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The Management Myth

60 replies on 5 pages. Most recent reply: May 25, 2012 1:49 AM by Kuruvilla Abraham

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John Zabroski

Posts: 272
Nickname: zbo
Registered: Jan, 2007

Re: The Management Myth Posted: Feb 22, 2010 10:13 AM
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James,

Stewart's book was also reviewed in the WSJ a few months ago. It is a bit unfortunate that Bruce did not link to other book reviews, but I am not going to put a value judgment on how he chooses to review books.

Please see: http://online.wsj.com/article/SB10001424052970204313604574329183846704634.html

Also, this snippet toward the end of Stewart's book is all you need to know to critique whether it is worth reading:

Page 316
There are many works by management gurus that I neither discuss in this book nor include in the reference list. I neglect, for example, W.E. Deming and the quality movement, and I fail to give Peter Drucker a chapter of his own, as is custom among those who comment on the gurus. My excuse is in part that I had to be selective to make this book fit between two covers, and in part that, in my view, the issues that arise in reviewing these neglected schools of thought have already been discussed in the context of those that were included. Deming, for example, who argued for the abolition of merit pay and performance reviews on the grounds that they diminish social solidarity, I view largely as a utopian political philosopher in the style of Mayo. And his interest in applying statistical tools to quality control represents an extension of Taylorism. Although his success in post war Japan arose out of specific social and political issues in that country that I do not have the space to address. Deming's renown in the United States dates from the 1980s and really belongs to the humanist movement that I discuss in connection with Tom Peters. I should add that there is a large population of gurus on whom no comment should be offered. They are best left in the trash can of history.

This paragraph is so inane that I don't know how Bruce Eckel managed to finish reading the book after reading it. First, he equates Deming to the "de-humanizing" Taylor-esque approach to management. Then, in the same paragraph, he switches and says Deming's approach is essentially humanistic like Peters. WTF?

The comparison between Deming and Taylor just proves that Stewart does not know what he is talking about. I don't mind criticisms of either Deming or Taylor. However, to equate the two is simply reductio ad absurdum.

Earlier in the book, Page 24, the author admits his statistical training was limited to a three-week "Mini-MBA" course on how to use a spreadsheet and do regression analysis. Somehow this qualifies him to equate Deming's statistical process control theory to Taylor.

Bruce, what are your opinions on the above paragraph on Page 316? Are you familiar with the W.E. Deming?

Bonus question: How many times did you regurgitate while reading this book?

James Watson

Posts: 2024
Nickname: watson
Registered: Sep, 2005

Re: The Management Myth Posted: Feb 22, 2010 12:28 PM
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> This paragraph is so inane that I don't know how Bruce
> Eckel managed to finish reading the book after reading it.
> First, he equates Deming to the "de-humanizing"
> " Taylor-esque approach to management. Then, in the same
> paragraph, he switches and says Deming's approach is
> essentially humanistic like Peters. WTF?

This is exactly the kind of thing I am talking about. I want to clarify that I am not saying that everything is good in the world of business consulting. I believe what Stewart says about it. What I'm unconvinced about is his analysis of why the situation exists. What I see is someone with a very narrow experience coming up with a simplistic answer to the problems he's seen.

Take this from the article:

"The world of management theorists remains exempt from accountability. In my experience, for what it’s worth, consultants monitored the progress of former clients about as diligently as they checked up on ex-spouses (of which there were many). Unless there was some hope of renewing the relationship (or dating a sister company), it was Hasta la vista, baby. And why should they have cared? Consultants’ recommendations have the same semantic properties as campaign promises: it’s almost freakish if they are remembered in the following year."

Does this sound familiar to anyone? This is exactly how IT consultants operate (sans the ex-wives, perhaps.) That consultants in a completely different field exhibit the same behavior must just be a coincidence. Or, maybe, just maybe, the problem lies with the consulting industry. I've long thought that consulting is mostly a sham (I've worked as one, right out of school.) Often consultants are brought in merely to support whatever the person that hired them wants. You don't need much skill to be a shill. This serves two purposes. 1. You get what you wanted. 2. If you were wrong and things go south, you can blame the 'experts' that advised you. It takes all the risk out of decision making. In practice, it's really an effective technique even though you think it would be transparently obvious.

Stewart doesn't aware of this based on his article. He seems to think that every business is really seriously listening to these kids. Some probably are because they just as clueless as the average consultant. If he doesn't realize that a lot of the people hiring consultants couldn't care less about their skills or background, he's definitely missed the big picture.

