The great myth is the manager as orchestra conductor. It’s this idea of standing on a pedestal and you wave your baton and accounting comes in, and you wave it somewhere else and marketing chimes in with accounting, and they all sound very glorious. But management is more like orchestra conducting during rehearsals, when everything is going wrong.

Henry Mintzberg, quoted in the Wall Street Journal, 2009¹

In a nutshell

The need for skilled managers has never been greater, and globally the number of people in management is set to grow in the coming decades. The MBA reigns supreme as the badge of quality in business administration, yet only 1 in every 200 managers will get to do one. A business degree is a great thing, but you don’t need one to start thinking about purpose and contribution to the bottom line. With discipline and curiosity you can make huge strides in your professional life.

In this chapter you will:

• learn about the history and main functions of management
• define the purpose of management
• discover the structure and goals of the MBA
• write your first reflections and do your first activities for reflective practice

Why this book?

There may be many reasons why you have decided to read this book. Perhaps you are new to management and are feeling a bit overwhelmed. Equally, you could have plenty of experience but feel stuck in your career, as though you have reached a plateau. You may have a long list of specialist qualifications under your belt and are now beginning to think about an MBA as the next step. Or maybe you don’t have formal education behind you, have improvised from day one and somehow fear being exposed for this (by the way, this is known as the ‘imposter syndrome’ and is a lot more common in management than you might think). Alternatively, you may just be curious about business and education in general, or incredibly busy and feel that if you were better informed you would have a little more control over your career path.

Whatever your story, there will be something in The Every Day MBA from which you can benefit. But to find it you will need to do some critical thinking and some reflective writing as you go. So before anything else here are your first tasks.

As you go through The Every Day MBA, I want you to develop the habit of regularly making such notes – this is one of the things that will lead you to reflective practice (more on this in Chapter 2) and in Parts 2, 3 and 4 you will find a couple of reflection questions at the end of each chapter.

An open mindset is the only route to insights from this book. Critical practice – that is, doing it with your eyes wide open – is a key facet of an MBA, so you will also see regular suggestions for things to apply or ideas to investigate in your own job. Here is the first.

Assumption naming is an important thinking skill, but not an easy one. Even if you rated yourself as ‘above average’ in critical thinking skills in the list I gave earlier, you may struggle to name all your own assumptions in your day-to-day activities as a manager. Carrying out these reflective tasks is part of training yourself to challenge how you see the world.

Management

Since this is a book about management and the MBA we should start by understanding what these terms mean.

Having a job is nothing new, but the role of management is a relatively modern notion. It has roots in the industrial revolution more than 200 years ago, so its meaning was forged in an era of corporate invention, mass production, division of labour and admiration for the methods of science. Industrialised societies have benefited from unparalleled advances in technology, improvements in public health and social welfare, establishment of global trade, and high standards of education. Yet they have also seen exponential growth in human population, unquestioning exploitation of natural resources, destructive armed conflicts at every level from local to global, and repeated cycles of economic boom and bust. For better and worse, there can be little doubt that today business shapes our world.

There has never been a shortage of thinkers to make sense of all of this. In 1916 French mining engineer Henri Fayol published a seminal text on management.² It contained six functions of management that have proved quite resilient:

1. Forecasting and planning.
2. Organising.
3. Commanding or directing.
4. Coordinating.
5. Developing outputs.
6. Controlling (through feedback).

Fayol’s views were echoed by others. For example, American engineer Frederick W. Taylor championed management as a precise science of time and motion. ‘Taylorism’ belongs to a classical view of management built around technical rationality, and though it may now seem outdated, many organisations still owe something to it. The Ford Motor Company applied it to assembly-line production and Total Quality Management (TQM) united, for a time, organisational hierarchy and supply chain in every department, as Six Sigma attempts to do today.

