Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Businessman showing a dollar sign on his chest. (Comstock/Getty Images/Comstock Images)
Businessman showing a dollar sign on his chest. (Comstock/Getty Images/Comstock Images)

Management

Mintzberg: Real leaders don't take bonuses Add to ...

This is Part 1 in a series of interviews with the gurus of leadership and management theory.

When it comes to thought leaders on management in Canada, the first name that often comes to mind is Henry Mintzberg, the iconoclast and internationally renowned Cleghorn Professor of Management Studies at McGill University, who has been a source of provocative ideas for more than four decades. Prof. Mintzberg has pioneered an alternative to the MBA program, the International Masters Program in Practicing Management , and CoachingOurselves.com , a social learning site in which managers can pick from a shelf of topics for group executive development. His work currently is on updating some thoughts on managing health care and a five-part electronic pamphlet he intends to publish, Rebalancing Society: Radical Renewal Beyond Left, Right and Center.

The leadership guru interviews

I think of you as a debunker. People walk around with a lot of myths of management, things they subscribe to that you have shown are dead wrong. What are the top notions you think people need to reframe their thinking on?

First, that leadership should be separate from management. Second, strategies are planned. Third, that executive bonuses make companies better. I could go on for a month with a list, but those are the top ones.

Let’s start with the prevailing belief that leadership is different from management – and above management in importance.

Managers who don’t lead are quite discouraging, but leaders who don’t manage don’t know what’s going on. It’s a phony separation that people are making between the two. By the way, Peter Drucker made the same kind of distinction 50 years ago, except he distinguished managers from administrators, so the pattern is that we keep upping the vocabulary. Next it will be heroes are different from leaders, and then gods are different from heroes.

It’s the idea that somehow you can succeed by being above the fray, a leader, dealing with the big stuff, while other people do the small stuff. But you can’t do the big stuff unless you understand the little stuff. To use a metaphor, painting the big picture has to be done with brush strokes. So you need to know what’s going on in your organization – you can’t be aloof and apart from it.

That leads to the second myth, that strategy is somehow immaculately conceived in offices, whereas strategies are actually learned on the ground. My favourite story is IKEA. You know how it ended up with knock-down furniture, which today is the heart-and-soul of their strategy, one of the prime factors distinguishing them from other sellers of furniture? It started when a worker tried to get a table into his car and had to take the legs off. Somebody said, “Hmm, maybe customers have to do that, too.”

That’s how strategies are developed. Their service strategy came when they were mobbed at a new building in Stockholm and couldn’t handle the crowds, so they took the counters away and let people find the stuff themselves. That’s an example of the way companies learn, and improve. Strategy is about learning – about learning how you serve people and deal with issues better.

Does that mean leaders never head off on a retreat and plan strategy?

Sure they go off on retreats, but the retreats, when effective, are to consolidate what they have learned. It’s good to sit back and reflect on what you have learned. But you don’t go on a retreat separate from people who have their fingers dirty and know what’s happening.

So strategy bubbles up from the front lines?

It doesn’t necessarily bubble up. I bet that with Steve Jobs at Apple it bubbled down. But Jobs wasn’t disconnected from things. He was a customer – he used his own products, and lived them. Strategy doesn’t have to come up from the bottom, where it often does, but it has to come from people who are connected to the actual operations of the firm. If senior management are connected, so much the better.

People make a big fuss out of micro-managing, but the bigger problem is macro-leading. Micro-managing means meddling in the affairs of people working for you, but finding out what’s going on is not necessarily meddling. Macro-leading is what you had with the big banks and insurance companies in the States. They didn’t know what was going on with their mortgages. Or maybe they knew, and were cynical.

In your last book you wrote that to succeed managers have to be proficient in their superficiality. How does that fit into this line of thinking?

The pressures of managing are to get a lot done – get it done quickly. A manager who doesn’t make decisions is worse in a way than a manager who makes bad decisions, because it stops everything. So sometimes managers are forced to make decisions, even though they are lacking information, just to keep things moving. So in a sense they are forced into superficiality by the nature of their job.

So I have to accept this superficiality yet still be grounded in my business?

Yes, being grounded is what beats the superficiality. If you know what’s going on, deeply in your heart and soul as well as your brain, you are less likely to screw up with your decisions.

The third myth you mentioned concerns executive bonuses.

Yes, that’s destroying companies. The crisis in the United States is not an economic or financial crisis but a management crisis. My feeling about executive bonuses is that any candidate for a chief executive job who even raises the issue of bonuses should be dismissed out of hand. That’s a slightly different position from what is prevailing today.

Are you on any boards?

No. I get asked occasionally, but I don’t want to commit to anything regularly. I don’t get asked, however, hourly, weekly, or monthly. But some big boards have asked me.

So why shouldn’t they have bonuses?

I defy anybody to measure the effect of a single individual or a few individuals on the overall financial performance of a company. You can do it in the short run if you assume stock price or profit are an indication of success, but any fool can manipulate balance sheets, income statements, R&D, or investments and influence stock prices and profits in the short term.

In addition, how can you measure it in the long run unless somebody stays there for 20 years? If a CEO is in place for five or six years and somebody else replaces him, if the company does well, the successor will say it’s all because of me and if it does badly, the successor will say it’s my predecessor’s fault.

Beyond that, this approach creates narcissism. It creates the sense that the company is the chief executive, and nobody else matters. That is what has been trashing companies.

How many companies do you know that when they don’t meet their numbers on Wall Street fire 5,000 people? How come 5,000 people suddenly became redundant? What makes people redundant from week to week just because you don’t meet your numbers? What you are doing is trashing the future of the company, cashing in on the future of the company, to make the wolves of Wall Street happy. It’s complete madness.

Companies are communities. There’s a spirit of working together. Communities are not a place where a few people allow themselves to be singled out as solely responsible for success. And how could you call such a person who asks to be singled out a leader? Which means the heads of the Fortune 500, with a few exceptions, aren’t leaders.

But this madness continues because we are seized by this sense of greed and narcissism. The ideas that leaders are more important than managers is a part of that narcissism.

Another myth you seem to have been questioning in recent work is that the best management is in business and that “public service management “ is an oxymoron.

That’s complete and utter nonsense. There are great managers in every sphere and there are terrible managers in every sphere. What we are getting in the United States is terrible managers in corporations – people who are too disconnected.

American business is not a model for how to run business today. It’s also no way to run health care. There’s a lot of writing these days, particularly from people out of Harvard Business School like Michael Porter, that we can solve the problems of health care by making it more competitive and treating it more like a business. No country on Earth treats health care more as a business than the United States and their health care system is a disaster. Health care is a calling; it’s not a business.

Who do you look to for management wisdom – who do you read with some sense of excitement?

I never thought of that. There are people I have time for. Years ago, Dick Rumelt from UCLA, who only strategy professors know. He’s not on any list of gurus, but is always thoughtful. There are lots of people doing interesting things, but nobody I turn to consistently. Lately information comes to me in diverse ways, through letters or e-mail. It comes from here and there. I don’t look to any one person in particular, except – and it’s about politics, which is where I am working more now – David Brooks of The New York Times. I read all of his columns; they are the only things I find consistently wonderful. Recently I was taken by a piece in the New Yorker on modern desserts, looking at what is happening in Barcelona.

Do you read anybody on management any more?

No, not that much. It’s boring.

Join Globe Careers on LinkedIn.

Single page

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories