Management is notoriously faddish. Managers can reflect on a long line of management innovations that attracted huge attention, were widely adopted and then gradually dropped as management attention wandered to shinier tools. Richard Pascale in his 1990 book Management on the Edge identified over thirty of them, beginning in the 1950s. He began with the managerial grid and decision trees, progressed through t-group training and zero-based budgeting and ended up with the mega-fad, business process re-engineering (BPR).
The situation since the 1990s has not changed much. BPR collapsed for reasons to be explored shortly but the balanced scorecard, six sigma and core competencies have all risen and fallen in its aftermath. Agile and Design Thinking, which are currently enjoying spectacular growth, are the latest candidates for this roller-coaster ride
Is Agile Different?
Management writer Steve Denning argued in a recent Forbes column that Agile is different from all the others. He suggested that there were at least five differences between Agile and the failed management fads:
· Agile entails an ‘explicit paradigm shift in management’ that separates it from ‘cost-cutting bureaucracy’. He asserted that Agile emphasizes that the purpose of the firm is not to maximize shareholder value but, following Peter Drucker, to create customers.
· Agile ‘is a more comprehensive and coherent set of ideas than any of the 20th-century fads’.
· Agile was grounded in software development for fifteen years before general management discovered it.
· Agile continues to develop, incorporating other approaches like Lean and Design Thinking and growing through processes like DevOps.
· The human dimension is much more explicit in Agile and much harder to ignore than was in the case of fads like BPR.
All of these claims have merit but I think that they are largely irrelevant to whether Agile becomes a fad or not. The determining factor is the same one that has played such a central role in the rise and fall of all the other fads: the mainstream Anglo-American management mindset. This is the mindset as practiced, what HBS professor Chris Argyris called ‘theory-in-use’, not the philosophical views expressed when you speak to managers in the abstract. This dominant ‘Cartesian’ view of management is that it is a technical practice, like engineering, with the same relationship to economics that engineering has to physics. It is an applied science that works by putting principles into practices. It appeals to an individualistic ‘CEO’ theory of mind. This is the folk theory that we have only one conscious mind and that the manager is a detached, knowing actor/agent in a knowable world, rationally calculating (predominantly) his options and issuing crisp, actionable instructions.
Accordingly to this Cartesian view all management innovations are seen as instruments — tools and techniques — to be wielded by such rational actors. Engineering deals with means, not ends; the selection and application of appropriate means to achieve given ends. Organizations are viewed as collections of atomistic individuals that should function like parts of a well-oiled machine. The goal of any management tool is to produce measurable improvements in performance — efficiency and effectiveness. This view is closely associated with scientific materialism, the philosophical belief in a universe of matter and that physical reality, accessed by the natural sciences, is all that exists
The Rise and Fall of Business Process Reengineering
The rise and fall of Business Process Reengineering is the clearest illustration of the making and breaking of a management fad. First its very name implied that one was dealing with a mechanical, engineering process. The ‘reengineering’ tag was deliberately chosen because it was ‘hard, tough and masculine’; for instance, ‘business process transformation’ was rejected as being ‘too squishy’. This reinforced the mainstream Anglo-American mindset, confirming managers in their often-macho beliefs. Secondly, a feature of BPR was its violent prose penned by the appropriately-surnamed Michael Hammer. The title of his 1990 article on the subject in HBR was “Reengineering Work: Don’t Automate, Obliterate”. This appealed to the two most common characteristics of American managers — aggression and impatience. Thirdly, BPR’s main advocates Michael Hammer and James Champy made it clear that knowledge of a particular business was unimportant for BPR to be a success: they were talking about “clean sheet” design and the less one knew about the details of the business the better. That was catnip for consultants.
