Robert Locke and J-C Spender – Confronting Managerialism

Confronting Managerialism: How The Business Elite & Their Schools Threw Our Lives Out of Balance

Robert R. Locke and J-C Spender, Confronting Managerialism: How The Business Elite & Their Schools Threw Our Lives Out of Balance (Zed Books, 2011)

Robert Locke and J-C Spender have written a rather excellent book focusing on the history of what they call “managerialism” (a term they adapt from Alfred Vagts‘ concept of “militarism”) in the United States.  Their specific formulation of the concept of “managerialism” is quoted from an earlier article by Locke; it is:

“What occurs when a special group, called management, ensconces itself systematically in an organization and deprives owners and employees of their decision-making power (including distribution of emoluments) — and justifies that takeover on the grounds of the managing group’s education and exclusive possession of codified bodies of knowledge and know-how necessary to the efficient running of the organization.”

Much of the book consists of comparisons of businesses and schools in the United States (plus the UK), Japan and Germany.  What they conclude is that the ideology of short-term, predatory financial gain without regard for a firm or economy as a whole that predominates in the United States is not as prevalent in Japan or Germany.  They find better outcomes, in terms of factors like firm longevity and well-being of workers, outside the United States.  Their strength is a very even-handed tone, backed by ample research.  The cover of the book and the series title “economic controversies” perhaps make this seem like a harsh screed or a sensationalist tract.  No doubt, this is polemic to a point, but the authors largely let history speak for itself, and spend most of their effort pulling together data that tends to be ignored or concealed by business schools.  Nothing about that approach is inflammatory, and their conclusions are extremely moderate (nowhere do the authors suggest abandoning capitalism, for instance).  Ultimately, their conclusion is that business schools in the United States, which don’t exist in the same form elsewhere in the world, have an overall negative effect on business and society, and they think management in U.S. companies should be more inclusive of people with backgrounds in production.  Although they don’t spend many pages advocating any particular system of business management, other than to try to discredit the application of neoliberalism, one detects sympathies for the kinds of Rhineland capitalism of Germany (as Locke has written about elsewhere) or the W. Edwards Deming-inspired, engineering-led “total quality” management approaches of Japan.  They see those other countries as providing better “balance” between competing interests of managers, owners and employees than in the United States.  For that matter, they see the software and computer companies of Silicon Valley in the United States outperforming East Coast businesses.

The book’s rather direct treatment of morality and ethics, as a symptom of business school ideologies, is welcomed.  There is a fairly frank discussion of how much of contemporary business practice has to do with power — who has it and who doesn’t.  Management in the United States acts as a caste that posits they have valuable but still generic “management” skills that uniquely position them to hold a disproportionate amount of power, to the exclusion of workers, etc.  The authors contrast Japan, where management tends to rise through the ranks and have a greater understanding of substantive operations across entire companies.  They carry this analysis over to the ways in which business schools operate, and note how academic “prestige” is a rather direct counterpart to the more purely economic power of businesspeople.  The authors also delineate how religious practices contrast sharply with the types of amoral, ethics-free neoclassical economics adopted by modern American business schools.  They provide intriguing evidence of how religion in America has shifted from ones that emphasized social responsibility and charity to ones (often located in suburbs) with an egotistical focus on the salvation of believers. They also mention the reintroduction of Confucianism to Chinese state capitalism, and resistance of Islamic economics to neoclassical economics.  It is somewhat unclear whether the authors believe religion, either generally or in specific forms, is a countervailing force that can push back against business in a pragmatic sense, or if it even should — more interesting questions since the Catholic Pope Francis started speaking out against unfettered capitalism and inequality in 2013.  This is somewhat of a loose end in the book.

The comparisons being limited to Japan and Germany naturally provides only a limited range of data.  We get nothing from Spain, Brazil, India, Canada, or France, for instance.  It would be informative to take Locke and Spender’s analysis and apply it to other countries, to see how they compare.

As is common with writing of this sort, there are some recommendations at the end.  And as usual, it is possible to accept all the detailed analysis of historical parameters without necessarily accepting the policy recommendations.  Still, Locke and Spender suggest reforms of corporate management structures into discrete supervisory and management levels that require employee participation (as in Germany) and that prevent control of both levels by a single CEO.  They make an intriguing argument there, noting that business schools and business leaders would absolutely fight these things because they would diminish their power.  Yet they also present a compelling basis for why so many other groups, like ordinary workers and absentee shareholders, have aligned interests that might provide a path around the business school trained managers.  Still, in the last few pages they make statements about how no one today is advocating for centrally planned economies.  Really?  (though perhaps this depends on what you interpret “central planning” to mean).  Contemporary evidence from Venezuela, Bolivia, Cuba, even Egypt and Occupy Wall Street might suggest otherwise.  Even just within Germany, a recent poll found that a majority of residents of the former East Germany would prefer to return to communism.  A major publisher also released a book about imagining living in a socialist USA.  While Locke and Spender advocate for flatter, more equal management structures than predominate today in the USA (Spender co-wrote a later book, Strategic Conversations, along those lines), there is a curious lack of evidence as to whether Germany and Japan present any sort of optimal balance in that regard.  The German school system may be better than the United States, but could Germany do even better?  What would a comparison to the worker-owned cooperative Mondragon in Spain add to the discussion, when it potentially has an even flatter organizational structure than is typically found in Germany and Japan? Do the sorts of German employee participation is supervisory roles resemble the kinds used in the former Yugoslavia, which arguably pitted workers against each other? Hasn’t the German works council and co-determination model been exposed as something of an illusion, using Volkswagen as an example?  Or perhaps take this critique:

“Today, the two superpowers, the USA and China, relate more as Capital and Labour.  the USA is turning into a country of managerial planning, banking, services, and so on, while its ‘disappearing working class’ (except for migrant Chicanos and others who work predominantly in the service economy) is reappearing in China, where the majority of US products, from toys to electronic hardware, are manufactured in ideal conditions for capitalist exploitation: no strikes, limited freedom of movement for the workforce, low wages. . . . Far from being simply antagonistic, the relationship between China and the USA is, at the same time, deeply symbiotic.  The irony of history is that China fully deserves the title ‘workers’ state’; it is the state of the working class for American capital.”

The authors don’t really get into the modern practice of using outsourcing to shed responsibility, inscribing discrimination, exploitation and an imbalance of power into the mere existence (but precisely not the explicit terms) of contracting agreements across national borders.

These questions would require a much lengthier book.  It is, however, fair to raise these concerns because the subtitle of this book posits that managerialism “threw our lives out of balance.”  This implies that our lives used to be in balance, or at least that the authors know what a proper balance would look like.  It also raises the question of whether, say, Chinese and East Asian laborers are part of this “us” (“our”).  The pseudo-global perspective of the book does come up a bit short there, fitting the theoretical frame to the author’s geographically-constrained background knowledge — like a tailor fitting a suit to the available cloth regardless of whether the suit fits the wearer.  But, on the other hand, contrary to the book’s provocative subtitle and cover image, the book sets its sights on something rather more specific: proving that — contrary to its claims — U.S. business school managerialism is not optimal on its own terms (they don’t try to quantify how sub-optimal it is).

