Mintzberg on America’s Management Failures

Henry Mintzberg is the authority that I most respect on the subject of strategy. He has written both the best textbook and the most thoughtful critiques of current practices of strategy and strategic planning I know. The easiest way to get a feel for his perspective is Strategy Bites Back.

So I pay attention when he speaks. And he had lots to say in his piece in the Globe and Mail recently here entitled, “America’s Monumental Failure of Management” which I found thanks to a post by Richard Florida.

Mintzberg has been a strong critic of management education. This theme underlies the statements he makes including (this is just a taste–I recommend the whole article):

We have been told how productive the American economy has been. Well, check the way productivity is calculated: Firing great numbers of people, and expecting those left behind to carry the load before they burn out, is productive, indeed – until the longer-term consequences show up. They have been partly showing up in the massive U.S. trade deficits. The U.S. economy is collapsing because the American enterprises – and worse still, the country’s legendary sense of enterprise – have been collapsing.

To get bailed out yet again, the auto companies have to offer plans. No problem: American companies specialize in making plans. It’s the execution that’s been the problem. (Remember those grand auto shows, with all their exotic cars that never made it to market? That was “planned obsolescence.”) These companies couldn’t succeed by doing, so how are they supposed to succeed by planning? The only thing we know for certain is that these plans will result in many more layoffs. That’s some way to fix an economy.

In recent years, we have perfected the art of short term earnings. We glorified leaders that delivered them.

In many ways, this perspective was forced on us. We as a nation believe in results. As we shifted to a knowledge economy, the only way to measure results was through the financial bottom line–that’s because knowledge intangibles are outside our accepted measurement systems. Most businesses are a black box if you use traditional information sources. But now we are paying the price for not developing better information about what goes on inside that black box.

What will help us come out of this? Our nation has enormous intellectual capital. It is the only resource that will bring us sustained growth in the future. We must learn to measure, manage and monetize our intellectual capital in new ways.

Do you agree? Help build the conversation by sharing this post. Bookmark it. Comment on it. Tell me what you think. Can we use our intellectual capital to re-build America?