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Meet
the MasterMinds: James Hoopes Takes on the False
Prophets of Management
 Every
now and then, a book comes along that is head and shoulders
above the rest. Business historian, James Hoopes, has
written such a book--False
Prophets: The Gurus Who Created Modern Management and
Why Their Ideas Are Bad for Business Today.
In the book, Hoopes traces the roots of
modern management thinking by examining the ideas and
practices of leading business "gurus," past
and present.
He challenges the popular movements these
gurus spawned, and is sharply critical of today's gurus
for perpetuating bad management practices in the name
of democratic values.
A Distinguished Professor of History at
Babson College, Hoopes has written a book that any student,
practitioner or observer of management should read.
You may not agree with Professor Hoopes, but he'll give
you plenty to think about.
MCNews talked to Hoopes about how consultants
can recognize the good and the bad in the gurus' ideas
and develop a clear-headed approach to leadership for
themselves and their clients.
MCNews: Let's start with this: what
motivated you to write False Prophets?
Hoopes: Twenty-five years ago,
I came to Babson College to teach American History.
I never expected to teach business history or be in
a business school, but there I was.
One of the things that interested and
surprised me was the tremendous attractiveness of both
the people who taught management and their ideas.
I found the whole leadership model very
engaging. But over time, as I got to know that world
better, it seemed to me that some of that attractiveness
had been purchased at the expense of realism about the
way managers have to operate.
So I decided to look for the historical
roots of what seemed to me a lack of realism in some
management ideas, especially about the nature of
corporate power.
MCNews: In the book, you talk about
what you see as the inherent conflict between corporate
power and democracy. Why is it important for us to understand
that conflict?
Hoopes: Democracy is a wonderful
ideal that will never be perfectly realized in this
world, and it probably shouldn't be. The world is not
a perfect place and humans are not perfect creatures.
The sad fact is that in business organizations where
profit, not freedom, is the primary goal, it's top-down
power that often gets the job done best.
We all need to recognize that corporations
are not little models of democracy. If we cover up this
reality, we can create serious problems for ourselves.
Some gurus have tried to dilute this reality
by teaching managers to understate their power, over-emphasize
employee participation and lead mostly by inspiration.
MCNews: Many managers follow the inspirational
leadership model. Should we re-think that approach?
Hoopes: We need to be realistic
about the fact that decisions in corporate life get
made at the top. We like to think of ourselves as free.
But, to some extent, you have to check that freedom
at the door when you go to work.
If you can create an environment in which
people feel free, obviously that's a wonderful thing.
The trouble is, if you oversell the idea that everyone
is free and that the workplace is nirvana, eventually
there will be a hard landing for some disillusioned
people. That can come back and hit a manager in the
face.
I have talked to managers who got themselves
into deep trouble by following the inspirational leadership
model to such an extent that they let things get
out of hand; they lost the ability to say no to the
troops when no was what needed saying.
MCNews: In the book you suggest that
democratizing corporations and legitimizing management
is a pipe dream. Why do you think that?
Hoopes: There is a quote from James
Madison that is getting a lot of play these days: "If
men were angels, no government would be necessary."
The same is true for our workaday lives--we wouldn't
need managers if human beings were perfect. One of the
reasons corporations exist is that people get themselves
organized to get the job done best when somebody takes
charge.
We are very lucky in America to have a
mix of democratic political institutions and corporate
economic institutions. That mix gives us freedom and
civil rights in our political lives and lets us get
wealthy from our work lives.
It's really important that we keep
that balance and not try to democratize the corporation
or get idealistic about it in a false way. I think
it's equally important for our country's political future
that we understand this difference and that we not try
to corporatize or manageralize our political institutions.
We want to remain a free people, so obviously
we want to keep democratic bottom-up power in our political
institutions. But to get our jobs done, we need some
amount of top-down direction in our economic organizations.
MCNews: So how can managers wield the
right amount of top-down power?
Hoopes: I was worried while writing
the book that some people might think I was calling
for authoritarianism in the workplace, but I certainly
don't mean to propose such an idea at all. Bottom-up
participation is vitally important. Everybody's ideas
may be useful and should be considered as much as possible.
Some managers--not the really good ones,
but some--slip into a kind of arrogance, a feeling that
they must be special, even superior, by virtue of their
positions. That's one of the temptations of undemocratic
power. Those who manage most successfully temper their
power with a healthy dose of common sense and with personal
competence; they have enough humility to realize that
their power and their competence, not their charisma,
are the main reasons people follow them.
If managers can hang on to a bit of humility
and at the same time demonstrate competence, then they
do have a chance of winning some loyalty from people.
People want to follow leaders who know what they're
doing.
If you start by trying to be the inspirational
leader, it's easy to lose sight of competence and then
you are headed for real trouble.
MCNews: Business leaders have a long
history of following the advice of management gurus.
What is the reason for this love affair with the gurus?
Hoopes: Well, first of all it needs
to be said that gurus have done a lot of good. I don't
know if I managed to say that as clearly as I might
have in the book, but that's a big reason for the attraction.
The characters I wrote about in the book, most of them
anyway, made important contributions to our understanding
of how businesses work. At the same time, there is the
danger that if the emperor is paying the guru, the guru
may not mention that the emperor is not wearing any
clothes.
There is an unavoidable conflict of
interest built into the relationship between business
leaders and the gurus advising them. The whole system
is built on the best, honest intentions of both sides.
But human beings are imperfect creatures, and sometimes
that honesty will not be there on one side or the other.
So there has been a natural tendency for the gurus to
try to pretty things up and make corporate life seem
more satisfactory to the democratic conscience of managers
than it really is--or can be.