Suffice it to say, Locke and Spender present convincing evidence that the current organization of business management and business schools in the United States is not optimal.  The current system benefits only management and its academic cohorts.  They obliterate the notion that the system of business management used in the United States is inevitable, or that there is no alternative (TINA).  The authors’ exposition of the issue is as clear as can be hoped, in an area in which obfuscation too often dominates.  Most importantly, they draw out the question of power that is routinely (and, for some, conveniently) ignored in the business world.  They also provide more extensive historical research than most commentators in this area who have drawn similar conclusions.

Further reading: Edward S. Herman, Corporate Control, Corporate Power; Adolph Berle & Gardiner Means, The Modern Corporation and Private Property; James Burnham, The Managerial Revolution (this book earlier coined the phrase “managerialism”); Willard Enteman, Managerialism; Alfred Chandler, Jr., The Visible Hand; Matthew Stewart, The Management Myth; V.I. Lenin, Imperialism: The Highest Form of Capitalism

Mary Walton – The Deming Management Method

The Deming Management Method

Mary WaltonThe Deming Management Method (Dodd, Mead 1986)

Mary Walton is a journalist who wrote a sympathetic (and authorized) book summarizing the key points of W. Edwards Deming‘s management methods, primarily as taught in the regular seminars he gave on the topic. Deming wrote books himself.  The best-known is Out of the Crisis (1982).  A question that surely comes to mind here is, “Why read a journalist’s summary of Deming’s seminars when I could just read Deming myself?”  Well, Deming was a theorist and a practitioner — currently unavailable for seminars due to his death in 1993.  As a writer, his prose could be choppy, repetitive and rambling.  This is a quality of many theorists — Deming preferred researchers to pure teachers unconnected to innovative research, writing “that the prime requirement for a teacher is to possess some knowledge to teach” and that “[n]o lustre of personality can atone for teaching error instead of truth.”  Certainly, readers can go directly to Deming’s writings.  But Deming really made a name for himself giving four-day seminars and doing consulting directly with companies.  During his lifetime, most acolytes learned from him in person rather than through his books.  Therefore, Walton’s book is useful for readers who want a high-level summary, and, above-all, something that is easy to read.  Moreover, this book is suited for readers who wish to approach the subject on their own, without hiring a consultant versed in the Deming Management Method or taking one of their seminars.

There are many, many, many books on Deming, offering extensions, reformulations, and other addenda to his work.  Walton’s book has remained one of the best-known and most popular of them.  That is largely because it is one aimed at the most general audience.  If you are looking for case studies, Walton wrote another book, Deming Management at Work (1990) on that topic.  Other books give you more on the statistical methods, particularly Deming’s own writings.  Others are written more like guidebooks to accompany consulting seminars, like Four Days With Dr. Deming: A Strategy for Modern Methods of Management (1995).  There are also books fairly similar to The Deming Management Method in terms of being an overview, like Rafael Aguayo‘s Dr. Deming: The American Who Taught the Japanese About Quality (1990).  There are even edited selections of Deming’s writings available, like The Essential Deming: Leadership Principles from the Father of Quality (2013).

There is maybe some need today to understand the context in which Deming rose to international renown.  At the core of his methods were the use of statistics to understand processes.  Also, he advocated management methods that involve “continuous process improvement” to set the stage for the use of his statistical tools.  The legend is that he tried to introduce his theories at American manufacturing companies, but they would not listen.  After WWII, the Japanese economy was absolutely devastated.  The Japanese welcomed American consultants like Deming (and Joseph Juran, etc.) to help rebuild their manufacturing base.  Deming was sent there in 1947 by the US government to assist.  With Deming’s help, and the help of other American consultants, the Japanese economy went from a reputation of making low-quality junk (a reputation sometimes assigned to China in the early 2000s) to becoming an economic powerhouse, making some of the highest quality products in the world.  The Deming Prize was established by the Union of Japanese Scientists and Engineers) in his honor (though in large part due to Deming’s donations).  Then, into the 1970s, the U.S. economy slowed.  American goods developed a reputation for being shoddy and low quality.  Take for instance the 1977 Johnny Cash song “Wednesday Car.”  The lyrics describe all the reasons the auto workers made crummy cars most of the time, and Wednesday was the only day of the week when they built them properly.  So you hoped you had a Wednesday car.  The rest were lemons.  It may be hard to believe, looking back, that companies would sell products that were so low quality that they didn’t even work when new.  But they did.  Harley-Davidson motorcycles nearly went out of business for those reasons, when they were owned by AMF.  Deming’s methods made their way to the United States.  A 1980 episode of the TV show NBC White Paper entitled “If Japan Can…Why Can’t We?” featured Deming and launched a surge of interest in his work stateside.  He was largely unknown to industry in his native country before that television program.  It was in that late-career period that many of the most popular books by and about Deming came into being, the present one included.

Walton’s book is organized into three parts.  The first includes an introduction to Deming and his personal background.  It also includes a general summary of his program for management.  Toward the end of his life, Deming put forward his 14 Points.  Walton summarizes these in chapter two.  These “points” range all over the place.  Some are affirmative things to do, while others are things to eliminate.  Deming’s four-day seminars were built around these fourteen points.  Part two (chapters 5-20) covers each “point” in detail, along with Deming’s “Seven Deadly Diseases,” which were things to avoid.  There is also a chapter called “Doing It With Data,” which gives very generalized examples of types of charts for representing data in meaningful ways and explains how they can be used as quality improvement tools.  As that chapter opens, “In God we trust.  All others must use data.”  Some charts are self-explanatory.  Those tend to be discussed the most.  The more complicated ones, like control charts, aren’t explained in sufficient detail here for direct implementation.  The third part of the book gives case studies of companies that have implemented Deming’s methods, with an emphasis on boasting of the big-shots and CEOs of large companies that adopted Deming’s methods.

“The Parable of the Red Beads” is described in chapter four.  Of all Deming’s teaching methods, this parable is one of his most effective devices.  Walton positions it in the first part of her book, and it serves to encourage readers to seriously engage and accept the Deming method.  The parable itself is an example of how management strictly controls worker autonomy and then tends to blame the worker for performance that cannot be corrected by the worker within her narrow sphere of control.  It also is a lesson on the correct use of statistics, and mathematics more generally, illustrating how false patterns can be alleged on the basis of what are really transitory fluctuations.  Deming makes the kinds of points that Thorstein Veblen made contra neoclassical economics around a century ago, that the very definition of a system is itself a variable that cannot be subsumed in a mathematical analysis.  In this way the question of what is “optimal” begs the question of what is being optimized, and can allow certain groups to benefit by obscuring considerations outside the mathematical optimization calculation.  Or, as an industrial engineering statistics professor once put it to me: you can always challenge the assumptions.