The most influential voice shaping our understanding of the organisation of business in the second half of the twentieth century was Peter Drucker, who wrote extensively on the role of management in a wide variety of settings. Drucker made a number of accurate predictions and coined many terms, such as ‘knowledge worker’, ‘outsourcing’ and ‘management by objective’. One of the reasons his work remains important today is his consistent belief that management is a matter of hierarchy and relationship.

Do these views still hold true today? Well, yes, and no.

Yes, in that we often rely on the past to show us the way to the future. Organisations, like people, derive a sense of identity from what has gone before and there are many turning points from the past that, for better or worse, still matter in management thinking. Consider just three:

• In 1888, a US court held that a private corporation was entitled to the same constitutional protection in law as a US citizen, and the concept of ‘corporate personhood’ was born. The results? First, a population explosion of businesses that are born (and die) every year around the world. Second, we are now comfortable thinking of organisations as if they have minds, identities, rights and ambitions entirely of their own. Third, huge diversity in what these corporate persons do, but almost no disparity in how they are organised (that is, they all tend to have the same basic structure).
• From 1927 to 1932 Elton Mayo conducted a series of experiments at Western Electric’s Hawthorne plant in Chicago. A good management scientist, his original aim had been research on how the company’s lighting products could boost productivity on any manufacturing shop-floor. What he unintentionally found was that productivity under experimental conditions increased no matter what variable was changed. At the time, no one made the connection with the experimental context itself. Less significance was seen in the social aspect of the study until the 1950s when, in a new era of behavioural psychology, others revisited these results and concluded that productivity had improved because supervisors and staff paid attention to each other. The ‘Hawthorne effect’ was coined and the human relations movement was born.
• In the late 1950s the Gordon and Howell report (in the UK)³ and the Ford and Carnegie Foundation report (in the US)⁴ strongly advocated the use of principles and practices from management science in the education of managers at business schools. Universities invested heavily in their business schools, the management disciplines took shape and the MBA took off.

This legacy still influences how your organisation is set up and these and other landmark moments have shaped management. But they are not the whole story. Management is constantly shifting and its definition is broad. Like all science, it will continue to evolve, but there is still no single, over-arching ‘theory’ of management.

When economic times are hard, management is often blamed. Many (including some insiders) have accused business schools of being part of the problem, not the solution. Renowned Indian academic Sumantra Ghoshal warned against MBAs relying too much on the ‘gloomy’ economic theory of greed and self-interest dominating business.⁵ Ghoshal believed that the job of senior management was not to change people but to change the context so that those people could flourish. Canadian strategy guru Henry Mintzberg has appealed to MBAs to use more thoughtful reflection on experience in the classroom.⁶ After the global economic downturn in 2008, many MBA programmes have been trying to learn these lessons themselves. There are indeed many issues in today’s business environment that call for new thinking, such as the following:

• An increasing number of people see the (post) industrial business world as a system in runaway, a vicious cycle unsustainable not just in the long run but in the medium term, too. According to this view, the same thinking that created this situation cannot be used to find a solution, and the challenge is one of finding a sustainable model for business using a different way of thinking.
• Knowledge has long been a currency of global business, but data is now so freely and quickly available that our definitions of knowledge, and of information, will need to change to reflect this. Knowledge is no longer power. This may seem an odd thing to say in education, and about an MBA, because there are still plenty of items of knowledge crammed into the course, but power now comes from how you share information.
• The key to managing or leading others is no longer authority and positions of power in a hierarchy but rather your self-awareness and skills in connecting all the resources around you.

The purpose of management: value creation

Management is a proxy activity. It becomes necessary to have someone stand in for founders or shareholders when an organisation becomes too big for those people to run it on their own. Therefore, fundamentally a manager represents the interests of others; they cannot do entirely what they please. Another word for this interest is value. Management must create value, and wherever you are in an organisation you need to understand what is meant by this.

