Ron’s Questions: Segment One
Welcome to The Soul of Enterprise: Business in the Knowledge Economy, sponsored by Sage, transforming the way people think and work so their organizations can thrive. I'm Ron Baker, along with my good friend and VeraSage Institute colleague, Ed Kless. On today's show, folks, we're going to be talking about The Management Myth with the author that we've been trying to get since day one of our show, Matthew Stewart. So Ed, how's it going?
Ed Kless
I'm really excited to be on today. I'm really thrilled that Matthew has finally been able to join us. He was, as you were saying to him, the most mentioned author on our show, and was mentioned in show number one.
Ron
And I'll talk to him about that. Matthew, welcome to The Soul of Enterprise.
Your 332 shows late as far as we're concerned, but that's okay. We eventually got you. Matthew, I don’t even want to take time reading your biography, other than to say that you graduated from Princeton University in 1985, with a concentration in political philosophy. And then you went to Oxford, where you earned a Doctor of Philosophy in 1988. And I think German philosophy, 19th-century German philosophy, if I'm not mistaken. How does a guy who's got a doctorate in philosophy end up in management consulting?
There's going to be some problems to solve some things to think about that will have some impact somewhere so i think i think there was a you know, a good a good side to that accident, too.
I think we crossed paths. I went into business as a CPA, and now later in life, I wish I had the degree in philosophy instead; you went the other way. And then you probably learned to appreciate philosophy more once you started getting into the management literature?
Your book, The Management Myth: Management Consulting Past, Present, and Largely Bogus, which came out in 2009, is based on an article you had written published in The Atlantic first, as we talked about, in June 2006. And we're going to put both on the show notes; folks, you've got to read both, you've got to read the book, and you've got to read The Atlantic article, because they really go well together. And the book traces, like you say, the genealogy of the management literature, and the discipline, whatever you want to call it, you expose its flaws. And then you want to replace it. And you say, it's not a discipline, but an idea of one. And I always thought the two biggest oxymorons were political science and scientific management. Scientific management isn't a science, is it? It's a business.
I love how you say that management theorists lack depth, because they've been doing for only about a century what philosophers have been doing for millennia, which is, studying human behavior. And we have a saying around here that if you want knowledge read nonfiction, but if you want wisdom, read literature (or philosophy, I'd probably add).
And this is a scary question for me, Matthew, as the author of seven “business books.” But how can so many bad books sell so well?
No, no, you don't have to qualify, I'm very aware of it. We joke around here that the library shelves in Hell are stocked with business books, and the ones in Heaven have literature. You quote an old Professor, Matthew, and I love this. He says, “How can so many, who know so little make so much by telling other people how to do the jobs they are paid to know how to do? Do you have a theory for why organizations continue to hire consultants? or theories?
I think you nailed it. I think bringing in that outside perspective because you can't be a prophet in your own land. So if some outside expert—you know, confirmation of authority—comes in and says, “Oh, you need to be doing this,” or whatever, then people are more likely to buy in. I think there's, like you said, multi-factor reasons for it. You know, Matthew, I read your book on a plane to Australia. And I had already written a couple books trying to trash [Frederick Winslow] Taylor and I thought I did a pretty effective job until I read your book. You tore him down from his pedestal and buried him in the ground and nailed the coffin shut. And yet he keeps rearing his ugly head. We have a special loathing here for Frederick Taylor because he influenced the first lawyer to implement both the billable hour and the timesheet into a law firm in 1919, a Harvard grad lawyer [Reginald Heber Smith], heavily influenced by the zeitgeist of the day, which was Taylorism, scientific management, the whole nine yards. And it has been a blight on the professions ever since. And it's still around, and it's 100 years later!
And you do a great job pulling down all the other gurus from Collins, Peters, even Drucker, and Drucker is kind of a saint around here with recognized flaws. And you pointed them out and I think you nailed it. Unfortunately, Matthew, we're up against our first break.