The parable highlights one of Deming’s secrets to success: his charm.  He made a lot of funny asides and jokes.  He seems more personable than the stereotype of an engineer or scientist.  This might be a key reason he is more well known than some of his contemporaries, like Juran.  Mary Walton does a fine job bringing out Deming’s humor without pandering or reducing everything to just the jokes.

Part three of this book is easily the least valuable.  It opens with a discussion of companies in Japan fiercely competing for the Deming Prize.  However, there is not really enough context given to understand why some companies considered it important.  The focus is too narrow on the areas in which Deming was involved.  There are also discussions of American companies Deming worked with.  An important example is Ford Motor Company, which created its long-time slogan “Quality is job one” upon adoption of Deming’s methods and launched their massively successful Ford Taurus and Mercury Sable automobile lines.  Millions of these cars were sold.  Together they were one of Ford’s five best-selling models, and its longest-running.  It was certainly an about-face for the company.  My grandfather worked in a Ford plant briefly, and he told a story about running out of hoods so the workers grabbed one that was out in a yard rusting.  They painted it and put in on a car!  Deming’s efforts helped remedy that kind of problem.  However, the chapters of part three of Walton’s book are a tough read because they constantly describe epiphanies that executives have about Deming’s methods, in a way that fawns over the prestige and importance of these businessmen (all men, mind you).

What happened to Ford since then?  The Taurus was successful, but the company focused more on sport utility vehicles (SUVs) in the 1990s.  A major scandal took place with regard to Firestone tires on the Ford Explorer SUV that were prone to tread separation and blow outs.  One study suggests that after the Japanese company Bridgestone (ahem) purchased Firestone, certain union busting activities were undertaken to lower pay and extend working hours.  At a particular Decatur, Illinois plant, replacement workers (“scabs”) were brought in who crossed a picket line of striking workers.  Defects in tires from that Decatur plant during the labor dispute were fifteen times higher than at other facilities.  Deming gives brief examples of these sorts of problems, and he ties this to his point of “driving out fear,” namely, giving workers job security.  Unions often supported what he tried to do, because of his support for better training, avoidance of layoffs and firings, and an altered relationship between labor and management.

A Deming-focused approach would have helped Firestone, and Ford, but his methods were increasingly marginalized in the 1990s.  When he said that “Today’s corporations are controlled by financial wizards and lawyers who airily manipulate figures but do not make substantial changes in production and quality[,]” (p. 90), that seemed to be increasingly the case even at companies Deming once worked with, and at Japanese-controlled companies too.  These sorts of incidents suggest that Deming’s methods won’t always take hold permanently, if they ever take hold in the first place.  Looking back with hindsight on part three of Walton’s book, it is clear that there has been a further shift in social and economic arrangements since the 1980s, and not always in the direction Deming advocated.  But copious examples exist that where his methods are applied, quality does improve.

Deming’s politics?  These must be discussed, because they are central to why some adopt his methods and why some resist them.  Walton mentions that Robert Reich (then, a professor at a business school, later, Secretary of Labor) has a similar political outlook.  That is very, very accurate.  Basically, Deming can be considered a kind of center-left “New Deal” liberal.  He advocated for meaningfully increased worker involvement in production, and for management to take responsibility for leadership and all failures.  This results in a flatter organization, but one that fundamentally remains structured around top-down management.  One paper that tried to graft a “theory” onto Deming’s work (supposedly lacking in Deming’s own work) said that one of the seven key concepts was “visionary leadership”, which presupposes a top-down hierarchy.  Just like the New Deal sociopolitical compromise, workers were given a stake and their interests taken into account, but the bargain stopped short of any sort of codetermination that shared leadership with them.

Deming was part of a second generation of scientific management, improving and expanding upon (and replacing) systems put forward by Frederick Winslow Taylor in the early 20th Century.  Although some saw Taylor as degrading working conditions by imposing more control over workers, and simply being a bully, others saw Taylorism as improving matter-of-fact engineering efficiency and preserving the autonomy of engineers from finance.  Both sets of observers had points that are well-taken.  The rigidity of Taylorist insistence on the “one best way” (actually a phrase coined by Frank and Lillian Gilbreth) gave way to the “Deming wheel” (also called the Shewhart Cycle, after the mentor of Deming who actually developed it) of continuous process improvement: plan, do, study/check, act (PDCA).  At bottom, Deming, like the Taylorists and technocratic/technocracy movement groups like Technocracy, Inc., advocated for the primacy of engineering standards over financial standards for business management.  Straight out of Veblen, Deming wrote things like “Paper profits, the yardstick by which stockholders and Boards of Directors often measure performance of top management make no contribution to material living for people anywhere . . . .  Paper profits do not make bread: improvement of quality and productivity do.”  He also said, like the classical economists, “Paper profits do not make the pie bigger.  They give you a bigger piece.  You take it from somebody else.  It doesn’t help the society.”  (p. 90).  He also basically argued for engineering school and on-the-job education over masters of business administration schooling.  At one level this is a normative, political position.  It is a question of which group has more power within a company and the economy writ large — after all, the powerful decide what are the metrics for success and performance, so this is a gating issue as to determining who succeeds and who fails.  So, predictably, Deming doesn’t address the point directly.  In fact, few if any management gurus mention it.  But it comes up repeatedly in an indirect way, and has an impact on the success or failure of implementations of the program.  For a direct analysis of these phenomena, look to sociologists like C. Wright Mills, who saw “management science” as just an elaborate manipulation of workers.  In this light, Deming might be considered a (benevolent) technocrat rather than a (harsh) autocrat, because the prime role of management and technical experts is preserved through a distancing maneuver.  Just like John Marshall the first Chief Justice of the U.S. Supreme Court in in early judicial cases, Deming confirms the power of management in certain areas by relinquishing power in others.

He oscillates into normative questions frequently.  Walton’s book repeats numerous times Deming’s exhortations (ironically, also in a chapter about eliminating exhortations and slogans) about what is management’s job or responsibility.  In this book, at least, this argument never rises above either a kind of naturalistic fallacy, insisting that because management exists and controls workers that they properly ought to do so, or simple tautology.  Here the kinds of thorny management/labor relations issues that historian David F. Noble wrestled with (Forces of Production) come to the fore.  Yet to his great credit, Deming’s use of statistics in the service of a customer focus tried to constrain the subjective judgments of management and instead place an emphasis on matter-of-fact quantitative measures of serviceability to society at large over things like stock price and profits (as an aside, Deming wisely warns against reductionist thinking that only looks to the measurable, emphasizing the importance of the unknown and unknowable).  He may have preserved management and the technocratic roles, but he did so by advocating limits on their discretion and searching for standards (quality) that were beyond managers’ direct control.  Still, his insistence on the necessity of knowledge for good management and leadership stops a bit short of explicating what kind of knowledge matters.  Again, Deming glosses over the political question of how good vs. poor knowledge relates fundamentally to the divergent interests of different groups.  At least this in the impression given by the high level at which Walton’s book operates.