Value is traditionally measured in business by money (e.g. by economic profit, which we cover in Chapter 5), but it can and should also be measured in other ways. Although profit margin is one measure, there are other metrics that can measure value, such as a care for what your customers are getting from the relationship, how suppliers are in tune with your internal processes or the extent to which your fellow employees are contributing to those processes.

When it comes down to it, the world wants managers who can:

• make decisions under uncertainty
• gather, process and analyse information quickly and thoroughly
• communicate effectively on paper and face to face
• see the strategic connection inherent in every situation.

To get all these things done, especially in larger organisations, the role of management is often divided into three levels: first, middle and senior.

First-level managers have three main tasks to take care of:

• Learning from doing: gaining hands-on experience of the subject matter in their part of the organisation is the best way to pick up basic knowledge skills. Another way of saying this is on-the-job training.
• Learning the ropes: behind all the processes and systems lies the culture of the organisation – this is the ‘how we do things round here’ part, and is how it actually works.
• Taking on responsibility and decision making to complete relatively basic management tasks such as meeting agreed targets or mastering limited staff supervision and development.

The politics of the organisation are rarely an obstacle at this level because there is little that you can do (usually ...) to rock the boat.

Middle managers have all these – plus three more:

• An informed curiosity: a hunger for new knowledge and for new ways of doing the job better.
• Self-preservation: the practical necessity to align with senior management’s definition of value creation. This is a big one. Managers are constrained in what they can and can’t do and must weigh up day-to-day decision making between what subject knowledge and experience tell them and what politics will allow or condone.
• Responsibility for implementing small- to medium-scale change: middle management. This is mostly a process of adjusting what is already there, as opposed to creating things from scratch. Middle managers rarely get the chance for visionary leadership.

Effective middle managers may be given the chance eventually to lead at the top. Then, as senior managers they get to do all the things above, plus three additional tasks:

• Stand in place of the founder or owners: their task is, above all else, to decide what will maximise rather than destroy value for the shareholders of a business. This is despite the owners being only one category of stakeholder, and value being measurable in many other ways.
• Translate the vision and set the strategy: ultimately they are responsible not just for the direction but also for the consequences of everybody’s actions.
• Keep eyes and ears open: continuously survey and interact with the external environment and prepare for the future context.

Truly successful organisations are those that create an environment of possibility, trust and openness, where middle managers can reach their full potential as they create value for stakeholders. That, however, is rarely the case. Few people work harder than middle managers because they are the bridge between day-to-day operational tasks and the big picture, but in organisations with a confused context at the senior management level, their efforts can end in frustration and burn-out.

The good news is that the MBA is very relevant to the tasks of middle management and as preparation for the complexities and challenges of senior management and leadership. This is exciting. With the right ingredients, MBA thinking can be life-changing.

In summary, management involves:

• acting with thoughtful purpose and intention
• being the symbolic but active representative of the owners of a business or organisation
• consciously using resources to create value in a way that is socially and ethically acceptable
• setting the context for future performance.

The MBA

We’ve discussed what management is, now we’ll look in a bit more detail at the MBA degree.

The MBA is a generalist degree. It was first offered at Harvard in 1908, but management remained stubbornly vocational for several decades after that. In fact, the MBA did not gain much acceptance until the 1950s when shifts in education policy and economic growth following the Second World War combined to create demand for qualified practitioners. It has not looked back. In the United States alone more than 250,000 people are currently studying for an MBA, offered to them by nearly 1,000 institutions. The MBA now accounts for nearly two-thirds of all graduate business degrees. If you want to do an MBA in the United States, there are plenty of schools to choose from, but expect a two-year full-time course, and an average age among your fellow (largely non-US) classmates of 28.

In Europe, where the MBA arrived in 1957 at INSEAD in France and in 1964 at London Business School, the market is dominated by part-time study and the average age is a lot higher. In emerging economies the degree is rapidly growing as a mass-market product by big business schools in large universities. Class sizes in full-time MBAs may vary from a handful to several hundred, depending on the school. MBAs are expensive. Fees on many MBAs are high and usually don’t include living costs or the opportunity cost of a year or two away from employment. Nearly everywhere, men still outnumber women in most MBA classes, as they do in the boardroom – something that business schools ought to be changing.

