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Why The Lunatics Really Do Run The Asylum

2011 March 6

The great management theorist, Tony Soprano, when confronted by his therapist about modifying his overbearing behavior, asked, “Then how do I get people to do what I want?”

More conventional managers have the same dilemma.  Modern businesses are increasingly a collection of highly specialized skills.  No one, no matter how smart or vigilant, can keep up with more than a small fraction of them.  We are therefore often at the beck and call of those we manage, rather than the other way around.

This can be frustrating for many, inspiring for some and probably confusing for most.  Nevertheless, it is a reality that we must not only accept, but embrace.

The Grand Inquisitor and The Medici

In Dostoyevski’s most celebrated novel, The Brothers Karamazov, the character Ivan tells the tale of The Grand Inquisitor.  Encapsulated, it is the story of the second coming of the messiah during the Spanish Inquisition.  Alerted to His presence, the Inquisitor promptly imprisons Him.  His crime:  endangering the mystery of the church.

For the Grand Inquisitor, much like generations of parents, managers and practitioners of the paranormal, knew that with mystery comes authority and with authority comes power. Without mystery, traditional structures are voided and power shifts from the rulers to the ruled.

Just such a process unfolded in medieval times.  The Medici family’s rise to prominence through commerce heralded a new economic age which transfered power to the merchant class.  This new economic reality gave rise to greater leisure and literacy, destabilizing the church’s role as the sole bearer of truth, which many believe eventually led to the Protestant Reformation.

The tension between freedom and order has been a constant theme throughout history, no less in business than in politics.

Commander’s Intent

When the modern corporation was created at General Motors by Alfred Sloan, the military was its primary model.  Companies were split into divisions, each with their own leadership.  Orders flowed downwards and your rank determined your responsibility.

So it is significant that detailed orders have fallen out of fashion in military circles in favor of commander’s intent.  The idea is that detailed orders often end up being either useless or worse in the heat of battle when facts are changing by the minute, if not by the second. Plans, no matter how well thought out, can’t foresee how events will unfold in the real world.

Therefore, the role of leaders has evolved.   They still manage resources, set goals and timelines and create plans.  However, most decision making needs to be done on the ground.  As this HBR article shows, the concept of commander’s intent is taking hold in management circles as well.

A corollary to operating under commander’s intent is a new emphasis on decision making skills in both the military and in industry.  A shift in power needs to be accompanied by a requisite transfer of skills.

Total Quality Management and Scrum

A primary example of commander’s intent at work in business is Total Quality Management (TQM), often associated with W. Edwards Deming.  The idea being that quality is not just a design or a materials issue, but is one of process and therefore needs to involve everybody.  TQM and accompanying innovations such as quality circles, are often credited for Japan’s post-war economic miracle.

A more recent approach is the Scrum method of product development.  Designed to be iterative and super fast, it focuses on self organizing, cross-functional teams.  Even more than TQM, it is intended to adapt quickly to changing requirements and operate with little oversight from senior management.

While TQM revolutionized manufacturing, Scrum is increasingly becoming the standard for software development.  These are not “warm and fuzzy” inventions of business school intellectuals, but time and battle tested practices widely adopted by top performers.  We’ve come a long way from the Dickensian factory floor.

Emergent Strategy

Much like TQM and Scrum have revolutionized manufacturing and development, management theorist Henry Mintzberg proposes a similar evolution in strategy.  His reasoning can be summarized in this graphic.

While decision making power rests with senior management, most of the information lies much lower down.  Therefore, while we must plan for the future, we must also do so with the understanding that our our strategy will be, at least in part, flawed either because it was based on incomplete information to start with or because facts simply changed on the ground.

The result is an emergent strategic process that looks like this:

Probably one of the best examples of successful emergent strategy is Andy Grove’s fateful decision to pull Intel out of the memory chips business and bet the company on microprocessors.

Although many still see this as the work of a lone genius, Grove himself describes the situation much differently in his book, Only the Paranoid Survive.  In actuality, most of his factory managers had already shifted production long before Grove made the final decision.  His bold move had less to do with strategic thinking than it than it did with effective listening.

Taking Control by Giving Up the Illusion of Control

Many managers feel, like Dostoyevski’s Grand Inquisitor, that giving too much power to subordinates undermines control, discipline and eventually performance.  However, my experience has been the opposite.

I used to have a recurring situation with a woman who ran one of our largest divisions. She would come to me with a problem, the details of which I had only a general familiarity.  She would explain the situation, outline some possible options and usually within fifteen minutes decide on a solution.

Even though I had scarcely uttered a word, she would end the meeting by exclaiming, “Thanks, you really helped me!”

Of course, it didn’t always work like that.  Sometimes I had information that she didn’t and sometimes her logic was flawed.  Usually though, her proximity to the situation made her judgments better than mine and, on the occasional instances where I felt the need to step in, my voice was decidedly more credible.

The Lowest Common Denominator

While successful companies are characterized by the genius of their top management, company performance is often most determined by the lowest common denominator. Nobody cares about idle CEO rhetoric when somebody earning minimum wage is putting them through hell.

Moreover, inherent in any organization is the basic Hobbesian paradox which holds that enforcement costs negate the efficacy of any rule that the majority doesn’t want to follow. The lunatics are perfectly capable of creating their own rules, and often do, without letting the C-Suite know about it.

