Back to the Future

Where lies the future of management? Are the days of top-down management over? Is hierarchy dead? Has Catbert used up the last of his nine nasty lives? Gary Hamel thinks so.

In The Future of Management (Harvard University Press, October 2007), Hamel makes the case - showcasing several companies that have abandoned traditional models - that we are slowly but inexorably moving towards more democratic, bottom-up systems of management.

One example given is Whole Foods which has the people in, say, the vegetable department, managing the vegetable department. Managing includes hiring, buying, pricing, merchandising and selling. The theory is that the people at ground zero would be in the best position to know who would fit comfortably in the group, what products people are looking for and how best to serve them.

Of course, one might argue that hiring in these circumstances would be self-serving. A traditionalist would claim that buying is best done by professional buyers who understand the dynamics of pricing in the context of a global supply chain, who keep close tabs on the fluctuating prices of commodities (including vegetables), and who are skilled negotiators. Old style marketers would protect their turf by pointing out that the value of the Whole Foods brand is predicated on convincing consumers that they are buying non-industrialized foods and that this image requires careful nurturing and merchandising. Pricing would be particularly sensitive since consumers buying into the Whole Foods positioning strategy are generally willing to pay more.

Senior managers protecting their creaky hierarchies would insist that building an organization requires a broad accounting of human resources, that hiring, developing and rewarding staff must be seen - and managed - globally. Those who cannot escape their administrative and financial roles would want to centralize reporting, perhaps impose an ERP system, track GMROIs and the like. All in all, it would be tough to keep old style managers at bay.

Over the years, I have seen companies decentralize and then, some time later, recentralize. I have witnessed, first-hand, the effectiveness or lack thereof of a variety of organizational models, including something that on paper looked vaguely like a pizza. I have lived through corporate de-layering or flattening (take your pick). In the end, none of it means anything unless everyone, at all levels, executes.

Trust me on this: if an organization’s head is screwed on straight and each person does his or her job properly, the old management system works just fine.

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One Response

  1. Dave J. Says:

    The success of the execution (and, therefore, the leadership structure) is being *engaged*. One might say that this is the Dilbert dilemma, where Catbert is the only one engaged.

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