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Go forth & multiply

Entrepreneur, May, 2002 by Mark Henricks

Management, 1997-present, has been a lot like that movie gremlins. We started out with a bunch of cute, cuddly new ideas, and before we knew it, the whole town had been overrun with trends. what's next?

In 1977, there was no such thing as a management trend--not, at least, as we know them today. Back then, almost nobody had heard of Tom Peters' search for excellence or total quality management, much less learning organizations, business process reengineering and the rest of the more recent additions to the management lexicon. The few trends that were around--hoary ideas like management by objective--had for the most part been in place for decades.

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How times change. A list of current management tools maintained by Boston-based consulting firm Bain & Co. Inc. contains 66 entries, from visioning and corporate venturing to competitive gaming and data mining. Many more have come and gone unmarked by the Bain counters, including adventure learning, co-opetition, Tao-based management and attempts to translate concepts from theoretical quantum physics to the operation of a business.

Management trends are indeed getting more numerous and fleeting, according to Paula Phillips Carson, a management professor at the University of Louisiana in Lafayette. "There are many more fads on the scene," says Carson, who has studied trends back to the 1950s.

"At the same time, we are finding that the life cycle is getting dramatically shorter," she adds. The average life cycle from introduction to decline for management fashions from the '50s to the '70s was 15 years, Carson found. In the 1980s, the cycle was about seven and a half years. "Fashions introduced in the 1990s," she says, "have an average life cycle of two and half years."

STYLES OF THE TIMES

In addition to being shorter-lived and more numerous, many of today's management trends revolve around three overriding themes: reengineering business processes, managing knowledge and learning, and facing the changing dynamic between management and employees.

Starting in 1993, thousands of firms experienced massive change as processes from purchasing to customer service were reengineered and made more efficient. Knowledge management and the learning organization, concepts championed by General Electric CEO Jack Welch and others, encouraged companies to ensure they were open to new ideas and to put systems in place to capture and share valuable knowledge with everyone who could use it. The manager-employer relationship was affected by several phenomena: reengineering-inspired downsizing, worker empowerment and a historically tight labor market. Perhaps most important was a growing sense among employees that their own skills and employability were more important than loyalty to an organization.

To Jack Duncan, a management professor at the University of Alabama in Tuscaloosa and author of Management: Ideas and Actions (Oxford University Press), the change in employee relations is perhaps most significant. "The whole idea of the employee has been radically altered in the last five years," Duncan says. Concurrent rises in free agency, telecommuting and collaboration among employees have drastically changed the way people have to be managed, Duncan says. "It's more of a networked or virtual organization than a hierarchical organization."

MANAGEMENT OUTLOOK

Don't look for the growth of management fashions to abate soon. The forces of rapid change, competition and ambition that have increased the number and reduced the life spans of management fads for decades are still in place. However, the nature of this moment, emerging from a downturn following a historic expansion, suggests that the next set of management trends will conform to a certain shape.

Management of innovation will be one major trend, according to Steve Ellis, a director of Bain & Co. and head of the consulting company's San Francisco office. With capital tighter and tougher standards for justifying growth forecasts, entrepreneurs need better, fresher ideas for products and services than ever. That's a challenge. "A lot of companies are going through a crisis of confidence in their ability to be innovative," Ellis says. "That's going to be a focus going forward."

After many years of increasing investment in technology for managing businesses, Ellis now sees a trend toward management investing in people to enable and encourage them to use all those billions of dollars' worth of computers, broadband data connections and software. "People haven't moved nearly as fast as the technology," he says. "Management is now wrestling with the reality of what information technology can really do to increase organization effectiveness. In conversations with CEOs, this is a major topic."

A third emphasis, Ellis says, will be on interacting with customers. Much technology has been introduced recently--Web-based ordering, for example, where a customer never talks to a person. Customer relationship management systems, online auctions, Internet comparison shopping and electronic procurement also serve to erode loyalty and separate sellers from buyers by a wall of electronics. Now companies are threatened with losing human touch with their customers. Says Ellis, "All the change that's going on is as much a threat as an opportunity"

Business Services Industry

Go forth & multiply

Entrepreneur, May, 2002 by Mark Henricks

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