Management Consultants: Separating the Wheat From the Chaff
Source: VeraSage Institute
The following includes excerpts, reproduced with permission, from a blog entry by Ron Baker.
Masters of Management is the update to one of my favorite business books of all time, The Witch Doctors (TWD), first published in 1996, by Adrian Wooldridge and John Micklethwait, two editors from The Economist.
What has happened between TWD and this work? Enron and the 2008-09 financial crisis, which was partly fueled by MBAs' risk models and financial innovations in packaging up faulty mortgages. The industry has essentially stayed the same, though the ideas have changed.
In TWD, the authors laid out four charges against the industry, which I believe are as true today as they were then:
- The discipline is constitutionally incapable of self-criticism;
- It favors terminology that confuses rather than educates;
- It rarely rises above the level of basic common sense;
- It is faddish, fickle, and bedeviled by contradictions that would not be allowed in more rigorous disciplines.
There are some new fads that come in for a skewering. One is Corporate Social Responsibility (CSR), which is “the tribute that capitalism everywhere pays to virtue.” Approximately two percent of all investment in the USA are in CSR funds, and less than one percent in Europe. So much for putting your money where your mouth is.
There is a chapter devoted to Peter Drucker and Tom Peters, and other prominent gurus get their mention: Michael Porter, Clayton Christensen, and Henry Mintzberg, among others. The new wave of academic and journalist gurus comes in for some criticism (and praise) as well: Howard Gardner, Robert Reich, Richard Florida, Thomas Friedman, and Malcolm Gladwell.
There's also a chapter on “frugal innovation,” which is definitely changing the pricing, supply chain dynamics, and value proposition in developing countries.
A few quibbles aside, this is an incredibly worthwhile book. The management consultancy industry is still immature, and allows in all sorts of self-proclaimed gurus and thought leaders, but it could be argued that this is a sign of its vitality and openness to new ideas. But this low barrier to entry also means there is an enormous number of crackpots. Masters of Management is a useful guide in separating the wheat from the chaff.
For the complete blog entry, read “Book Review: Masters of Management.”
From VeraSage Institute, http://www.verasage.com/index.php/community, February 21, 2012.