Despite many criticisms that BPR was a Taylorism in a new guise, a cloak for cost-cutting and downsizing, the methodology took off. In 1992 the book, Reengineering the Corporation: A Manifesto for Business Revolution became a runaway best-seller. By 1993 60% of Fortune 500 firms claimed they had either initiated BPR projects or had plans to do so. By 1994 a $50 billion consulting business had developed around it. By early 1995, however cracks were appearing. Reengineering projects were failing badly, often making situations worse. Reduced headcount had become the main corporate goal conducted under the banner of BPR. The three founders of the movement, James Champy, Michael Hammer and Thomas Davenport, all made public apologies, confessing that in their revolutionary fervor they had forgotten about people. They protested that they had never intended the process to be used for mindless downsizing.
It seems that the creators of BPR were helpless to change the way in which the mainstream management mindset had appropriated their invention. Today BPR is a shrunken version of its former self, a management tool that still carries unpleasant associations with its ugly past.
An Inadequate Theory of Mind
BPR failed because the CEO Theory of Mind on which it was based is a totally inadequate, impoverished view of how humans function. For we don’t have one conscious mind; we have two minds in a complex relationship with each other. This double feature of our minds has been noted by many observers over millennia but most recently and notably by Daniel Kahneman in his 2011 book Thinking, Fast and Slow. Although the twin brains have many names, he, together with some other cognitive scientists, called them System 1 and System 2. System 1 a.k.a. ‘intuition’ is unconscious. It works fast, effortlessly and associatively and it is often emotionally charged. System 2 a.k.a. ‘reasoning’ is slower, conscious, effortful and deliberately controlled. It often follows rules.
Kahneman focused narrowly on risk-taking, errors and biases. For a broader exploration of the psychological and cultural implications of the two minds perspective one can turn to Iain McGilchrist’s provocative 2009 book The Master and His Emissary. He uses the traditional division between the left and right hemispheres with numerous caveats about the complexity of the brain itself. In his view both brains operate largely unconsciously. They constitute two distinct modes of perception, two ways of being in the world that are in creative tension with one another. One way (right hemisphere) is concerned with the novel, the other (left hemisphere) with the familiar, the one with what’s possible, the other with what’s predictable, the one with what is unknown, variable, dynamic, embedded and implicit, the other with the known, fixed, static, decontextualized and explicit.
From a philosophical perspective one might say that the first brain (The Master) is existential, evolved to handle questions like “Who are we?” and “Why do we matter”. The second brain (his Emissary) is instrumental dealing with questions like “What do I want? and “How do I get it”. Central to the dual-process theory of mind is the relationship between ‘I’ and ‘We’, the individual and the collective, for humans are wired in ways both hard and soft to cooperate as well as to compete. The folk ‘CEO’ theory of mind, with its focus on the individual, neglects this relationship and as a result it downplays powerful concepts of collective behavior such as ethics and culture.
BPR focused on the conscious and the instrumental in the pursuit of efficiency, and ignored everything else. Management was the master and consultants were its emissaries. The result was that people within organizations were treated as objects and instruments rather than as ends-in-themselves. And the victims knew it — they were being told to change by those who themselves did not have to change.
The Double Bind of Management Methodologies
The fate of BPR illustrates the double bind that the developers and peddlers of new approaches to management find themselves in. To ensure that a new approach has wide appeal they will be tempted to frame it as being within the Cartesian mindset i.e. as an efficiency tool, but if a methodology is used purely instrumentally it is unlikely to be effective. If, on the other hand, the creators emphasize the counter-cultural nature of the new approach it will likely be seen as ‘squishy’ and ‘touchy-feely’ and it will be unlikely to achieve widespread use. The creators of BPR went for the first option. That’s why they called it ‘reengineering’ and not ‘transformation’, why they emphasized ‘clean sheet’ design and why Hammer stressed the speed with which results could be achieved. One sees some proponents of both Agile and Design Thinking taking the same route, presenting them as linear, mechanical processes — an efficiency tool to do more work in less time, and a ‘roadmap’ for innovation.