American companies should export anything except their management methods, Deming joked.  “Failure to understand people is the devastation of western management.”  (p. 248).  He frowned on American managerialism, and criticized (though at times supported discrete aspects of) management theory coming from business schools.  For instance, Deming regularly wrote and spoke about the rejection of “management by objective” (MBO) or “management by results”.  This was a direct attack on other management consultants like Peter Drucker, who might be seen as financially-oriented, center-right (aristocratic liberal) counterparts that branched off Taylorism in another direction, and who were definitely associated with business schools rather than engineering schools (though even in ancient Rome, Crassus set productivity targets for his slaves). An advantage that Deming had over the likes of Drucker is that there was a long historical record of successes associated with Deming’s methods in the Twentieth Century, particularly from Japan.  Even more recent studies tend to show Deming’s methods are effective (even if some of those studies use methods that could fairly be questioned).  Drucker and his followers have no such track record, and Drucker supposedly walked back on MBO later in his life.

There is a lot of writing trying to update Deming to present conditions.  Some ask, “Are Deming’s 14 Points Still Valid?”  Others focus on the “Deming Legacy.”  Some of these commentaries are sympathetic, others not so much.  There have been valuable critiques that take Deming and test and expand upon what he said.  These are some of the most useful writings of this sort.  For instance, some scholars have noted the cultural contingencies that go a long way to determining the success or failure of Deming’s methods in practice.  People like Robert Locke and J-C Spender have written about this stuff, and they note that in Japan there are certain cultural practices that have been taught in schools that encourage flat organizations and provide “management” or “leadership” skills to all students that emphasize collective, bottom-up responsibility.  In other words, those skills are (or at least were) not cordoned off to only a certain class of “managers” in Japan as is more common in the United States (cf. The Visible Hand).  They also talk about how in Germany post-WWII laws give rank-and-file workers a seat on boards of directors, thereby allowing codetermination by giving workers direct access and power, albeit partial, to set the leadership direction of a given company.  The third part of Walton’s book is the most deficient in this regard.  While it does provide examples of success stories, replete with descriptions of challenges faced, it does not have the level of detail to rigorously prove the efficacy of Deming’s methods in the same way Deming advocates for data-driven quality improvement within an organization.  This is not to say Deming’s methods are ineffective, but to say that Deming never established any sort of comprehensive list of factors or preconditions necessary for his management method to work.  Others have tried to do so, mostly posthumously.  But his examples overwhelmingly focus on the United States and Japan.

There is another area in which Deming’s views demand more scrutiny.  His views on economics and international trade were, unfortunately, quite naïve.  He often would make unsupported pronouncements about how quality was the difference between national success or failure.  This was a very self-serving position.  While no doubt, quality matters, Deming had no basis for his often reductionist statements that it was the sole determinant of success or failure — other than the fact that “quality” was the sermon he preached.  When it comes to international trade, Deming advocated for free trade and the abolition of protectionist policies (traditional Southern Democratic policies that pre-date the New Deal, but also carried over into the modern Democratic Party platform that was supported by capital-intensive industry).  Historically, economic protectionism has been pursued by all Western industrial nations that have risen to global prominence, including the United States, and Japan followed a version of the same protectionism.  To overlook that policy trajectory is to be ignorant of economic history.  Indeed, numerous peripheral and third world countries have adopted trade liberalism and the “free trade” regime, and they have uniformly shown either no gains, or losses.  Deming said nations should not behave like colonies, yet he unwittingly endorsed policies that promote colony-like status — for other nations. Indeed, the reconstruction of Japan’s economy after WWII was part of a conscious strategy to create U.S. zones of interest as an extension of the Bretton Woods system to suppress the economic ambitions of the UK and France (as well as cold war rival the USSR); the 1985 Plaza Accords confirmed Japan’s subordinate role under a revised, post-Bretton Woods economic paradigm.  Moreover, manipulation of currency valuations, raids on currencies to crush central banks, etc. may be somewhat immoral acts, but they do happen, and they undermine “free trade” regimes.  Whether they should be used or not, they are used by governmental and private interests in point of fact, and these sorts of thing dominate over concerns like “quality”.  Deming offers no useful commentary on this issue, and actually confuses the matter somewhat, at least within the scope of what Walton’s book recounts.

Another phenomenon is the way companies take “poison pills” by loading themselves up with debt to avoid being taken over by corporate raiders, being dismantled and the pieces sold off to the highest bidders, has been pursued by management since the 1980s.  There is no “quality” possible when a company is dismantled.  Deming quoting biblical scriptures seems unlikely to convince Wall Street financiers that they are wrong about greed being good.  He spoke and wrote about how this was indeed a problem, and he thought government regulators at the SEC should address it.  But, they didn’t, and it is as much a legislative problem with the tax code as anything (caused by placing higher taxes on productive labor than unproductive “capital gains”).

Deming also said that monopolies should be encouraged because they lead to better quality.  This view fits with an outlook that places engineering standards of efficiency to the forefront, because it is easier to impose engineering standards when engineers have power to do so without claims on that power from ruinous competition (or from finance).  But it also overlooks the problems inherent in monopoly.  Who controls a monopolistic enterprise?  Who holds a monopoly accountable?  Even if customers benefit, do workers?  And why not go a step further and nationalize already monopolized industry (Rudolph Hilferding advocated as much)?  Here we have those questions of power that Deming doesn’t directly address.  This also presents Deming’s classical liberalism in stark light: he wants industry to move to the left, but only to a point, and without any real justification for where that line is drawn.  Could quality and productivity be furthered by eliminating “management” and (absentee) owners entirely?  Maybe, or maybe not.  What is significant is that Deming doesn’t consider these questions.  But as another data point, consider that Aleksei Gastev was a scientific management advocate in the Soviet Union and he was executed during Stalin’s Great Purge.  Is this evidence that scientific management was viewed as a threat to central planning, whether communist or capitalist?  Probably.  Workplace democracy, a concept with origins attributed to the writings of Jean-Jacques Rousseau that is premised on an opposite model, was found lacking even in the communist USSR where real power in companies laid in the hands of a few directors — something Tito did differently in Yugoslavia, or at least attempted.  Indeed, Deming’s approach is quite different from Veblen’s advocacy of a “soviet of engineers”.  The “customer focus” of programs like Deming’s do nothing to alleviate this problem, and probably exacerbate it.  If customers aren’t willing or able to support jobs, what then for workers?  And who selects which customers to focus on?  A comment by Locke and Spender is quite relevant here, particularly in view of Deming’s repeated reference to morality and the responsibilities of management:  “The appeal to the personal morality of the managers leaves the student unaware of the importance of systemic morality — the impropriety when one element within a firm is a privileged caste that is exclusively empowered to decide moral issues.” (Confronting Managerialism, p. 104).

