Flavor of the Past Management Improvement Techniques

Deniz Saral

Founding Dean 41 North Business School

Year after year corporate managers are drawn to new management styles and models because they either notice them in popular management periodicals or their favorite management consultant thinks these are hot potatoes! Unfortunately, many experiments with these flavors fail to meet managerial expectations. What to do to stop this history from repeating?

Let’s start by visiting a few and well-known management models from the recent past. Anyone remember Total Quality Management (TQM)? When Japan ran into Edwards Deming, their manufacturing industry quickly adopted his recommendations (14 points). It was as if a new religion had been born for their manufacturing industry. Instead of an a priori acceptance of a tolerable but unavoidable rate of manufacturing defects, which would only be detected after products left the assembly line, production systems now had to build quality into every phase of the process so that completed products no longer needed inspection, in other words, they would be free of defect. TQM led to a further development, the Six-Sigma quality assurance model. Observing Japan’s phenomenal improvement in manufacturing quality, firstly U.S. and later European firms adopted Deming’s approach. However, Detroit soon realized that practicing TQM, Just-in-Time (JIT) manufacturing and Six-Sigma was not easy to emulate. Supplier distances from Detroit were very long which necessitated placing large-size lot orders. When GM went down stream to instill TQM thinking in their suppliers, they met strong resistance, because this required significantly high costs of training, which they could not afford. When TQM, and 6-Sigma techniques were tried in the service sector, many companies failed miserably. Autopsies revealed that these techniques were not suitable for all firms and that the timing of their introduction in the company’s growth-cycle was critically important. New, exciting and high-growth companies needed these models as much as a man needed a whole in his skull! Years of wasted effort and lots of spent corporate funds littered the battle field.

Let us now jump to a more recent management improvement model, the 360-degree evaluation process. Employees and managers rate each other’s performance systematically to measure participants’ performance for corporate culture congruity, team work dynamics, leadership assessment and operational performance against benchmarks. In a recent case, the HR Manager of a company reported that their recently promoted young and energetic managers were not living up to the company’s cultural expectations. What could be done to remedy the situation? A colleague immediately suggested the 360-degree evaluation methodology so that these young managers, through interaction with their superiors, would learn the intricacies of their company culture and how management expected them to conform. When I asked if the company’s objective was to modify behavior or to improve business performance, the HR manager said “both”! To me this meant, “sell a lot more product, don’t put your feet up on your desk, come to the GM’s office wearing a jacket and keep him informed on what you are doing each day”. When I suggested the PIKES model instead (Purpose; Integration; Knowledge; Ecosystem; Self) there was silence. This approach requires that top management assess each aspiring manager from his/her own PIKES perspectives so that the two sides mutually work to eliminate gaps between company expectations and those of the promising young managers. This is a significant diversion from traditional management, because it focuses on the young manager’s traits and expectations rather than the individual’s adaptability to the existing company culture.

Behavior modification through management training is a dead end! So why do companies still attempt this? Main reason is their inability to modify their own organizational architecture when faced with radical shifts in competitive labor markets. They need assistance in learning how to make this hard shift and 41North will be ready and able to deliver the much needed expertise.

Deniz Saral

Founding Dean 41 North Business School