STUPID MANAGEMENT IDEAS

I find it amazing that people in senior roles in business management are as susceptible to fads in the same way as are overweight teenagers hoping to shed some kilos before their graduation party.

The major difference is that business fads can have a significant affect on thousands of people over a prolonged period of time and thus waste thousands of employee days and millions of shareholder’s dollars. I have always believed that the blame often lies with the large global consulting organisations which need to keep generating these “fads” as a way of creating new solutions that only they can implement, to solving problems that only they have identified. All they need to do is to find the right senior executive in an organisation who is weak enough to be sold on an idea he doesn’t understand to solve a problem he didn’t know existed.

Here are three I have always disliked:

1. MATRIX MANAGEMENT

The theory is that you have functional reporting lines as well as say geographic reporting lines, so the country marketing manager would report to the global head of marketing as well as the country MD, or all engineers report to the engineering manager, but also report to the manager of the project that they are working on. The idea is that this enables specialisation which increases depth of knowledge and allows better professional development, as well as facilitating knowledge sharing across task boundaries.

Source: NASA NPR 9501.2D; via Wikimedia Commons


The reality is that a complex multi-faceted matrix creates confusion in employees as to where their loyalties lie amidst on-going turf wars as to who has the strongest line to the employee. It generally also increases the number of managers, particularly when compared to a well-managed and flat line-organisation. This has the effect not only of driving up costs by increasing the number of expensive non-revenue generating heads, but also drives up the number of meetings to ensure alignment, and slows down the decision making processes. It also allows people to finger point and play the “blame-game” when things go wrong.

In the late 1970s and early 1980s Digital Equipment Corporation (DEC) where I worked for 8 years had an over-developed matrix organisation that I believe eventually helped lead to the company’s demise. People who failed in the field could find roles in the myriad of HQ-based product lines, meaning that some truly incompetent people now had a mandate to interfere in what was happening around the world, rather than just being limited to one country. As a country MD you had to negotiate separately with every one of the product lines that you had demand for in your country. For example, Laboratory Products (LDP) might offer to fund 4 salesmen in return for $6 million in revenue, whereas Education Products (EDP) could offer you just 3 salesmen for $8 million, and so it went on, making the yearly budgeting process take up an inordinate amount of management time that would have been better spent in running the business.

Author: Snaevar (own work); via Wikimedia Commons


Sun Microsystems was in the process of heading down the same route of moving from line to matrix when I left in 1993, having created an organisation where the country MD had direct control only of the sales force and his PA, everyone else in the company reporting to someone sitting in California. They didn’t survive either.

2. MANAGEMENT BY CONSENSUS

The theory is that rather than have top down decision making you get “commitment through involvement” by having everyone in the group involved in the decision making process. Everything is developed through collaboration with unanimous decisions being the primary goal.

By Mysid (SVG), Everaldo Coelho and YellowIcon (raster); via Wikimedia Commons under the GNU Lesser General Public License


The reality is that as everyone involved has the right to be part of the decision made, it also means that everyone involved has the ability to kill an idea and a decision simply by not agreeing to it. This means that only innocuous and non-threatening decisions are ever made, being generally decisions that do not drive change and do not cause any ripples in the organisation. Tough decisions get shelved again and again as they are too hard to drive to a consensus. The idea that “no one of us is as smart as all of us” does notwork when it comes to management decisions. It may work (though rarely) when it comes to brainstorming (see “Innovation and brainstorming sessions” posted May 16, 2011), but ultimately it is just encouraging the herd instinct. The truth is that even when there is a consensus it can be a decision that no-one actually wants to own, and even one that no-one actually agrees with, but one that has been taken because it is just easier than having to keep sitting there until you actually get a decision that is workable and beneficial to the entire group.

3. SIX SIGMA

The theory is (thanks to Wikipedia) that Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization (“Black Belts”, “Green Belts”, etc.) who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified financial targets (cost reduction or profit increase).

via Wikimedia Commons; under the GNU Free Documentation License


The reality is that it is a way for consulting firms to make large and embarrassing amounts of money by passing themselves off as six sigma “black belts” when they generally have just a basic understanding of the tools and techniques. It can also breed a cadre of internal certified black-belt smartasses who believe that they have a better understanding of how a job should be done than the people actually doing it. A Fortune magazine article pointed out that “… of 58 large companies that have announced Six Sigma programs, 91 percent have trailed the S&P 500 since …” making many people believe that the six sigma craze is just a massive con. I believe that it is a way to strangle a company as it focuses only on existing processes and does nothing to drive change or innovation, and that the only visible increases are in the number of meetings that generate no results, and in the number of irritating people who, because they have spent an incredible amount of company time and money getting their certification, now believe that they have the right to interfere in everyone else’s business areas.

