Кафедра английского языка №2 Дубовская О. В., Кулемекова М. В

Jan 18th 2014/ The Economist

MANAGEMENT is one of the most successful industries of the past century. In 1914 it was a mere infant. The Harvard Business School (HBS) was just six years old. Management literature consisted of Frederick Taylor’s “The Principles of Scientific Management” (1911) and a few other scraps. Today it is a loud-mouthed adult. A quarter of American graduate students study business. Some of the world’s most profitable businesses peddle the modern equivalent of Taylor’s “Principles”.

But does management deserve its current elevated status? Or is it just a jargon-spouting con-trick? There is no shortage of sceptics. Matthew Stewart, a former management consultant, has written a book on “The Management Myth”. Philip Delves Broughton, an HBS alumnus, calls his fellow MBAs “masters of the apocalypse”. This columnist co-wrote a book on management gurus called “The Witch Doctors”. Other critics argue that there is no such thing as “good management”—everything depends on context—or that it is impossible to measure how much difference something as nebulous as management makes.

For the past decade a group of economists, including Nicholas Bloom of Stanford University and John Van Reenen of the London School of Economics, have been trying to bring some rigour to the argument. They have focused on three commonly accepted management techniques—setting targets, rewarding performance and measuring results—and studied the performance of more than 10,000 organisations in 20 countries in the light of how well they implement these techniques. They have employed about 150 researchers and rigorous econometric methods to guarantee the robustness of their results. Their study is still a work in progress. But it nevertheless promises to be nothing less than the Domesday Book of the management age.

The economists conclude that good management is indeed tightly linked to improved corporate performance, measured in terms of productivity, profitability, growth and survival. Good management is more like a technology than merely an adjustment to circumstances. Certain successful management practices can be applied to many horses on many courses. Some of these are eternal, such as rewarding merit. Some are genuine innovations, such as the quality movement founded by W. Edwards Deming after the second world war.

In some respects Messrs Bloom and company’s findings uphold conventional wisdom. America has the best-managed companies overall, followed by places like Germany and Japan. Rich-world laggards like Portugal and Greece, and big emerging markets, have a long tail of badly run firms. Big multinationals have the highest management scores, and public-sector bodies and firms run by their founders or their offspring have the lowest.

However, the researchers have put some hard figures on these common assumptions: they estimate that management accounts for roughly a quarter of the 30% productivity gap between America and Europe; so prophets of America’s demise need to reckon with the size of its managerial superiority. They find that China’s tail of poorly run firms is a lot shorter than India’s or Brazil’s. Britain’s abnormally large number of poorly managed companies is in part the result of its tradition of primogeniture.

The findings have been subjected to two experiments. The first was accidental: when the 2007-08 financial crisis struck, in the worst-affected industries those businesses that implemented the “correct” management techniques properly did indeed fare better than the rest. The second was deliberate: the economists provided free management advice to a randomly chosen group of Indian textile plants and compared their performance with that of a set of control plants. A year later, those that implemented their advice had improved their relative productivity by 17%.

The researchers also made use of a mammoth survey by the US Census Bureau of management practices in more than 30,000 American factories. Again they found that their three chosen management techniques were tightly linked to superior performance. They found that companies in the South and Midwest are better managed than those in the West and the Northeast. They also found that American management improved markedly between 2005 and 2010, particularly in data collection and analysis.

Why do good management practices spread in some areas and not in others? The economists have a simple answer: the quality of management seems to be clearly related to the competitiveness of the markets businesses operate in. That is why American firms are especially well-managed: the country’s competitive business climate drives out badly run firms and rewards well-run ones. Multinationals that must cope with a wide variety of competitors tend to be well-run; public-sector firms, and family firms with strong political protection, do not.

Judgment and revelation

Some caveats are in order. Messrs Bloom and company may be a bit too quick to dismiss the idea of adjusting management principles to the circumstances. For example, the unthinking implementation of performance-related pay may be counter-productive in industries that rely on creativity and innovation—some of the most dynamic parts of the modern economy. And new management principles are constantly emerging; some may prove to matter more than the three the researchers base their studies on.

That said, the importance of this work should not be underestimated. Good evidence now exists that there is a body of management practices which is strongly associated with better performance, regardless of time or place. It is a body that can be expanded by the addition of new ideas such as, say, lean manufacturing or total quality management, but its core principles have demonstrably stood the test of time.

