Excerpt
Chapter Six
Schools for Business
There were once three occupations in Britain for which you required
no qualification and for which no training existed: politician, parent
and manager. Unfortunately, they were also three of the most important.
Management, in particular, was something that, it was felt,
everyone could do at a pinch. Rather like making love, it was something
that sensible people instinctively knew how to do, when and as
the need arose.
But then, as I discovered, even lovemaking isn't quite as natural as
people assumed. Nowadays there is such an abundance of explicit
magazines, films and books demonstrating just what goes where and
how that no one can be ignorant of how it should be done, even if not
always expert in the execution. I had only a strange magazine called
Health and Efficiency, a nudist publication, to acquaint me with some
rather bowdlerised photographs of the female body - even James Joyce's
Ulysses was banned in the Ireland of my youth. I learnt by experience
in due course, but not without much fumbling frustration and
gaucherie.
Parenting wasn't much better, although my young wife and I did
have Dr. Spock's bible Baby and Child Care at our side, by day and night.
Then there were always mothers and mothers-in-law all too eager to
advise. Looking back, I can only apologise to our two children. Our
daughter once, half jokingly, accused us of using her as a social
experiment
in her education. She did not know the half of it. All her early
life was an experiment, as it inevitably is for the first child of
first-time
parents.
Management didn't even have a Dr. Spock. There was no decent
book, as far as I can recall, back in the fifties in Britain, to which a
would-be manager could go for help. The first remotely readable book,
The Human Side of Enterprise, by Douglas McGregor, a professor at MIT,
was not published until 1960. Shell was very taken by McGregor's book,
in which he distinguished two styles of leadership. One, Theory X,
worked on the assumption that people needed to be told what to do,
while Theory Y assumed that people could be trusted to act responsibly
on their own initiative. Shell memorably sent out a circular to
every manager in that year, summarising the book and decreeing that,
with immediate effect, Shell would be a Theory Y organisation, unaware,
presumably, of the confusion they caused by using Theory X to implement
Theory Y. Old habits die hard.
The thought of actually going back to school to learn about management
struck people as bizarre, or so it certainly seemed to both Oxford
and Cambridge universities who each turned down the invitation from
the business community to establish graduate business schools along
American lines. 'We are not a trade school,' one professor said,
indignantly.
That was in the early sixties when the government in Britain,
urged on by a group of leading business people, had begun to worry
about the state of British management and how it might be better
educated. It was right to be concerned. Thirty years later, as part of
'The Making of Managers', a 1987 report for the government that I
chaired, I calculated that almost every business executive at that time
would have left school at fifteen and not had one day of formal education
since. This was because only eight per cent of school leavers in
those days went on to university and they almost all went into the
professions or the civil or colonial services. Business had to make do
with the 'University of Life', as the managers of the day defiantly
termed it.
There were two exceptions: the alumni of the armed services and
accountants. The armed services took management seriously. They
trained their officers on recruitment and, later, at their staff
colleges,
where mid-career courses for high flyers lasting up to a year were the
norm. Many British managers in the fifties and sixties had done their
national service and had been exposed to the management theories
and practices of the armed services. They carried this experience into
their new business careers and, for a time, the businesses of Britain
bristled with the equivalent of officers' messes, where the managers
enjoyed three-course luncheons while the lower orders made do with
the works canteen. It often took time for the new ex-servicemen to
understand that business organisations operated in a different world,
one where the right to command had to be earned and where they
could no longer count on the ready acceptance of authority and the
privileges that went with it. No one ever suggested that training to
fight a war was the right preparation for managing a business. It just
happened to turn out that way, the unintended consequence of the
national need for military preparedness.
The best preparation, however, for a management role in business
was generally thought to be an accountancy qualification. In preparing
my report 'The Making of Managers', I unearthed the intriguing fact
that Britain had 168,000 qualified accountants compared with four
thousand in West Germany, six thousand in Japan and twenty thousand
in France. We didn't need or use that many accountants. The
great majority were not working as accountants at all, but as
nonfinancial
managers in business organisations. There is nothing wrong
with the accountancy training - for accountants. But accountants are
taught to give priority to the visible financial costs and assets, not to
the less quantifiable human assets, which they regard as costs. They
focus on the past rather than the future, because that alone can be
accurately measured and audited. Their training regards risk, uncertainty
and the unknown as undesirable. People management, at that
time, had no place in the curriculum, for money and its measurement
was all that mattered. The accountancy professions had, accidentally,
become the business schools of Britain. No wonder our economy was
lagging behind that of our competitors.