The stereotype of an MBA is an ambitious, power-hungry and brash male manager investing in a year or two off work, eager to show their competitive zeal and mental agility, and equally eager to trample over their colleagues to finish top of the class and get hired by a leading consultant or bank. There may be some people like that, but actually it’s not representative of the majority of students, who are professionals with management experience and fewer expectations that the return on their study will be measured only in salary and bonuses.

Why does anyone do an MBA?

Management is a process of both personal identity and analytical sense making. An MBA involves a lot of work in what is already the busiest period of a person’s working life. Reading, writing assignments and exams, classroom discussions and group work, myriad adjustments in work–life balance and major changes in perspective and beliefs – all are typical of the experience. An MBA is about understanding and then managing changes in the web of relationships between senior and middle levels of management. The value of doing one comes from the applicability of what you have learned to a range of industries, in a host of situations, across a world of cultural divides. An MBA will not make you a genius in every field, but it ought to equip you to manage, lead and inspire others who are experts in theirs. This requires good character, astute self-awareness and strong thinking skills.

So why doesn’t everyone do one? The majority of managers in the world will never do an MBA, and not just because there are many more managers than spaces. It’s expensive, it consumes time that most people never seem to have in the first place, and it imbalances further the precarious equilibrium of work, family, relationships and other parts of your life. On top of that, there is nothing magic about a business school other than creating the right context for personal development. However, with determination and support you can achieve many of the same results through self-awareness and application to self-study.

MBA thinking: why is it so important?

As we saw in the introduction, this book is about MBA thinking, or thinking like an MBA every day. So let’s be clear and precise about thinking, because how you think is part of creating value.

We use the word ‘thinking’ in a number of ways. It can mean the ‘stream’ of conscious and semi-conscious images and ideas that passes through our minds, usually unchallenged, every day, or things that are real but not present, except in our imaginations. Equally, it can mean the deliberate mental process linking enquiry/explanation to reasoning/action. It is the last one of these that is MBA thinking. As you read on, keep in mind two important facts about thinking:

1. Thinking is always categorical. In other words, thinking is a way of dividing up a ‘messy’ world so that we can examine, understand and apply actions to it. As a manager, if the way you think does not match the way the world is, you will end up in trouble.
2. We all have the ability to think about thinking. This is a skill we can develop.

What are concepts, frameworks, models and theories?

People who do an MBA often get a boost to self-confidence early on. All the new vocabulary and the new concepts you pick up on the course, as well as the quick feedback at work if you are studying part-time, can make a difference to how you feel and how others see you. When you learn about new things, you tend to start to see them around you. This new MBA vocabulary has its own grammar, so it will help to differentiate between a few important terms now:

Concepts: Our way of imposing order on a complex world by defining things – in this case ideas and concepts. When we name, we create categories, so a concept is a way to build a map. Business contains a great number of concepts (e.g. profit, competitive advantage, culture, etc.) and these form the vocabulary of management.

Frameworks: Representations, often visual, of concepts that have something in common. A good framework is useful because it organises your thinking in a structured way. Which way round you order those concepts is not so important.

Models: Collections of concepts arranged a particular way to map the relationships between concepts (e.g. cause and effect), and more detailed than frameworks. Unlike frameworks, with models it matters in which order concepts are placed. Models are short cuts. MBAs, academics and business practitioners like them because they quickly let you apply other people’s thinking to a given problem or question. The statistician George Box once said, ‘Essentially, all models are wrong, but some are useful’, so keep this in mind.⁷

Theories: Our current best explanations for how we think the world works. Good theories aim to explain as wide a set of phenomena as possible and provide a basis for testing predictions. A better theory is one that explains more than its predecessor. Theories are there to help make sense of incoming information, and are fine-tuned by trying to find their limits. MBAs are not attracted to theory usually until it’s too late! Theory building is driven by curiosity.

