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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