Blowing the lid on what top managers actually do

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The Independent Online
Wall Street financier Stephen Roach's recent change of heart may have helped put "downsizing" out of fashion, but that does not mean organisations are going to stop getting smaller.

Indeed, management consultants Richard Koch and Ian Godden suggest that the process has a lot further to run. In their new book Managing Without Management, they say too many managers are taking too much out of the companies for which they supposedly work.

Going beyond the enthusiasm for such concepts as "delayering" and "empowerment", they argue that "management is now constraining the growth of large corporations and preventing them from taking the next strides in growth and shareholder value creation. It is taking an increased share of the wealth, it is adding complexity to the decision-making processes and organisation structure and it is not devoting its time and effort to the marketplace".

There is nothing revolutionary about taking a dim view of management. The Canadian academic Henry Mintzberg effectively blew the lid on what managers did all day in his 1973 book The Nature of Managerial Work. But where Mr Koch, who is credited with turning around Filofax, and Mr Godden, a partner with international consultancy Booz-Allen & Hamilton, differ is in their view that this life of attending endless meetings and reacting to crises is the way it has to be.

They stress that they do not really want to abolish management - just most managers. Doing this requires dividing management into three categories: high-value, low-value and negative-value to customers. The latter should "definitely be abolished, more because of what it does to an organisation's ability to serve customers than because of its cost". The others should be reallocated from management to "doing".

This is essentially what ABB - the Swedish-Swiss engineering group whose chief executive is famous for cutting 90 per cent of headquarters' staff - has done. Personnel work, for instance, is carried out by line managers rather than by a huge corporate department. Similar initiatives have been adopted by its US rival General Electric. But Mr Koch and Mr Godden claim these two organisations are still too complex and too focused on internal issues as opposed to those of the customer.

Achieving a life without management depends on other factors, though. In addition to simplicity, this personal and unconventional leadership can become "the substitute for costly and inefficient management".

The problem, of course, is that many more people will lose their jobs. Some, no doubt, will be able to join or form the smaller organisations the authors say are increasingly taking the large corporations' market share. But, as Mr Koch admitted this week, there will be significant social and political repercussions.

Neither he nor his co-author has the solution for dealing with that situation. But they regard it as inevitable and see their book as an attempt to start the debate before it is too late.