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The Secret Phrase Top Innovators Use

by Warren Berger / Harvard Business review /  September 17, 2012

How do Google, Facebook and IDEO jumpstart the process that leads to innovation? Often by using the same three words: How Might We. Some of the most successful companies in business today are known for tackling difficult creative challenges by first asking, How might we improve X ... or completely re-imagine Y... or find a new way to accomplish Z?

It's not complicated: The "how might we" approach to innovation ensures that would-be innovators are asking the right questions and using the best wording. Proponents of this increasingly popular practice say it's surprisingly effective — and that it can be seen as a testament to the power of language in helping to spark creative thinking and freewheeling collaboration.

When people within companies try to innovate, they often talk about the challenges they're facing by using language that can inhibit creativity instead of encouraging it, says the business consultant Min Basadur, who has taught the How Might We (HMW) form of questioning to companies over the past four decades. "People may start out asking, 'How can we do this,' or 'How should we do that?,'" Basadur explained to me. "But as soon as you start using words like can and should, you're implying judgment: Can we really do it? And should we?" By substituting the word might, he says, "you're able to defer judgment, which helps people to create options more freely, and opens up more possibilities."

Tim Brown, the CEO of the innovation and design firm IDEO, says that when his company takes on a design challenge of almost any type — and IDEO does everything from designing new products to envisioning new ways to deliver healthcare — it invariably starts by asking How Might We. Brown observes that within the phrase, each of those three words plays a role in spurring creative problem solving. "The 'how' part assumes there are solutions out there — it provides creative confidence," Brown said to me "'Might' says we can put ideas out there that might work or might not — either way, it's OK. And the 'we' part says we're going to do it together and build on each other's ideas."

Although the HMW process has been used at IDEO for a number of years, its origins can be traced back to Basadur and his early days as a creative manager at Procter & Gamble. In the early-1970s, the company's marketers were working themselves into a lather as they tried to compete with Colgate-Palmolive's popular new soap product, Irish Spring, which featured a green stripe and an appealing "refreshment" promise.

By the time Basadur was asked to help out on the project, P&G had already tested a half-dozen of its own copycat green-stripe bars, though none could best Irish Spring. Basadur figured the P&G team was asking the wrong question ("How can we make a better green-stripe bar?") and soon had them asking a series of more ambitious HMW questions, culminating with: "How might we create a more refreshing soap of our own?"

That opened the creative floodgates and, over the next few hours, Basadur says, there were hundreds of ideas generated for possible refreshment bars — with the team eventually converging around a theme of finding refreshment at the seacoast. And out of that came a coastal-blue and white striped bar named (what else?) Coast, which became a highly successful brand in its own right.

As the Coast story suggests, there's more to HMW methodology than just using those three words. Basadur employed a larger process to guide people toward asking the right HMW questions. This involved posing a number of "why" questions, as in, Why are we trying so hard to make another green-striped soap?. He also urged the P&G team to step back from their obsession with a competitor's product and try to look at the situation from a consumer perspective: For the customer, in the end, it wasn't about green stripes, it was about feeling refreshed.

Gradually, Basadur took the HMW approach beyond P&G to other companies, including the tech firm Scient. One of his converts at Scient, the designer Charles Warren, then proceeded to take the methodology with him as he moved to IDEO. Tim Brown confesses that, when first introduced to the phrase, "I was skeptical at first; it sounds a bit Californian." But before long, Warren told me, IDEO was conducting company-wide sessions "with 700 people doing HMW together."

As Warren then moved from IDEO to Google, the infectious HMW approach found a new host. More recently, HMW was carried from Google to Facebook by Paul Adams, who worked with Warren on Google+.

And there's evidence, too, that it may be spreading to the nonprofit sector. When one of IDEO's co-founders, the late Bill Moggridge, was named director of the Cooper-Hewitt National Design Museum in 2010, he brought HMW questioning with him. Soon after he started at the museum, Moggridge posed for a group photo with museum staff members — and everyone wore T-shirts bearing the words "How Might We..."

Min Basadur maintains that it's common for companies to expend efforts asking the wrong questions and trying to solve the wrong problems. "Most business people have limited skills when it comes to 'problem-finding' or problem definition," he says. "It's not taught in MBA programs." To fill that void, Basadur opened a consultancy, Basadur Applied Creativity, which developed its own "Simplex" process of creative problem-solving for business — with HMW questioning at the core of it.

