Follow Simon Caulkin on Twitter



Article Archive
2019
May
April
March
February
January
2018
November
October
September
August
July
June
May
April
March
February
January
2017
December
November
October
September
August
July
June
May
April
March
February
January
2016
December
November
October
September
August
July
June
May
April
March
February
January
2015
December
November
October
September
August
July
June
May
April
March
February
January
2014
December
November
October
September
August
July
June
May
April
March
February
January
2013
December
November
October
September
August
July
June
May
April
March
February
January
2012
December
November
October
September
August
July
June
May
April
March
February
January
2011
December
November
October
September
August
July
June
May
April
March
February
January
2010
December
October
September
2009
November
October
June
May
April
March
February
January
2008
December
November
October
September
August
July
June
May
April
March
February
January
2007
December
November
October
September
August
July
June
May
April
March
February
January
2006
December
November
October
September
August
July
June
May
April
March
February
January
2005
December
November
October
September
August
July
June
May
April
March
February
January
2004
December
November
October
September
August
July
June
May
April
March
February
January
2003
December
November
1998
January
1997
January
1996
February
1994
May


Rebooting management

Tue, 11th Nov 2014

J D Wetherspoon is a successful pub group with a long-term view. In contrast to the rest of the industry, sales are buoyant, and the company has opened 40 new pubs this year. But the news in its recent quarterly results that it had awarded its employees a 5 per cent pay rise sent its shares tumbling. On the other hand aeroengine maker Rolls Royce, which has had a poor couple of years, was rewarded by a boost to the share price after it announced it was cutting its workforce by more than 2,000, many of them in the UK.

Welcome to the new normal. Perhaps not surprisingly, Wetherspoon CEO Tim Martin is an exception in his willingness (and ability) to raise two fingers to the City. Most others are less brave. The cumulative effect of 30 years of of diminishing corporate courage and increasingly overweening finance is that the UK in 2014, the 13th most prosperous nation in the world, now has 5.28 million people, or one-sixth of the employed population, working for less than a living wage (currently defined as £7.85p an hour). Unemployment is falling, but the slack is being taken up by the self-employed, now numbering 1.7m, and more likely to be cab drivers than entrepreneurs. In today’s hour-glass shaped jobs economy, cab drivers, carers and pittance-earners in the ironically named sharing economy is all they’ll ever be. Real wages have been falling for seven straight years; as a share of GDP they have lost 10 percentage points since 1973. Only one in seven people in the UK (one in 18 in the north of England) says that they have felt the effects of the ‘recovery’; more than half believe the UK’s best days are gone. More austerity – much more is in the pipeline, and the climate of antagonism, tacit or overt, against immigration, Europe and the poor is the ugliest in my lifetime.

The underlying truth is: for most people there isn’t going to be a recovery. This is pretty much as good as it gets. As Paul Mason notes in his piece, it is financialisation – companies dancing to the tune of the insatiable capital markets – that is the primarily cause of widening inequality, not technology or globalisation, the two other usual suspects. In other words, business as usual has become the problem we need to solve. Capitalism UK (and US) style is broken, unable to provide not only luxuries but the basics: proper livelihoods for the employed, pensions for those retired, or reliable investment returns for all but a handful of CEOs and hedge-fund activists who thrive on market volatility.

This is the backdrop against which academics, managers and commentators (including this one) will meet this week in Vienna for the 2014 Global Peter Drucker Forum. The theme of the Forum, set up to commemorate the man who was one of the first and most influential of all management thinkers, this year is the ‘great transformation’: what it will take in management terms to get beyond today’s stasis and trigger a real recovery. It’s a worthy cause, and one that measures how far the discipline has diverged in the last 30 years from the human-centred ‘liberal art’ (his words) that the Viennese-born Drucker espoused.

‘We have arrived at a turning point,’ says the Forum’s launch abstract. ‘Either the world will embark on a route to long-term growth and prosperity, or we will manage our way to economic decline’. This puts managers in an unaccustomed and uncomfortable position. As the FT’s Andrew Hill put it in a penetrating piece, what has come to be management’s default mode – internally focused, often detached from purpose, numbers- rather than people oriented, with scant appetite for change – will suddenly no longer do. Quoting Henry Mintzberg, who pointed out that east Europeans pushed through obstacles to change 25 years ago because they ‘understood full well how enslaved they were by their system of governance’, Hill notes that not only have default managers lost sight of their part in perpetuating today’s failing system, ‘more worryingly they fail to recognise they have the potential to change it’.

One plenary forum session takes the bull by the horns to pose three questions: Should firms shift their focus from maximising shareholder value to adding value for customers and citizens? Should they change from narrow financial to more inclusive metrics? Should they abandon traditional hierarchical management for approaches that encourage initiative and creativity rather than compliance? To all of which the answer is yes. Drucker always insisted that the company was a social institution that could only harness the potential of its people if it fully respected them. If not a noble calling, management was a central resource of society whose ‘very survival … is dependent on the performance, the competence, the earnestness and the values of their managers’. As usual he was ahead of his time. Never was that more true, or a reset of the management default more urgent.

 

 

 

 

 


<< Back to Index

User comments

Keith R :: 12th Nov 14
Amen. These are Dickensian times, 'Hard Times'. Ruskin responded to those times (1862), with many observations pertinent to our times, in 'Unto this Last' with, for example: "The true veins of wealth are not in rock, but in flesh. The final outcome of all wealth is in the producing as many as possible full-breathed, bright eyed, and happy-hearted human creatures. Our modern wealth, I think, has a tendency rather the other way: and most political economists appearing to consider multitudes of human creatures not conducive to wealth, or at best conducive to it only by remaining in a dim-eyed and narrow-chested state of being." Not just re-boot; boot out. Out with dishonesty, arrogance, elitist entitlement, narrow self-interest. Make them redundant. In with care, kindness, respect, honesty, mutual interest and common sense. It's not that hard. Employ them.
Andy L :: 12th Nov 14
I say amen to both Simon and Keith for the article and your comment respectively!
Henning :: 14th Nov 14
In the late 1960s in the US, I headed up the community health care planning agency in metropolitan Pittsburgh in the US. Drucker was a powerful influence, and I'm encouraged that his wisdom is being kept in the light. Drucker insisted that corporate decision-making was misguided if the organization didn't have a clear view of its mission and its goals & objectives. He quite explicitly included non-profit human service entities in his focus. Our own mission was primarily to try to persuade community as well as teaching hospital trustees, senior managers, and medical leaders to focus on the long term, and on identifying the populations which they aimed to serve, and basing decision-making on the defined health care needs of those populations. This differed markedly from the usual focus on physical buildings and technologies to meet the needs (and ambitions) of the hospital doctors. And because the 25 or so local hospitals inevitably identified target populations which significantly overlapped with heighbou
Name:
Comment:
Check:6+9=