John Wellbelove

Posts: 72
Nickname: garibaldi
Registered: Mar, 2008

Re: The Management Myth Posted: Feb 23, 2010 6:22 AM
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> "The world of management theorists remains exempt from
> accountability. In my experience, for what it’s worth,
> consultants monitored the progress of former clients about
> as diligently as they checked up on ex-spouses (of which
> there were many). Unless there was some hope of renewing
> the relationship (or dating a sister company), it was
> Hasta la vista, baby. And why should they have cared?
> Consultants’ recommendations have the same semantic
> properties as campaign promises: it’s almost freakish if
> they are remembered in the following year."

Followers of the Dilbert cartoon strip may remember Dogbert becoming a consultant in order to make quick money.

To quote Dogbert,
"It's a combination of the words 'Con' and 'Insult'".

James Watson

Posts: 2024
Nickname: watson
Registered: Sep, 2005

Re: The Management Myth Posted: Feb 24, 2010 12:08 PM
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> Followers of the Dilbert cartoon strip may remember
> Dogbert becoming a consultant in order to make quick
> money.
>
> To quote Dogbert,
> "It's a combination of the words 'Con' and
> 'Insult'"
.

I don't want give the impression that aren't any good consultants. There are many. The problem is that for every good consultant, there are probably a dozen bozo consultants. If you can find good consultants, they can be invaluable. Worth every penny.

There's a simple rule of thumb that I think works: if you don't have at least a decade of experience in your field, you can't really be a decent consultant. That doesn't mean you can be one just because you have a decade or more of experience. It's a necessary but not a sufficient constraint.

robert young

Posts: 361
Nickname: funbunny
Registered: Sep, 2003

Re: The Management Myth Posted: Feb 24, 2010 12:19 PM
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> > Followers of the Dilbert cartoon strip may remember
> > Dogbert becoming a consultant in order to make quick
> > money.
> >
> > To quote Dogbert,
> > "It's a combination of the words 'Con' and
> > 'Insult'"
.
>
> I don't want give the impression that aren't any good
> consultants. There are many. The problem is that for
> every good consultant, there are probably a dozen bozo
> consultants. If you can find good consultants, they can
> be invaluable. Worth every penny.
>
> There's a simple rule of thumb that I think works: if you
> don't have at least a decade of experience in your field,
> you can't really be a decent consultant. That doesn't
> mean you can be one just because you have a decade or more
> of experience. It's a necessary but not a sufficient
> constraint.

Sometime in the 1970's "consultant" went from being a gray haired experienced expert you hired to tell you what you didn't know, to being a hired corporate drudge; which is why the number of them exploded. Not unlike the "contractors" used by the US Armed Forces: really expensive bodies to do what the organization should be doing with its own staff.

James Watson

Posts: 2024
Nickname: watson
Registered: Sep, 2005

Re: The Management Myth Posted: Feb 24, 2010 3:17 PM
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> Sometime in the 1970's "consultant" went from being a gray
> haired experienced expert you hired to tell you what you
> didn't know, to being a hired corporate drudge; which is
> why the number of them exploded. Not unlike the
> "contractors" used by the US Armed Forces: really
> expensive bodies to do what the organization should be
> doing with its own staff.

There are a few things I think have to do with that. The first has to do with a lot of people confusing 'contractor' with 'consultant'. There are reasons to hire contractors that aren't consultants but treating contractors as if they are consultants is a bad idea (and vice-versa.)

Part of the reason there has been such an explosion of contractors is that contractors don't go against your head count. You can reduce headcount with the same amount (if not more) of staff. Coincidentally, the feds are going to start clamping down on companies who employ full-time 'independent contractors' mainly for companies who use this status to avoid providing benefits and otherwise skirt employment law.

Cameron Purdy

Posts: 186
Nickname: cpurdy
Registered: Dec, 2004

Re: The Management Myth Posted: Feb 26, 2010 12:37 PM
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> The formula appears to be this: find out what people want
> to believe, then concoct a story and discover (or just make
> up) some data that supports that belief

