Wednesday, June 18, 2014

Management models - Why they are useful


Put yourself in the shoes of a CEO. What is your primary goal? There are many different ideas about that, but I like this one:
To ensure that the organisation can survive and thrive on its own terms!
Not my idea by the way, but the idea of Colonel John Boyd, U.S. Air Force.

No matter what goal you, as the CEO of your organisation, subscribe to, you have a problem:
How do you make the organisation move in the right direction?
One of your most important tools is the set of managers in the organisation. According to Gallup, companies recruit the wrong kind of talent for management jobs 82% of the time.


Why is that? Gallup puts it down to failure to identify the right personality traits, or talent. Though that is probably true, it is unlikely to be the whole truth. There is another thing that matters:
Skill matters!
Talent alone won't make a manager great, or even good. Talent is just a measure of the aptitude a person has for a certain kind of tasks. To be good at it, it is necessary to develop the right skill set. Before you can do that, you need to figure out what the right skill set is.

That is what this article is about: How to identify the skills that will enable your managers to be really great.

Try to stay in the role of CEO throughout reading this article. The managers work as an extension of your brain. (Or, you are part of the same organisational hive mind, depending on how you view the organisation.) Managers are supposed to detect and correct problems, and continuosly strive to innovate and improve the organisation.

That takes skill. Actually, it requires a fairly complex set of skills. Your managers must hone their skills to a quite high level to be efficient. If the managers are unskilled, or have the wrong skills, your organisation, and your own job security, is toast.

Therefore, you, the CEO, need to think about the skills you want your managers to have,

That is where management models come in! Models are useful because they help us visualise, and think about things. Management models help us think about management.

Specifically, a management model can help when hiring or training managers. As the CEO of a large company you cannot personally oversee all hiring and training, but you can, and should, make sure that the people who do use relevant models.

There are many such models. The ones I write about in this article are models I have found useful. They are by no means the only useful models.

Beware of models that don't work!

Many organisations have only implicit models for how management, or any other kind of work, works. The problem with implicit models is that it is very difficult to see if they really work or not. It is taken for granted that they do. Often they don't!

For example, during my more than 25 years as a software developer I maintained a work portfolio, showing things I had done, from design, to code samples. Not once in my career, not once, did any recruiter or HR person want to see my portfolio.

Hiring a programmer without looking at code is like hiring a juggler without actually seeing the person juggle anything. It is completely daft, and yet it is common practice.

The problem is that many organisations delegate hiring and training to separate departments, but in these departments very few people have the skill nessesary to assess the level, or relevance, of the skills of the applicant.

The people who were assessing me had no clue how to distinguish a great programmer from a poor one. Instead, they fell back on checklists of tools and frameworks, i.e. things a programmer learns very quickly, and have very little to do with the ability to work well with other programmers, solve programming problems and write code that works, and can be maintained.

To assess the skill of a knowledge worker you often need to have the same skill yourself, at a very high level. This means you have to be a highly skilled programmer to assess the skill of other programmers, and a highly skilled manager to assess the skill of other managers.

Think about it: How would you estimate the competence level of an aircraft pilot, a surgeon, a chef, or an optician, just by talking to them? Unless you yourself have relevant skills at a fairly high level, it is not possible to do it reliably.

Same thing with managers!

To make it even more difficult, most of us overestimate our own skills. We know what we know, and that is what we make our assessment based on. We have no way to assess the importance of the things we don't know, because we don't know them. This is sometimes called The Asognosic's Dilemma.

If you have a good model as a base, you can at least get started in the right direction. You know what you need to learn. By comparing your model with other models, you can begin to understand where the gaps are, and how to fill them in.

So, let's look at some management models.

Fayolism, the Classic


Henri Fayol divided management into six functions
Henri Fayol described a management model in his 1916 book General and Industrial Management. Fayol divided management into six functions, and laid out fourteen principles for managers to follow. In this article, I'll just briefly discuss the functions, and the skills necessary to execute them.

Now, let's do some magic: We can look at Fayol's model and figure out what kind of skills are necessary to perform the six functions. There is more than one way to do this. there are different skills that can support the same function. A function can also be interpreted differently depending on the situation, and the skill and background of the person doing the interpretation.

When Fayol's book was translated from French to English, there was an error in translation. This error caused a fundamental change in the ideas about how to manage:

The French word "contrôle" means "check", or "inspection". "Contrôle" was translated into the English word "control", which means "to influence or direct people's behavior". Thus, the idea that a manager must know how to inspect results was replaced by the idea that a manager must direct people's behavior.

That is a pretty big change. For the purpose of this article, I am retaining Fayol's original meaning:


Fayole's management functions mapped to management skills. This is a modern interpretation. Most of these skills  did not exist in 1916.
Of course, you do have to be familiar with the skills in the figure to be able to assess their relevance. For example, why is statistics relevant to planning? It is partly because of the Planning Fallacy, the tendency for people and organisations to underestimate the time and cost of projects.

