Management Theory. It's all bunk

Management theory has been a huge boon for writers, pundits and MBA’s for the last 30 years or so. It’s a multi billion dollar industry with endless books, conferences, experts, acolytes and general fan boys hanging on the every word of the “gurus” of management. Thousands of people make a living in this world, telling individuals, companies and governments how best to run themselves and their businesses, even their whole economies.

But there’s a problem, it’s all nonsense. Your first reaction to this is probably What !?!?!

Management theory is generally broken down into four distinct ideas. So let’s look for the evidence to support each of the big ideas.

A Hyper competitive world

The world is competitive like never before. The barrier to entry is practically zero, anyone at any time can compete with the big boys. And the evidence shows the exact opposite. The biggest trend is consolidation, not competition. Since 2008 over 30,000 companies a year are being swallowed by their competitors. It’s the biggest bull run in Mergers and Acquisitions in history.

Entrepreneurs are the new kings of industry

Entrepreneurialism is the way forward. Forget working for “the man”. Start your own business, show them who's boss. It’s a seductive idea. The trouble is the evidence suggests now is not a good time to start a business. In the USA for example the rate of business creation is lower now since the 1970’s. In fact in recent years more companies have gone bust than were born.

Speeding up

Business is speeding up. This is at least partially true. The internet has enabled businesses to grow at incredibly fast rates. Acquiring millions of customers far faster than was possible in the past. But is the ability to buy a toaster and have it delivered more impressive than what Henry Ford did, by equipping half of American families with automobiles in 20 years from a standing start from 1913 onwards? Perhaps it is, but productivity growth rates are now lower than they were 20 years ago. So perhaps either the internet isn’t that big a deal, or perhaps we haven’t worked out how to use it effectively yet. Either way it gives us something to think about, and rather kicks a hole in the management theorists models.

Globalization

Often management theorists will speak of Globalization as if it’s a new and unstoppable force. As usual that is to fail to learn from the lesson of history. The world was, in many respects just as globalized as it is today in the late Victorian age from the 1880’s until the outbreak of the Great war in 1914Many politicians and economists scoffed at the idea of a great war between the global powers. They believed the economies were simply too interconnected to conceive of such folly. The real folly was to not build the institutions to defuse conflict when it occurred, and the denial that such a turn of events could even occur.  Over 18m people died in the first world war because the idea of war was impossible to imagine.

So now what?

The first rule to solving a problem is to recognize that you have one. The West has low productivity growth, many highly uncompetitive sectors (Airlines, Telecommunications and Agriculture are prime examples of uncompetitive industries), low levels of company formation and a willingness among many to believe  that protectionism, and “”beggar thy neighbor” policies will save them from a hostile world.

By any measure it is obvious that Management theory isn’t working.

Once it has been acknowledged that we have a problem then what? Unfortunately I don’t know all the answers to that. But if identifying the problem is half the battle then at least we have started. Next we need to stop listening to the existing orthodoxy and look for new answers.

If we wake up from the droning of management theory nonsense, we might realize the whole field of management theory is ripe for an Excession Event. The answers that got us where we are now simply won’t get us to where we want to go tomorrow. It’s time to think differently. Some of these ideas are also discussed in my book. The End of Certainty.

I’d love to hear your thoughts on this, and even more some answers.

About the Author

Simon is a leading authority on the power on technology to improve people’s lives.  He is an expert in the design, implementation and use of visual collaboration tools. Much of his work is involved in  helping empower organizations to make better use of visual communications to improve their business and people’s lives.

With a strong background in Marketing, Design, Product Marketing and Sales he takes a holistic view of the market. Simon is from the UK, lives in Austin, Texas, is a sought after public speaker, an author, and has been awarded two patents.