Saturday, April 10, 2010

A Blast From the Past (It’s the People, Stupid)

The first class we took in business school having to do with people management was called Organizational Behavior.  It was a required course in the first-year curriculum, but one that seemed trivial after a hard day of Marketing, Operations Research, and Finance cases.  After all, we were much more concerned about learning how to break bottlenecks on the assembly line, launch new products and compare net present values.  The “soft side” of business was easy. 

I’ve mentioned before the little pep-talk we received from our professor on the first day of “OB” informing us that this was going to be one of the most important courses we ever took.  He said, and I’m paraphrasing roughly, “Anyone can learn to discount cash flows.  Not everyone can manage or lead people.  You might want to pay attention.”

We laughed. We scoffed.

Funny thing:  The other day I was sitting in a meeting with some venture capitalists when one of them remarked, “You know, we have all these great companies with all of this really cool technology, and we spend almost all of our time talking about people.”

He was not laughing.  His partners did not scoff. 

In fact, his comment rocketed me to that day almost 30 years ago.  Maybe we really did need to pay attention in OB.  Turns out you put a few hundred million dollars to work in a bunch of technology markets and all you really have to count on is people. 

I’ve been leafing through The Essential Drucker again and am always amazed at how early and clearly Peter understood how business worked.  “Management is about human beings,” he wrote.  “Its task is to make people capable of joint performance, to make their strengths effective and their weaknesses irrelevant.”

It’s the way, I’ve mentioned before, that Duke Ellington arranged music for his band; if the trumpet player could hit the high notes, the trumpet player inevitably got arrangements that had lots of high notes.

Would we could do that for everyone.

What’s ironic, of course, is that in our desire to improve the art and science of Management we’ve created all kinds of sham distinctions.  So, boring old Management turns out to be different than flashy new Entrepreneurship, both of which are different than heroic Leadership.   

Thinkers like Drucker aren’t having any of it.  Making a distinction between Management and Entrepreneurship, Drucker wrote, is like saying “that the fingering hand and the bow hand of the violinist are ‘adversaries.’”   The lack of entrepreneurial thinking, he reminded us, is the single largest reason for the decline of existing organizations, while the inability to manage is the single largest reason for the failure of new ventures.

Some recent and reasoned thinking on the issue appeared last month in strategy + business as well.  McGill Professor Henry Mintzberg, known for his close study of the working lives of executives, says that the most effective companies are those where leaders have created a sense of community.   

This is accomplished, Mintzberg says, by people capable of managing and leading.  “Would you like to work for a manager who doesn’t lead?  That can be terribly discouraging.  What about a leader who doesn’t manage?  That can be awfully disengaging.”

“We have had more than enough of detached, heroic leadership,” Mintzberg believes.  “It is time for more engaged management, embedded in “communityship.”

I might say it a different way: There should be signs hanging over our great technology communities, and maybe over each of our companies’ front doors, that remind us (no matter how cool the technology or healthy the Net Present Value):  “It’s The People, Stupid.”