Good managers realize that, in reality, they make only a handful of consequential decisions per year.  The rest of the job entails enabling the actions of others.  In the end, you really don’t have a choice.

The lunatics will always run the asylum.  Effective management helps them run it well.

- Greg

Clarification: I’ve been informed that the first chart should actually be attributed to Mary Adams and her book “Intangible Capital.”  You can check it out at http://intangiblecapitalbook.com/

14 Responses leave one →
  1. March 6, 2011

    Great article. Even though I was already a convert this gave me more unsightly and more context (mintzberg.)

    Thanks!

    [Reply]

    Greg Reply:

    Thanks Craig. Have a great week!

    - Greg

    [Reply]

  2. March 6, 2011

    Greg-

    Great post–I love the analogy. And yes, businesspeople really do have to get used to the idea that power and ideas flow from the bottom up in today’s world.

    Just one quick clarification: The second drawing is indeed based on Mintzberg. The first one with the triangle is something I developed and recently published in Intangible Capital http://intangiblecapitalbook.com/

    To me, the way that management can help run the asylum is by actually monitoring its intangible capital system (the knowledge available to an organization from people, relationships and re-usable forms like data and processes). The role of management is to get the IC system the resources and support it needs and then, as you say, let it run itself!

    [Reply]

    Greg Reply:

    Ooops! Sorry for the oversight.

    Anyway, great chart! Good luck with the book!

    - Greg

    [Reply]

  3. March 6, 2011

    No problem – always glad to see ideas spreading! Love the blog, Mary
    Mary Adams´s last blog post ..The future of money is not just about money

    [Reply]

  4. March 7, 2011

    My only comment on an excellent post is that exciting theories aside, the real problem in business is the layers of middle management that exist only to serve as a buffer between bottom and top. I’ve managed using SCRUM and implemented business processes/strategies based on SCRUM as well as orthodox processes but the middle is the layer that quells innovation.

    My experience of dealing with top people in organizations is that they often do have vision and a great deal of insight that complements the groundswell understanding but that the middle layer stultifies and negates this.

    [Reply]

    Greg Reply:

    Richard,

    Thanks for your comment. However, I think you need to be a bit careful about characterizing people “in the middle.” I’ve encountered the situation that you describe above many times. Almost always, it is the sign of a poorly run company (from the top).

    What’s usually going on is that there is a control freak at the top who doesn’t give anybody any real responsibility (or leeway to fail). When you talk to subordinates, of course they are reticent to take a chance. But as soon as the “big boss” hears of a new idea (especially from outside). he immediately gives it credence.

    While it might seem like he’s doing you a favor, anybody who undermines his people in this way is a prick, not to mention a very poor manager. There’s no reason why someone in the middle should be inherently more risk averse or less creative than someone at the top (unless that person is Steve Jobs or something).

    When you encounter a situation like this you’re best move is to not work with the company. Even if you get your way, there is trouble down the line (i.e. as soon as your idea is accepted, you will become that “middle manager.”)

    - Greg

    [Reply]

  5. Jenny permalink
    March 7, 2011

    Great article, Greg. Agree completely with your inter-related comments of “Almost always, it is the sign of a poorly run company (from the top).” and “What’s usually going on is that there is a control freak at the top who doesn’t give anybody any real responsibility (or leeway to fail).” I have personal experience of this as a (middle) Manager and, after struggling for quite sometime, the only resolution I could find was to leave.

    A good follow up to your comments is Macoby’s HBR article and book – http://www.maccoby.com/Articles/NarLeaders.shtml

    [Reply]

    Greg Reply:

    Thanks for the tip, Jenny. Great article!

    - Greg

    [Reply]

  6. March 10, 2011

    I came across your article thanks to Semira Soroya-Kandan. I must confess the title immediately caught my eye…
    What a delight to read in the same article references to Dostoyevski, The Medicis, Sloan and Mintzberg…
    Literature, History, Religion, Economics all weaved together, with talent and striking examples.
    I want to read more!
    I was wondering if you were familiar with Charlene Li’s Open Leadership where she develops the concept of Letting go of Control and Still be in Command? http://geronimocoachingnow.com/?p=10

    Refreshing to read someone who has such an universalistic approach to management.
    Looking forward to discovering your work!
    marion chapsal´s last blog post ..Mes Bugnes Lyonnaises

    [Reply]

    Greg Reply:

    Thanks for such a nice note Marion. I haven’t heard of Charlene Li, but will surely check her out. Thanks for the tip!

    - Greg

    [Reply]

  7. NEIL permalink
    November 4, 2013

    Thought you might enjoy the story, though you may well know it already, Greg. Wonderful article, and articles generally. I agree with your view of strategy and the bit about ‘minimum wage/supervisors from hell’, well haha, True! But times are changing, aren’t they?

    Here is the Poe story: http://en.wikipedia.org/wiki/The_System_of_Doctor_Tarr_and_Professor_Fether

    [Reply]

    Greg Reply:

    Great story! Thanks Neil!

    - Greg

    [Reply]

  8. Kuldip Singh permalink
    June 6, 2014

    You wrote, ” His crime: endangering the mystery of the church.”

    I truly fear for the well being of Pope Francis.

    [Reply]

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