Why management is in desperate need of an overhaul

18 February 2015 -

Poor ethics and bad behaviour are hindering UK corporate life – but identifying flawed management styles is more of an art than a science

Ann Francke, chief executive, CMI

Even experts sometimes miss what is staring them in the face. During a recent Chartered Institute of Internal Auditors (IIA) dinner, I sat between two members of the team investigating why the Royal Bank of Scotland (RBS) failed. They were both highly qualified and experienced auditors. But when it came to diagnosing the problem, they were none the wiser. One wondered why, even after a thorough investigation, the reasons for the banks failure remained shrouded in mystery.

There was no mystery to me. I could answer why RBS collapsed in a single word: greed. Or two words: poor ethics. Or three: bad management styles.

Later that evening, the key speaker, Douglas Flint, nailed it. Flint stressed that auditors, in their hunt for the truth, should rely less on proofing procedures and processes and more on vetting values and culture. He is right. Identifying problems so we can change organisations is more art than science.

In his thought-provoking column, Simon Caulkin concludes that, for management to survive, we will have to reinvent it. Caulkin wants to reintroduce the human touch to business. As the auditors at the IIA found, enterprise-by-numbers doesn’t work with real people.

What are the consequences of this managerial reinvention? I can think of a few. If growth is so vital, why not reward executives for improving the bottom line and creating jobs, rather than cutting costs and employment? Why don’t business schools focus on skills that really matter – communication, performance management, coaching, change management and teamwork? Why promote great professionals (be they engineers, accountants or others) to managerial positions, give them no training in how to manage, then expect them to succeed? Why are most organisations still run with bureaucratic, controlling behaviours that cause managers to disengage? It is hardly a surprise that managers have lost the road to happiness.

Reinventing management is a crusade at CMI. It is central to our Management 2020 thought-leadership programme. We are reinventing management for the 21st century, from the very top. In the process, we will inspire managers, leaders and executives to examine the cultures that can break – literally, for RBS – the bank. Those cultures hold clues about what we need to change. Which, in the case of the management orthodoxy, might be everything.