Nobel prize laureate Daniel Kahneman, and his colleague Amos Tversky, showed that the key to avoiding the planning fallacy is to use statistical methods of planning. However, this does require that managers have a basic grasp of statistics.

Queueing Theory is also important, because once a project is under way, and the workload builds up, processes will start to exhibit non-linear phenomena that has a great effect on time and cost. Knowing Queueing Theory allows a manager to avoid a great part of the adverse effects. It also has a great impact on how processes are designed.

However, if you do not know about statistics and Queueing Theory, there is no way to assess their importance. Of course, it is the same thing with Systems Thinking, Network Science, and Psychology.

Do you agree with my mapping of skills to functions? If not, still thinking as a CEO, what skills would you map to these functions?

Even more importantly, is Fayol's model still relevant? A lot has changed since 1916.

Deming's System of Profound Management

Deming's System of Profound Knowledge
After WW II Japan set about rebuilding their devastated country. The result was unprecedented economic growth throughout the 1950's through the 1980's. (And unfortunately an economic bubble that burst in 1991, and caused a decade long depression.)

W. Edwards Deming, an American statistician was sent to Japan by General Douglas MacArthur to help with the 1951 Japan Census. While he was there, Deming taught hundreds of Japanese engineers and managers Statistical Process Control  (SPC) and concepts of quality.

Some of the people taught by Deming were top management, like Akio Morita, co-founder of Sony.

In the 80's, Japan became so successful it was a threat to the U.S. economy. Deming developed a knowledge system for managers that was designed to enable U.S. industry to catch up again. His 1980 book Out of the Crisis is one of the most influential management books ever.

By Deming's time much had changed compared to the world Fayol lived in. And, new sciences had emerged, which enabled Deming to be more specific as to the skill set a manager would need.

Deming designed his management model in a manufacturing society. Since then, we have moved into the information age, so the skill sets of managers would need to evolve and adapt.

What would Deming's system look like if he had created it today?

Deming's knowledge system updated for the information age. Neuroscience and Complexity Thinking have contributed greatly to the understanding of management over the past 10-15 years.

Amazingly, these skills are still rare among managers. They are more common among management consultants, although I must admit, we consultants far to often focus on sales skills so much that the skills for getting the job done are in danger of atrophying.

Mintzberg on Managing

Henry Mintzberg's 2009 management model
Henry Mintzberg is considered to be one of the world's foremost experts on management. In his 2009 book Managing, Mintzberg presented a management model based on his research.

Mintzberg's management model with mappings to to skills and entities in Tempo!

I read Mintzberg's book while working on my own book Tempo!. Tempo! is intended as a practical guide for managers, so I was interested in how well the things I wrote about mapped to Mintzberg's model.

Though I did not have Mintzberg's management model in mind when I wrote Tempo!, the mapping is pretty good. This is not surprising, because good management models are bound to have similarities. After all, they all describe the same thing, albeit from different perspectives.

IOHAI – Boyd on leadership

The IOHAI leadership model is part of the Maneuver Conflict strategic framework developed by Colonel John Boyd, U.S. Air Force.
The 1960 book The Human Side of Enterprise by Douglas McGregor presented a new way to view organisations, Theory X and Y. The U.S military, who understood the limitations on the classical functional hierarchy very well, were much quicker to pick up on McGregor's work than the business world.

In general, the military is more focused on leadership than management, so their models are a bit different. When Colonel John Boyd of the U.S. Air Force developed the Maneuver Conflict strategic framework, his IOHAI leadership framework was an important part of it.

Boyd stressed the importance of being able to shift from one point of view to another, in order to better understand and solve problems.

For example, an IOHAI trained business manager would be able to shift between useful frameworks such as Systems Thinking, Lean, Statistical Process Control, Self-Determination Theory, Theory Of Constraints, and others, to come up with innovative solutions to problems.

The Power of Paradigms

Donella Meadows's famous System Intervention points.
The Systems Thinker Donella Meadows wrote a famous essay about places to intervene in a system. A manager who understands this model has a powerful tool for applying effective change.

Like Boyd, Meadows considers the ability to consciously switch between different frameworks for thinking, the most powerful ability of all.

To be able to do this, a manager, or leader, must of course be trained to use more than one framework. If the framework is implicit, that is, no one thinks about how the thinking is done, shifting frameworks becomes impossible.

Now, still putting yourself in the place of a CEO, would you like to have explicit management models in your company, as references, to help you decide what skills to hire for, and how to train your managers?

Assuming the answer is yes, do any of the models I have written about fit the needs of your company? If not, what are the needs of your company? What skills do your managers and leaders need to master to fulfill those needs?

Do you have anything like an explicit management model in use today? If not, what is stopping you, and how do you fix it?

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