In the case of Design Thinking the titles are sufficiently broad to accommodate the entire left/right, existential/instrumental spectrum. ‘Design’ covers a wide range of meanings from deliberate design and the use of ‘blueprints’ and ‘roadmaps’ on the right to the complex group dynamics and ‘conversations for learning’ proposed by second-order cyberneticists on the left. Similarly, ‘thinking’ can be interpreted in its narrow Cartesian sense of being conscious and intended or extended to cover the full spectrum of human behavior. Here acting is a form of thinking. For marketers of Design Thinking there is a huge temptation to present it as another instrument in the engineering toolbox. But if they take that route it will be ineffective and end up as just another fad.
Complicated and Complex Challenges: Engineering and Ecology
The Cartesian mindset isn’t wrong: it works well in the natural sciences. In management it’s limited in its applicability. It works when applied to predictable, machine-like systems, situations where the same inputs always produce the same outputs and cause-and-effect relationships between independent and dependent variables are stable. These systems can be simple, like baking a cake or complicated like sending a man to the moon and returning him to earth. But as systems they share their predictability of outcomes based on stable parameters. One can come up with abstract rules and principles that are useful in managing such systems.
The Cartesian mindset doesn’t work, however, when it is applied to complex systems where parameters are unstable, agents are interdependent and cause-and-effect is non-linear. Raising children is like that. There is no manual and what ‘works’ with one child may not work with another. Starting new business ventures is also like that. No venture is the same and what works in one situation may not work in another. Complex systems don’t yield to engineering-technical methodologies; they require an ecological-adaptive approach. Instead of thinking like engineers, entrepreneurs have to act like gardeners. They realize that nascent enterprises and emergent strategies have to be cultivated and grown not designed and built. They have to understand the ecology of the situation, what might thrive and what might die. They have to select and plant, water and fertilize, train and prune. At other times they may have to break out the chainsaw to clear away the deadwood, uproot and transplant, make a bonfire of the debris and plant anew. As managers they realize that no two situations are ever the same; history matters, contexts matter and stories matter.
Expanding Mindsets; Doing, Knowing and Being
The Cartesian mindset is baked into Anglo-American management theory and practice. As a result it overused and misapplied. It has become standard practice for consultants to ‘reverse-engineer’ stories of organic success and reduce them to ‘Key Success Factors’ and principles to be applied. Thus when Chan Kim and ReneéMauborgne (Blue Ocean Strategy) examined the emergence of the outrageously successful entertainment company, Cirque du Soleil, they ignored the character of its founders and their experiences, the venture’s idiosyncratic history and the unique rural Quebecois context in which it had developed. Instead they are argued that it was “as if” the Cirque had implemented the consultant’s “blue ocean” strategy and had reinvented the circus in a way that all but eliminated competition. Milton Friedman always argued that “as if” assumptions were valid for predictions, but they don’t work as explanations. The outcome of this consulting practice is that habits are equated with choices and competencies are represented as strategies. The so-called ‘principles’ they develop turn out to be desirable outcomes — difficult to argue with but nearly impossible to produce. The result is management behaviour that can be described but not practiced. In the process often-worthwhile management frameworks and methodologies are applied mechanically and quickly become fads. Agile and Design Thinking will suffer the same fate unless and until the Anglo-American mindset changes. That will be neither quick nor easy.
How does one change one’s mindset? When did you last change yours? Of course the Cartesians have an answer — all it takes is a conscious choice, like an engineer selecting welded connections over riveted ones. But this ignores that fact that ‘mindset’ is a multi-layered concept. A mindset can be as shallow as the selection of an explicit model or as broad as a worldview and as deep as a philosophy of life. Somewhere along the continuum from modes of doing through modes of knowing to modes of being the process of abstraction breaks down. Knowledge becomes wisdom and the Cartesian ‘I’ becomes incapable of standing outside of itself. From this point on a ‘change in mindset’ demands a change in identity, an existential change in a way of being. Changes at this deep level take compelling experiences, not intellectual choices.
