A Short History of the Managerial Movements

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Management theorist Venkatesh Rao believes we are entering into new management era: management for opportunity. In this era, the manager’s role is to control risks via enterprise 2.0. To explain his theory Rao first provides a history of management theory in the last century. Specifically, Roa focuses on management by process, management by objective and management by exception. This article very useful to obtain a basic understanding of management theory.

How The Enterprise 2.0 Managerial Model Was Born

New technological eras invariably create new managerial eras. Enterprise 2.0 is no different. In this three-part series, I will argue that E 2.0 organizational technology leads to a management model I will call “Management For Opportunity,” a model that exposes managers to market risks in unprecedented ways. This model is contrary to the popular emerging idea that managers (especially the much hated middle managers) will become entirely obsolete.

But to get to this vision, we need to situate E 2.0 management and technology ideas within the evolutionary history of corporations.

I’ll start the story around 1954 rather than go all the way back to 1600. If you’re interested in earlier eras of management, check out my posts “A Brief History of the Corporation: 1600-2100″and “Hall’s Law: The Nineteenth Century Prequel to Moore’s Law”.

Let’s start by trying to characterize the job of the manager in the E 2.0 world. I assert that this job is to manage for opportunity (MFO), which is fundamentally a risk management role that requires E 2.0 tools to fulfill. It’s the newest layer of the functional organization of the evolving managerial mind, which I visualize like so:

Credit: Information Week.

I’ve tried to capture higher- and lower-level functions in a dependency stack. You need the lower layers before you can install the higher layers. There’s a chronological anomaly in that the second layer developed after the third one, but that was due to some historical peculiarities.

Continue reading about the history of management visit Information Week.

FedEx Day: The New Way to Spur Innovation

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Atlassian, a software company, created a unique and successful program to induce innovation within the company: FedEx Day. Atlassian describes FedEx Day as “We give employees the chance to work on anything that relates to our products and ship it within 24 hours – hence the name, FedEx Day.” To learn more about FedEx Day you can visit http://www.atlassian.com/fedex-day. Below is an article by Polly La Bare analyzing the reasons that FedEx Day is successful.

Delivering Innovation Overnight–What it Takes to Do New Things Fast

By Polly LaBarre

 

What leader today doesn’t want more innovation? Yet, producing more (of anything) inside an organization generally leads to more process, which smothers individual creativity and all-too-often kills organizational innovation.
Innovation isn’t about structuring a process to lead to an outcome so much as it’s about creating space–both elbow room, the space to roam free of bureaucratic rules and red tape, and head room, the freedom to see differently, think wildly, and aim higher. The leaders who generate more creative energy and innovation are always wrestling with the question: How do we design in more slack? Or, how do we cultivate an environment and support work that enlists people as drivers of their own destiny and inventors of the company’s future?
Those questions are the beating heart of nine-year-old Australian enterprise software company Atlassian. Founded with the intent to become “a different kind of software company,” Atlassian has also dedicated itself to developing a different way of working. The result: the company stands out as much for its fresh, energetic, relentlessly clever approach to engaging and unleashing people as it does for the software development and collaboration tools it makes. And it’s grown to $100 million in sales (with no salespeople) and 18,000 customers around the world (including Citigroup, Nike, NASA, Facebook, and Zappos) on the basis of that approach.

Atlassian is constantly inventing and refining practices to unleash and ignite its people. One of those practices has gone viral. It’s called FedEx Day, a twenty-four hour innovation blitz of hacking, prototyping, and presenting that involves almost everybody in Atlassian’s three offices around the world once a quarter. Launched seven years ago by co-founder Mike Cannon-Brookes as an effort to retain the creative vigor of a startup even as the company expanded rapidly, FedEx Day is an experiment in structuring the kind of slack that not only gives new ideas room to grow–but also pushes them forward.
The two pillars of the practice address that tension between opening up space to explore and driving to produce. First, participants must work on something that is explicitly not their day job–a passion project, a personal itch you’re dying to scratch, or an organizational pain point that is forever back-burnered. Second, they must deliver something in 24 hours–hence FedEx, “when it absolutely, positively has to be there overnight.” In the course of 18 FedEx Days, Atlassian has done exactly that, with 550 projects shipped and 47 features or products delivered to the company’s customers.