Deming frowned on “employee involvement” programs (particularly those that resembled MBO), which he likened to “instant pudding,” because these programs tended to be used on a short-term basis and then be forgotten, or never give workers enough authority in the first place to succeed in the long term.  Deming had good intentions, but those aren’t always enough.  He wrote that “Everyone doing his best is not the answer.”  He seemed to need some of his own medicine when it comes to certain economic and political questions.

Especially with the rightward shift of American politics in the neoliberal era, many criticize or ignore Deming, favoring the more unabashedly right-wing management gurus like Jim Collins, et al.  If you are reading this, you probably know who these guys are.  They always seem to praise the kinds of cut-throat CEOs who do regular, mandatory layoffs (Deming insisted on a moral obligation to not fire people and to find a way for them to stay and succeed).  Even knowledgeable writers on business sometimes criticize Deming.  But rarely is there any explanation for these views, which come across as extremely petty provincial turf wars among the various gurus and academics.  At the fringes, however, there are some commentaries on and critiques of Deming from the left, which is to say left of Deming’s politics.  At bottom, Deming was one of the people pushing to recast and thereby strengthen New Deal-style political coalitions, and he rose to prominence precisely when that coalition was coming apart.  But aside from his quasi-celebrity status, his major career achievements can be better explained as anecdotal expressions of the generalized geopolitics of the post-WWII era than through the isolated and independent merits of their “success” in industry.

At its best, Deming’s management method did allow a focus on “quality” in a way that rejected calls to focus on price directly, or to have managers with more power repeatedly blame workers with little or none for stock price performance failures.  He focused on intrinsic motivators (like an instinct of workmanship and idle curiosity) rather than extrinsic motivators (like pay for performance, performance reviews, quotas, etc.) — something that social science has validated again and again.  Fear-based extrinsic motivators were especially problematic in Deming’s view.  A contemporary example from pop culture is on the cartoon show Adventure Time With Finn and Jake, in which the character The Earl of Lemongrab shrieks at his subjects, “Unacceptable!” and throws them in his dungeon for non-compliance with his whims (“lemon ways”) — though similar real-world examples abound.

Deming’s program, generally, and Walton’s book, specifically, are not the final word on business management.  Still, Deming’s approaches are much more sound than the vast majority of business management “science” being peddled by consultants and academics.  His method is a substantial step above most.  Yet, his program was not without its own flaws, and might be criticized for not going far enough to advance workplace democracy, or for not explaining the leap from validated statistical methods to leadership principles not directly premised on them.

Walton’s book aims for a level of generality that makes it suitable for readers without backgrounds in math and statistics, or engineering.  In that, it might be easily dismissed as no deeper than all the junk science business guru books out there.  Certainly, the case studies and the first part of the book that makes an argument for the relevance of Deming’s methods has inevitably lost some luster as the passage of time (since 1986 — the same year the film Gung Ho was in theaters) has changed the contextual reference points of most readers.  It also would be fair to characterize this book as written at a nearly remedial reading level (this characteristic it shares with most popular business management books).  If more depth is desired, Aguayo’s Dr. Deming would be a good alternative, as would simply reading Deming’s own books and articles.  For general and business audiences, though, this book remains probably the best written introduction to Deming’s management method.  The cursory treatment of most of the concepts can be pardoned because this is a book summarizing a mature program.  There is more detail available (elsewhere) for anyone who wants it.  This is not like those faddish business management books that are flimsy and unsupported and present a program that is basically novel and untested.  The Deming Management Method is worth reading, for the right audience.  It represents only a small step toward improving the operations of productive enterprises.  It still takes a step forward.  That sense of orientation and direction forward, in the sense of economically productive rather than non-productive results, is the book’s most important contribution.  Once oriented in that way, readers may need to look to more detailed books on statistical quality control.

*Unless cited to a page in the Walton book, all other Deming quotes above are from The Essential Deming. 

Nobert Häring and Niall Douglas – Economists and the Powerful

Economists and the Powerful

Nobert Häring and Niall DouglasEconomists and the Powerful: Convenient Theories, Distorted Facts, Ample Rewards (Anthem Press 2012)

An interesting book on a topic that needs more widespread discussion. Häring and Douglas address the biases and fallacies that are pervasive in mainstream economics (long dubbed “the dismal science”), and gather evidence as to how those have developed and been reinforced because they favor the powerful. It’s a good effort, though a few limitations also deserve discussion due to the criticality of the topic. On the spectrum of political economists, the authors are highly supportive of Irving Fisher, and the post-Keynesian Australian economist Steve Keen who recently revived some of Fisher’s theories, as well as Daron Acemoğlu and a few others. On the whole, they somewhat self-consciously take a “centrist” or “compromise” approach that insists capitalism needs to be reformed in order to save it — a tactic sometimes referred to as “economism”. This leads them to primarily discuss the work of economists who utilize the same methods as the dominant neoclassical schools that favor neoliberal politics but reach conflicting, non-neoliberal conclusions. They devote little space to discussions of wholly different theories that might merit further empirical study. A number of times they stress that they are not advocating for socialism, and that nationalization is not necessary. Curiously, they offer no support whatsoever for those conclusions. One can speculate why they take such an approach. It is clear that the book is a critique of dominant ideologies, and not a critique of marginalized ones. But when they do offer policy proscriptions, their preemptive dismissal of some possibilities raises some doubts about the veracity of the claims. The most glaring aspect of that problem is that throughout the book the term “neoclassical” is used, as are “vested interests” and even “conspicuous consumption”. These are all terms coined by American economist Thorstein Veblen roughly a century ago. Yet Veblen is never mentioned by name, even though he was the first major economist to raise many of the critiques presented here. The first three chapters are the best. The last few come across as a bit less clear in their analyses, draw a few more dubious conclusions, and in general seems to suggest that even heterodox economists are a few steps behind sociologists, philosophers and maybe even some anthropologists on the topics of political processes, labor dynamics, and the like. For instance, at the end of the final chapter, they take an instrumentalist approach and suggest that the United States needs a constitutional reform committee to re-think legal structures that favor the rich and powerful. While they acknowledge that such a process could be captured by those same rich and powerful interests that need to be constrained, the very suggestion of such a constitutional committee is not tied very closely to anything discussed elsewhere in the book, and comes across as somewhat naïve. Sociologists like Frances Fox Piven and G. William Domhoff have explored such topics over entire careers, and neither makes such naïve proposals. Even Machiavelli said that the laws are the means by which the powerful oppress the weak. The preemptive dismissal of any solutions that might sound “revolutionary” remains the major limitation of the book when it tries to make recommendations. It is best when it offers a more readable and less technical explanation of some of the major flaws of mainstream (neoclassical) economics — making this perhaps more accessible to general audiences than books like Steve Keen‘s Debunking Economics: The Naked Emperor Dethroned, which tackle much the same issue. As a final note, another missed opportunity here — well within the confines of the authors’ thesis — involves a discussion of the accuracy of economic predictions and reliance on those predictions in the mainstream press. I recall a study someone did (the specifics and the citation elude me) that claimed the economists cited in the mainstream press were correct some tiny percentage of time (like 3%), and yet those same economists keep being cited for further predictions. Such evidence supports the notion that such economists are tools of the powerful (“useful idiots”), because otherwise economists with such poor track records of predictions (worse than, say, a weatherman’s record on forecasts) would have been discredited long ago.  It also echoes a quote frequently attributed to Donald Berwick (among others): “Every system is perfectly designed to get the results it gets.”