Ed’s Questions: Segment Two
Folks, we are back with the author of The Management Myth: Management Consulting Past, Present, and Largely Bogus, Matthew Stewart. Pleased to have you on Matthew, and I want to just jump in from page three of your book: “Like all consultants, I owe my education to the extraordinary generosity of my clients.” And I wrote next to it in the margin, “Amen.” And one of the things that I think is important to me as a professional consultant for a long time, when I did much more consulting day-to-day, was some of the philosophies of Peter block, who taught me that when done well, and I agree with you that it's often not done well, consultants can be a model for behavior for how organizations should move forward even after the consultant moves on. And one of the best compliments that I ever received in a consultant role was when they would say to me, Ed, you've taught us how we can begin to solve our problems on our own once you're gone. And I think when done well, that can be one of the powers of consulting. Your thoughts on that?
Well, one of the things Ron and I talk about is social capital. And in a way consulting can be a form of social capital as you move from organization to organization and bring some of those, as you say—I hate the term best practices—really more the philosophical point. But this leads me now to something that I've been wanting to ask you for a long long time ever since I read your book. I want you to talk to us about the tool, the main tool in any consulting engagement, The Whale.
“The Whale” as described by Ron and Ed during the show.
It's a great tool. I'll often put that graphic up and shout out, “Thar she blows!” You find it everywhere. It's a truism in a lot of places. I wanted to share this with you, it got expressed to me this way in one organization: “Ed, you have to understand here at X organization, the spreadsheet is mightier than the sword.”
One of my favorite insights was in one of Edward R. Tufte’s books, and he is citing somebody else—I can't remember the name of the other author who did an executive summary of executive summaries. He read like 10,000 executive summaries and then wrote an executive summary of them. And it came down to three points, and it's, One, some do, some don't. Point number two, the differences aren't very great. Point number three, it's more complicated than that. And that's ultimately what The Whale tells you; it can give you some insight, as you say, depending upon how The Whale is drawn in a particular company. But what you then have to do with it is really up to you. I want to share with you one other thing that has happened to me as an inspiration to you. I was in a meeting a couple of years ago, I've been with Sage for 17 years. So this is a previous regime that really got into ROI analysis, what's the ROI? So we had the spreadsheets of ROI, and you had to fit your thing into the ROI. And I asked during a meeting, again, inspired by you, “Has anyone done the ROI of the ROI tool?” And of course, the answer's no. They look at you like you're insane, because it's self-evident, right Matthew? It's the ROI tool, it must be right.
Well, one last question before the break. You talk about the impact of your customers, as we would say, had on you and the learning that you've done from them, and I think that’s great. Did you ever have an experience where the client was inviting you into their bubble, and wanted you to be part of their bubble? In other words, we talked earlier about sometimes being the outsider is helpful, but a lot of cases they want you to continue the self-deception. Did you ever have experience with that? Where they'd want that, to just continue with this the bad story that was happening?
Well, Matthew, this is great, but we're up against our break.
Ron’s Questions: Segment Three
Welcome back, everybody, we're here with Matthew Stewart, the author of The Management Myth: Management Consulting Past, Present, and Largely Bogus, and Matthew, if you want to get Ed really upset, say something like “If you can't measure it, you can't manage it,” and then attribute that saying to Peter Drucker. We've combed through Drucker, and he never really did say it. The closest I could find of anybody who said it was Marvin Bower from McKinsey, called the McKinsey Maxim. But here's my question, kind of like Ed's meta-question [on ROI]. How do you measure the effectiveness of management itself?
Judgment is so much more important in a lot of areas than measurement itself. You wrote that “Our motto might well have been if you can't manage it, measure it.” And it seems like a lot of organizations do that. Well, the more we measure, the more we'll accomplish. And I actually think the most precious things in life can't be measured. I think about the Declaration of Independence, life, liberty, and the pursuit of happiness. Tell me how you measure that? But those ideals are principles that we all aspire to, and that can't be measured. The whole cult of measurement drives me crazy, it bleeds through your book, too, and it bleeds through our work, we hate it.
