David Burkus, a consultant and former professor of management, says the five worst ideas in management are stack rankings, performance reviews, personality testing, open offices, and right-sizing. To an extent, all spread through what consultant Eileen Shapiro identified in 1997 as fad surfing in the board room. It is the practice of riding the crest of the latest management panacea and then paddling out again just in time to ride the next one, always absorbing for managers and lucrative for consultants, although frequently disastrous for organizations. The fads Mr. Burkus cites, however, have tended to stay, making them more dangerous.
One of the biggest fads of the past few decades but missing from his list is the tendency to shy away from the word he employs, management, and inflate the role into leadership. Nobody these days is a manager. Everyone is a leader. Or, when management is recognized as an acceptable function, it’s treated as secondary, the manager an administrative assistant to the person of real importance, the leader. The reality is things get done through solid – and gifted – management.
The counterargument, of course, is that managers are narrow-minded, and the true gift is to move beyond the existing situation, pulling the organization to new heights. That takes us to the importance of vision, which perhaps also belongs on Mr. Burkus’s list of dangerous management fads. Leaders supposedly must have vision. Organizations must collectively subscribe to a vision. Certainly managers – and founders of organizations – need creative, imaginative ideas, a willingness to explore. But corporate vision is usually self-satisfying bunk.
But let’s return to Mr. Burkus and his list. He considers stack rankings the worst, a practice glorified by one-time General Electric CEO Jack Welch, in which employees are ranked as either A, B or C, with limits to the number who could be in the top categories. The A players got promotions, the B folks got to keep their jobs and ideally some support, and those consigned to C were elbowed out.
Behind it lay two faulty notions, he argues. One is that people respond positively to being labelled but in fact they don’t, especially if the ranking is lower than last time. As well, it assumes the C players would be replaced by new hires of A or B calibre. “We know now from research on the portability of talent that hiring star players is expensive and ineffective. Growing stars works better. And how do you grow stars? You invest in B and C players – you do the opposite of stack ranking,” he writes on his blog.
The second worst idea is formalized performance reviews. “It’s not that giving feedback on employee performance is a bad idea – it’s that often the systems developed to provide that end up failing,” he says. Specificity will be lacking and the feedback lag actual performance. Better to train your managers to be better coaches, he argues.
Personality testing has a lot of fans so you might have been surprised to find it third on his list. Obviously different personalities are scattered through our organizations and that can lead to conflict. But he feels tests that try to slot people into different personality styles fail.
“Actual personality psychologists know that there are no personality types, only personality dimensions. You can have honest conversations about how different members of a team scored differently along personality dimensions. But a conversation about different personality types is a conversation about imaginary differences that often don’t reflect reality and as such are likely to fail,” he says.
Open offices were an attempt to import the hothouse culture of start-ups and fast-growing tech companies that have to cram as many people into a space that has been outgrown. But fast growth led to crammed offices, not crammed offices to fast growth. Research has found in-person communication went down rather than up in open offices, perhaps, he suggests, because of how hard it was to have a real conversation surrounded by everyone else. Open offices also increase stress and absenteeism, and decrease productivity.
Right-sizing has mostly disappeared from the managerial lexicon but it was a dreadful euphemism (and excuse) for laying people off. But he makes the point that layoffs – still with us – are a terrible idea as well. Sometimes, of course, reducing head count is inevitable. “But in the last few decades, the trend became using layoffs in order to cut costs in the short-term, make quarterly projections, and save the jobs of the very executives whose bad decisions led to the cash crunch in the first place. Those layoffs cause a lot more problems than they solve – including decreases in the morale and productivity of the employees who remain,” he writes.
He says these ideas seemed logical initially, but when implemented, flopped. So beware of fads that appeal. They may be deceptive. I think they also flowed from a sense of omnipotence, overestimating the ability of managers to manipulate systems and people.
Stanford University business professor Jeffrey Pfeffer warned in a 2015 book against Leadership B.S.: “Sometimes – not always, but some of the time – doing precisely the opposite of what the leadership industry prescribes produces better outcomes.”
I have wondered what current fad we’re buying into will seem abhorrent down the road. Hybrid offices? Abandoning offices? Those are certainly big gambles right now. But several on Mr. Burkus’s list had a computational element, and so perhaps it’s our worship of algorithms and artificial intelligence that we will in the future snicker over (or mourn).
Cannonballs
- Jack Welch’s successor, Jeff Immelt, had a bumpy ride as CEO of GE and looking back at mistakes regrets the times when he tried to give certainty to others when the right answer would have been, “I don’t know.”
- Charisma is often seen as something you either have or don’t have. Some argue it can be learned. But academics Cristiano Guarana and Christopher M. Barnes offer a different perspective: It might vary with the clock, so we display charisma at high points of our circadian rhythms and don’t at low ebb. Followers may similarly perceive charisma according to their circadian cycle.
- Research by UBC Sauder finance professor Kai Li found of five commonly cited corporate values – innovation, integrity, quality, respect and teamwork – innovation was the most mentioned in corporate earnings calls and integrity the least.
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Harvey Schachter