Patrick Lencioni – The Five Dysfunctions of a Team

The Five Dysfunctions of a Team

Patrick LencioniThe Five Dysfunctions of a Team: A Leadership Fable (Jossey-Bass 2002)

Patrick Lencioni is a business consultant guru and he has written a number of books on business management.  The Five Dysfunctions of a Team is a sort of self-help book, with a separate workbook, DVD and facilitator’s “field guide” available to accompany it for implementation in actual businesses.  It is written in two parts.  The first is the “fable”, an entirely fictional story of a group of executives at a start-up software company that just demoted its previous CEO and appointed a new one.  The second, much shorter part of the book is an explanation of the author’s theory that there are five dysfunctions of a team, as were purportedly illustrated in the preceding fictional story. The second part of the book also provides brief (one paragraph) suggestions for how to redress each dysfunction.

The book is absolute rubbish — let’s make that clear from the outset.  It provides absolutely no justification or empirical evidence for any of the its assertions, and the fictional story is so poorly drawn and unrealistic that it has only a negative value for the entire book.  Even taken together with the available supplemental materials, the package is really meant to accompany a session with a paid consultant (“facilitator”) who, one hopes, will contribute something useful not found in the book or related written materials.

Most [books like this] have one simple, enduring message that echoes through the ages: ‘Pay to see me speak at the Ramada’.”  (online review)

When someone offers advice on how to avoid the pitfalls of structuring a team, it seems immanently reasonable to demand something more than idle conjecture.  Is Mr. Lencioni’s book an attempt to provide an easy-to-grasp narrative illustration of theories that others have empirically tested?  No.  Does it even fit within a particular school of thought on leadership — generally or at least within a business context?  It is hard to say.  There is not so much as a bibliography included.  No attribution is given to anyone as having originated or at least influenced the concepts discussed in the book.  This is problematic, to say the least.

“How does Patrick Lencioni know there are five dysfunctions and not three or seven? Answer – he uses his own experience, and nothing more.

“What research does he cite in support of his thesis that the most important dysfunction is an ‘abs[]ence of trust.’? The answer is none.

“I could continue but sympathetic readers will understand my point. This is yet another anecdotal, pseudo-scientific business book, of questionable accuracy and limited use.”  (bookstore customer review)

No doubt, it would be easier to swallow some of the advice contained in the book as “common sense” or some such thing if the “fable” part of the book had even a whiff of believability.  Sadly, no.

“One of the main characters in the case (Kathryn) would rarely be hired into a mid-size company. There is no chance that her resume would hit the desk of a multinational corporation. Climbing through the ranks with Kathryn’s credentials is fiction. The author tends to suggest that an extremely uncommon event (that is, retaining an executive with Kathryn’s inexperience and lack of academic pedigree) has some relevance into corporate management at the executive level. It does not. Someone of her caliber may come into the company as a Manager, Director or other middle management hire – but not the lead executive. No way!” (bookstore customer review)

So, the new CEO (Kathryn) sets up the premise of the fable in a totally implausible way.  But, setting that aside, what about her interactions with the other executives?

“The huge egos of company vice presidents crumble under the matronly 7th grade teacher whose husband is a high school basketball coach. Characters are unrealistic and you can’t help but want their company to fail so they find themselves selling Starbucks lattes for a living.” (bookstore customer review)

While the comment immediately above smacks of misogyny — the corporate world needs more “matronly” attitudes as desperately as anything else — and hints at social ostracism based on background — does the occupation of an employee’s spouse really matter to his or her job competence? — the problem with Lencioni’s narrative is that the almost uniformly hard-nosed attitude of most higher-level executives would never let them “crumble” as they do in this fictional account.  The fact that the characters do crumble is revealing about what this book is really about, and why it is so popular — and it is immensely popular.  Here we start to get to the crux of the problem with this book: its ideology.  One “exposé” of business management gurus had this to say:

“Much of management theory today is in fact the consecration of class interest—not of the capitalist class, nor of labor, but of a new social group: the management class.  *** [A]ll economic organizations involve at least some degree of power, and power always pisses people off.”  The Management Myth

So, this looks like a book that is nothing more than a weapon of choice for CEOs or other management trying to reinforce a hierarchy of power within a company.

“This book was completely absurd. It was written to sell and tells CEO’s exactly what they want to hear — that their managers are paranoid children who cannot behave like adults and must be spanked into submission, (though he offers absolutely NO solutions on how to do this).” (bookstore customer review)

Many bookstore customer reviews sharply criticize this book as pushing a “socialist” idea of teams, perhaps also asserting that the supposed benefits of collaboration is empirically false. There is a documentary called The Pervert’s Guide to Ideology (2013) in which old Soviet film is discussed and compared to the 1956 Hungarian uprising against Soviet rule, which was dismissed by Soviet leadership as a few troublemaking individuals not representative of The People — the mythic force of historical necessity used to give the leadership credibility.  There is an analogy here.  This seems precisely to be what Mr. Lencioni is doing with The Five Dysfunctions of a Team.  There is this mythical notion of an Effective Team, which is never really delineated — this book focuses only the supposed dysfunctions without really ever setting forth what an effective, non-dysfunctional team would look like or what ends they pursue.  The only thing we are left with at the end of the book is a reassertion of the control of the CEO.  Whether the company actually succeeds once the CEO has control of the team is not really part of the book, which, lest we forget, is justified only by pure fiction.  This is not “socialist” but authoritarian (that documentary illustrates how the same ideologies show up across the political spectrum, used by communists, fascists and capitalists alike).  Really, if this book were “socialist” (it manifestly is NOT), or even if it really took seriously the democratic implications of teamwork, why is it all about executives operating off on their own without input from rank-and-file employees?  This is the major fault of the book.  It stresses teamwork, but only within certain unquestioned boundaries, all the while offering a stern lecture about how everything, boundaries and all, need to be discussed.  This is a profound hypocrisy.

