Tuesday, August 5, 2008

The Management Crises

Engraving by John Byddell of Truth, Image via WikipediaRight now we are going through another burst of bubble caused by the sub prime lending by the most conservative institution of the Industry the banks. They were supposed to be the institutions that people can trust and place their life savings with them. The CEO's from banking industry are considered the pillars of the society. So what happened? It all can not simply be explained away by blaming it on the excessive greed of bankers. Something more deeper malaise at work here. As usual the tax payers will be paying for the bill that the bank failure will create. Another news recently was that GM lost close to 16 billion dollars. These are staggering numbers. Any other business with that kind of losses will have closed by now. Again some thing missing from the explanation provided by the mainstream presses for the loss.

It all shows that managing business has become very complex affair. People are expecting too much from the miracle worker CEO's who are consistently failing to deliver what they promise. As a result they have perfected the art of creating smoke screens. All of them need PR departments to avoid answers to hard questions. At the same time they will not let go their monolithic, hierarchical style of management. None of them are willing to learn how to manage complexity. Any time a problem comes around immediately a new administrative position is created to deal with the problem leading to creating even more complexity without any solution to the original problem.

Umair Haque at Harvard Business Review explaining edge economy and how Obama used the principles of Edge economy to win the democratic nomination. Even companies like Google are using the principle of "Edge Economy" effectively to win against well entrenched competitor such as Microsoft.

In this video he talks about the shrinking brand and how Google can become a brand name without investing lot of money in marketing and advertising.


Managing technology and technology related businesses is complex because of the need of large amount of information that is needed to manage knowledge workers. IBM for most part followed the old hierarchical style of management to serve the businesses who followed the same style of management. The next version of tech company who became prominent is Microsoft and had one technologist(Bill gates) and one marketer(Steve Ballmer) at the top. Even Apple had the duo of Steve and Steve. One Engineer and one marketer. Now if we look at the top echelon of Google it is a troika and all three top people have background in Engineering. Does that mean that in the future the high tech companies will be run by techies? A management focused on outcomes and delivering it not on empire building and obfuscation.
Zemanta Pixie

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