Book Review: The Management Myth

Is there anything more absurd than trying to measure something that can’t be measured? In my opinion, most performance reviews are an utter waste of time because they try to measure things that can’t or shouldn’t be measured. The most important aspects of many jobs can’t be measured, but managers (usually armed with an M.B.A.) delude themselves into thinking that scientific performance reviews measure an employee’s worth. How dare a manager acknowledge that someone is doing a good job without any data to support such a claim.

Early in my finance career, I vividly remember being the victim of one particularly ludicrous performance review in which I was lambasted for failing to meet a certain quantitative metric. At this firm, the important things, come review time, were only what could be measured. After this review, I was in a spiteful mood. I vowed that I would act like homo economicus for the rest of my time at this firm, i.e., I would do the economically rational thing and neglect all of my job responsibilities (no matter how important) that weren’t quantitatively evaluated in my next performance review. Luckily, I quit before I got promoted.

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Not too long ago, I stumbled across an article published in the Atlantic (back in 2006) that caught my attention. The author was Matthew Stewart and the subtitle of the article read “If you want to succeed in business, don’t get an M.B.A. Study philosophy instead.” Needless to say, I was intrigued. After reading the article, I decided I needed to pick up Stewart’s book, The Management Myth.

At large, this book is a polemic attacking scientific management and business schools, although the book has an autobiographical element as well. The essence of Stewart’s argument is that management is not a science and it is silly to worship science in business problems that are fundamentally philosophical in nature. Those who understand the nuances of management make better managers than most spreadsheet jockeys.

In other words, the secret to being successful in business, while remaining an ethical personal, is not to study scientific management, but rather it is to be well-educated person. This, of course, includes an extensive study of the humanities.

Stewart has a chapter titled “The Accidental Consultant” and I can’t help but think that this is a play off Montaigne, who called himself “an accidental philosopher”.  Stewart, after his doctoral studies, somehow accidentally became a management consultant. As an insider, he saw the inner workings of the corporate monster from a consultant’s perspective.

When you think about it, consulting is really an improbable business. Bruce Henderson, the founder of the ­Boston Consulting Group, is quoted by Stewart in the book and he sums up the improbability of management consulting by asking the following: “Can you think of anything less ­improbable [sic] than taking the world’s most ­successful firms, leaders in their businesses, and ­hiring people just fresh out of school and telling them how to run their ­businesses, and they are willing to pay ­millions of dollars for their ­advice?”

In the book, we learn that the idea of scientific management, which ultimately gave birth to consulting as a business, has an interesting history that can trace its roots back to the early 20th century. And Frederick Taylor is the man to blame for it all. It seems that when the Taylorist mindset became commonplace, ethics and most corporations simply decided to part ways.

It’s worth noting that the father of modern economics, Adam Smith, warned us what the division of labor (and for that matter, an obsessive focus on scientific management) does to people when it is not tempered with humanity, i.e., it makes people “as stupid and ignorant as it is possible for a human being to become.”

Taylor, borrowing from the classical economists, scientifically studied the way pig-iron was handled by laborers at Bethlehem Steel. His research ultimately led to the sullen belief in the efficacy of scientific management. However, Mr. Stewart points out that Taylor fudged both his ­research and his results, but that’s a secret better left unspoken within the walls of Harvard Business School.

Taylor, however, isn’t the only person that Stewart picks on. He has a bone to pick with other management theorists and many modern day gurus too, e.g. Michael E. Porter and Peter Drucker.  Stewart writes: “The gurus are often accorded respect as great authorities. But what exactly are they authorities in? And why is it that millions of people are eager to pay for instruction on what they should do in the fantastically improbable event that they become CEO of a major corporation? How did management theory become so personal, so spiritual, so impractical?” I must say, I often wonder the same thing.

This book resonated with me deeply and I absolutely agree with Stewart’s critique of business schools and modern corporations. “If any political party funded political science departments in the way corporations fund the business schools, we would naturally consider their research to be little more than propaganda.”  Stewart is a very clear writer with keen prose and an often humorous tone. He’s a witty philosopher to boot.

I’ve written about the problems that come with trying to quantify everything before (here). I don’t know the secret to being an excellent manager, but I do know that trying to quantify everything is a sure-fire way to be a terrible one.  Undoubtedly, Stewart would agree.

[click the following for amazon.co.uk and amazon.ca copies of the book]

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