinking is of little use in a multidimensional world. And yet there were many students of management whose research and findings insisted on a simpler
world.
In The Reflective Practitioner, Donald Schon argued that professionals lost their credibility during the seventies when they acted as if the world was certain, simple, and susceptible to a body of knowledge and tools. But "problems are interconnected, environments are turbulent, and the future is indeterminate just in so far as managers can shape it by their actions. What is called for, under these conditions, is not only the analytic techniques which have been traditional in operations research, but the active, synthetic skill of designing a desirable future and inventing ways of bringing it about." Schon was describing the need for what has been a fundamental change in the perspective of management thinking and research. Rather than dissecting the past, delineating cause and effect, and modeling the results, the study of management now looks forward, focusing on aspirations, empowerment, the creation of new products for new markets, and ways of probing an ill-defined future. More and more, the study of management reflects, or needs to reflect,
a description of management proposed by Russell Ackoff: " Managers are not confronted with problems that are independent of each other, but with dynamic situations that consist of complex systems of changing problems that interact with each other. I call such situations messes. Problems are abstractions extracted from messes by analysis; they are to messes as atoms are to tables and charts. . . . Managers do not solve problems: they manage messes."2
How do we get better at managing "messes"? "Do it, try it, fix it,"3 wrote the authors of In Search of Excellence, building on James Brian Quinn's arguments for "logical incrementalism." But the world seems to be changing too fast to appear logical or to tolerate incrementalism. Clearly managers should recognize
the need and develop the ability to experiment with not only implementing but also conceiving strategy through interactive action and analysis. We experiment to discover and invent. In his analysis of the new professional, the ''reflective practitioner," Schon described various experiments undertaken in
order to both understand situations and improve them. ''When the practitioner reflects-in-action his experimenting is at once exploratory, move testing, and hypothesis testing."4
Given Schon's arguments and the environment in which management operates today, it is not surprising that the roles of academics, consultants, and managers have begun to blur. Consultants do more research (McKinsey invests $50 million to $100 million per year) to help clients make real-time decisions; academics do more consulting to test the usefulness of their observations; and managers, much more aware of the theory behind their practice, do more willing experimentation with new approaches. All of us need to "reflect in action." So why read this book? Because, unlike other books, these essays search for understanding rather than proselytize new answers to solve all problems. The articles that won the McKinsey Award between 1980 and 1994 reflect years of turmoil, waves of acquisitions and divestitures, lessons learned the hard way, and the emergence of a truly powerful and humbling global marketplace. For younger managers this collection provides a good opportunity to scan some of the best thinking about management over the past 15 years and to determine what to pursue as part of their own development. For more seasoned managers, it offers a chance to return to relatively solid ground from the heights of management fads that seem to change yearly. And for the chief executive, this book serves as a reminder of the crucial task of developing people by exposing them to new management challenges and experiences.
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