Anyway, the criticism of Lencioni’s advocacy of “teamwork” rests on two key points.  One is that working collectively on a “team” is more effective than working individually or competitively.  This is an empirical point.  Lencioni does not address it.  The other is that there is an agreed upon way to measure success that allows such an assessment of effectiveness.  Stock price?  Err, does anyone really believe the “efficient market hypothesis” that stock price actually tracks the “real” value to a company anymore?  Stock price aside, this latter issue really gets to the crux of the problem with Lencioni’s book.  What it obfuscates is the question of power.  Who gets to decide the metrics that matter to a business?  After all, accountability (“avoidance of accountability” is one of his “dysfunctions”) presupposes a format for measurement.  Lencioni’s theory rests on a curious definition of teamwork.  That is, it is a non-democratic form of teamwork.  The CEO decides the metrics.  Period.  If a CEO has bad ideas, perhaps a “coup” of sorts by other, lower-level executives to mire the leadership in circular infighting has a benefit to the company, by preventing the implementation of idiotic plans from an incompetent CEO that the other executives have no power to remove — making them somewhat like Bartleby, the Scrivener.  Here, Lencioni’s “fable” gives the company’s board, which fired the previous CEO and hired the new one, a complete pass.  Their decision is non-reviewable.  But shouldn’t accountability flow up to them too?  Oh, wait, accountability in this model implicitly flows, like shit, only downhill.

In a business context, there is always a default to saying that profits matter.  But, of course, Lencioni’s book doesn’t provide data like that as a judge of success — not that any such data in a fictional story would have any persuasive value whatsoever.  And yet, there are other intra-company dynamics at work too.  Why does anyone care about profits?  Why should anyone subordinate their personal interests for the pursuit of profits for someone else?  Lencioni offers a very naïve analysis — really a dismissal — of these things.  Yet sociologists like Pierre Bourdieu have documented such fields of struggles (The Social Structures of the Economy) in a way much more compelling than what is offered here.  This also fits squarely within the theory of historian Alfred Chandler, Jr., whose The Visible Hand: The Managerial Revolution in American Business won many awards on its release for its delineation of how business management behaves like a distinct “class” acting in its own interests quite apart from concerns of shareholders or even for long-term profitability of the firm (really an older idea that comes from the likes of Adolph A. Berle if not earlier, and was later backed up by an investigation by Edward S. Herman). What is difficult to swallow is that the sorts of theories like Lencioni’s look like attempts to justify inequality (here, of power) on the basis of meritocracy, something that at least one observer has noted “conveniently places management consultants … at the very pinnacle of the new order.”

Most executives enter business and go into management for social status, either due to the prestige of their position and the power that it offers, or as a byproduct through the salary or wages it provides.  Lencioni’s narrative would have us believe that such an executive would demote himself for the betterment of the team!  Historians and sociologists have developed considerable evidence that suggests this is quite unlikely.

There are some vague hints at useful concepts implied here.  For instance, the idea that people in business try to save face is an interesting concept.  It is not discussed in any detail though.  Other consultants have brought up that point too, though many also flounder when it comes to offering any actionable advice around it.

Lencioni does suggest that a significant problem teams face is that the people involved won’t discuss real issues.  Anyone who has worked in a corporate setting will immediately appreciate this problem.  Lencioni is by no means the only person who has made this point.  But he offers very little in the way of techniques to uncover subtle obfuscation of the “real” issues in business settings, and in some ways perhaps distracts from such insights.  And his suggestions to overcome this fall very flat.  In this book, his suggestions are so limited to be almost non-existent.  More is provided in the DVD and workbook — oh, did you buy those too?

Lencioni’s accompanying workbook includes a bunch of silly exercises that try to build “trust” by encouraging executives/management to reveal personal details of their life to build trust in a work setting.  This approach could easily be empirically tested.  Like everything else in this book, it isn’t.  It is also a dubious proposition just on a theoretical level.  It seems reasonable to think that people may trust each other as friends, on a personal level, and still not trust each other in work-related capacities, or vice-versa.  If this is not a fair belief, it could be empirically disproved, but you would need to look elsewhere than a Lencioni book.

One prescient comment from an online review is that this book tends to be trotted out by corporate “leaders” who themselves are the major problem in an executive “team” using the book to insist that the problem is everyone else:

“The real truth in our case — the poobah who is making us read this book is the dysfunction of our group. This person has a physical ailment that causes emotional instability — but is too high up the ladder for anyone complain about without being fired. Now we have this book to tell us how it’s actually our fault for not being a good enough team.”  (bookstore customer review)

A much better way to look at problems in business settings is simply to ask the question that Roman censor Lucius Cassius used to ask (this analysis was cited approvingly by Cicero), “Cui bono?”  (“to whose benefit?”).  Is management simply reasserting its power over other employees in a company?  Is that the ultimate object of improving “teamwork”?  Are executives simply re-positioning themselves relative to each other, or relative to other firms, in a hierarchy of social status?  Also, as Lencioni does eventually mention, there are tools from psychology that can help mediate purely interpersonal interactions.  Of course, Lencioni only mentions this stuff on psychology in passing, and without any citation to even a single resource.  You would need to look elsewhere on your own for any useful information in that regard.  But, purely within a “leadership team” setting, Lucius Cassius’ question tends to rise above all others.  Most executives are smart and/or educated enough to not be put off by minor frictions between different personality types, though most executives are also so motivated by status that they constantly reinforce — consciously or unconsciously — the reproduction of certain habits of thought and hierarchies of power and prestige.

Seriously, if your boss is making you read this, it’s already too late.(online review)

Indeed.  If you work at a company where the management believes this book to be useful, you should start looking for other employment immediately.  Sadly, though, it might be hard to find anything outside this paradigm.

Jim Collins – Good to Great

Good to Great: Why Some Companies Make the Leap...And Others Don't

Jim CollinsGood to Great: Why Some Companies Make the Leap…and Others Don’t (Random House Business 2001)

Read The Halo Effect by Phil Rosenzweig for an absolutely devastating debunking of Good to Great (or the “peer review” by Matthew Anderson). I won’t repeat what is readily available in Rosenzweig‘s book, or elsewhere, but will say that Rosenzweig systematically picks apart how Collins seems to have no understanding how to conduct proper research and how many of Collins’ theories don’t hold up to scrutiny. Much of Good to Great sounds maddeningly like the kind of “science” relied upon by climate change/global warming deniers. In fact, if you read the collection of Albert Einstein‘s writings Ideas and Opinions, in numerous places he states that science cannot involve deducing theory from evidence, which happens to be precisely what Collins claims he has done with Good to Great and Collins calls it the physics of business/management. Everything you need to know about Jim Collins and his ilk can be summed up by recognizing that probably no union has ever organized workers to demand that management gurus like him be brought in. This is not neutral stuff.  It is partisan rhetoric used to consolidate power with a management class, and strip it from ordinary workers.  In more concrete terms it is about selling feel-good myths to top corporate management, to justify shake-ups and layoffs, and the pay-for-performance regime in executive compensation, for example. There are a few good points in here, but mostly they are reworkings of existing concepts assigned useless new buzzwords by Collins. As many others have made clear, it is sort of amusing to see how many of the companies that Collins trumpets have since gone under (Circuit City), been involved in massive fraud (Fannie Mae, Wells Fargo), or are just plain slimy and corrosive to public well-being (Philip Morris). He seems to defend this in a crude way, simply implying that businesspeople should be sociopaths… Anyway, the bottom-line myth behind this is the idea that MANAGEMENT holds the key to the success or failure or a business. Read Confronting Managerialism by Robert Locke and JC Spender for a useful (and quite different) historical perspective on that. Indeed, the late sociologist Pierre Bourdieu said, “‘Management Theory’, a literature produced by business schools for business schools, fulfills a function identical to that of the writings of the European jurists of the sixteenth and seventeenth centuries who, in the guise of describing the state, contributed to building it: being directed at current or potential managers, that theory oscillates continually between the positive and the normative, and depends fundamentally on an overestimation of the degree to which conscious strategies play a role in business, as opposed to the structural constraints upon, and the dispositions of, managers.” (The Social Structures of the Economy).