In a more general sense, what you are describing is the very basis of both wealth creation and social parasitism. It's all about being able to infer what people are looking for, and to propose it back to them in a manner that they can "purchase" or "invest in" it (whether that means that they buy your book, pay you to speak, buy your software product, hire you as a consultant, or just support / promote your ideas / brand, etc.) That's how you build a successful business, but it's also how you successfully build a Ponzi scheme. Other than the actual value that you deliver in the end, there is very little difference between these two things! Consumers tend to discriminate based on trust systems, which are most obviously evidenced by branding (whether the brand is "BMW" or an individual's name). In the absence of an established brand, there is marketing (expensive), charisma (cheap) and forward-looking statements (promises of things to come); none of these things has any intrinsic value. Thus, for a well-meaning entrepreneur (for example), whether in raising investment capital, hiring employees or selling products / services, what is being sold is always an unrealized dream (a pointer yet to be de-referenced ;-), and only by "tricking" (convincing despite the absence of intrinsic value) each of those parties into investing in something that does not yet exist can the whole of it come into existence in the first place. The market's job (the market of human capital, investment capital, and the consumers of the proposed product / service) is to differentiate between shysters and "the real deal", and the market largely rewards successful determination of "the real deal" while eliminating players who bet on the shysters. Nonetheless, and quite "unfairly" from a western culture point-of-view, the market rewards shysters very well for the role that they play in differentiating between wise and foolish "consumers" ;-)

Peace,

Cameron Purdy | Oracle Coherence
http://coherence.oracle.com/

Bruce Eckel

Posts: 874
Nickname: beckel
Registered: Jun, 2003

Re: The Management Myth Posted: Feb 26, 2010 4:07 PM
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Cameron: I find that most interesting things have this duality about them. It's a choice of how we use it.

With the web, and communication in general, the choices can be separated from their consequences. We might not make the "bad" choice in many countries, but in some cultures the consequence of the "bad" choice is not so bad, or the desperation is higher, so we get scams (easy to point the finger outside the country, since we just reclassify Enron as "accounting irregularities" and ridiculous executive compensation as "determined by the market").

I do think that societies can reach a metastable state whereby "bad" is promulgated, and the market doesn't correct for it (or corrections are thwarted). The US situation where lobbyists can basically bribe congresspeople is an example.

Bruce Eckel

Posts: 874
Nickname: beckel
Registered: Jun, 2003

Re: The Management Myth Posted: Mar 2, 2010 7:08 AM
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Doonesbury shows the process step-by-step:
http://www.doonesbury.com/strip/dailydose/index.html?uc_full_date=20100228

Bruce Eckel

Posts: 874
Nickname: beckel
Registered: Jun, 2003

Re: The Management Myth Posted: Mar 4, 2010 7:16 PM
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David Hannemeyer Hansen speaks at the Stanford Business School on "Unlearn Your MBA," telling how he went to business school and has since decided that 97% of what he learned there was useless:
http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2334

John Zabroski

Posts: 272
Nickname: zbo
Registered: Jan, 2007

Re: The Management Myth Posted: Mar 5, 2010 12:02 PM
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Bruce,

I don't know if my comment above struck you as rude and unworthy of reply, but I have been following your blog for years and it was really intended to state:

You should probably read up on various approaches to management, and I can provide you with good reading suggestions if you'd like.

For example, The Managementh Myth takes punk rockstar jabs at W.E. Deming. Why not actually read what Deming has to say? His process control theory approach to management is fairly unique and does not get much mainstream attention. Even today, Six Sigma overlooks a lot of his teachings and advice on how to manage subordinates and fairly evaluate their performance against your own performance as a manager. I saw within the last year Google recently hired a Six Sigma guru to help cutback on how Google employees were allowed to use their 20% time (e.g. getting additional resources from other employees). The explanation of the decision and how the guru was going about things just struck me as "odd". He might be doing a great job short-term - industry insiders certainly say that Google's recent ability to withstand the recession can be directly attributed to him - but cutting costs is a hard way to determine long-term profitability.

For Deming, Raphael Aguayo has a very approachable book, and Deming later went on to write two books of his own, describing how he helped the Japanese improve quality and eventually dominate the American car market. Of course, part of the American car companies problems were self-inflected: no reasonable company could sustain GM's salaries and benefits packages, and among unionized middle class workers, the American autoworkers union was simply the upper crust.

robert young

Posts: 361
Nickname: funbunny
Registered: Sep, 2003

Re: The Management Myth Posted: Mar 5, 2010 2:41 PM
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> For example, The Managementh Myth takes punk rockstar jabs
> at W.E. Deming. Why not actually read what Deming has to
> say? His process control theory approach to management is
> fairly unique and does not get much mainstream attention.
> Even today, Six Sigma overlooks a lot of his teachings
> s and advice on how to manage subordinates and fairly
> evaluate their performance against your own performance as
> a manager.

At my last, good riddance, employer, they took a failed manager (MBA, of course) and sent him to be the Six Sigma guy, even though they knew full well that I was trained as econometrician and would have enjoyed going back to that, or in addition to my regular duties. After he started pestering me about his SS (cool acronym, just now noticed as I typed!!) homework. It's clearly another faux "technical skill" along the lines of ISO-900X stuff from the 90's. I suppose I shouldn't been surprised, having gone through the ISO-9000 stuff. They ignored Deming, too. By the way, I studied with him; he worked just about until he croaked.

