Conventional management – central planning in disguise?

Simon Caulkin has an excellent piece in today’s Business Observer in which he reminds us of what is wrong with the notion that capitalist orthodoxy had triumphed over central planning with the fall of the Soviet Union.

 

With exquisite irony, while central planning had been largely discredited at macroeconomic level, at microeconomic level it remained alive and kicking – in their own organisations. Veteran systems thinker Russ Ackoff is not alone in noting that while at the macro level the west is vehemently committed to a market economy, at the micro level almost everyone works in “non-market, centrally planned, hierarchically managed” ones.

 

The truth is that much conventional management is central planning in western disguise. This is why most companies are zombie-like in their structural and strategic similarity. This is why, too, they are unable to learn. With their faces toward the CEO and their arses towards the customer – in the immortal words of GE’s former CEO, Jack Welch – what would they learn from? No wonder warnings of disaster were suppressed or auto-censored at the banks, or that the only messages heard were those that fitted with the earnings targets that managers managed by. In turn, the learning failure explains why so many companies adhere to the Zimbabwe school of change management – altering course only after ruin, by coup d’état.

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