Fri, Jan 09, 2009

Business

Saturday Reader

'New' management truths sometimes started as heresies

By Cecil Johnson
McClatchy-Tribune News Service
Tucson, Arizona | Published: 09.06.2008
Having a tradition of allowing space for heresy accounts in huge measure for the longevity and prosperity of such companies as Toyota, General Electric, Procter & Gamble and Royal Dutch Shell, prolific business author Art Kleiner contends in this updated edition of his 1996 best-seller, "The Age of Heretics."
Kleiner reprises Thomas Huxley's defense of Charles Darwin's theory of natural selection — that new truths begin as heresies — and argues that the same principle holds true in the realm of management thinking.
"The most effective management ideas follow a life cycle — from heresy to outlier (championed by a small group of people) to ingrained practice to conventional wisdom," Kleiner writes. "In the process, if they are genuinely powerful management ideas, they distinguish the organizations that adopt them."
One of the management heresies focused upon by Kleiner that has morphed into accepted management wisdom of the highest order is the Toyota Production System, which embraces much of the thinking of heretical quality advocate W. Edwards Deming. That system, Kleiner reminds the reader, entrusts teams at each station in the assembly process to control their local operations. Performance is not evaluated on a predetermined numeral basis.
Managers in that system undergo rigorous training to sensitize and harmonize them to the whole operation. The emphasis, once considered heretical in the Western world, is on delivering quality rather than mere numbers and eliminating the costs that accrue to fixing mistakes.
That, of course, Kleiner points out, is in line with the original heretical thinking of Henry Ford, for whom making money was not the first priority. Kleiner reminds the reader that before Ford became a numbers-oriented manager, he took the view that if one produced a good affordable car, employed a lot of people and paid them good wages, one would make a lot of money incidentally.
Higher thinking on management, as Kleiner sees it, divides, by and large, between those who emphasize numbers and those who see the corporation as something greater than just an engine for making money. And Kleiner clearly comes down on the latter side.
"Without corporations, no efforts to make the world better can succeed because corporations are responsible for infrastructure — not just the networks of telecommunications and transportation, but the distribution, commerce, energy and financial infrastructures that determine the quality of life in general, inside and outside the commercial world," writes Kleiner.
Seldom has the case for corporate social responsibility been made as convincingly as it has in this comprehensive, incisive, well-wrought historical retrospective.