Management ‘Gurus’ Need to Create Some New Kool-Aid

02/24/2017 08:04 am ET

Management ‘Gurus’ Need to Create Some New Kool-Aid

If you take a look at the drums management theorists have been beating for the past several decades, some familiar themes come to mind, such as the wonders of entrepreneurialism, the necessity of comparative advantage, and the benefits of globalization. That’s fine, but wasn’t it always the case that business is a competitive landscape, that those businesses which innovate will have the first mover advantage, and that, in order to grow, businesses must expand beyond their home countries (unless they happen to be China or India). Just what are these ‘gurus’ telling us that we don’t already know?

Books such as “In Search of Excellence”, “The 7 Habits of Highly Effective People”, and “The One Minute Manager” are, in the end, selling common sense. Their messages resonate because individuals in business crave the ability to improve themselves, have something no one else has, and, ultimately, make more money. That’s all fine, but where there is real value addition in the process? Are these gurus really telling us something we really did not already know, or are they simply masterful at packaging what we already know into something that appears to many to be something they had no idea they knew anything about?

Given that we are living in an era of disruption, should it not be the case that these business gurus should themselves be disrupted, and promote the art of disrupting? Yes, we understand that businesses operate in a competitive landscape (they always have and they always will), but why isn’t more time being spent talking, for example, about the impact of the consolidation process currently under way in industries ranging from airlines to food production to technology? Rather than becoming a more competitive landscape, the opposite has become true in many sectors of the economy -- the companies engaged in consolidation are generating record profits. Does this mean that all that talk for all those decades about being more competitive is just bunk?

Consider also that, despite all the crowing about the importance and need for entrepreneurialism, the rate of new business creation has actually declined in the U.S. since the 1970s. Why, despite all the billions of dollars spent in the pursuit of entrepreneurialism since then, is that the case? Also, instead of enhancing organizational efficiency over the past several decades, many of the businesses that have embraced good governance, as they should, have become sclerotic -- devoting enormous resources and clogging up approval processes to ensure they are doing the right thing the right way. Why is this not a primary focus of the gurus?

One could even argue that, in many cases, the very Kool-Aid businesses have drunk from the gurus has contributed to preventing managers from thinking critically about the bigger picture, focusing instead on micro-level issues such as decision making style, market-specific penetration, and quarterly financial performance. This is occurring while the world is starting to spin in a different direction and march to a different tune. Businesses can get so caught up in short-termism and fine tuning that they may fall further and further behind the very curve they are trying so hard to stay in front of.

Since the business world has become so accustomed to relying on the gurus to tell them what to do, the gurus have an obligation to stop peddling the same old snake oil. Who is talking about how globalized the world was between 1880 and 1914 -- until war broke out and fascists subsequently determined the course of history -- and the parallels between then and now? Globalization always had a down side, and was never meant to last forever -- but the gurus chose not to talk about it. It is always just a question of time until economic nationalism reappears, but the gurus have done a poor job of addressing the nexus between economics and politics and its impact on business, which is the real story.

If the business gurus want to do their brethren a real favor, they will address not only how to survive, but how to thrive, in this era of disruption. The benefits of entrepreneurialism, comparative advantage and globalization are yesterday’s topics. Today, global business is as much about having a foreign policy as it is about having a realistic approach toward corporate social responsibility. Current topics include how to anticipate change and create and maintain a defensive posture, creating products that contribute to the well-being of people, and wanting to do the right thing not because it is fashionable or profitable, but because of a desire to adopt a corporate culture that loudly proclaims who a company is and what it stands for. Let’s see if the business gurus can tackle that.

*Daniel Wagner is Managing Director of Risk Cooperative and co-author of the book “Global Risk Agility and Decision Making”.

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