Just like you talked about Robert McNamara and his one metric, “body count,” during the Vietnam War, which he apologize for later in his autobiography. We always joke that if Disney had hired efficiency experts, or maybe Frederick Winslow Taylor himself, he would have ended up producing Snow White and the Three Dwarfs. Efficiency can come at the expense of doing the right thing. And that's where it gets really dangerous.
Matthew, the other thing that you wrote that is absolutely profound. And I think only a philosopher could have written this. You said, “Theory X and Theory Y depend on Theory U, for utopian. And you say really, it's about Theory T, for tragic. Shakespeare, our framers, the ancient Greeks, maybe without Plato, but most successful managers are T-types. Unpack that for us, because I think that's phenomenal.
It reminded me of Thomas Sowell’s book, A Conflict of Visions, where he talks about the constrained and unconstrained view of man, same type of thinking. I just thought it was a brilliant insight to apply it where you did. We couldn't agree more with you that business is not a profession. And Ed’s got a great saying, “Business ain't science.” But let me ask you this, because you take on this issue, too, and Peter Drucker did in his own way as well. He thought business was a branch of the humanities, basically. Do you think, Matthew—and this is an impractical question, but I can do that because I'm talking to a philosopher—would society be better off without business schools?
Like you say, it's all about people. And the key has never been to study human relations. It's to become a better person. I just absolutely love that. Well, this has been a real honor to have you on the show. Ed is going to take you home, but I just want to say thank you so much. This has been great.
Ed’s Questions: Segment Four
We are on with Matthew Stewart, the author of The Management Myth: Management Consulting Past, Present, and Largely Bogus, debunking modern business philosophy. Also his books include The Courtier and the Heretic: Leibnitz Spinoza and the Fate of God in the Modern World, and Nature's God: The Heretical Origins of the American Republic, and the upcoming book, The 9.9 Percent: The New Aristocracy That Is Entrenching Inequality and Warping Our Culture. Matthew, please come back on after that [last] book is out, we'd love to talk to you about that as well. But let's finish up on The Management Myth conversation so we can put this to bed. In doing the research for our interview today and revisiting your work, I came across this sentence and it says “Americans often fell in love with the effects of science, not the method.” And that struck me with regard to what we're seeing with COVID-19. And we had a guest about a month ago, Donald Hoffman [Episode #329], who is at UC Irvine and his book is called The Case Against Reality, which will let you figure that out. He said this, “Science isn't dogmatic, but scientists are.” And I think the same thing is happening in leadership and management today. There's a lot of dogma that has really no basis in fact. Talk a little about your observations of that.
Nothing is less scientific than the phrase, “It's settled science.” If the science is settled, well then by definition it's not science, right? We’re supposed to be questioning it, that's the point. I wanted to share with you something. One of the other business philosophers, and in fact CEO, that I'm a big fan of is John Mackey at Whole Foods. He has a really interesting way of thinking about business and profitability. He says profit is like the red blood cells in your body. You die without red blood cells, but you don't think, “Hey, I got to make red blood cells today.” That's not why you wake up in the morning. And he also compares businesses with giraffes. And he says, “People see businesses making a profit as surviving, and say, therefore, they must be in business to create a profit.” The reality is you're in business for some other purpose, and the ones that survive happen to have profits, just like the giraffes that survive happen to be the one that have longer and longer necks to get to the higher and higher leaves. So what is your thoughts on Purpose in business?
All right, I'm going to do something totally unfair to you, Matthew. In 30 seconds, the 9.9% [Matthew’s book due out October 12: The 9.9 Percent: The New Aristocracy That Is Entrenching Inequality and Warping Our Culture]. What do you got?
Well, outstanding. We look forward to reading it and having you back on to discuss it. Ron, what do we have coming up next week?
Ron Baker
We have got Dre Baldwin, basketball player and entrepreneur, and he's going to tell us his story.
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