All the management idea we assume are solid, are in effect false. Don’t trust analysts, boards, high profile CEOs and consultants. Management systems such at TQM and ISO don’t work. In fact you need mistakes for innovation. And true innovation is about changing the taste of the customers; don ask what they want, give them what they don’t know they want. His advice is to make profit to innovate NOT innovate to make profit. But then innovative firms don’t perform better, so why bother.
The management practice plague
The conclusion is that companies are too complex to really understand what they are doing. Bad management practices are contagious and spread quicker than they kill. What does work? Looking after your staff, constant re-organisation, storytelling, R+D, CSR, luck. appoint a female CEO and create corporate alumni. What causes the crisis; success trap, overexploitation, tunnel vision, intertwined links between CEOs, analysts and board of directors, board cloning imitation and Icarus.
Some of his pointers on strategy:
- Numbers and strategy do NOT go together
- Strategy is a framing contest between fraction (which future frame wins?)
- Strategy is invented retrospectively (Southwest)
- In the end, there is only flux
- Strategic recognition capacity; know when you got lucky
- Fortune favours the prepared mind
- Your expectations manage you
In a downturn:
- Manage revenues, not cost
- Be brave
- A company is a tribe (with all the usual dynamics)
- You are overpaying your staff performance. Performance is supported by the soft capital that you have developed. Put these overachievers in other organisation and their abilities vanish.
- Shut down document database and focus on the internal network of experts
- Tacit versus explicit knowledge; complex systems cannot be put on paper and are irrelevant
- Don’t decide; create internal markets, let collective wisdom decide
- Complex systems and casual ambiguity (we don’t’ know what works)
- Community building and looking after your staff increases the value of your organisation
- Does CSR add value → No, but it is a good buffer against in case of a “bad” event.
Compulsory reading. Don’t trust anything.