The three phases of a typical MBA programme

Imagine you were creating an MBA curriculum, where would you begin? With strategy? Leadership? Personal development? Study skills? Team building? Or would you launch into one of the functional modules? All these approaches exist, but sooner or later programmes conform to three conventions:

1. Categorising business and management into subjects.
2. Organising those subjects into parts/stages.
3. Sequencing of subjects, usually from simple to complex, functional to strategic and core to elective.

This feels linear, and it is. You might also feel that this does not map exactly onto the messy world as you experience it at work, and it doesn’t. But it is a way to organise a lot of ideas and content while you develop your reflective thinking skills as a manager. I want to make The Every Day MBA useful for those at work and those studying, so the book will follow the same pattern.

The thinking skills that the MBA develops can be seen to have three phases:

Phase 1 – Tactical: Using facts gained from experience to help make managerial decisions, taking action in line with existing strategy, networking, looking for incremental improvements, ‘problem solving’.

Phase 2 – Strategic: Using context, developing a relational view of situations, participating in strategy formation, communicating and implementing strategy, ‘problem setting’.

Phase 3 – Critical: Independent learning, systematic questioning of assumptions, mastery, asking unsettling questions, becoming an effective leader, ‘problem dissolving’.

Running alongside these is a fourth type of thinking: reflective. It is arguably the most vital, but also the one that many MBA students – and MBA programmes – neglect.

For most people, the career journey is experienced as parts that add up, step by step, to a whole. To be given greater responsibility in management first means proving you are competent at making decisions, solving problems and directing the work of others. Yet in important ways things do change when you become responsible for more. Your decisions are bigger, fewer in number, based on a broader range of considerations and much less reversible.

Putting it together: a blueprint for personal development

At the end of each chapter I will encourage you to think about how each part of the book fits into the bigger picture.

Often we say that we know what a manager is by combining what a manager does with what a manager thinks and knows. Everything you do as a manager happens in relation to everything else and management is by its nature always interconnected. Each chapter in The Every Day MBA is a new perspective on the same thing. Before we consider those separate points of view, I want you to consider how much you know about the person you are.

Further reading

A classic text:	HBR’s 10 Must Reads: The essentials (2011), Harvard Business Review Press. A collection of seminal articles in HBR by the ‘big guns’ of management thinking.
Going deeper:	A Very Short, Fairly Interesting and Reasonably Cheap Book About Studying Organizations by Chris Grey (2012), Sage Books. I really recommend this book, though it is a challenging read in some parts.
	The Corporation: The pathological pursuit of profit and power by Joel Bakan (2005), Robinson Publishing. A timely look into the growth and dominance of our modern business system.
Watch this:	‘The transformative power of classical music’, classical musician and orchestra conductor Benjamin Zander’s powerful TED talk from 2008: www.ted.com/talks/benjamin_zander _on_music_and_passion

Notes

1 http://online.wsj.com/news/articles/SB10001424052970204908604574334450179298822

2 Fayol, H. and Storrs, C. (2013) General and Industrial Management, Martino Fine Books.

3 Gordon, R.A. and Howell, J.E. (1959) Higher Education for Business, Columbia University Press.

4 Canning, R.J., Robert, I.D. et al. (1961) ‘Report of the Committee on the Study of the Ford and Carnegie Foundation Reports’, Accounting Review, American Accounting Association, 191.

5 Ghoshal, S. (2005) ‘Bad management theories are destroying good management practices’, Academy of Management Learning & Education, 4(1): 75–91.

6 Mintzberg, H. (2004) Managers, Not MBAs: A hard look at the soft practice of managing and management development, Berrett-Koehler Publishers.

7 Box, G. and Draper, N. (1987) Empirical Model Building and Response Surfaces, John Wiley & Sons.