HMW proponents say this form of questioning can be applied to almost any challenge — though it works best with ones that are ambitious, yet also achievable. Brown says it doesn't work as well with problems that are too broad ("How might we solve world hunger?") or too narrow ("How might we increase profits by 5 percent next quarter?"). Figuring out the right HMW questions to ask is a process, Brown says: "You need to find the sweet spot."

by Charalambos Vlachoutsicos  / HBR / September 19, 2012 


Besides our choice of words and the volume and tone of a voice, gestures, posture and facial expressions all convey powerful messages to the people we are talking to, which is precisely why everyone pays close attention to other people's body language. What's more, some research suggests that your body language can even affect your hormones, which affects your decisions and attitudes to risk. In other words, how we say what we say to people is at least as important as what we say to them.

Yet for all the care we take to read other people's body language, we're remarkably unconscious when it comes to our own. This is largely, I think, because knowledge of our true selves is hard and does not come naturally to us. Most of us are not what we think we are and therefore we need to question our self-image, which all too often is an idealized version of our true selves.

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  When did I last eat? Physical conditions have a powerful impact on one's emotional state and therefore on the body language colleagues and subordinates will be watching so closely. If you haven't eaten for several hours, do so. Make sure you've visited the toilet recently. Be careful about having that extra cup of coffee just before you go in.
  
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  Do I have issues with anyone I'm meeting? If you don't make an effort to put your feelings about the people you're meeting front of mind, those feelings will influence your emotional state. Suppose you are irritated with a particular subordinate. Your irritation could come through in the way you talk or position your body in relation to her (are you closed off, are your arms folded?), which could well inhibit her from making a useful contribution. Before going into a meeting, note the issues and feelings you have with the people you will be engaging with.
  
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  Am I prepared? If you aren't prepared for a meeting you'll have to rely on winging it. In that case you will concentrate on making sure you keep up with the discussion and don't show your ignorance. People who aren't well prepared end up compensating by taking a lot of airtime to make others think that they are well informed. So, whatever body language faults they have get amplified. What's more, they are unlikely to think about their body language if they are concentrating on winging it. So if you're not prepared it's better to postpone a meeting until you are or admit that you are not. If you can't or won't do either of these, the best thing is to keep quiet and make sure you're better prepared the next time.
  
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  Am I angry? If you are, just take time out. Anger doesn't play well with any form of communication, non-verbal and verbal alike. Years ago, when I was running my family's export-import business in Greece, I found out that one of my subordinates had made a serious mistake resulting in the imposition of a stiff fine by the Greek Customs. I was about to call him to my office to give him hell when it occurred to me that I had better calm down. So I waited and later went to his desk and told him quietly that I was aware of the mistake and requested him to write a memo explaining why the mistake had happened and how it could be avoided it in the future. The next day I received a detailed report, which contained a couple of very useful process suggestions that I decided to implement in the company.
  

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  Am I fidgeting? If you're fairly still and listening then all is probably well. But if you're shifting about in your chair, drumming your fingers, doodling or, worst of all looking at your phone, then you can be pretty sure that the person talking is likely to be feeling that you're not interested in what they have to say. The question also leads naturally to thinking about how you are sitting or standing: are you looking at the person talking or out of the window? Is your pose attentive or are you leaning back with arms folded, indicating impatience or withrawn skepticism? This is especially important if you're the boss because everone else will be following every arch of your eyebrow.
  
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  Am I interrupting? In any healthy debate people will occasionally interrupt. But if you do it a lot, people may feel that you're not open and not listening carefully to what they are saying — or indeed that you're overcompensating for your ignorance. When you are seen to deny the validity of a person's argument that person will withdraw and will take offense. Asking yourself if you're interrupting too much also leads naturally thinking about how you are communicating with your body, expressions, and gestures: are you acknowledging the other people, are you smiling at them or looking angry?
  

We cannot expect to be able iron out all our communication faults but we should try at least to become aware of them and of their negative impact. In any case, awareness of our interactive behaviour is self-fulfilling and, therefore, is gradually internalized and thus requires less and less conscious effort on our part.

Jul 20th 2013 | From the print edition of the Economist

ENTREPRENEURSHIP is the modern-day philosopher’s stone: a mysterious something that supposedly holds the secret to boosting growth and creating jobs. The G20 countries hold an annual youth-entrepreneurship summit. More than 130 countries celebrate Global Entrepreneurship Week. Business schools offer hugely popular courses on how to become an entrepreneur. Business gurus produce (often contradictory) guides to entrepreneurship: David Gumpert wrote both “How to Really Create a Successful Business Plan” and “Burn Your Business Plan!”.