An example from the lean movement illustrates this. When Lean or the Toyota Way first become well known in the West through the 1990 book The Machine that Changed the World (Womack, Jones and Roos) many firms tried to apply it mechanically by implementing its artifacts like quality circles and suggestion schemes. These attempts failed. In a 1993 article, ‘Y’Gotta Believe: Lessons from American and Japanese-Run U.S. Factories’, Thomas Mahoney and John Deckop concluded unless management believed in their people’s capacity to make the lean system work the practices alone were ineffective. Jim Womack, a founder of the lean movement put it to me this way, “Without an extended sensei-deshi (master-apprentice) experience to embed it in habit, any effort to propound a Toyota Way is certain to become an abstract, high-level flop”. Today true practitioners of lean, like believers in other radical management approaches like the open book and beyond budgeting movements, carry all the hallmarks of members of religious cults.
It Will Take a Social Movement Plus Much More
Expanding the Anglo-American management mindset will take a social movement plus much more. This is not a change from a wrong view to a right one like that from an earth-centered Ptolemaic view of the solar system to a sun-centered Copernican one. The latter view was clearly superior to the former and observations and data supported it. Changes like this are possible in the natural sciences because knowledge in them is cumulative: science regularly prunes the tree of knowledge. This is why Thomas Kuhn used the concept of paradigm as a key characteristic of a science. The humanities, however, are noncumulative and thus nonparadigmatic. Ideas come in and out of fashion but never disappear completely and can be revived in new forms at any time: the result is a luxurious jungle of knowledge. The reason for the disparity between the different modes of inquiry is that in science one can control for context, in the humanities one cannot.
We are looking at a complete re-assessment of the theory and purpose of the corporation and its role as an organ of society. The secret of our success as a species has been the combination of genetic and cultural evolution that has allowed us to cooperate with each other in diverse groups much larger than the extended family. Corporations in particular and organizations in general have to be seen in this context as ecosystems rather than as machines; cooperatives of organisms formed to grapple with uncertainty. This is why they need managers who think and act like gardeners who cultivate and grow organisms rather than as engineers who design and build machines.
Society allows corporations to use all three of the great catalysts for cooperation; integration (our need to belong), exchange (trade and barter) and threat (power). What does society get in return? It gets an organ that promotes technological progress, economic growth, the creation and distribution of wealth and creates meaningful roles for people that allow them to grow and develop. These are, however, not unalloyed benefits. Progress also has unintended consequences. There are externalities like worker exploitation, pollution and environmental destruction, and side-effects like the formation and perpetuation of power elites and oligopolies that can thwart societal purposes. The societal objective is to keep the benefits and mitigate the unwanted side effects. But the ecological balance between value creation and value extraction is a complex dynamic and even measuring it, let alone managing it, is a tricky, uncertain task.
To make the situation even more difficult this reassessment of the role and purpose of the corporation will challenge the hegemony of the philosophy of scientific materialism and the scientific method as the only valid form of inquiry into the human condition. The universe may be made of matter but we humans live in a world of significance, a world of ‘what matters’. Here history, context and narrative all matter. Once this is accepted the limits on the context-free, scientific method become clear and the importance of the liberal arts in general and the humanities in particular become recognized as valid forms of inquiry into the context-dependent human condition.
In that process we need to reverse the current supremacy of theory over practice. The essentials of management cannot be reduced to a guidebook consisting of explicitly stated rules, formalized technical procedures and general abstract principles. The emphasis needs to be on practical wisdom, what Aristotle called phronesis, in contrast with technical expertise or techne. In techne ends are set in advance and reason is applied to determine the best means to achieve them. With phronesis ends and means are entangled. It requires experience, knowledge and situational judgement to understand the circumstances and make value-laden decisions about what is good. Techne can be taught and learned, phronesis can only be imparted and acquired through situated experience.