MCNews: In the book you say that "culture
change" should be dropped as a management tool.
Why is that?
Hoopes: Culture is a very ambiguous
word--one that can cover up painful realities, such
as the fact of power. I do believe it's possible that
some corporations have something that fits the original
anthropological sense of the word culture. But I
also think that it's easy to use the word culture to
cover up the fact that people are doing what you want
because you are the boss.
If people are going along because they
know this is what you, the boss, want, it can be very
dangerous to kid yourself into thinking that you have
changed the culture and changed people's values. In
addition, you might also be engaged in a kind of manipulation
that isn't very attractive.
It is very tempting, especially for
young managers, to think they are going to change a
company's culture and that will change people's behavior.
A manager might think, well, I don't really have to
address the serious issue of people's behavior directly.
Instead, I can insidiously change their values so they
will do what I want and they won't even notice they
are being managed. So we are back to the democratic
façade that isn't real.
Changing people's behaviors and attitudes
is important and worth the effort, but we would do better
to go back to some very old-fashioned words from the
early twentieth century, like morale and procedures.
Those are up-front, honest words that say we are going
to change the way we do things around here, rather than
talk about changing values and culture.
Given how many times culture is changed
in most organizations these days, it can't be very deep
"culture" in the first place.
MCNews: Are there gurus or leaders
you would put in your "Hall of Fame?"
Hoopes: Peter
Drucker, who I interviewed for the book, is an extraordinarily
impressive man. He is a tremendous idealist, who has
addressed the moral illegitimacy of corporate life head-on
throughout his career. He insisted on recognizing
that managers do have power that is not consistent with
a democratic society. At the same time, he was very
successful as a teacher of management and as a consultant.
Through that work, Drucker brought a lot
of high-level awareness to people about what corporate
life is. But I think he has been disappointed. His
idea has been that the corporation is morally illegitimate
and it needs to become morally legitimate.
My notion, which may never be a popular
one, is that we are better off accepting the moral illegitimacy
of the corporation--accepting the fact that we live
in this imperfect world with imperfect institutions.
So I disagree with Drucker on that fundamental point,
but I think he is a real hero.
MCNews: Any other "Hall of Fame"
gurus come to mind?
Hoopes: Alfred
Sloan, CEO of General Motors from the 1920's to
the 1950's might be everybody's candidate for the greatest
manager ever, and I certainly wouldn't disagree with
that. I might disagree with some people about where
his greatness lies, though.
He does fit the model I outlined in the
book in that he accepted that the corporation is not
a perfect institution. In fact, a couple of times in
his autobiography he says that the corporation is
not the most gentle institution of society and insisted
on the importance of top-down executive power.
Sloan combined that understanding with
a great deal of simple, human decency. He managed
to keep it all in balance--his own human decency on
the one hand, understanding the imperfect nature of
the organization he was running, and at the same time
never forgetting it was there to make money.
Some people overestimate the decency in
Sloan and underestimate his moral realism. He stayed
focused on making money and didn't try to become a business
statesman or a social leader.
MCNews: On the flip side, anybody you
would put in your "Hall of Shame?"
Hoopes: Elton Mayo, who is in the
book, really created the human relations movement
in American industry in the 1930's. While Mayo
did a lot of good, he was not a totally honest
thinker. He was one of the people who failed to
point out the lack of clothes to the emperor.
A lot of what's wrong with the leadership
model in management today is descended from Mayo and
the HR tradition that developed at the Harvard Business
School in the 1930's. The fact that Mayo manipulated
the data in the Hawthorne
experiment is reason enough for consultants not
to imitate him.
MCNews: What about present-day "Hall of Shame"
candidates?
Hoopes: An interesting guy in the
present is Kenneth
Lay, former CEO of scandal-plagued Enron. The wrath
against him when the Enron scandal broke was because
he had been telling employees who were locked into their
Enron shares that it was a great company and the future
was bright, and meanwhile he was selling his shares.
It made him look just horrible.
It turned out Lay's sales were margin
calls, transactions he had to complete. He was forced
into a sell position, but truly believed what he was
telling employees, believed that their money was well
invested in the company. He didn't know what was going
wrong in his own company because he was a false idealist
who thought he could lead the company just by inspiring
the troops with their supposed bottom-up power.
He didn't have the accounting skills to
keep up with the complex deals being done. The lesson
we should draw from Lay's career is not so much the
importance of morality but the importance of competence,
or rather that the two are so directly related.
It's immoral not to do your job. He didn't
do his job, and he hid his incompetence, even from himself,
with his false moralism and belief that he could run
the company just by being a morally inspiring leader.
MCNews: Last question: If you could
give one piece of advice to somebody on managing people
or managing in a corporate environment, what would it
be?
Hoopes: Remember that you have
necessary, but unjustifiable, power over other people's
lives. They did not elect you their manager, and so
you need to be as fair and careful as you can in handling
their lives. The temptations of power are just as great
for managers as they are for political figures.
One bit of advice to help people stay
honest is to keep this in mind: no matter how good you
are, you will never be good enough to deserve such power
over others. As hard as it may be in the corporate world,
if you can mix just an ounce of humility with your pound
of power, it might help you do as good a job as you
can with as much decency and fairness as possible.
MCNews: That's great advice. Thanks
for your time.
"Only if managerial power is understood
as an undemocratic but necessary evil in an imperfect
world does moral caution have a fighting chance to engage
the manager's conscience."
- James Hoopes, False Prophets
You can write to James Hoopes at
hoopes@babson.edu.
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