But what exactly is entrepreneurship (apart from a longer way of saying “enterprise”)? And how should governments encourage it? The policymakers are as confused as the gurus. They assume that it must mean new technology; so they try to create new Silicon Valleys. Or that it is about small businesses; so they focus on fostering start-ups. Both assumptions are misleading.

Silicon Valley has certainly been the capital of technology-based entrepreneurship in recent decades. But you do not need to be a geek to be an entrepreneur. George Mitchell, the Texas oilman who pioneered fracking, did as much to change the world as anybody in the Valley. Nor do you need to be a conventional innovator. Miguel Dávila and his colleagues built a huge business by importing the American multiplex cinema into Mexico. Their only innovation, says Mr Dávila, “was putting lime juice and chili sauce on the popcorn instead of butter.”

Equally, there is a world of difference between the typical small-business owner (who dreams of opening another shop) and the true entrepreneur (who dreams of changing an entire industry). Jim McCann, the creator of 1-800-flowers.com, is an entrepreneur rather than just a florist because, when he opened his first shop in 1976, he looked at the business “with McDonald’s eyes”, as he put it, and laboured for years to build the world’s biggest flower-delivery business.

These misconceptions matter because they produce lousy policies. The world is littered with high-tech enclaves that fail to flourish. Malaysia’s biotech valley has been nicknamed “Valley of the BioGhosts”. The world is also full of small-business departments that fail to produce many jobs. The Kauffman Foundation, which researches such matters, has shown that the bulk of new jobs come from a tiny sliver of high-growth companies.

Daniel Isenberg has spent 30 years immersed in the world of entrepreneurship as a (sometimes failed) entrepreneur and venture capitalist as well as an academic (he previously taught at Harvard Business School and is now at nearby Babson College). He has also travelled the world accumulating examples—he is just as interested in Iceland’s generic-drug industry as in Silicon Valley’s giants. In a new book, “Worthless, Impossible, and Stupid”, he presents a new definition of entrepreneurship. In essence, entrepreneurs are contrarian value creators. They see economic value where others see heaps of nothing. And they see business opportunities where others see only dead ends.

There are plenty of striking examples of this: Mo Ibrahim, the founder of Celtel, saw the possibility of bringing mobile phones to sub-Saharan Africa when telecoms giants saw only penniless peasants and logistical nightmares. On a trip to Tobago Sean Dimin and his father Michael observed that fishermen were leaving tonnes of fish to rot, so they created a company, Sea to Table, to get the surplus fish to New York restaurants. As a student at Harvard Business School, Will Dean noticed that social media were irrigating a fashion for extreme sports. So he established a company, Tough Mudder, that charges people to subject themselves to pain and humiliation.

Mr Isenberg emphasises that successful contrarians also need the self-confidence to defy conventional wisdom (Mr Dean’s professors told him that he was crazy) and the determination to overcome obstacles (it took the Dimins two years to get the fishermen to change their habits). Indeed, some of the best entrepreneurs are distinguished more by their ability to achieve the impossible than by the originality of their thinking. TCS is essentially a Pakistani version of FedEx. But to get it going, Khalid Awan had to overcome “insuperable” problems such as striking deals with the gangs that control the haulage industry and sweet-talking the politicians who can shut a new company at the drop of a hat.

In it for the money

Mr Isenberg has two important bits of advice for policymakers who genuinely want to foster entrepreneurship. First, they should remove barriers to entry, and growth, for all sorts of business, rather than seeking to build particular types of clusters. Second, they should recognise the importance of the profit motive. There has been much fancy talk of “social entrepreneurship”—harnessing enterprise to do good deeds—but in truth the main motivator for entrepreneurs is the chance of making big money. This is what drives people to take huge risks and endure years of hardship. And this is what encourages investors to take a punt on business ideas that, at first sight, look half-crazy.

Politicians and bureaucrats do not just confuse entrepreneurship with things they like—technology, small business—they also fail to recognise that it entails things that set their teeth on edge. Entrepreneurs thrive on inequality: the fabulous wealth they generate in America makes the country more unequal. They also thrive on disruption, which creates losers as well as winners. Joseph Schumpeter once argued that economic progress takes place in “cracks” and “leaps” rather than “infinitesimal small steps” because it is driven by rule-breaking entrepreneurs. It might be nice to think that we could have growth and job-creation without a good deal of Schumpeterian cracking. But, alas, some thoughts really are worthless, impossible and stupid.