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Encouraged by well-meaning but wrong-headed management consultants, companies latch onto new fads, and wind up worse off than before, the author argues. (Thinkstock)
Encouraged by well-meaning but wrong-headed management consultants, companies latch onto new fads, and wind up worse off than before, the author argues. (Thinkstock)

managing books

When management theories come home to roost Add to ...

I’m Sorry I Broke Your Company

By Karen Phelan

(Berrett-Koehler, 211 pages, $22.95)

Karen Phelan is sorry if she or her fellow management consultants broke your company. More than that, she has gone back to the decisions she made and advice she gave in her consulting and executive career, tracing the intellectual roots, to understand why she and her colleagues caused so much damage.

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“On behalf of all the management consultants who’ve been working in your companies over the last three decades, proselytizing about management by objectives and competitive strategy, I’m sorry,” she says at the start of her saucy book with the saucy title, I’m Sorry I Broke Your Company .

The New Jersey-based author stresses that she meant well. But she was hired, like so many other consultants, just after university graduation, with little real-world experience, skilled only at performing logical analyses and applying the theories developed in business schools to the companies they met.

She came to it with an engineering and science background, and knew that real-world results didn’t always match theory. But she was as gullible as the next consultant when starting out.

“Unfortunately, few statistically sound, well-managed studies prove the accuracy of management theories. Management theories rarely get peer-reviewed or validated by a third-party before they become part of the accepted body of knowledge. Most of the evidence is anecdotal, and many of the existing studies have a degree of self-interest,” she notes.

The result, Ms. Phelan feels, is a profusion of companies trying to be lean and mean, operating with similar approaches, offering copycat products and services, and dependent on acquisition for growth. The companies latch onto new fads, like dieters, and just as weight-loss enthusiasts end up regaining their pounds, and more, the companies wind up frustrated.

“The widespread adoption of each fad brings with it its own set of problems that lays the groundwork for the next fad,” she declares.

If it’s any salve, the fads didn’t work for the companies she worked for, either. Take Deloitte Haskins & Sells, the consulting firm she toiled for in the late 1980s, caught up in the strategic ideas of Harvard Business School Professor Michael Porter about controlling your future by contouring external forces to your advantage. Deloitte didn’t simply sell those theories to others but also put them into operation for its own benefit, setting up national consulting teams targeting certain sectors.

But it ended up merging with Touche Ross, which dissolved the entity of which Ms. Phelan was a part. “Our strategy of becoming strategy consultants was foiled by external influences! If we had been any good, we would have seen it coming,” she writes. Touche Ross was seen to be mired in the past, with local offices focusing on local clients rather than following the expansionist approach of her company, she recalls. “We had a strategy! We had centers of expertise! Yet Touche Ross had more work.”

Rereading Prof. Porter’s pioneering book, Competitive Strategy, she was struck by the emphasis on manufacturing. Although there are references to other industries, the examples given focused on building capacity in plants and equipment to create barriers to entry by other companies. Today manufacturing is on the decline, with health care, retail and financial services in ascendancy, she notes. The “mini-computers” he mentioned drive our economy and companies, and have created a far different strategic reality.

After her Deloitte experience, Ms. Phelan’s next venture was to sell downsizing in the 1990s, working for a firm called Gemini, which aimed to own the business-transformation market. It was successful – until the economy picked up and, whammo, the firm was in trouble (it’s now a small organizational development group within Cap Gemini Ernst & Young).

Ms. Phelan shreds other fads: managing through measuring, the war for talent, performance management, and re-engineering. “A big part of this problem is the belief that work processes are separate from people,” she notes in her chapter on re-engineering. “People do the work and are the work process.”

She is convinced from her own experiences in managing that the key to success is taking an interest in your staff and allowing them to flourish. “Being a good manager isn’t all that different from being a good person,” she believes.

Show people you care. Communicate, because no one knows what’s in your head. Be flexible, adaptive, responsive. Think and plan ahead.

“Good management technique is not rocket science, people,” she writes. “Why are we overcomplicating this? To be a good manager, first you have to be able to manage yourself and get things done, and second, you need to be able to have good relationships with those around you. You should also think about the future, yours and your team’s, but that’s a lower priority. Good management skills are good relationship skills. That’s it. End of story.”

This is not novel, of course. But she’s fun to read. And her tour of the past few decades of management theories is provocative as she grapples with the theories that she sold and that reverberated through our lives – some of them still lingering. And yes, she’s sorry that, with the help of those theories, she broke your company.

POSTSCRIPT

  • In Make Room for Her (McGraw-Hill, 224 pages, $30.95) executive coach Rebecca Shambaugh argues that companies must secure a balanced gender perspective to attain better results.
  • Making Habits, Breaking Habits (De Capo, 264 pages, $29) by psychologist Jeremy Dean shows how to make behavioural changes stick.
  • Big data is a popular catch phrase these days and the business intelligence approach is explained in Big Data, Big Analytics (John Wiley, 187 pages, $59.95) by three practitioners, Michael Minelli, Michele Chambers and Ambiga Dhiraj.

Special to The Globe and Mail

Harvey Schachter is a Battersea, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online work-life column Balance. E-mail Harvey Schachter

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