Excenomics: the Future of Management

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Move over capitalism, there is a new management theory in town: Excenomics. The creator of excenomics is Dr. Pateep Phillip, a senior police officer from Tamul Nadu, India. Dr. Pateep’s theory is based on the idea that the ultimate goal of any organization is to achieve and maintain excellence.

TN IPS officer grabs global attention with new management theory

A senior IPS officer, Dr. Prateep V Philip, currently serving as ADGP (Crime), Tamil Nadu, has caught the attention of global management experts with his theory of ‘Excenomics,’ which he has proposed as “an alternative to Capitalism, Socialism, Communism, Economics and Management.”

Philip pioneered the Friends of Police Movement in Tamil Nadu. Credit: The Weekend Leader.

 

A paper he wrote on the subject for Management Innovation Exchange or MiX (www.managementexchange.com), a portal floated by sixteen global players, including Mckinsey, HCL, London Business School, and Dell, has moved up on the popularity ratings out of the seven hundred odd ideas posted by practitioners and management experts including CEOs from across the world.

According to Philip, “Excenomics is a new global discipline which seeks to integrate economics, management sciences and education in it to a harmonic, dynamic and workable model of human development.

“It seeks to learn from the failures of other models in helping the holistic development of individual excellence vis-a-vis the development of human societies.”

To continue reading about excenomics visit the Weekend Leader.

Asset Valuation: Is Twitter Worth More than Facebook?

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Rory Sutherland believes that Twitter is worth more than Facebook. Sutherland’s opinion is surprising considering that Twitter has yet to produce any revenue while Facebook earned over $3.7 billion last year. Facebook is asking for $96 million and plans to go public May 18, while Twitter shows no signs of following. So what makes Sutherland so sure Twitter is worth more?

Twitter Will Be More Valuable Than Facebook, Says Industry Expert

By Shea Bennett on May 9, 2012 8:00 AM

With Facebook gearing up for what is likely to be a $100 billion IPO and Twitter showing no signs – or interest – in following suit anytime soon, the suggestion that Twitter’s value might exceed that of Facebook, now or at any time in the future, might well appear to be folly.

Credit: MediaBistro

 

Not so, says Rory Sutherland, vice-chairman of Ogilvy & Mather, and the man who helped turn Microsoft into a major force in the 1980s. Sutherland has not only tipped Twitter to ultimately outrank Facebook in valuation, but that the micro-blogging network will also will reveal itself to be a money-making monster.

“I can see Facebook being superseded more easily than Twitter being superseded,” said Sutherland. “As a forum for outbursts, Twitter’s [character] limit, its haiku element is very appealing. I wouldn’t bet against it being more valuable [than Facebook] in the long term.”

To continue reading visit MediaBistro.

DiFrancesco Presents on Return on Investment at ISDC

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Each Spring the National Space Society (NSS) holds the International Space Development Conference (ISDC).  NSS describes the ISDC as  ”[Covering] several broad areas of study related to building a spacefaring civilization. Area such as: transportation to and through space, technology needed to live and work in space, and Earth-based activities to advocate for or educate others about space development.” This year the conference is scheduled to be the weekend of May 24 in Washington, D.C.

Principal Consultant at ProOrbis, Jeanne DiFrancesco, has been asked to speak at the conference by Cliff McMurray, Track Chair of ISDC.  McMurray invited DiFrancesco because of ProOrbis’ role in the International Space Station U.S. National Laboratory Reference Model.  In June 2010, ProOrbis was formally tasked to provide within 90 days a “reference model” for an organization and strategic approach that could maximize the value to the nation for the U.S. share of the ISS. He stated that NSS members are becoming increasingly interested in commercialization of space.