There Will Be Significant Opposition
As if all these requirements were not demanding enough, there will be significant opposition to this new, broader view of the human mind, the role and purpose of the corporation and the task of management. For example, neither the management academy nor mainstream consultants have any interest in revising their view of management as an engineering and technical practice. For the business schools the teaching of management as a technical practice is an article of faith and central to their pedagogical model. And their business is flourishing. Any threat to this model comes from technology in the form of MOOCs but this is a threat to the mode of delivery rather than to the validity of the model itself. Mainstream management consultants have built their business models on management as a technical practice. It allows considerable leverage for the partners as the bulk of the analytical work can be done by armies of modestly-paid young technicians who are highly-skilled analysts but may lack management experience. Work that can be done only by skilled practitioners and does not allow such leverage is not nearly as profitable.
The only support for this model will come from management practitioners because it captures the reality of their experience, especially those in privately-owned companies and the not-for-profit sector. Managers in small and medium–sized companies can also be expected to be supporters. The management in large public companies may be more ambivalent. It is well established that successful organizations become more mechanical as they grow in size and exploit economies of scale. As such, the engineering-technical approach is more widely applicable to them than to any other class of business. The focus on quarterly reporting and short-term results argues against an ecological-adaptive approach that may take a long time to show results. But their standardized processes and routines are also responsible for the inability of successful large-scale organizations to come up with anything other than efficiency-related innovations.
Leading Like a Gardener
The core to this challenge is the Anglo-American management mindset with its macho ‘make-it-happen’ management identity. Engineering is ‘hard, tough and masculine’, gardening not so much. Gardening has a much more feminine feel; gardeners care, they nurture, they tend. They are cooperative rather than competitive. It’s a subtle and indirect approach always embedded in a systems view and calling on multiple perspectives to ‘help it happen’. Certainly there are activist moments when gardeners must train and prune, uproot and cut down but these activities are always contained within the larger view.
But changes in identity are possible. One of the most encouraging examples of such a change comes from Iraq and the experience of General Stanley McChrystal, a West Point-trained engineer, as leader of the Joint Iraqi Special Operations Task Force from 2004 to 2008. In Team of Teams: New Rules of Engagement for a Complex World (2015), he explains how the confrontation with Al Quaeda in Iraq (AQI) posed a complex challenge rather than one of the complicated situations that the Task Force had been designed to handle. Their hierarchical structure and formal communication and approval processes were totally unsuitable for this encounter with an elusive, resilient enemy, whose organizational network morphed continually. McChrystal realized that he had to change the task force’s culture and ways of working into those of fast, flexible network that could match AQI’s for agility and speed of decision-making. The result was something he called ‘shared consciousness’.
He recounts his struggle to do this in a chapter entitled “Leading Like a Gardener”: “Although I recognized its necessity, the mental transition from heroic leader to humble gardener was not a comfortable one. From that first day at West Point I’d been trained to develop … behaviors that reflected personal competence, decisiveness and self-confidence. …I expected myself to have the right answers and deliver them to my force with assurance. Failure to do that would reflect weakness and invite doubts about my relevance. I felt intense pressure to fulfill the role of chess master for which I had spent a lifetime preparing. But the choice had been made for me. I had to adapt to the new reality and reshape myself as conditions were forcing us to reshape our force. And so I stopped playing chess, and I became a gardener.”
What McChrystal’s account makes clear, like those of others who have been through similar experiences, is that it takes a compelling experience to expand the engineering mindset into an ecological one. Only when a situation’s demands are so pressing, unambiguous and anxiety-inducing can deeply embedded habits, one’s identity, one’s way of being, be changed. Only then can individuals truly set aside self-interest and collaborate with their peers in common cause. Only then do both sides of our dual brain become fully engaged and begin the fruitful conversations between the two hemispheres, reuniting the existential with the instrumental. Where such experiences come from is as varied as the situations in which people find themselves. Mass conversions of this kind typically take place in the aftermath of some great event or crisis. But that’s what it’s going to take if agile and design thinking and other management innovations are not to become management fads and we are to develop a more sustainable approach to management and learn to lead like gardeners.
This is the immense new task of management, both in theory and in practice.