As Albert Einstein said “Only two things are infinite, the universe and human stupidity, and I’m not sure about the first one”.

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6 Responses to STUPID MANAGEMENT IDEAS

  1. Frank says:

    Les, what great food for thought; and you’ve made me rethink Matrix managenent, though I think it is a valid strategy in an innovative growing company (not a mature business), as innovation can have life, if rejected by parts of the matrix decision making, if you believe in the idea you can keep pushing til you find a supporter.. but that has a price. I probably have to agree with you re Six Sigma, but it sure has gained traction here in Aussie. I love your knockout blow to the black belters.. interesting marketing term is black belt, invokes combative approach, as has been miy experience with it. Consensus sounds good, but agree, it end there. Regards, Frank

  2. leshayman says:

    Frank … i have no issue with a simple matrix particularly in project management, but like all reasonable ideas, people take matrix management to extremes that ultimately confuses and slows decision making in an organisation. Les

  3. Sean says:

    Six Sigma… so so true… to the point that on one major global BPO transition/implementation I was involved in I can remember thinking that the whole point had become a successful “six sigma” project not successful transition…. can remember subject matter experts being made to feel inferior because they weren’t six sigma experts/blackbelts etc etc… the days, weeks and indeed months that were “added” to the overall project…. was a a matrix type organisation too… so really did end up as “emperors new clothes” scenario in every way

  4. leshayman says:

    Sean,
    Scary to have to live through a Six Sigma project.
    I have been fortunate to only come in on a couple as an independant outside advisor. I was not impressed by either.
    Les

  5. Bruce Rankin says:

    Hi Les,

    Some comments – first on matrix management – I endorse your remarks by the way. I worked in EDS (now part of HP) for 5 years and quickly learned that it was a “leveraged” organisation – ie matrix. The idea being that, with ongoing IT production operations for multiple clients and many major IT projects, resources could be drawn from different parts of the company, thus maximising the use of skilled resources wherever they were, (theoretically) underutilised, therefore available (as required) for projects. My experience was this worked fine – in theory only.

    Project managers were kept in a separate pool and managed by their “People Manager”, each of whom took care of up to 30-50 PM’s, and were allocated to manage large projects/programs. This part actually worked fine.

    Cross-charging of skilled resources and PM’s to projects worked well. Managers providing resources (1) had an obligation to keep their people fully utilised and make them available, and (2) knew they got financially compensated, so there was a strong incentive to support the “leveraged” model.

    Where things came unstuck was that skilled people in production/operations were indeed allocated to projects, often more than one project, but if a major production problem arose, or they were needed for additional “routine” work, suddenly that resource disappeared as far as the projects were concerned – with inevitable project delays.

    Thus confirming the Law of Project Resourcing: “Anyone who can work effectively on a project part-time certainly doesn’t have enough to do now.”

    And Corollary No 1: “If his boss won’t give him a full time job, you shouldn’t either.”

    And Corollory No 2: “If he has a time conflict, his boss’ work won’t suffer.”

    Somewhat different from your perspective on matrix management, however equally supportive of your experience.

    Secondly, on Management by Consensus

    13 years in Fujitsu allowed me to learn much about the Japanese style of decision making – in particular their “ringi” system. The idea being that key managers and stakeholders were involved in all components of major decisions, and, although the process would take longer (especially compared to sometimes western style decision making), better decisions would result, everyone in the “ringi” signed off and everyone owned the decision. Then everyone would rush off in different directions and all work to the same cause, with little or no conflict. Not time or space here to expand on the pros and cons, but overall I did feel that, once a decision was made, there was harmony and all worked productively in support of the decision. I did experience examples where the two Japanese directors of our Australian subsidiary agreed with us to proceed with our recommendations, but back in Japan, got rolled by others in their “ringi” back in Japan. ie if our Directors said “yes” that did not mean we could proceed!

    Maybe this style of Consensus would only work in Japanese society.

    Bruce

  6. leshayman says:

    Hi Bruce,
    Maybe consensus can work in Japan, but I havent seen it work well whenever I have come across it. In Europe and US from what I have seen “ringi” would be more like “retardi” to progress.
    Les

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