To read more go to ProOrbis.com and for details about the International Space Development Conference visit ISDC 2012.

 

McKinsey Partner Defects, Stealing Clients

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Ethics in management consulting are critical. Companies turn to management consultants for advice on succeeding in business. There for it is incumbent upon those in the industry to lead by example. Sadly there are many who do not. I want to share with you a post of one of the industry’s bad eggs.

McKinsey is no longer the top-ranked management consulting firm!

by All About Management Consulting on May 20, 2011

This extraordinarily disturbing article appeared in Bloomberg. For some odd reason, it has received very little attention in the New York Times, Washington Post or Financial Times. I waited a week before posting because I wanted to think about this some more and discuss it with my former colleagues in management consulting.

The gist is as follows: While he was Managing Partner of McKinsey & Company, Rajat Gupta and another partner registered and managed their own management consulting firm which competed with McKinsey.

There are so many things wrong with this, that I am not even sure where to begin. Let’s start with the obvious.

The Managing Partner of the world’s most prestigious management consulting blatantly flaunts the sacred rule of consulting. He secretly sets up his own firm, then solicits clients and charges them for his work. He basically took revenue from McKinsey. That’s the equivalent of Jeff Imelt founding his own engineering firm, pitching against GE for work, and then delivering the work. Before you ignore this, you must truly think about the type culture at McKinsey which would let this to happen. These are brilliant men, who rise on a platform of values, but who break the rules repeatedly. Consulting partners have many team building events. I know – I attended too many of them and developed paunch! Gupta looked all his partners in the eye, vowed to defend the firm, and then went to see prominent clients and stole them. He was no junior partner. He was the partner The fact that he did this and nothing happened is bizarre.

Linked to this, there is no way he could have done this without other partners knowing about it. He is just too senior and well-known in business to have managed this under the table. At least a few clients would have inadvertently mentioned this. This raises an even more troubling problem, how many senior people at McKinsey knew about this and refused to face the issue? How many people did not want to lose the lucrative salaries Gupta’s growth strategy was generating? How many people chose to poison the culture of one of the world’s most élite firms? McKinsey insists on the right to dissent. This clearly cannot be true when someone cannot challenge the managing partner on such criminal behaviour.

When I was a partner, we went through strenuous and painful internal compliance rules to make sure we were ethical. How did McKinsey not have these rules in place? When did the firm become a place where senior partners where above the law? Clients should rightly be worried about McKinsey’s compliance processes if the managing partner has the audacity to flaunt them while in office.

Where are McKinsey’s values? How in the world can McKinsey possibly be differentiating themselves on their values when they have none? McKinsey will rightly not comment on anything in the hopes of killing the issue. Yet, I have had many discussions with ex-clients who have chosen to pass McKinsey on work because of this issue. Admittedly, they are in the minority. Let’s hope McKinsey learns from this and fixes its problems.

McKinsey is no longer the top consulting firm. A firm cannot be the top firm when:

  • Its Managing Partner is breaking sacred rules and stealing work.
  • When this behavior is condoned.
  • When this behavior is not detected.
  • When this person can evade detection and be elected Managing Partner 3 times. (Have they changed the election process since I was in consulting?)

Consultants are not businessmen, they are professionals. McKinsey is lacking in that regard and irrespective of how many Harvard MBA’s, Rhodes scholars, or Fulbright Scholars they hire, if they lack ethics, they cannot be the world’s top firm. You especially cannot be the world’s top consulting firm when all these supposed geniuses drank their own Kool-Aid and missed the traitor in plain view.

The young and naïve, or the ones just interested in a big salary and fancy name of their résumé, will still flock to McKinsey. In fact, these people flocking to McKinsey who lack ethics could be McKinsey’s downfall. The wrong behavior attracts the wrong people! However, if you are a true professional who cares about his/her future and integrity, you need to ask yourself if you want to be immersed in this culture?

