Long ago I believed that there was a golden theory of Management which would help us motivate people without using money, motivate the general public to buy our goods or services without diluting our profits, pay huge dividends without tanking the stock prices, and generally make every stakeholder happy. A sort of free lunch for all. Did I mention huge bonuses for the Management? That too. Such a golden theory just needed to be discovered or invented. With Harvard and Wharton spending enormous sums in search of such a silver bullet I had no doubt that it would be found. Just a matter of time and serendipity. Golden theory or silver bullet - I am not sure which is better, but am sure HBR will come up with an erudite paper on that subject.
Then two non-Harvardians, Henry Mintzberg and Harry Levinson pricked my balloon. By way of introduction, Mr Mintzberg was neither from Harvard nor Wharton and was in fact critical of both as to their excessive focus on numbers-driven management. Sort of Management By Numbers which at one time was also known as Management By Objectives or MBO. Mintzberg was an academic in Canada. Canada is widely considered to be the backwaters when it comes to cutting edge research in management or anything else, for that matter, except maple syrup in which Canadians have an unassailable lead, not to mention 90% of global reserves.
Levinson questioned this approach, asking "management by whose objectives?" That was a bit silly because the only objectives that matter in the real world are those of the owners and in the case of large corporations the Management is as good as the owners. He was not educated at Harvard (not everyone is, some are lucky) and was not even an MBA but a psychologist from Kansas U. His paper "Management by whose Objectives?" was sub-titled: "Asinine Theory of Management". To make the point abundantly clear to those a bit slow on the uptake (most of the management community), there was even a cartoon of a donkey - the "asinine" in the title. The donkey had a pole tied to its back and had a carrot dangling tantalizingly close to the its mouth from the pole. To make matters even clearer he called the approach the Jackass Fallacy. In a final irony, it was published in Harvard Business Review.
The whole idea propounded by the MBO-ists was that if you gave clear objectives to people and rewarded them for achieving them and punished them for not not achieving them - a sort of carrot and stick approach - things got done. In a further elaboration they felt that aligning the Individual Objectives with the Corporate ones helped matters along. The latter was easier said than done: for example, insurance is best sold to a dying man (good for the dying man as well as the agent who earns the commission, and the selling is easy) but bad for the insurance company (they pay the claim which is many times the premium received). Going to Harvard, it is said, helped you resolve such conflicts. Since the intake at Harvard is limited, there is plenty of conflicts still to be resolved which is good for the Management community as well as Harvard.
In my experience this theory - I mean the theory that Levinson called asinine - does not work. The only way for the corporation to benefit is for it to keep moving the goal posts or, as the cartoon had it, keep the carrot tantalizingly close to, but out of reach of, the asinine mouth. The downside is of the donkey getting wise to the trick and not trying at all, for even donkeys get clever some times. They are also prone to violently rolling around in the dust and scratching their backs against walls in order to get rid of fleas and ticks, in which case what happens to the pole tied to its back, not to mention the carrot? Back-scratching, though, is known to help in organizations. The thought of two grown men topless at work and scratching each other's back is disturbing, even without the presence of carrots.
The Indian variant of MBO is known as Management By Objections and is widely practised in the Public sector. In the public sector knowledge of and adherence to procedures are far more important than achieving results and the pursuit of results is attributed to "vested interest". In this environment carrot is conspicuous by its absence. Stick is present, but there are numerous ways of evading its arc - the obsession with "proper procedure" ensures that. The right approach, as any seasoned public sector employee would tell you, is to raise objections to any proposal, ad nauseum, and let time and the courts do the rest. The reward-punishment asymmetry encourages going by the book.
Increasingly the discipline of economics is being viewed from the perspective of human behaviour under incentives; that is, to say, how humans behave with a carrot in front of them and a stick ready to make violent contact with their rear ends. In my experience free TV sets, laptops, fuel, housing, etc have failed to make positive impact. The stick just might. Without any risk of a backlash: whereas the donkeys pack a powerful kick backwards, humans can only kick in the forward direction and thus there is no danger to the wielder of the stick. Humans can also not undo the last election, only defeat you in the next.
Where carrots have manifestly failed, alcohol seems to work. The government that makes it easier to access alcohol has been successful at the hustings in the Indian state of Tamil Nadu. The government of this state reportedly earns 4 billion dollars a year from alcohol for which it is the sole distributor. There is a saying in Tamil that cash from selling a dog does not bark. But cash from the sale of alcohol intoxicates. So much so successive governments have been intoxicated with, and are unable to kick, the alcohol habit.
We thus might have to modify the Levinsonian cartoon somewhat: a Donkey with a stick attached to its back from which dangles a glass of alcohol tantalizingly close to but out of reach of its mouth. Should the donkey wise up to the fact that it can never actually access that alcohol, it is Game Over. If it gets drunk on the alcohol there is a further downside of it forgetting why the inducement was offered in the first place. The trick, to paraphrase Mark Twain, is to tank up enough to increase the desire but not enough to distract from the performance.
