Management Gurus: Charlatans or Visionaries?
Excerpts from The Witch Doctors: Making Sense of the Management Gurus
Shelley once claimed that poets are "the unacknowledged legislators of mankind." Today that honor belongs to management theorists. Names such as Drucker and Peters may not have the same ring as Wordsworth or Keats; yet, wherever one looks, management theorists are laying down the law, reshaping institutions, refashioning the language, and, above all, reorganizing people's lives. In late 1994, the revelation that the late Princess Diana had sought help from Anthony Robbins, a business-motivation guru who encourages his clients to "unleash the power within" by walking on red hot coals, caused barely a flicker of surprise in Fleet Street. The simultaneous news that Newt Gingrich, then Speaker-elect of the House of Representatives, was preparing for his new job "by reading Peter Drucker" was greeted with relief.
At the same time as the princess and the Speaker were seeking out management theory, millions of more mundane human beings were having it done unto them. Many of those laid off in the 1990s were "reengineered" out of their jobs. The name was used in a book, Reengineering the Corporation, published in 1993 by two management theorists, James Champy and Michael Hammer, to refer to the method of reorganizing businesses around "processes," such as selling, rather than administrative fiefs, such as marketing departments.
AN INDUSTRY IS BORN. The reengineering craze is merely the latest, most potent example of the bewildering power of management gurus throughout this century. Interest in management theory went into overdrive in the 1980s as the rich world, and America in particular, tried to come to terms with the rise of Japan, the spread of computers, and radical changes in working patterns. For a new breed of increasingly evangelical management theorists, led by Tom Peters, the accompanying corporate self-analysis proved a bonanza. In the summer of 1982, Peters and another consultant from McKinsey, Robert Waterman, published In Search of Excellence, which boldly (and correctly) told American businessmen that they were in better shape than they thought. The book turned its authors into millionaires.
Ever since In Search of Excellence, the guru industry has boomed. The gurus themselves are only the most visible tip of a much larger management iceberg that incorporates business schools, management consultancies, and much of the business press. American firms alone now spend $20 billion a year on outside advice. Even in cynical Britain, some 40 companies provide adventure-based management training courses in which fat merchant bankers and balding bond traders swing across rivers and tell their colleagues what they really think about them.
THE AGE OF ANXIETY. Wherever management theory has been invoked, fear and anxiety seem to have followed. Despite their invariable presence at the scene of the crime, the gurus have not yet been rounded up for questioning. In one way, this is right. The underlying reasons why people have lost their jobs (or feel more insecure in them) have to do with competition, technological change, and government budgets. However, it is not quite enough for the management gurus to claim that they were the servants of macroeconomic forces beyond their control. Management theory has played an enormous role in how those forces have affected people.
THE MANAGEMENT THEORY PARADOX. While most other academics -- even scientists and economists -- have to wait decades to see their work have any practical impact, the gurus' ideas are often tested immediately. Yet, this intellectual discipline is far from respectable. As Peter Drucker puts it, people use the word "guru" only because they do not want to say "charlatan."
The doubts are not confined to snooty people living in ivory towers. Talk privately to virtually any publisher of management books, and you will probably unearth the attitude: "Isn't it incredible that this stuff sells?" Corner a consultant, fill him or her up with alcohol, and the chances are that he or she will admit the same thing. Even those who have fired thousands in the name of one of these theories will blush awkwardly when asked how "intellectual" management theory is. Sooner or later, the word "bullshit" appears.
Even if it is not all "bullshit," then enough of it is to disqualify the rest. In many cases, the blame lies with the tub-thumping charlatans ("Transform your company in three days for $10,000"). Such people make convenient scapegoats. The real problem is that there are grave doubts about the serious canon of management theory.
WITNESSES FOR THE PROSECUTION. Management theory, according to the case against it, has four defects: it is incapable of self-criticism; it usually confuses rather than educates; it rarely rises above common sense; and it is faddish and bedeviled by contradictions. The implication is that management gurus are the witch doctors of our age. Sprung suspiciously from the "great university of life," they exist largely because people let them get away with it.
The first charge against management theory -- its lack of self-criticism -- we happily accept. The second charge -- that much of it is incomprehensible gobbledygook -- we also happily accept. The idea for this book sprang out of a Swiss management forum, where a room full of German businessmen endeavored heroically to understand what an American guru was trying to say.
What of the third, more substantial charge: that most of what the gurus say is blindingly obvious? Some things that strike us nowadays as blindingly obvious were anything but when far-sighted management theorists began to talk about them. Besides, there is nothing inherently wrong with stating the obvious. One argument for hiring management consultants is that they can see what insiders can't.
The most common criticism of management theory focuses on the fourth charge: its faddishness. True, management theorists have a passion for permanent revolution that would have made Leon Trotsky or Mao Zedong green with envy. But, such complaints miss the point. The real problem is that management theory is pulling institutions and individuals in conflicting directions. Most management theorists have not worked out whether it is important to be global or local, big or small, to be run in the interests of shareholders or stakeholders. Usually, they end up telling managers to do both. One of the more fashionable words in management theory is "trust." This, the theory holds, will keep "knowledge workers" loyal and productive. Yet the gurus also preach "flexibility," usually shorthand for firing people.
Some would argue that all these contradictions indicate that management theory is a contradiction in terms. We prefer to see it as an immature discipline. Many of its fundamental tenets have yet to be established. Yet, it has generated debates on such momentous subjects as globalization, the nature of work, and the changing structure of companies. Dig into virtually any area of management theory and you will find, eventually, a coherent position of sorts. The problem is that in order to extract that nugget you have to dig through an enormous amount of waffle.
John Micklethwait, the New York bureau chief of The Economist, has written for the Los Angeles Times, and has appeared on National Public Radio. Winner of the Winscott Award for financial journalism, he lives in New York City.
Adrian Woolridge, the West Coast bureau chief of The Economist, has written for The Wall Street Journal and The New Republic. He lives in Los Angeles.
Reprinted and excerpted with permission from The Witch Doctors, Making Sense of the Management Gurus
Copyright 1996, 1997 by John Micklethwait and Adrian Woolridge
All rights reserved under International and Pan-American Copyright Convention
Published in the U.S. by Times Books, a division of Random House, Inc. in New York
Adapted with permission of Random House, Inc.
Available at the McGraw-Hill bookstore, local and online bookstores or see Random House's website www.atrandom.com.