Vindicating middle management

As we saw in the mortgage foreclosure fiasco, paperwork is necessary.  And, according to some research in India, so are the processes, policies, and record-keeping associated with “bureaucratic” business management:

Imagine a world without middle managers. If you’ve done time in a cubicle, you might picture a paradise where workers are unshackled by pointless bureaucracy, meaningless paperwork and incompetent bosses. A place where stuff actually gets done.

Despite a proliferation of management gurus, management consultants and management schools, it remains murky to many of us what managers actually do and why we need them in the first place. A new World Bank-Stanford study titled “Does Management Matter?” provides an answer. Working in collaboration with the consulting firm Accenture, the researchers randomly selected a set of textile factories in India to receive a complimentary five-month management makeover and compared the profitability and efficiency of these revamped factories with a control group of factories that continued doing business as usual. It turns out that management does matter: The consultants boosted productivity by about 10 percent by improving quality, managing inventory and speeding up production.

via In defense of middle management.

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • http://www.johndcook.com/blog/ John

    That’s not much of a vindication if one of the world’s largest management consulting companies was only able to raise the productivity of a factory in a developing country by 10%. Presumably Accenture planned to write a case study about their experiment before they began and gave it their best shot, assigning better people to the project than they might have otherwise. (Firms like Accenture, née Arthur Andersen, have a reputation for sending their A Team on sales calls and then sending their B Team to do the work. Maybe the A Team stayed on these jobs.)

    Also, factory management is a different matter than office management. In a factory, the people at desks have very different jobs than the people on the floor using machines. In the bureaucracies of Dilbert cartoons, managers are doing essentially the same work as the people they manage. It is easier to understand the contribution of managers the more their work is distinguished from the people they manage.

  • http://www.johndcook.com/blog/ John

    That’s not much of a vindication if one of the world’s largest management consulting companies was only able to raise the productivity of a factory in a developing country by 10%. Presumably Accenture planned to write a case study about their experiment before they began and gave it their best shot, assigning better people to the project than they might have otherwise. (Firms like Accenture, née Arthur Andersen, have a reputation for sending their A Team on sales calls and then sending their B Team to do the work. Maybe the A Team stayed on these jobs.)

    Also, factory management is a different matter than office management. In a factory, the people at desks have very different jobs than the people on the floor using machines. In the bureaucracies of Dilbert cartoons, managers are doing essentially the same work as the people they manage. It is easier to understand the contribution of managers the more their work is distinguished from the people they manage.

  • Tom Hering

    “Randomly selected” factories. Yeah, that sounds scientific. But there’s no way you can implement a “management makeover” without the managers knowing something’s going on.

    So did productivity increase 10% because the managers, knowing (or at least suspecting) their performance was being tracked in a new way, do a little better than usual? Observation changes behavior.

    And did the gains last beyond the makeover period? If so, for how long?

  • Tom Hering

    “Randomly selected” factories. Yeah, that sounds scientific. But there’s no way you can implement a “management makeover” without the managers knowing something’s going on.

    So did productivity increase 10% because the managers, knowing (or at least suspecting) their performance was being tracked in a new way, do a little better than usual? Observation changes behavior.

    And did the gains last beyond the makeover period? If so, for how long?

  • Tom Hering

    I’m thinking of those programs to increase worker happiness. Changes are made in the workplace, productivity increases, and workers report higher levels of happiness. The changes were effective, right? Yes and no. Turns out that making changes, in itself, is what increases productivity and happiness. As soon as the new way of doing things becomes an old routine, productivity and happiness drop to their old levels.

  • Tom Hering

    I’m thinking of those programs to increase worker happiness. Changes are made in the workplace, productivity increases, and workers report higher levels of happiness. The changes were effective, right? Yes and no. Turns out that making changes, in itself, is what increases productivity and happiness. As soon as the new way of doing things becomes an old routine, productivity and happiness drop to their old levels.

  • larry

    Even changes in and of themselves do not “increase” productivity. They mostly produce pseudo readings on “increased” productivity. The “changes” themselves become their own self fulfilling prophecy. Usually what happens is “changes x, y and z” are proposed with new metrics x, y and z accordingly. The new metrics are “relative” and not absolute. Then some increase is measured via the new metrics which were of course created to measure the new changes.

    Any real absolute increase and change due to the new procedures is nearly always contributable to basically “picking low lying fruit” anyway, in other words some good old periodic house keeping. Most of the time it has little to nothing to do with the changes made in and of themselves.

    Of course the general concept of ever continual increased productivity is non-sense in and of itself and at length most (not all, but most) just becomes “busy work” to no end. Even though it is taughted as “sucess” due to the temporary new metrics measuring it and the low lying fruit that was easy to get at anyway.

  • larry

    Even changes in and of themselves do not “increase” productivity. They mostly produce pseudo readings on “increased” productivity. The “changes” themselves become their own self fulfilling prophecy. Usually what happens is “changes x, y and z” are proposed with new metrics x, y and z accordingly. The new metrics are “relative” and not absolute. Then some increase is measured via the new metrics which were of course created to measure the new changes.

    Any real absolute increase and change due to the new procedures is nearly always contributable to basically “picking low lying fruit” anyway, in other words some good old periodic house keeping. Most of the time it has little to nothing to do with the changes made in and of themselves.

    Of course the general concept of ever continual increased productivity is non-sense in and of itself and at length most (not all, but most) just becomes “busy work” to no end. Even though it is taughted as “sucess” due to the temporary new metrics measuring it and the low lying fruit that was easy to get at anyway.

  • http://www.bikebubba.blogspot.com Bike Bubba

    As one who interacts a lot with management, and has visited developing countries, 10% is not much to gain there. I would have to guess that if you sent subject matter experts instead of a management consulting company in there, you could have gotten double or triple the gain.

    Not that management is unimportant; I concede that. It’s just that I’m not convinced that consultants and business schools are terribly helpful; one study about 5 years back found that MBAs were no more effective at their jobs than similarly talented people without an MBA. If you know your business and how to account for it, you’ll do OK–and vice versa.

  • http://www.bikebubba.blogspot.com Bike Bubba

    As one who interacts a lot with management, and has visited developing countries, 10% is not much to gain there. I would have to guess that if you sent subject matter experts instead of a management consulting company in there, you could have gotten double or triple the gain.

    Not that management is unimportant; I concede that. It’s just that I’m not convinced that consultants and business schools are terribly helpful; one study about 5 years back found that MBAs were no more effective at their jobs than similarly talented people without an MBA. If you know your business and how to account for it, you’ll do OK–and vice versa.

  • http://www.toddstadler.com/ tODD

    Didn’t read the article, but … in what way is this article or study a “defense of middle management”? Did Accenture study, as the article lede implies, how “a world without middle managers” would change things?

    No, they studied how having (slightly?) improved managers would change things. Answer: it slightly improves things. The article would be more accurately titled “In defense of improved management”. But that would be obvious, wouldn’t it?

  • http://www.toddstadler.com/ tODD

    Didn’t read the article, but … in what way is this article or study a “defense of middle management”? Did Accenture study, as the article lede implies, how “a world without middle managers” would change things?

    No, they studied how having (slightly?) improved managers would change things. Answer: it slightly improves things. The article would be more accurately titled “In defense of improved management”. But that would be obvious, wouldn’t it?

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