Chris Argyris – Flawed Advice and the Management Trap

Flawed Advice and the Management Trap: How Managers Can Know When They're Getting Good Advice and When They're Not

Chris ArgyrisFlawed Advice and the Management Trap: How Managers Can Know When They’re Getting Good Advice and When They’re Not(Oxford University Press 2000)

Some good ideas here, but ultimately Argyris falls a bit short. His basic goal is to highlight how many business consulting programs are flawed. He does in fact offer some useful insights and is quite adept at describing some of the “real” problems that businesses face. His strength lies in taking a very psychological approach — it has echoes of the noted French psychiatrist Jaques Lacan. He emphasizes how much behavior of managers is motivated by defensive reactions to avoid embarrassment (what might psychologically be more generally termed “hurt”). Often this produces autocratic responses from managers who seek to impose unilateral control in a counterproductive way and then suppress meaningful discourse on critical topics (often permitting discussion only on what is irrelevant). Argyris’ descriptions fit situations I have witnessed firsthand. Unfortunately, much of this discussion gets mired in unnecessary jargon that is endlessly repeated but never adequately delineated (a glossary or reference table for key terms would help a lot). He does occasionally refer to his past books, but requiring a reader to obtain and read numerous other books in order to understand the current one is not really an acceptable way to write. Moreover, some of his jargon seems to consist of little more than re-labeling of existing concepts (for instance, much of his “theory in use” discussion seems a lot like Alfred Korzybski’s “the map is not the territory” dictum, or sociologist Pierre Bourdieu’s concepts of “habitus” and “a knowledge of the real world that contributes to its reality”). The book makes its key point in saying that other management advice tends to not be actionable or testable. A lot of that “other advice” is well-intentioned and perhaps necessary in the abstract — who can argue with injunctions to be accountable, have courage, and produce results? But, according to Argyris, many of these programs lack the detail to rigorously test unstated assumptions. This is a lot like saying those are necessary but not sufficient factors for success. It’s a more ideological attack on Tom Peters/Jim Collins/Stephen Covey nonsense than books like Phil Rosenzweig’s methodological critique in The Halo Effect (which is actually a much better book overall). Where this book falls very flat is that once he has torn down other approaches, Argyris puts little in its place. Argyris’ examples (often in the form of a transcript with annotations) are often esoteric, leaving the reader wondering about the context for the unexplained titles and roles of the characters, and are most often presented as if self-explanatory while lacking any actionable analysis (the very same flaw he points to in other programs). He discusses a lot of role-playing situations, but never clearly establishes that role-playing is an effective tool (one gets the impression that useful information is withheld from this book in order to encourage companies to instead simply hire the author as a consultant). But it also bears mentioning that Argyris is a strong influence on the bogus “fifth discipline” organizational learning crowd, and so must be viewed with a skeptical eye.

In short, this book highlights some extremely frustrating aspects of corporate and business culture, particularly some of the insufferable lies perpetrated by management seeking to assert (or reassert) unilateral control while feigning to engage in “collaboration” or “teamwork” (the real core of the Peters/Collins/Covey-style programs) that only applies to the lower rungs of a business. He offers useful clues to spotting those flaws. But other than that, this book doesn’t put much on the table as an alternative, so don’t come expecting to find it here. In the end this seems like a rather lightweight overview of a topic that deserves better treatment.

For a critique that offers an entirely different perspective (more academic, less practical — and with a few equally stupid recommendations), try Robert Locke and JC Spender’s Confronting Managerialism which offers a historical perspective on US management contrasted to German and Japanese styles and concludes that much of the problems have to do with balance of power (especially the influence of finance), pay inequality, differences between guilt and shame cultures, and the very concept of “professional management”. For instance, they show how Japanese-style programs (re)imported to the USA are often perversely brought over without some of the necessary foundational elements (like meaningful bottom-up employee empowerment). What I like about Locke and Spender is that they recognize that there is no substitute for intelligence and knowledge of the inner workings of a business and only certain organizational structures (the relatively flat ones like in Silicon Valley) can really make use of that talent, whereas others, it would seem Argyris among them, think (I would say wrongly) that good management can be “learned” in any organization independent from organizational structure. Spender and Locke also make compelling arguments that management, particularly the “MBA culture”, brings a typically unspoken agenda to the table and they do a good job elucidating that hidden agenda (de-skill white collar workers, engage in labor arbitrage, and generally substitute financial for engineering standards). Of course, those guys are not without their own flaws, as they seem to endorse German “christian capitalism” as some kind of solution to something, rather than simply taking a psychological approach and saying that US businesses tend to select and reward sociopathic behavior for ideological reasons. Even Rosabeth Moss Kanter might be another person who has offered better overviews of corporate culture at a high level.

Phil Rosenzweig – The Halo Effect

The Halo Effect: ... and the Eight Other Business Delusions That Deceive Managers

Phil RosenzweigThe Halo Effect: … and the Eight Other Business Delusions That Deceive Managers (Free Press 2007)

If you’ve ever had to suffer through business management books by Jim Collins, Tom Peters, et al., this is a welcomed counterpoint. Rosenzweig spares you from having to make all the usual arguments debunking the junk science behind the outrageous claims in many of those other business management books. He does acknowledge that the cheerleading component of business management gurus can have a place. But most importantly he actually engages some of the serious academic research out there on business management, he weighs the different methodologies, and he ultimately concludes that there is no silver bullet, miracle diet or other simple formula or set of steps that inexorably leads to lasting success. Rosenzweig is not without his own blind spots. Anyone who relies as heavily on Joseph Schumpeter as he does naturally would. He also makes ad hominem attacks on W. Edwards Deming that seem odd. The only metric that ultimate matters to Rosenzweig’s analysis is stock price. If you recognize that the speculative nature of stock trading can deviate sharply and nearly independently from company performance (i.e., that the “efficient-market hypothesis” is unsound, as empirical data confirms), you won’t find a comparable recognition here. If you have moral qualms about the human toll incurred through profit at any cost, you’ll also have to look elsewhere for those critiques.