New Rules for Management? No!

Fortune recently published an article talking about the “new rules” for management using Jack Welch (GE six sigma) as the focus of the old rules. It seems to me there is nothing new here (once again).

“New” rule: “Agile is best, being big can bite you”
Yeah. Does anyone think this is new. Do they really believe Jack Welch thought agile was not a good thing? Yes, Jack Welch wanted to be number 1 or number 2 in the field or get out of that business line. I still don’t think that he thought being a big un-agile organization couldn’t hurt you.

“New” rule: “Find a niche, create something new.”
Yeah, good idea. I seriously doubt GE was against creating new things. Finding niches in fact is basically what being number 1 or 2 is about. Find those niches you excel in and focus there. I think saying you have to be number 1 or 2 is a silly arbitrary target. But that was just as true 10 years ago as today. Lets look at who the article for these new ideas quotes (with big photos on the main page): Starbucks – number 1 coffee shops, Xerox (I don’t know), Cisco – number 1 switches/routers, Coke number 1 sugar water sellers. Boy this old idea of number 1 or 2 is sure old thinking. Why are those highlighted as experts all perfectly suited to the old rule?

“New” rule: “The customer is king.”
yes. GE would have said the same thing. Shareholders rule as the old rule? Yeah they still seem to. Few companies today, 10 years ago, 50 years ago… understand that there are many stakeholders – all of which the organization should benefit: customers, stock holders, suppliers, workers, the community… I see no evidence there has been any shift in thinking. Deming, The New Economics, 1993, page 51: “The aim proposed here for any organization is for everybody to gain – stockholders, employees, suppliers, customers, community, the environment – over the long term.”

“New” rule: “Look out, not in.”
What kind of rule is that? It is pretty obvious you need to do both. I find it incredible the amount of time that is taken trying to show “new” ideas that amount to absolutely nothing. See comments on: Fast Company Interview: Jeff Immelt.

“New” rule: “hire passionate people”
Wow what a good idea!! I bet no one thought of that before??? The old rule – forced rankings? Now that is something to talk about. Yes that was a bad idea in 1900, 1950, 1990 and 2006. See: problems with forced ranking, performing without appraisal and Dr. Deming on performance appraisal. Even though the old rule was bad I believe GE believed in the new rule. They are not necessarily contradictory – though I believe forced ranking will hobble and force passionate people to leave.

“New” rule: “Hire a courageous CEO”
Meaningless. Of course you want courageous CEOs and charismatic and smart and lucky and knowledgeable and connected and liked and… Both the “new” and “old” world have a huge CEO problem – that of ludicrasly high SEO pay.

“New” rule: “Admire my soul”
Yeah, meaningless. Feel free to read more and disagree with me. Is it dangerous to be seen as a bully? Yes. That has been true for a long time. Is there value in being trustworthy and respected? Yes. Again, true for a long time. Is it a bit more difficult to hide bad behavior today. I think so. Is it a bit more difficult to get away with using might to enforce the will of your organization? Yes, but this is a quantitative not qualitative shift. Is it valuable to have guiding principles? Yes. The value is in truly making that fundamental to how the organization works. Changing with the winds of fads does nothing to make this a reality.

Jack Welsh responds the article: Welch fires back. He makes much better points than the original article.

Some of my thoughts on six sigmaSix Sigma Won’t Fix Bad Management?

and from – Deming and Six Sigma:

I must admit I find it somewhat amusing that I am becoming a defender of Six Sigma. It is not that I have a much better opinion of Six Sigma than I did before.

Basically I believe six sigma is a good but management improvement strategy that could be much better. That was true ten years ago and is true today. Acting as though six sigma was great 10 years ago and is no good now is a bad idea – and the type of thing the media seems to encourage. If you are trying to apply six sigma ideas read and be guided by the work of Roger Hoerl, Soren Bisgaard, Forrest Breyfogle III, Ron Snee, Bill Hill… and learn and apply what they talk about as six sigma (since what people call six sigma varies so much).

My response to an article similar to the Fortune new rules article: Secrets of the World’s Best Companies.

Many other blogs have commented on this article (which might very well suit the aim of Fortune regardless of what I think of the article):

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