Gary Hamel has an article in the HBR of January 2009 on how we need to reinvent management. The article came out of discussions among a group of scholars and practitioners. There is nothing wrong the ideas- some two dozen of them- but I wasn't bowled over because these aren't new. eg. management being more democratic, more transparent and, not least, being focused on nobler objectives than shareholder wealth maximization.
The last is not new at all because Peter Drucker wrote extensively about it. In one of his books, he said management could never win legitimacy as long as it focused on such a narrow objective. Management needed to focus on something loftier. He proposed making people productive as the declared goal of management. But Drucker was writing at a time when the market was far less efficient than it is today. Are we saying that the market cannot judge whether a company is doing enough with respect to, say, innovation and people development? Then, the right question, perhaps, is: how do increase the flow of information on these matters to the market?
My problem is: how do you operationalise such goals? How do we measure performance in ways other than shareholder value? Drcuker never answered this question. He left the definition and measurement of management performance as an important challenge for corporations.
True, shareholder value leads to distortions in managerial actions but at least the market is an impersonal judge. Are we to substitute the market's judgement with that of some independent personalities who will come up with appropriate measures? Well, I hope these personalities are not independent directors!
More thoughts on this in my last ET column, A new paradigm for management?