Management Has Changed!

 

THE PRINCIPLES OF MANAGEMENT HAVE CHANGED!

 

I heard the Chairman of a National Council speak at a professional seminar last week. This grand old man, who I will not name until I get permission to mention him by name, amused participants at the seminar when he challenged them to develop and stop training people today using principles he learned in his postgraduate class of 1966 (40 plus years ago). He made his point and insisted on it.  Participants roared with laughter when he said that as far as he was concerned those principles were irrelevant. but I doubt many of us took him seriously. The seminar ended and I believe that most of the participants went back to using the same management skills they too learned in college (more recently perhaps, but hardly any different from 40 years ago).

 

The speaker understood something that is completely lost to most of us – The principles of management have changed. Before you say that cannot be, let me take you back to school briefly. In school, you were told that there were certain laws that were fundamental and unbreakable. Gravity was one of these laws. The laws of Addition enabled you to learn mathematics. You were told that 1+ 1=2 if you believed it, you found maths a very straight-forward subject. If you challenged this principle you found maths a daunting subject. But that was to last only until you were old enough to understand that 1+1 could in fact =10. What had changed?  Was the original principle wrong? No. There was nothing wrong with the principle – the context had changed. Whenever the context changes, principles must change too.

 

The new principles of mathematics enabled the invention and development of the computer. A machine that hardly existed 40 years ago. By changing the principles man learned to defy gravity and fly 100 years ago. Today's context is vastly different from what it was even 10 years ago. 40 years ago communicating with someone on the other side of the globe took paper pen and several weeks in between post offices. Today you can pull out a cell phone from your back pocket and speak to the person in a few seconds. The principles of communication have changed.

 

If we continue using the principles of management developed 40 years ago in today's changed context, we can hardly expect to be competitive. We will only attain the level of productivity possible 40 years ago. Imagine someone sitting down to write an urgent letter to a friend instead of using the cell phone in his pocket!  Applying new management principles has enabled eastern countries to develop faster than it took western countries to develop basic concepts. Africa, in other words, is busy writing urgent letters to friends around the world with a cell phone in its back pocket. We may be actually sitting on the solutions.

 

If we look at our context today we will discover that the principles of management have changed and that effective managers are defined by different parameters other than planning, organizing leading and controlling. Their effectiveness is defined by Information, Outsourcing, Leadership and Performance. The old doctrine of a good plan, an efficient organization, a focused director (boss) and foolproof control is out.

 

Today what you need as an effective manager is information. If you don't have information, I don't care how good a planner you are. Your plan is irrelevant. There are people who have very poor planning skills but have the right information. They are able to achieve much more because instead of wasting their time planning they immediately take advantage of current opportunities they are able to identify from the information they have.

 

There are those of us who still believe in building an organization, and delegating responsibility. Today that principle leads to very heavy overhead costs. These costs are needed to maintain massive  structures and efficient systems. Many times management does not have the competence to manage the structures. It is not too long ago that banks realized that printing cheque books was not their calling. The government is now privatizing many of its services. Outsourcing is not throwing organization away. It is giving the job to the more competent. American goods are now manufactured in China.

 

Leading (directing) used to be the bosses job. In the past managers literally ran departments single handedly. Today with the amount of specialization required in business, no manager can do so. Managers must work in teams to be effective. And use leadership within the team to develop the various functions. The manager used to be in front. Today the manager is the cheerleader, servant and developer who stands at the back and inspires rather than leads team success.

 

There is the story of an accountant who was hired to protect company resources and ensure that money was only used for what was approved in the budget. In other words his job was to limit expenditure. He was often commended if he "saved" money for the company by not spending it. 40 years ago he would have been considered an excellent manager. Today that manager would not last a few months in office. Today that same accountants job is to ensure that the business has the money to compete in the market and take advantage of opportunities as they arise by spending the company's money wisely. It is no longer about controlling resources, it is about multiplying returns. However there are still many managers, lecturers and professionals today who still teach and use the same principles used 40 years ago as the principles of success in today's globalized world.

 

Allan Bukusi , 14^th March 2009