It is a fine line that the government has to walk.
Governing is not as easy as writing management papers, especially when it involves donkeys.
Then two non-Harvardians, Henry Mintzberg and Harry Levinson pricked my balloon. By way of introduction, Mr Mintzberg was neither from Harvard nor Wharton and was in fact critical of both as to their excessive focus on numbers-driven management. Sort of Management By Numbers which at one time was also known as Management By Objectives or MBO. Mintzberg was an academic in Canada. Canada is widely considered to be the backwaters when it comes to cutting edge research in management or anything else, for that matter, except maple syrup in which Canadians have an unassailable lead, not to mention 90% of global reserves.
Levinson questioned this approach, asking "management by whose objectives?" That was a bit silly because the only objectives that matter in the real world are those of the owners and in the case of large corporations the Management is as good as the owners. He was not educated at Harvard (not everyone is, some are lucky) and was not even an MBA but a psychologist from Kansas U. His paper "Management by whose Objectives?" was sub-titled: "Asinine Theory of Management". To make the point abundantly clear to those a bit slow on the uptake (most of the management community), there was even a cartoon of a donkey - the "asinine" in the title. The donkey had a pole tied to its back and had a carrot dangling tantalizingly close to the its mouth from the pole. To make matters even clearer he called the approach the Jackass Fallacy. In a final irony, it was published in Harvard Business Review.
The whole idea propounded by the MBO-ists was that if you gave clear objectives to people and rewarded them for achieving them and punished them for not not achieving them - a sort of carrot and stick approach - things got done. In a further elaboration they felt that aligning the Individual Objectives with the Corporate ones helped matters along. The latter was easier said than done: for example, insurance is best sold to a dying man (good for the dying man as well as the agent who earns the commission, and the selling is easy) but bad for the insurance company (they pay the claim which is many times the premium received). Going to Harvard, it is said, helped you resolve such conflicts. Since the intake at Harvard is limited, there is plenty of conflicts still to be resolved which is good for the Management community as well as Harvard.
In my experience this theory - I mean the theory that Levinson called asinine - does not work. The only way for the corporation to benefit is for it to keep moving the goal posts or, as the cartoon had it, keep the carrot tantalizingly close to, but out of reach of, the asinine mouth. The downside is of the donkey getting wise to the trick and not trying at all, for even donkeys get clever some times. They are also prone to violently rolling around in the dust and scratching their backs against walls in order to get rid of fleas and ticks, in which case what happens to the pole tied to its back, not to mention the carrot? Back-scratching, though, is known to help in organizations. The thought of two grown men topless at work and scratching each other's back is disturbing, even without the presence of carrots.
The Indian variant of MBO is known as Management By Objections and is widely practised in the Public sector. In the public sector knowledge of and adherence to procedures are far more important than achieving results and the pursuit of results is attributed to "vested interest". In this environment carrot is conspicuous by its absence. Stick is present, but there are numerous ways of evading its arc - the obsession with "proper procedure" ensures that. The right approach, as any seasoned public sector employee would tell you, is to raise objections to any proposal, ad nauseum, and let time and the courts do the rest. The reward-punishment asymmetry encourages going by the book.
Increasingly the discipline of economics is being viewed from the perspective of human behaviour under incentives; that is, to say, how humans behave with a carrot in front of them and a stick ready to make violent contact with their rear ends. In my experience free TV sets, laptops, fuel, housing, etc have failed to make positive impact. The stick just might. Without any risk of a backlash: whereas the donkeys pack a powerful kick backwards, humans can only kick in the forward direction and thus there is no danger to the wielder of the stick. Humans can also not undo the last election, only defeat you in the next.
Where carrots have manifestly failed, alcohol seems to work. The government that makes it easier to access alcohol has been successful at the hustings in the Indian state of Tamil Nadu. The government of this state reportedly earns 4 billion dollars a year from alcohol for which it is the sole distributor. There is a saying in Tamil that cash from selling a dog does not bark. But cash from the sale of alcohol intoxicates. So much so successive governments have been intoxicated with, and are unable to kick, the alcohol habit.
We thus might have to modify the Levinsonian cartoon somewhat: a Donkey with a stick attached to its back from which dangles a glass of alcohol tantalizingly close to but out of reach of its mouth. Should the donkey wise up to the fact that it can never actually access that alcohol, it is Game Over. If it gets drunk on the alcohol there is a further downside of it forgetting why the inducement was offered in the first place. The trick, to paraphrase Mark Twain, is to tank up enough to increase the desire but not enough to distract from the performance.
It is a fine line that the government has to walk.
Governing is not as easy as writing management papers, especially when it involves donkeys.
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