It is often interesting to return to classic business concepts, to reflect and to gain some new perspective on them. Yesterday, I was reading Julian Birkinshaw’s book Reinventing Management, and it got me thinking again about the distinction we often make between leadership and management.
Birkinshaw is a Professor of strategic and international management at the London Business School, where he studies the strategy and management of large corporations. In this 2010 book, he turns his attention to the “neglected” concept of management.
One thing that surprised me was the author’s statement, in the introduction, that there are not many books written these days on the subject of management. According to Birkinshaw, management is seen as a necessary but tedious activity that “sits in the shadow” of leadership.
This dearth of writing may stem from a modern-day prejudice against the term “management” in general. To be sure, much more is written and discussed about leadership, with various authors stating that organizations today need leaders more than managers.
Why is there such disenchantment with management as a discipline? In today’s world, leadership has become glamorous, while management is boring and monotonous. Managers are often seen as low level bureaucrats: internally focused, absorbed in operational detail, controlling and coordinating the work of subordinates, and dealing with office politics. Many executives have come to assume that as leaders they shouldn’t need to get involved in the work of implementation.
Some scholars have gone so far as to predict the demise of the middle manager. In a Harvard Business Review article from 2011, Lynda Gratton, a London Business School professor of management practice who directs a research consortium focused on the future of work, writes that technology will become the new middle manager. In “The End of the Middle Manager”, she states that many of the functions of a middle manager can be performed without human intervention, since technology “can monitor performance closely, provide instant feedback, even create reports and presentations.”
Moreover, according to Gratton, today’s high-tech workers are often organized in skilled teams that are increasingly self-managed. Thanks to the Internet and search engines, everyone can know something about everything. If the middle manager was once a source of knowledge and information, Google and Wikipedia can now perform this function.
However, I tend to see this viewpoint as overly simplistic and even a bit gloomy. Middle management should be about far more than control and information; we should not confuse management with bureaucracy.
In the Industrial Age, the “manager as bureaucrat” made perfect sense, since business success depended on maximizing the return on physical assets. We made our factories more efficient by streamlining processes and then getting better at controlling them and the people who performed the work. In the end, though, the formalized planning procedures, dispassionate decision making, and well-defined hierarchies that came to define bureaucratic institutions would lead to their downfall. In large bureaucratic organizations, “serving the system”, not performance, became the key to career success. As Ross Perot once said of General Motors in the 1980s, “At GM, the stress is not on getting results—on winning—but on bureaucracy, on conforming to the GM system.”
As we move increasingly from an industrial economy to a service economy, from the age of the machine and the factory to the Information Age, we should perhaps focus more of our attention on “redefining” the concept of management, as Birkinshaw suggests.
And, it would be a mistake to assume that we need only leaders, not managers. One of the greatest problems today in the world of business is the gap between our goals and our ability to achieve them. With the current emphasis on leadership and strategic thinking, many companies are far better at creating grand plans than they are at implementing them.
To me, there may be even more important reasons for turning our attention to management. In the age of information, where return on human capital has become more crucial than return on physical capital, middle managers are the facilitators, coaches and mentors who should be developing and inspiring their teams every day. They are the custodians of the corporate culture. By actively promoting the company’s values through the ranks, they are the glue that holds the disparate parts of a modern organization together.
The distinction between leadership and management is largely an academic one. In practice, it is often difficult to separate the two roles. A middle manager with autonomy controls a team and inspires it as well, managing and leading simultaneously. People with the ability to perform this role will become an increasingly critical element of a progressive company’s success.
My model is that Leaders optimise upside and Managers minimise downside. Both together are needed in appropriate balance to optimise outcomes. The model centres on approach to risk which at the end of the day is, to me, the most fundamental challenge to business – making good decisions. And a ‘decision’ is something that has risk (if there is no risk, then it is simply a calculation, not a decision).
I think that ‘Leadership’ has taken on its cachet (to the detriment of ‘Management’s profile) due to the post-war boom years. By and large, there has been a long period where upside has significantly outweighed downside. As a result, the gurus of Leadership saying that going gung-ho for upside is the key thing have attracted much attention and in most cases been pretty much on the money. In the super boom years of the tech and credit bubbles, then (short term) upside was even more intense throwing petrol on already smoldering fire of Leadership mania.
There have been times in history when downside risks (survival) were especially acute (eg. economic crises) in which case good ‘Management’ was more revered for its criticality in keeping people alive. If you buy some pundits’ arguments that we have entered a period of abundance (Godin), then it makes sense to have an imbalance towards Leadership over Management. However, all indications (economic turmoil, natural resource limitations), that there is just as much need for protection against inevitable downsides as ever before.