It's Not Just Disruption: More Management Wisdom You Should Doubt

Some of what you learn in business school may be wrong!

We’re sorry to be such downers to those of you who just received your MBA (congratulations, by the way), and those of you getting ready to start business school (congrats to you, too). But the truth is, there are some “best practices” taken as gospel at many business schools that may actually do your company—and, by extension, your career—more harm than good. Here are some bits of management gospel you should question:

Structure follows strategy
This may be true up to a point, but like many B-school truisms, it breaks down in the face of complexity. If your organization has to meet many conflicting requirements, and you create many structures to address them—compliance departments, quality assurance departments, safety czars, logistics czars, units in charge of standardization, and units in charge of customization—then you wind up with burdensome rules, contradictory demands, and breakdowns in work processes.

When you have too many structures, you deter teamwork and cooperation, which causes people to disengage. Then performance suffers. Especially when requirements conflict with each other (you need both standardization and customization), that’s when you need to harness people’s judgment. That demands engagement and cooperation—not new strategies and structures.

Effectiveness and change start with tackling mindset
That’s a top-down management view if there ever was one. Ask frontline workers what turns their attitude black and you’re likely to hear how frustrated they are by their inability to influence a situation or opportunity. Forget workers’ mindsets and give them more power. That’s how you inspire effectiveness and positive change.

Size makes organizations complicated
We’ve seen plenty of small companies twisted in knots by unnecessarily complicated organizations. At any size, when you try to meet performance goals by creating too many structures or conflicting structures, you get complicated and performance takes a hit. We’ve also seen that it’s possible for a big organization to stay simple and nimble. Bristol-Myers Squibb is an example of a large organization that has avoided getting complicated, and reaped the benefits.

The harder it is to get people to do something, the stronger the incentives need to be
Most people think of incentives in terms of title or money. But in many situations, these have a limited impact. One of the results of complexity is that it’s hard to provide incentives to meet conflicting demands. In a vehicle maker we worked with, the incentive to make products easier to repair (as opposed to easier to build, or more customizable) was less than 1 percent of total compensation. And incentives won’t have an impact if it’s against someone’s interests to do what you need done.

Here’s a different view: Strengthen incentives by removing things that stand in the way. People won’t do something like reporting safety problems in a timely manner, if they believe the behavior would put them at risk of punishment for delays if equipment goes out of service to address the problem. To create the behavior you want, remove the risk of blowback.

More rules give managers control over those to whom the rules apply
More control isn’t what organizations need. They need to be agile and responsive, and that requires workers who can act and cooperate on their own. Rules take power away from leaders, whose job it is to make people do what they wouldn’t do spontaneously. The more rules, the smaller the role of leadership. Instead, find ways to give line managers and employees the confidence and encouragement to do more on their own and cooperate with other teams.

Successful transformation requires that people realize change is in their common interest
The thing about common interest is that before you can get to the common good, people have to believe their own interests are being met. To transform an organization or culture, change the goals, resources, and constraints so that it’s personally beneficial and rational for people to do what you need them to do.

Enhancing individual skills equals better results for the organization
You’ll hear a lot about training and expanding the skills of employees. But individual skills matter little if cooperation does not happen. The performance of an organization truly improves only when people cooperate.

Measure individual behaviors to make things happen
Individual behaviors don’t account for everything that happens in a workplace. Cooperation means coming together to produce a single result. What percentage of the result did each individual produce? You can measure individual inputs and overall output, but not the effect of teamwork in producing the outcome. Thus, the more you measure individuals, the more you may wind up deterring cooperation. To promote cooperation, rely on the judgment of good managers, not pseudo-precise metrics.

Teams have to get along
Not all work conflicts are bad. What matters is not whether people work smoothly with each other, but what results they produce. When people cooperate, there is often conflict and even anger. This can be a good thing—a sign that people are working through any issues. Conflict is often the proof that real cooperation is happening.

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