Book Review: What Management Is — Joan Magretta
Joan Magretta starts to describe what management is by describing what it is not. A good place to start because we have so many notions about what a manager is and usually associate them with our boss, more often than not. The introduction helps us understand that management is a discipline just like science and medicine, which can be studied and put into practice to achieve results.
“Management’s real genius is turning complexity and specialization into performance”
The book is divided into two parts — Basics and Execution.
Part I is a wonderful exposition on the core principles of management that make an organisation competitive and is basically an answer to the question — Why do people work together and how? The author cuts out all the jargon and illustrated through various examples the meaning of the words like value, business model, strategy and organisational structure.
Each of the above words get their own chapters where the examples of Coca Cola, General Motors, Dell, Ford and numerous others are cited and the journey of these organisations are traced through the decisions made by the managers and/or founders. The most illuminating chapter for me was the one on strategy. It is very easy to get the idea wrong but the author through some wonderful examples stitches together a story that would help us understand the nuances of it. Citing Walmart, the author shows that though the business model of Walmart was the same as others — discount retailing, the founder had a competitive edge by opening stores in the isolated rural towns as opposed to opening in the metropolitan cities. This gave him the first movers’ advantage by capturing the market and also creating a barrier for entry to other competitors (small towns cannot sustain more than one store).
The organisation of each chapter is such that we see how the big ideas relate and work together to produce results that the highly successful organisations show year after year.
“Simple numbers help us to face reality and make sense of events in ways that our intuition alone cannot do”
The second part of the book focuses on the execution of these strategies. It traces the evolution of the various performance measure like Six sigma while also stressing on the fact that these tools are only aids in judgement. If we happen to focus only on the bottom line and numbers, we would become short-sighted. It’s important to know what is the core function of the organisation and then decide what performance measures to use. And a key strategy is the now ubiquitous Pareto Rule which forces organisations to see which 20 percent is producing the 80 percent results and how to maximize that 20 percent.
“The greatest obstacle to innovation in organizations is the unwillingness to let go of yesterday’s success, and to free up resources that no longer contribute to results”
Also, the most important lesson for anyone reading the book lies in the fact repeatedly told that — we need to see when something is not working and have the courage to stop it. This is vitally important because many organizations burn so much cash on something that wouldn’t create enough value to offset the costs incurred. This is even true for individuals spending their time and/or money on anything — don’t get too attached.
While the book focuses on management of organisations, I also felt that the strategies were effective on a personal level. This is pointed out by the author at the end where she shares that for an individual to flourish they should know what is of value to them, they should “hire the right organisation” or “hire the right boss” for them to really add value to themselves and to the society.
In conclusion, this is one of the best “self-help” books for any organisation or a manager or an entrepreneur. It is a birds’ eye view of how a business runs and is a perfect way to look back on what is working and what’s not for any organisation or for anyone working to accomplish a goal.
