We've all heard the saying, "Give me a break, will ya?" That saying also could apply to all the new management tools that have come on the market in the past few years with promises to make companies more successful.
Not surprisingly, most don't.
Bain & Co. recently put the spotlight on what has been going on with management fads and trends. Bain director Darrell Rigby, writing in The Wall Street Journal, recounts some of the recent experimentation with these new concepts.
Some have gotten mixed results, while others have experienced nothing but grief by trying out new management fads that simply don't work in the real world. The ideas may look good on paper, but when someone tries to put one of these tools to work, it just doesn't jell.
Rigby notes that more than 10,000 business books have been published over the past three years, many touting management tools claiming to "make their users incredibly successful by showing them new ways of doing business."
Mr. Rigby hasn't been fooled, however, by all this glitz and glitter.
He uses Gateway as an example of a company that threw itself into a series of management fads. Back in 1999, Gateway ranked No. 1 in revenues in the U.S. market for personal computers. Even during last year's technology slump, the company showed no signs of weakness.
Management experts gave credit to a number of tools for Gateway's success, Rigby states. One was termed Market Disruption Analysis. Here the senior executives of Gateway foresaw PCs going the way of pagers with slow growth and unacceptable margins.
Corporate Venturing came next. Gateway created a venture-capital arm to invest in new and diversifying businesses. Then came Customer Relationship Management, designed to create lifelong relationships with customers. Gateway expanded its product line, spent hundreds of millions of dollars on more than 300 retail outlets and allowed customers to buy products on the installment plan.
What happened? As of January of this year, Rigby writes, Gateway had significantly missed its forecast, fired its CEO, sharply reduced product options and announced a layoff of 3,000 workers. The stock price fell to $15 from $50.
As a footnote, Gateway's co-founder reclaimed his old job as top executive and has set about restoring profitability in the company's traditional computer products.
But Gateway is only one example of companies that have gone down this path with disastrous results. Management consulting company Bain has for the past eight years surveyed some 5,600 senior executives from around the world to find out how they feel about management tools. Some 72% feel it is important to stay up-to-date with management tools, but close to 81% believe most management tools don't deliver on their promises.
One tool that executives felt was the most effective in running their companies was the old tried-and-true "strategic planning." Other basics include mission and vision statements, along with pay for performance.
It comes down to this: Keep it simple. Stay with the basics and win; stray from your core business and fail.
Experience is a great teacher,
Charles S. Lauer