I do not know if every McKinsey office is like this. But of this we can be sure, the current partnership vetting process and culture is not able to flush out damaging behavior. Does this mean you should avoid McKinsey like a GM car? No. They will hopefully fix this problem. Nonetheless you should question the culture they created and think twice about absorbing all their lessons during your stay with them.

For the first time in my life, I am ashamed to call myself a management consultant.

[http://firmsconsulting.com/2011/05/20/mckinsey-is-no-longer-the-top-ranked-management-consulting-firm/]

Humans as a Capital Asset

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Proper management of assets is one of the most critical tasks that an business today faces. There are three types of assets Human Capital Asset Management (HCAM®), Technology Capital Asset Management (TCAM™) and Physical Capital Asset Management (PCAM™). This idea of breaking down capital assets into three categories was pioneered by ProOrbis. In an interview with Matt Barney for The Society for Industrial and Organizational Psychology Jeanne DiFrancesco, the principal consultant of ProOrbis, discusses how she formed this theory as well as how to implement it. The interview can be found at Management Theory.

In the article “Theories of X and Y” The Economist also explores the concept of humans as a capital asset. The Economist analyzes Douglas McGregor’s book The Human Side of Enterprise. Here is an excerpt of the article:

“Theory X is an authoritarian style where the emphasis is on “productivity, on the concept of a fair day’s work, on the evils of feather-bedding and restriction of output, on rewards for performance … [it] reflects an underlying belief that management must counteract an inherent human tendency to avoid work”. Theory X is the style that predominated in business after the mechanistic system of scientific management had swept everything before it in the first few decades of the 20th century.

Theory Y is a participative style of management which “assumes that people will exercise self-direction and self-control in the achievement of organisational objectives to the degree that they are committed to those objectives”. It is management’s main task in such a system to maximise that commitment.”

Read the full article at The Economist.

Re-Positioning Your Marketing Strategy

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When you hear the phrase “Just do it” what is the first thing that comes to mind? Nike.

Over the last two decades “Just do it” has been one of the most successful marketing campaigns in modern history. So successful that it was named one of the top five ad slogans of the 20th century by Advertising Age as well as earning a place in the Smithsonian. However, recently Nike has decided to drop “Just do it” for another three-word phrase: “Make it count.” Why fix what isn’t broke? In his article Modern Marketing May Require Moving Away from what Worked”,  Tobin Slaven investigates why Nike decided to make the change and whether or not it was a sound decision.   To read the post go to the Daily Dose.

Why do companies change their marketing position when their current position is successful? ProOrbis, a management consultant firm, explains why this change occurs: discovering the areas where an organization’s market opportunities intersect the organization’s capabilities:

“Market Positioning is essential to the understanding of how and where a business creates value. By discovering the areas where an organization’s market opportunities intersect the organization’s capabilities, clients are better able to identify the market space into which offerings (products and services) are best positioned. The future positioning is determined by trending the market and establishes the requirements for the organizational capability shift. This provides a transformation trajectory for the organization’s offerings and capabilities — a clear, actionable business strategy.”

What do you think about Nike’s new slogan? If you were on Nike’s management team would you have suggested the shift?

The Legacy of Peter Drucker

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Peter Drucker was the the father of management theory. In his 96 years earth, he published over 40 books, given 25 honorary doctorates, accepted 7 McKinsey awards, and received the Presidential Medal of Freedom. Although Drucker passed away in 2005 his legacy lives on in the management structures of companies everywhere. In a recent review of Drucker’s book Management Challenges for the 21st Century in Bloomberg Businessweek, the editor, Chris Lauer,  discusses a few of the book’s most important themes. One of the themes Lauer writes about is transparency:

“While reflecting on management’s new prevailing theories, Drucker presents smart principles for all individuals and organizations. One of these principles is that an organization has to be transparent so people know the organization structure they work within.” (Bloomberg Businessweek)

Drucker’s emphasis on transparency can be seen in businesses across the globe. One organization that follows Drucker’s principle is ProOrbis, a management innovation firm.  The ProOrbis approach represents the management equivalent of precision engineering – recognized for the fundamental principle of causal determinism whereby the relationships between functions is known and more predictable (generally referred to as an “integrated design”). Learn more at ProOrbis.

