(Source: https://threader.app/thread/1306047987613745152)
I want to talk about the topic of “modern management doctrine”, what is taught in business schools around the world. Let’s look at core tenets:
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a) Metrics: you can only manage what you can measure
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b) Specialize: focus on your core competence and outsource all the rest
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c) Shareholder value: the sole purpose of a company is to increase shareholder value (this from Milton Friedman).
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Now my take on these.I often joke that a major purpose of my life is to refute Milton Friedman, who I actually admire as a person!
First on “Metrics”. This is probably the most pernicious modern management doctrine and has done so much to rob people of dignity and purpose at work, simply because who can be against measurement and metrics? Unscientific nuts? Metrics are great for widgets, not people. I am a mathematically inclined software engineer and metrics are great for widgets. Metrics try to reduce people to widgets.(5) That’s why metrics don’t work long term for people. Here is a great book that details the case against metrics for people: https://www.goodreads.com/book/show/36644895-the-tyranny-of-metrics
Here is the basic problem with the second doctrine “Specialize”: how does an organization develop a NEW core competence? Toyota branched out from its core competence of textile looms to automobiles. Amazon branched out from ecommerce to AWS. Zoho Corp has done that too. We used to have intense debates on “core competence” at Zoho and I rejected that doctrine and declared “Our business domain is whatever we take a deep interest in”.(5) That’s the only way an organization can evolve to add new competencies, by tinkering with new ideas.
Finally, shareholder value. The social crisis in America traces its origins to this seductive and pernicious idea. An organization is an organic entity that must remain rooted to people and communities. Untethered from roots, organizations become soulless and destructive. This idea of “shareholder value” is tied to the idea of “everything worthwhile about an organization is reflected in its financial valuation”. Philosophically it confuses the tail with the dog and “pointer to an object with the object itself” (sorry for that - programmer 😂)(5)
Metrics and Indian CEO-s
(Source: https://threader.app/thread/1465872719963049985)
So many large US tech companies now have India-born CEOs that it is worth asking why. American agriculture as well as the corporate world suffer from “top soil erosion”, in the latter case replaced with imported top soil. Extreme focus on “measure and manage” is the cause.
As early as in the 1970s, Wendell Berry pointed out the intrinsic problem with US style large scale factory farming: it destroys soil culture and water resources and converts fossil fuel into food.
The “measure and manage” approach to corporate management destroys morale and drastically increases employee turnover.(4) It ends up overly focusing on things that are easy to measure (quarterly revenue and profit) and ignore difficult to measure aspects like org culture. The damage done by metrics obsession is documented in this book.
American corporations have made up for the cultural and top soil erosion arising from metrics obsession by importing talent from a culture that still has some old school values left. It is worth noting that almost all the India-born CEOs have stellar academic records. India has specialized in exporting its best test taking talent.(4) Naturally, that talent will excel in a system that is too focused on metrics: is there a more competitive test than IIT JEE?
Now India itself has started to apply that metrics obsession in its own business world, brought to India by India-born management gurus who made it American business schools. The result is employee turn over and lack of morale, same as in the US. Time to think different🙏