Thinking Managers

Robert Heller of www.thinkingmanagers.comargues that management success is based on defining your own certainty in an uncertain world, not simply following accepted dogma.

Management truth, myths and consequences

Managers are great believers. They hold to ideas about success in business management, the strength or weakness of markets, what motivates people in organisations, the nature and role of innovation, and so on. The list winds on and on, wending its way from misconception to misconception. Though this can have humorous results, it’s no laughing matter.

I have long stressed the weakness and obvious failure of the universal belief that the comparative performance of the shares is the most meaningful and powerful measure of management.

If the principal beneficiaries of a proposition are also the chief architects of its application, you can bet your bottom (or top) dollar that the impact will be high, wide and handsome. Year after year the level of CEO wealth packages in the US rose to huge amounts, far exceeding equivalent levels of pay for other players in the economy.

Another infallible proposition is that where the Americans lead, other nationalities will follow. That is because of another firmly held belief - that the US remains the world leader in the quality and achievement of business management. It’s another lie, alas. But other CEOs promptly upped their own pay.

There are few general truths in management; only situations and alternatives that apply in specific circumstances. False generalities produce unhappy results in both the perpetrators and the followers. The overblown valuation of US managerial prowess encouraged the major companies to believe in their own superiority.

This error discouraged many overseas firms from competing in the US for fear of defeat; or, still worse, mimicking the transatlantic heroes by picking up their most lethal products and practices. Following your leaders is a highly dangerous procedure when they are running on the wrong track with all possible speed.
Rational managers start from the position that there is always a rational explanation. While accidents do happen, the evolution of markets and industries is not accidental. There are always developments and trends that change the possible outcomes of economic activity. The irrational manager won’t accept that new needs and norms are altering the factors that will dominate future returns.

What you don’t require is readiness to take risks - that is, if you identify risk with danger. The professional gambler doesn’t take risks; he uses his knowledge, powers of analysis and experience to make the bet which has the best chance of winning big. Professional managers should copy this approach. Consultant Ram Charan talks of the need to anticipate and visualise radical change - like Steve Jobs at Apple, Andy Grove at Intel and Sam Walton at Wal-Mart. Such heroes look to make the unsure thing sure, adapting their products and processes to their visualisation, and being led and leading others by the innovatory flow, not the financials.

The future, to quote the US humorist Mort Sahl, lies ahead. Belief in that future is a truth with huge potential consequences.
About the author
Robert Heller is one of the world’s best selling authors on business management.