An example of ProOrbis’ transparency in management can be seen in their work with Center for the Advancement of Science in Space (CASIS). CASIS is a non-profit organization created to manage the US lab aboard the International Space Station. The site New Management Theory talks about ProOrbis’ partnership with CASIS, to read more go to ProOrbis Takes On a New Management Challenge.

International Space Station: Worth the Cost?

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Although NASA officials promise the International Space Station is on the verge of becoming the world’s greatest scientific achievement, little evidence of this promise can be found.  Much of the laboratory space on the ISS remains unused because NASA is unable to pair the potential scientist with the proper organizations to obtain the funds necessary to finance the research.  Last summer NASA selected the Center for the Advancement of Science in Space (CASIS) to help manage this process. Unfortunately, there have been growing pains. With proper communication and improved cooperation, however, the ISS should be able to exceed our expectations as a research center.

By Mark K. Matthews

The Orlando Sentinel

WASHINGTON — After more than 12 years and at least $100 billion in construction costs, NASA leaders say the International Space Station finally is ready to bloom into the robust orbiting laboratory that agency leaders envisioned more than two decades ago.

“The ISS has now entered its intensive research phase,” said Bill Gerstenmaier, head of NASA operations and human exploration, in recent testimony to Congress in defense of the roughly $1.5 billion the agency spends annually on the outpost.

More than a quarter of the space that NASA has designated for experiments sits empty. Much of the research done aboard the station deals with living and working in space — with marginal application back on Earth. And the nonprofit group that NASA chose to lure more research to the outpost has been plagued by internal strife and recently lost its director.

And more broadly, questions remain about whether NASA can develop U.S. capability to send experiments up and bring them back to Earth — and whether, in fact, the station can live up to the promises that were used to justify its creation.

“Now that NASA has finished ISS construction, I hope the incredible potential of ISS is not squandered,” said U.S. Rep. Ralph Hall, R-Texas, chair of the House science committee.

This “incredible potential” is what NASA used to justify the decision to build a space station, which has been in the works since the Reagan administration.

“When we finish, ISS will be a premier, world-class laboratory in low-Earth orbit that promises to yield insights, science, and information, the likes of which we cannot fully comprehend as we stand here at the beginning,” said then-NASA chief Dan Goldin during a 2001 congressional hearing.

In the decade following, NASA and its international partners used the space shuttle and other vehicles to assemble the station, complete with several on-board laboratories lined with science “racks.” These racks, each about as big as a telephone booth, provide a home for dozens of experiments and can stream data and video to researchers back on Earth.

But then — as now — some questioned the station’s future as a center of science. They note much of the research done aboard the station deals with surviving the space environment, from studies of spaceflight’s effect on human muscles to developing improved smoke detectors for human spacecraft.

Privately, some NASA officials worry the outpost could feed into the agency’s reputation as a “self-licking ice-cream cone” in that space-based experiments help NASA keep doing space-based experiments.

Others note that station research — there have been about 500 American experiments and 800 international ones — has produced comparatively little scientific literature. Thomson Reuters Web of Science, which tracks such publications, has identified about 3,000 scientific articles that have resulted from station research.

By comparison, a 2001 satellite that cost about $150 million — NASA’s Wilkinson Microwave Anisotropy Probe — has generated more than three times as many papers; many scientists used the probe’s analysis of temperature differences in space to theorize about the origin and structure of the universe.

Continue reading at Orlando Sentinel.