Why do promising management practices so often fail?New research blames lack of expertise among consultants
May 1, 2006
For more information, contact: Benjamin Haimowitz, HHaimowitz@aol.com
They come and go in what seems an unending parade -- management fashions, like Job Enrichment, Quality Circles, Total Quality Management, Business Process Reengineering, Knowledge Management, Balanced Scorecard, and (a possible current candidate) Corporate Social Responsibility. Often they turn out to be little more than fads that result in a great waste of time and money.
Why do management fashions commonly turn out badly? Most research on this question has focused on two phenomena that are part and parcel of the management- fashion parade -- excessive drum-beating by the media that produces a boom for a new management approach followed by a bust; and the pressures of business competition, which promote unthinking adoption of a fashion through a kind of bandwagon effect.
Insightful though this research may be, it is not likely to be of much help to managers. After all, how is one to tell whether the enthusiasms of the business press are more hype than help? And how does one resist jumping on the bandwagon in the face of success stories about rival firms that have adopted a new fashion?
Now, new research focuses on an element in fashion booms and busts that has been little explored, and, in the process, provides guidance likely to have greater practical value for managers.
A study in the current issue of the Academy of Management Journal finds that the boom-bust pattern typical of management fashions is, to a great extent, driven by the type of consulting firms that guide companies' adoption of a new practice. What happens, roughly, is this:
As a new management approach gains in popularity, large numbers of generalist consultants, expert at recognizing burgeoning opportunities, jump in to advise firms on implementing the new method, even though these generalists may have little knowledge of its intricacies. This influx of "fashion surfers," as one scholar called them, produces many program failures, and the practice that not long before was widely viewed as a virtual panacea gets a bad name. This in turn results in diminished demand, and consultation about the practice becomes mainly the province of experts and specialists, much as it was before the boom set in.
In the words of the study's authors, Robert J. David of McGill University and David Strang of Cornell University, "These supply-side dynamics...help explain why fashion booms are so fragile." They also "suggest that fashionable practices can return to their technical roots once the hype is over."
Adds David: "Our study does not imply that management fashions should be shunned as a matter of course, any more than it suggests that they should be adopted as a matter of course. The key to implementing any ambitious management practice is to insist that one's consultant have a sound technical grasp of it. Better to do nothing than rely on superficial knowledge."
He continues: "What our findings do suggest is that, to a great extent, the failures of many promising management practices can be laid at the doorstep of management consulting, which, although a $125-billion industry, has done little to set professional standards that begin to compare with those found in medicine or law or accounting. This study should be a wake-up call to the industry -- and its clients."
The findings are based on an analysis of the consultant-industry's role in what may have been the most celebrated management fashion of the past two decades, namely total quality management, or TQM. As David and Strang describe it, TQM's fashion boom occurred in the early 1990s after "American companies lost considerable market share to Japanese firms," a development that "led to much consternation surrounding American industrial productivity and an intense search for Japan's 'management secrets.' " The result was a variety of fads, culminating in TQM, that were "linked to American perceptions of Japan."
To gauge the progression of TQM as a management fashion, the authors searched ABI/INFORM, a bibliographic and full-text database covering business, management, economics and related fields, and counted the number of articles from 1989 through 2001 that had "total quality management" or "TQM" in their titles. The number rose rapidly from scarcely more than a handful in 1989 to close to about 200 in 1992 and 400 in 1993, with by far the greatest increase occurring in non-specialized journals, defined as those whose name did not include the terms "quality control" or "quality management." Beginning in 1994, the number of articles declined, dropping to fewer than 200 in 1996 and fewer than 100 in 1999.
This waxing and waning were accompanied, the authors note, by a marked shift in articles' views of TQM. In the early 1990s, they write, TQM "was generally seen as a panacea and few caveats were voiced." In contrast, by the late 1990s, "disillusionment and sober analysis replaced exuberance...Authorities offered...messages [that] reinforced managerial caution."
Having defined the progress of the TQM fashion, David and Strang analyze how consulting firms responded to it. Employing a comprehensive directory of the management-consulting industry, they find that generalist firms (active in four or more of the 10 general service categories listed by the directory) constituted most of providers of TQM services in the editions of 1992 (the first to list TQM), 1995, and 1997. The generalists' share reached a high point of about 80 percent of TQM providers in the 1995 edition, following upon the wave of enthusiasm for TQM that peaked in 1993.
By the edition of 2001, however, after disillusionment and sober analysis had largely displaced exuberance in articles about total quality management, generalists constituted only about one third of TQM providers. Meanwhile, firms that specialized in quality control, which represented only about 15 percent of TQM providers in 1995, had forged ahead of generalists and constituted more than 40 percent.
"These results paint a clear picture," the authors comment. "As TQM's fashion cycle moved from boom to bust, TQM consulting was increasingly populated by specialists and firms with roots in the more technical aspects of practice.
"What largely drove this reversal, the authors surmise, was that clients became more demanding over the course of time. They write: "The urgency and inexperience of buyers during the upswing and their skepticism and increased knowledge during the downswing present qualitatively different sorts of demand [which] result in identifiable organizational differences in suppliers."
By this time, though, considerable damage had been done. As the authors put it: "The period when the business community's attention was focused on TQM was also the time when managers were the least likely to find capable, committed TQM providers...A supply side inundated with firms lacking strong expertise and favoring one-size-fits-all applications is likely to result in many program failures and to thereby engender much disillusionment and skepticism within the business community."
In short, this was not a case where a half loaf was better than none. An abundance of fashion surfers "may be worse than a supply-side shortage in which there are not enough consultants to meet demand. Unfortunately, management consulting is a weakly professionalized field with no real credentials and few protections for best practice. Without gatekeepers or other forms of endogenous or exogenous monitoring, consulting dynamics appear structurally prone to amplify rather than dampen the faddishness of the business community."
Finally, can a fashion make a comeback? "In a memoryless world," David and Strang conclude, "the answer would be yes." More likely, though, it "will continue to be implemented in a narrow, technically responsible way, until perhaps it can be relabled or combined with other approaches to once again seize the managerial imagination."
The study, entitled "When Fashion is Fleeting: Transitory Collective Beliefs and the Dynamics of TQM Consulting," is in the April/May issue of the Academy of Management Journal. This peer-reviewed publication, now in its 49th year, is published every other month by the academy, which, with more than 16,000 members in 90 countries, is the largest organization in the world devoted to management research and teaching. The academy's other publications are the Academy of Management Review, Academy of Management Perspectives, and Academy of Management Learning and Education.
- Media Coverage:
- The Globe & Mail. Beware of Management Consultants Bearing Fads. (Monday, May 29, 2006).
- The Wall Street Journal. Why Management Trends Quickly Fade Away. (Monday, June 26, 2006).
- U.S. News & World Report. The Lemming Effect. (Monday, June 26, 2006).