Nothing New Under the Sun: Enduring Management Practices 
Michael Contrada
Source: AdaptableOrg.com
Publication date: Apr 3, 2012 

The ancient Greek, Heraclitus, and the Biblical author of Ecclesiastes recognized this truth millennia ago. More recently, Roger Sutton in an article titled “Good bosses are the same today as they were in 1992” makes a similar point with regard to business leaders:

In a world of near constant innovation and disruption, the definition of a great boss (or leader or manager) may be the one thing that doesn’t require reinvention.

But why only go back to 1992? What was good enough for Alexander the Great leading the ancient Greeks to conquest of the known world, you might say, should be adequate for today’s CEO. Except for lacking a good succession plan, Alexander did pretty well. He forged the basis for a shared culture across the Mediterranean world – Hellenism – which the Romans eventually “leveraged” to build an “integrated” empire (using the jargon of a consultant).

Sutton’s main point is that the peddlers of business advice have a need to tout their ideas as the latest best practices required by an unprecedented new world of change if they are going to attract attention and sell books. However, what I particularly liked about Sutton’s essay is that he references a book called Beyond the hype by two academics, Robert Eccles and Nitin Nohira, who noted the same thing in the Stone Age year of 1992.

From Hype to What Really Works
The reference to Beyond the hype reminded me of another book co-authored by Nohira, now Dean of Harvard Business School, called What really works? Written a decade after Beyond the hype, and in a sense a sequel, What really works is an attempt to identify through statistical research the enduring management practices used by winning companies, if not across the centuries then at least across the decades. Since Beyond the hype and What really works are among my favorite business books by academics, let me add to Sutton’s reflections on the former my own reappraisal of the latter.

What really works turns out to be a simple recipe: clear strategic choices, execution focus, high-performance culture, and lean organization. Add a dash or two of growth by acquisition, investing in talent, developing leaders, and innovation and you are now feasting on superior performance. It’s time, indeed, for business managers to throw out all those other faddish management cook books and get back to true fundamentals, as described by Nohira and his co-authors, of what really works.

Recognizing the peril of trying to generalize from specific success stories (e.g., Gerstner’s at IBM) or following the latest (and now dated) fads, whether management fads (e.g., learning organizations, TQM, Six Sigma) or technology fads (e.g., ERP, CRM – how quaint!), the authors set out to discover “the fundamental practices that create business success – the ones that do indeed really matter.” Their approach is to conduct “the world’s most systematic, large-scale study of the practices that create business success.” This effort, called the Evergreen Project, sifted through 160 Winners and Losers, Climbers and Tumblers divided into industry groups to identify statistically “what management practices actually work.” The authors are right to tout their methodology as an improvement on prior research-based studies. In search of excellence focused on just the winners and From good to great studied the differences between winners and losers but without identifying whether the differences are cause or effect of outstanding performance.

What the research says
Their conclusions about the management practices that make a difference can be straightforwardly summarized. In the authors’ words:

  • “Devise and maintain a clearly stated, focused strategy.” Focus on growing the core business while building closely related new businesses.
  • “Develop and maintain flawless execution.” Make sure you are meeting your customer’s value proposition.
  • “Develop and maintain a performance-oriented culture.” Set high performance standards and deal with poor performers.
  • “Build and maintain a fast, flexible, flat organization.” Structure organizations to eliminate bureaucracy, simplify work and emphasize speed.

In addition to these four “primary management practices” there are a set of “secondary” ones, as well. Among these, winners will usually choose two to pursue:

  • “Hold onto talented employees and find more.” Internal development trumps hiring outside guns.
  • “Keep leaders and directors committed to the business.”  Boards should understand the business and choose leaders with a like-minded commitment to success.
  • “Make innovations that are industry transforming.” Don’t react to but anticipate industry disruptions.
  • “Make growth happen with mergers and partnerships.” Make consistent, smaller deals instead of occasional larger ones.

Thus, managers now have “a proven set of approaches” to replace the “trial and error” of the past.

Interestingly, just a few years before What really works appeared, Robert Kaplan and David Norton published their second book, The strategy-focused organization, and seemed to have re-discovered many of the same truths. Using a much smaller data set, namely those companies who adopted their management framework, they summarized (from inductive research you might say) what they saw as the winning formula for management. They called their insights the “five principles of a strategy focused organization”:

  • Mobilizing change through executive leadership
  • Translating the strategy to operational terms
  • Aligning the organization to create synergies
  • Making strategy everyone’s everyday job
  • Making strategy a continual process

Plus ça change
Now, more than ten years on, we are back to searching for the next new thing. Almost as a challenge to What really works and The strategy-focused organization, Gary Hamel has just published What matters now or “how to win in a world of relentless change, ferocious competition, and unstoppable innovation” as stated on Hamel’s website. Having followed and commented on the discussions Hamel leads on the Management Innovation eXchange for AdaptableOrg, I know the fashionable stance is management must be remade. However, in line with the books referenced above, I am not so sure.

From Julius Caesar to David Patraeus, from Andrew Carnegie (to go no further back than the 19th century) to Steve Jobs, I believe there are straightforward management principles that indeed prove enduring. They may be all one really needs to be a successful business manager.

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