Microscope on management

Kelly Walker loves being a manager. The 30 year-old general manager of retail software firm Triquestra New Zealand graduated from the University of Auckland with an honours degree in management studies and marketing, was snapped up by Power New Zealand as a business analyst and account manager, then went on a working OE, spending 18 months as a marketing analyst for UK telecommunications firm Worldcom. On her return, Walker worked as a category manager for Telecoms wired business division and as marketing manager for consumer loyalty. Now enjoying heading up a smaller business, she says a manager is someone who achieves results through teamwork.

I enjoy people management, being able to work out different learning skills and styles and knowing how to use these within in a team to reach a unified goal. People need to be managed very differently, says Walker.

However the process of management and the training of managers today have critics. Many successful entrepreneurs are scornful of formal management and management education, believing that successfully leading and growing an organisation is about just doing it and learning via the school of hard knocks. After all, many successful entrepreneurs - including Microsoft's Bill Gates - began with little or no management training, yet developed and led teams and grew their businesses to giddy heights. Human resource experts, government think-tanks and business analysts are beginning to ask: are managers even necessary?

Batch Hales, programmes and policy manager for the New Zealand Institute of Management (NZIM) says there is a business culture that wants to redefine management and shift the focus and reward to people who are self motivated, entrepreneurial by nature and go-getters.

But I think there is also a role for people who do the same job over and over again and do it well. The entrepreneurs and go-getters have drive, clear ideas and goals, but eventually an organisation gets too big for one person to manage. The entrepreneur has to remain free to develop and change and retain their creativity, says Hales.

Romie Littrell, associate professor of international business for the Auckland University of Technology (AUT), says large businesses do need formal managers but often attempt to recreate the entrepreneurial spirit and process because it's important.

"IBM created an entrepreneurial organisation to develop [PC architecture] by geographically and managerially isolating its PC division in Florida. From there, it dominated the PC market. The importance of the entrepreneurs was demonstrated after the PC division leaders were wiped out in an airline crash and IBM lost PC market leadership," says Littrell.

Littrell says academic news media is increasingly focused on charismatic leadership rather than management, but leadership is only half the issue; if an organisation doesn't have a transactional manager, it doesn't matter how inspiring a transformational leader is, the organisation won't work well.

"Managers control, problem solve, and monitor results through reports, meetings, and other tools; leaders motivate and inspire, and keep people moving in the right direction despite major obstacles to change. They appeal to basic and often untapped human needs, values, and emotions," says Littrell.

Hales advocates a lighter management structure based around the dynamics of a smaller organisation and says there is international research to support the premise that academic qualifications and management success have a limited relationship.

"Anything that runs through an academic institution can be subject to academic capture; by that I mean academic institutions compete and contribute to the [notion of necessity]," says Hales.

Hales prefers to talk about management roles rather than managers and says as modern organisations want to be fluid and to work globally, old management structures are becoming less valid.

"Where you have little cabals of power going on, creativity can be squashed, so the primary role of a manager today is to manage change. Organisations can probably remove operational management," says Hales.

What about the concept of no managers at all? Considering the confidence, social aptitude and autonomy of the younger generations, could a bunch of extremely skilled individuals eventually run an organisation through teamwork and mutual respect and without general management? Would this end up like a corporate version of Lord of the Flies or result in a lighter, less hierarchical and more energised organisation? Littrell says the idea isn't new - it was called the self-managed work team in the 90s and derived from 60s and 70s socio-technical system theory. Successfully self-managed teams are typically found within larger, professionally managed organisations and are focused on a relatively small set of non complex tasks, says Littrell. However, he agrees with Hales that the small business approach to self-management is not without merit.

"In a small organisation you really can learn by doing because a large mistake cost tens of thousands instead of tens of millions."

However, Littrell says learning only from personal experience can be limiting and the purpose of management education is that managers learn from the experience of others.

"People are fond of saying Bill Gates dropped out of university to start Microsoft, but Gates had completed three years towards a four-year Harvard degree. For every university drop-out there is an Andy Grove [co-founder of Intel who earned a PhD at the University of California, Berkeley] and a Peter Maier [founder of Navman New Zealand and engineering graduate]," says Littrell.

United States research suggests the critical point for when a business needs formal management structure is when it grows to $100 million revenue. Despite the example set by entrepreneurs and others who bypass formal management roles in favour of teamwork, New Zealand organisations do need managers. Hales says: "There can be enormous cultural differences between older and younger generations; the language is different, the ways of interacting are different. You need people able to manage change and these complex people situations."

Triquestra's Walker says someone needs to be able to make a final decision and managers who have the title but are not given the authority to make decisions in line with their goals are set up for failure. She says a general manager provides a common goal and a vision of where an organisation needs to go, what it will be, and what activities will deliver that goal.

"Organisations are becoming flatter and people benefit from being given more responsibility. But individual team members also like to be managed in different ways. Managers need to be able to have the hard conversations and be a mentor, a coach and an enabler," says Walker.

FORMAL MANAGEMENT TRAINING

A population of just four million limits the number of professional managers available in New Zealand says AUT's Littrell.

"We are losing a lot of business degree graduates to Australia and are in a transition period as people choose what they want to study first then pick up management training later," he says.

So what about the thousands being poured into management programmes, short courses and formal degree qualifications.

Do these deliver for participants? Littrell says a recent report on the economic value of ongoing management education conducted by the Australian Business Deans Council concluded the average business undergraduate degree generates a lifetime personal economic benefit of US$498,794 (NZ$721,578) per graduate as compared to US$183,513 (NZ$265,449) for another undergraduate degree.

The benefit for business post-graduate qualification was US$659,726 (NZ$954,286) compared to US$254,085 (NZ$367,523) for the average post-graduate degree recipient.

So while formal management qualifications may not automatically produce better managers, they are likely to result in better paid managers.