I saw within the last year Google recently
> hired a Six Sigma guru to help cutback on how Google
> employees were allowed to use their 20% time (e.g. getting
> additional resources from other employees). The
> explanation of the decision and how the guru was going
> about things just struck me as "odd". He might be doing a
> great job short-term - industry insiders certainly say
> that Google's recent ability to withstand the recession
> can be directly attributed to him - but cutting costs is a
> hard way to determine long-term profitability.
>
> For Deming, Raphael Aguayo has a very approachable book,
> and Deming later went on to write two books of his own,
> describing how he helped the Japanese improve quality and
> eventually dominate the American car market. Of course,
> part of the American car companies problems were
> self-inflected: no reasonable company could sustain GM's
> salaries and benefits packages, and among unionized middle
> class workers, the American autoworkers union was simply
> the upper crust.

You're wrong on that last part: it was the very existence of a blue-collar middle class that made the US economy strong (when it was). To understand that, one need only compare economic progress in plantation style countries to the US and Europe post WW-II. These economies, up to the first oil shock in 1973, grew internally and organically, due almost entirely to a 600 lb. gorilla middle class. Without that, you end up like China, where the few exploit the many in the export of widgets to ... wait for it .... middle class economies. Without the US and Europe, China would still be in the 16th century. Pillage enough of the Western middle classes, and the whole edifice crumbles. Wait, it is. Fancy that.

John Zabroski

Posts: 272
Nickname: zbo
Registered: Jan, 2007

Re: The Management Myth Posted: Mar 11, 2010 5:26 PM
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I'm not sure I grasp the second half of your reply.

I've never heard the argument before. Althogh, I do buy economist Ben Powell's "Japan" essay, where he describes what led to the collapse of the Japan economy and long-term recession.

How were you trained as an econometrician and end up working with Deming?

robert young

Posts: 361
Nickname: funbunny
Registered: Sep, 2003

Re: The Management Myth Posted: Mar 11, 2010 8:37 PM
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> I'm not sure I grasp the second half of your reply.
>
> I've never heard the argument before.

Ask any non-right wing economist.

As mass production has to be accompanied by mass consumption; mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery.
-- Marriner Eccles

Althogh, I do buy
> economist Ben Powell's "Japan" essay, where he describes
> what led to the collapse of the Japan economy and
> long-term recession.

In simple terms: when Reagan was installed, the top 1% took 8% of national income, while by 2008 they took 24%. Collapse followed. Same thing happened leading to the Panic of 1873, the Great Depression, and so on. Plantation economies must be ruled by the fist, democratic ones by equality. Take your pick.

>
> How were you trained as an econometrician and end up
> working with Deming?

An econometrician is an economist who does statistics. Deming was a math stat who did quality. Statistics is all about variance; actually quite a simple study, so long as one doesn't have to write proofs. Application statistics, econometrics, biostats, psychometrics and the like are quite similar. The differences boil down to the parametric/non-parametric and Bayesian/frequentist divides. In my specific instance, I was working as an operations research analyst on some hush-hush spook stuff.

James Watson

Posts: 2024
Nickname: watson
Registered: Sep, 2005

Re: The Management Myth Posted: Mar 16, 2010 10:06 AM
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> You're wrong on that last part: it was the very existence
> of a blue-collar middle class that made the US economy
> strong (when it was). To understand that, one need only
> compare economic progress in plantation style countries to
> the US and Europe post WW-II. These economies, up to the
> first oil shock in 1973, grew internally and organically,
> due almost entirely to a 600 lb. gorilla middle class.
> Without that, you end up like China, where the few
> w exploit the many in the export of widgets to ... wait
> for it .... middle class economies. Without the US and
> Europe, China would still be in the 16th century. Pillage
> enough of the Western middle classes, and the whole
> edifice crumbles. Wait, it is. Fancy that.

I don't disagree with you on this in general, but in the case of GM, they were paying 80K a year to line workers who who were retired. There's nothing wrong with that per se but it's hard to break even, much less make a profit when you are doing that, especially in a competitive industry. In their case, when they dealt with the union decades ago they would offer big pension and retirement packages. That is, they put off paying these costs. In a way, it's a pretty good example of screwing the union and the taxpayers. They made all kinds of promises that they would never be able to make good on. Then they go bankrupt and the taxpayers now foot the bill for the pensions but at a decreased rate for the union.

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