I didn't know all that back in 1965 as I prepared to leave Shell. I was
just hugely excited by the discovery that there were such things as
places in universities where one could learn all the secrets of business
and organisations and how to run them. A few of my generation had
known of the Harvard Business School and its competitors, had even
won Harkness fellowships to study there for an MBA, a degree that
was unknown to me. But I had been immersed in South-East Asia,
where such things were not talked of. Little did I know, back then, that
I would be privileged to study at one of the leading American schools,
would help to build one of Britain's first two graduate schools, would
later play a leading role in the first course of what was to become the
Open Business School of Britain's Open University, would act as advisor
to Cambridge University when it belatedly got round to establishing
its own business school and would chair the 'Making of Managers'
task force that helped to fuel the blossoming of management education
in British universities in the nineties. In the process I learnt a lot,
about management, about education and about the learning process.
I now believe that we and I got a lot of it wrong, but, as in much of
life, if we had waited for perfection we might never have got started.
Looking back now, after forty years, I can see that, if nothing else, we
helped to make the study of management and business respectable.
So much so that Business Studies is now the most popular undergraduate
course at most British universities. Given the anti-business culture
of the land when I left for America, that must count as a cultural
revolution.
It was exciting to be a part of it.
I was full of excitement and trepidation when I arrived at the Sloan
School of Management at MIT one sunny May day in 1966, having
survived the immigration process. So ignorant were we in Britain, at
that time, of things American and of business schools that one of my
friends, hearing that I was going to study what he called Commerce
at MIT, thought it must be the Montreal Institute of Typing that I was
headed for. I knew, however, that the Sloan School was one of the top
ten business schools in the world, that MIT was famed for its engineering
and science schools and that it had one of only two sabbatical
year programmes for high potential managers in mid-career, the other
being at Stanford University Business School in California. The director
of the MIT programme, one Peter Gil, sensibly suggested that the best
way for me to get to know the programme would be to participate as
a normal student. Thus it was that I joined fifty large crew-cut American
male executives - no women then - for a year of full-time management
study.
I remember thinking that there must be, in the Sloan Library, the
secrets of good management, that the scholars and researchers there
must long ago have found out what worked and what didn't and that
all would soon be revealed to me. I felt that I had been deprived, during
my ten years in Shell, of all the accumulated wisdom that must lie on
those shelves. After all, if there were such a thing as Management
Science, presumably there would be scientific laws and rules. I was to
be grievously disappointed. I read endless hypotheses that tried to
explain why people and organisations behaved as they did, but no
proofs. I ploughed through secular sermons, case histories and books
of tips, but remained confused rather than enlightened. Managing a
business, or any organisation, I came to see, was more practical art
than applied science. Yes, there were some useful disciplines, as in any
art form, but what worked best could not be wholly determined in
advance. Every situation was different. The actors, the motives, the
resources, the constraints were never the same.
The discovery came, unexpectedly, as a great relief. It meant that
ingenuity, imagination and character still had an important part to
play. The world of organisations was not firm and fixed like a piece of
engineering. An organisation was more like a mini society, one in which
anything could change or be changed. Not that that inhibited the
teachers of the Sloan School from trying to reduce the management
process to teachable formulae. It was my first blinding insight - that
schools, at every level, prefer to teach what can be taught, rather than
what needs to be learnt. It was to colour all my future thinking about
education.
Economics was a staple subject of our first semester. I was not
expecting to be troubled by the subject. I had educated myself in
economics at Shell and had worked as a business economist for a time,
both for Shell and in the interval between leaving Shell and going to
America. That was until we took the examination at the end of the
semester. It was a multiple choice examination paper, which, the
professor irritatingly informed us, had been marked by his ten-yearold
son, who had only to check our ticked boxes against the crib. I
scored twenty-three out of one hundred, the lowest in the class. I was
shocked. The problem was that I had ticked the box 'none of the above'
in too many instances, believing, as I saw it, that the correct answer
often depended on the circumstances. In time I learnt to play their
game, if only to ensure that I got the degree, but I disliked the
oversimplification
and reductionism that was involved. It was only later
that I myself came to see that you have to oversimplify things sometimes
in order to begin to understand them. Only when the basic
frameworks are established can you add in the qualifications and
complexities. Perhaps, I now think, it was injured pride rather than
undue simplification that triggered my annoyance.
The basic rules, as the professors defined them, were complemented
by case studies, in which we were presented with piles of data about
a business situation and were required to discuss what we saw as the
problem and what to do about it. These were useful exercises in analysis,
in sorting out the wheat from the chaff in the accumulation of
information
and in trying to formulate a way forward. It was, for me, a new
and exciting way to study, with real problems as the meat rather than
pages of a textbook. My worry, however, was that the case studies
inevitably passed over one of the main problems of real life, the actual
collection of the data, including, particularly, the assessment of the
individuals involved. The case-study classes also suggested, by
implication,
that the analysis was key and that implementing the decision
was secondary. Too often, however, I have found that knowing what
one ought to do in a situation is easy; it is the doing part that is
tough.
But that, of course, could not be tried out in the classroom, so it, too,
was seldom discussed. Fascinating though these classes were, I
worried, with my future role in mind, that it all made management
look easier than it really was.
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